AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS, N-30D/A, 1998-11-25

AMERICAN CENTURY QUANTITATIVE EQUITY FUNDS
N-30D/A, 1998-11-25

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[front cover] June 30, 1998

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

[graphic of computer terminal, keyboard and eyeglasses]

AMERICAN CENTURY GROUP
- -----------------------
EQUITY GROWTH
INCOME & GROWTH

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

A Note from the Founder
- --------------------------------------------------------------------------------

On our 40th anniversary, I would personally like to express my profound
appreciation for the confidence you have shown in American Century. We are
grateful for the opportunity to manage your money, and we will do our utmost to
continue to meet your expectations and justify your confidence in us.

I founded American Century on the belief that if we can make you
successful, you, in turn, will make us successful. That is the principle that
will guide us in the future.

Sincerely,
/s/James E. Stowers

About our New Report Design
- --------------------------------------------------------------------------------

Why We Changed

We're trying hard to be reader-friendly. Our reports contain a lot of very good
information, from fund statistics and financials to Q&A's with fund managers. We
hope the new design will make the reports more interesting and understandable
while helping you keep abreast of your fund's strategy and performance.

What's New

The reports are designed to be attractive and easy to use whether you're reading
them in depth or just skimming.

New features include:

* Larger type size in many sections.
* Brief explanations of the financial statements.
* More prominent graphs and charts.
* Quotes in the margins to highlight report content.

THE BOTTOM LINE.

The new design actually costs slightly less than the old one. We reallocated
costs and eliminated a cover letter and the envelope that previously came with
your report enclosed. This not only saves money, but reduces the number of
mailing pieces you receive.

The new reports also use roughly the same amount of paper as the old ones.
Previously, paper was trimmed and thrown away to produce the smaller report
size.

We believe we've come up with a more interesting, informative and user-friendly
publication.

We hope you enjoy it.

[left margin]

American Century Group
Equity Growth
(BEQGX)

American Century Group
Income & Growth
(BIGRX)

[40 Years logo]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

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

U.S. stocks have posted historic returns over the last few years. The first
six months of 1998 continued this momentum, despite some slowing in the second
quarter due to the economic and financial crisis in Asia. Large companies once
again outpaced smaller ones, and growth stocks continued to outperform value
stocks.

Furthermore, the market is composed of individual businesses, and there are
still attractive opportunities--companies whose earnings growth or value has not
been fully recognized, or that have been discounted due to temporary factors.

The ability of the quantitative equity teams that manage Equity Growth and
Income & Growth to find these opportunities is clearly reflected in the funds'
excellent performance during the first half of the year. Both funds outperformed
the S&P 500 for the period, as well as for the one-year and three-year periods
ended June 30, 1998.

Turning to the subject of distributions, please note the following policy
changes. Both Equity Growth and Income & Growth paid capital gains distributions
in March 1998 as well as in December 1997. The funds will continue on this
March-December capital gains distribution schedule going forward. The March
distribution allows the funds to promptly distribute capital gains realized
between the IRS's October 31 deadline for December distributions and the funds'
December 31 fiscal year end.

In addition, Income & Growth, which has historically paid dividends on a
monthly basis, recently began paying dividends on a quarterly basis. This will
make the fund's distribution policy consistent with other American Century
income and equity funds. Distributions are described in greater detail in the
"Distributions" section of your prospectus.

Finally, we hope you like the new design of this report. It's intended to
make the important information you need about our funds easier to find and read.

We appreciate your investment with American Century.

Sincerely,

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

[right margin]

Table of Contents
Report Highlights ........................................................ 2
Market Perspective ....................................................... 3
EQUITY GROWTH
Performance Information .................................................. 5
Management Q&A ........................................................... 6
Schedule of Investments .................................................. 9
INCOME & GROWTH
Performance Information .................................................. 13
Management Q&A ........................................................... 14
Schedule of Investments .................................................. 17
FINANCIAL STATEMENTS
Statements of Assets and
Liabilities .............................................................. 22
Statements of Operations ................................................. 23
Statements of Changes
in Net Assets ............................................................ 24
Notes to Financial
Statements ............................................................... 25
Financial Highlights ..................................................... 29
OTHER INFORMATION
Share Class and Retirement
Account Information ...................................................... 35
Background Information
Investment Philosophy
and Policies .......................................................... 36
Comparative Indices ................................................... 36
Lipper Rankings ....................................................... 36
Investment Team
Leaders ............................................................... 36
Glossary ................................................................. 37

www.americancentury.com 1

Report Highlights
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MARKET PERSPECTIVE

* The S&P 500's recent climb has been very steep. Calendar 1995-1997 marked
one of the best three-year performance runs on record for the index.

* The sharp ascent continued during the first six months of 1998. The S&P 500
gained 17.66%.

* The stocks of large companies continued to outperform those of midsize and
small companies.

* Market leadership has been narrow; the returns of the 100 biggest companies
in the S&P 500 outdistanced the remaining 400.

* Stocks owe much of their success to a robust economy with minimal inflation.
The U.S. economy is demonstrating a vigor we haven't seen in a generation.

* Many U.S. companies are enjoying extraordinarily high profitability. The
positive business climate is encouraging money to flow into the stock market
in record volumes.

* By most traditional measures, stock prices are expensive. Earnings multiples
have hit historical highs, and dividend yields have fallen to historical
lows.

* An upturn in inflation or a substantial decline in corporate earnings could
derail the financial markets. Investor expectations are running high. In
this environment, stocks could prove vulnerable to disappointments.

EQUITY GROWTH

* Equity Growth continued to outperform the S&P 500 and the average growth
fund, according to Lipper Analytical Services. (See Total Returns on page
5.)

* We shifted away from cyclical stocks, which tend to be sensitive to changes
in the economy, and into areas like banking, financial services, insurance
and communications services, that are less influenced by economic strength
or weakness.

* Going forward, we will continue to add shares of companies that have
improving earnings forecasts and appear undervalued.

INCOME & GROWTH

* Income & Growth outpaced the returns of the S&P 500 and the average growth
and income fund, according the Lipper Analytical Services. (See Total
Returns on page 13.)

* Income & Growth benefited from its concentration in S&P 500 stocks, our
quantitative approach to managing the portfolio and our policy of remaining
fully invested in stocks.

* Our quantitative models found many attractive stocks in industries like
banking, communications services, financial services, and utilities.

[left margin]

"MANY U.S. COMPANIES ARE ENJOYING EXTRAORDINARILY HIGH PROFITABILITY. THE
POSITIVE BUSINESS CLIMATE IS ENCOURAGING MONEY TO FLOW INTO THE STOCK MARKET IN
RECORD VOLUMES."

EQUITY GROWTH(1)
(BEQGX)
TOTAL RETURNS: AS OF 6/30/98
6 Months 18.34%(2)
1 Year 37.74%
NET ASSETS: $1.5 billion
INCEPTION DATE: 5/9/91

INCOME & GROWTH(1)
(BIGRX)
TOTAL RETURNS: AS OF 6/30/98
6 Months 17.79%(2)
1 Year 34.46%
NET ASSETS: $3.2 billion
INCEPTION DATE: 12/17/90

(1) Investor Class.
(2) Not annualized.

See Total Returns on pages 5 and 13. Investment terms are defined in the
Glossary on page 37.

2 1-800-345-2021

Market Perspective from Mark Mallon
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[photo of Mark Mallon]
Mark Mallon, head of conservative equity, specialty, and asset allocation funds
at American Century

A POWERFUL UPSLOPE

Just how quickly has the stock market appreciated over the past few years?
It took approximately 16 years, from 1970-1985, for the Standard & Poor's 500
Index to double. Only six years later, it had doubled again, and roughly five
years after that, in early 1997, it had doubled once more, to 800. As the
accompanying chart illustrates, the S&P 500's recent climb has been very steep.
At the end of June 1998, the index was just over 1100.

Looked at another way, calendar 1995-1997 marked one of the best three-year
performance runs on record. It was, in fact, the most consistent performance
ever for large-stock indices such as the S&P 500. All three years saw returns of
more than 20%. During the first half of 1998, the S&P 500 barely paused to catch
its breath, gaining 17.66%. Lower corporate earnings, a tight U.S. labor market,
and the ongoing economic crisis in Asia caused only minor pullbacks in the
second quarter of 1998.

A POWERHOUSE ECONOMY

Stocks owe much of their success to a robust economy with minimal
inflation. The U.S. economy is currently demonstrating a vigor we haven't seen
in a generation:

* U.S. economic growth hit 3.9% in 1997 and 5.5% in the first quarter of 1998.

* Inflation was a mere 1.7% for the year ended June 30.

* In 1997, prices rose at the slowest pace in 12 years.

* Nominal interest rates are among the lowest since the 1960s.

* Unemployment in 1997 was the lowest in 28 years.

* The U.S. government is projecting the first budget surplus in 30 years.

A successful market is also tied to the success of individual companies.
Earnings growth and productivity are at the top of the business agenda. We are
among the most technologically proficient of the industrial nations, and as a
result, U.S. companies are enjoying extraordinarily high profitability. A wave
of mergers, involving such high-profile names as Travelers Group and Citicorp,
has, in general, increased efficiency and boosted profits.

In 1997 and the first quarter of 1998, earnings growth slowed, but only
after a double-digit growth spurt that lasted five years. Given the positive
business climate, it's not surprising stocks remain such a popular investment
and that cash continues to flow into the market at record volumes.

However, by most traditional measures, stock prices are expensive. The
average stock in the S&P 500 now costs more than 25 times last year's earnings,
a historical high. Corporate assets are

[right margin]

"STOCKS OWE MUCH OF THEIR SUCCESS TO A ROBUST ECONOMY WITH MINIMAL INFLATION."

MARKET RETURNS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
S&P 500 17.66%
S&P MIDCAP 400 8.63%
RUSSELL 2000 4.93%

Source: Lipper Analytical Services, Inc.

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

[mountain chart - data below]

S&P 500 PERFORMANCE
FROM DECEMBER 1970 TO DECEMBER 1997

DATE PRICE
12/70 92.15
12/71 102.09
12/72 118.05
12/73 97.55
12/74 68.56
12/75 90.19
12/76 107.46
12/77 95.10
12/78 96.11
12/79 107.94
12/80 135.76
12/81 122.55
12/82 140.64
12/83 164.93
12/84 167.24
12/85 211.28
12/86 242.17
12/87 247.08
12/88 277.72
12/89 353.40
12/90 330.22
12/91 417.09
12/92 435.71
12/93 466.45
12/94 459.27
12/95 615.93
12/96 740.74
12/97 970.43

Source: Bloomberg Financial Markets

www.americancentury.com 3

Market Perspective from Mark Mallon
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(Continued)

also richly valued. Investors are paying roughly five times balance sheet
assets, or twice the historical average. The dividend yield on the average S&P
stock has fallen to less than 1.5%, another record.

BIG WAS BETTER, GROWTH WAS IN

As the accompanying charts make clear, large companies (as reflected in the
S&P 500) have continued to outperform midsize and small companies in the first
half of 1998. Leadership has been narrow. The largest 100 stocks in the S&P,
measured by market value, have outdistanced the remaining 400. And the very
largest--GE, Coca-Cola, Microsoft, and other household names--have posted the
biggest gains. These high-profile stocks are in vogue because they are
liquid--that is, easier to trade in large quantities. In theory, their liquidity
should make them easier to exit if the stock market slips.

The fascination with growth and size has been prevalent for several years.
It was also popular a generation ago, in the early 1970s, when the "Nifty Fifty"
(companies that were also household names) provided the performance fireworks.

EARNINGS, INFLATION, AND INTEREST RATES

What could derail the financial markets? An upturn in inflation or a
substantial decline in earnings probably could. You don't have to look further
than the second and third quarters of 1998, when the Asian crisis threatened
earnings. In late 1997, the spike in oil prices, combined with the deepening
Asian crisis, also raised the specter of higher inflation and lower earnings,
and stocks fell back.

If inflation picks up, interest rates are likely to rise as the Federal
Reserve tries to head off inflation by pushing rates higher. Higher interest
rates increase the cost of borrowing for everyone, from corporations to
prospective home buyers, and thus tend to slow economic growth and dampen
inflation.

In 1997, inflation failed to take off. Oil prices went into a tailspin when
Asian demand fell. In early 1998, as crude oil prices hit a nine-year low,
interest rates declined and stocks soared even though the fallout from Asia
still threatened to slow both corporate earnings and U.S. economic growth.

This has been a very resilient market. But investor expectations are
running high, which is reflected in the S&P 500's steep climb over the last
three and a half years. In this environment, stocks could prove vulnerable to
disappointments.

[left margin]

"LARGE COMPANIES CONTINUED TO OUTPERFORM MIDSIZE AND SMALL COMPANIES IN THE
FIRST HALF OF 1998."

[line chart - data below]

MARKET PERFORMANCE (Growth of $1.00)
For the six months ended June 30, 1998

S&P 500 S&P MidCap 400 Russell 2000
12/31/97 $1.00 $1.00 $1.00
1/31/98 $1.01 $0.98 $0.98
2/28/98 $1.08 $1.06 $1.06
3/31/98 $1.14 $1.11 $1.10
4/30/98 $1.15 $1.13 $1.11
5/31/98 $1.13 $1.08 $1.05
6/30/98 $1.18 $1.09 $1.05

4 1-800-345-2021

Equity Growth--Performance
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<TABLE>
TOTAL RETURNS AS OF JUNE 30, 1998
INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 5/9/91) (INCEPTION 10/1/97) (INCEPTION 1/2/98)
GROWTH FUNDS(2)
EQUITY GROWTH S&P 500 AVERAGE RETURN FUND'S RANKING EQUITY GROWTH S&P 500 EQUITY GROWTH S&P 500
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) ... 18.34% 17.66% 15.10% -- 18.23% 17.66% -- --
1 YEAR ........ 37.74% 30.03% 25.38% 65 OUT OF 884 -- -- -- --
- -------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS ....... 32.04% 30.16% 23.85% 25 OUT OF 560 -- -- -- --
5 YEARS ....... 23.61% 23.03% 18.91% 32 OUT OF 338 -- -- -- --
LIFE OF FUND .. 20.34% 19.38% 16.71% 30 OUT OF 226 17.63% 18.12% 18.34% 17.10%
</TABLE>

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

(2) According to Lipper Analytical Services, an independent mutual fund ranking
service.

See pages 35-37 for more information about share classes, returns, the
comparative index and Lipper fund rankings.

[mountain chart - data below]

GROWTH OF $10,000 OVER LIFE OF FUND

Value on 6/30/98
Equity Growth $37,519
S&P 500 $35,447

Equity Growth S&P 500
DATE ACCT VALUE ACCT VALUE
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
03/31/98 $36,732 $34,321
06/30/98 $37,519 $35,447

$10,000 investment made 5/9/91

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND
(periods ended June 30)

Equity Growth S&P 500
6/91* -3.60% -2.31%
6/92 13.31% 13.36%
6/93 19.00% 13.57%
6/94 1.37% 1.43%
6/95 23.69% 25.99%
6/96 24.23% 25.92%
6/97 34.53% 34.69%
6/98 37.74% 30.03%

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

* From 5/9/91 (the fund's inception date) to 6/30/91.

www.americancentury.com 5

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

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

HOW DID THE FUND PERFORM FOR THE FIRST HALF OF 1998?

Equity Growth continued to outperform its U.S. stock market benchmark and
its growth fund peer group average. The fund returned 18.34%*, compared to the
17.66% return of the S&P 500 and the 15.10% average return of the 1,012 "Growth
Funds" tracked by Lipper Analytical Services.

Equity Growth's consistently strong performance was reflected in the fact
that it also outperformed the S&P 500 and average growth fund for the one-,
three- and five-year periods ended June 30, 1998. (See the Total Returns table
on the previous page for other fund performance comparisons.)

EQUITY GROWTH HAS ATTRACTED ATTENTION FROM THE FINANCIAL MEDIA, DUE BOTH TO ITS
OUTSTANDING PERFORMANCE AND THE UNIQUE WAY YOU MANAGE ITS PORTFOLIO. HOW WOULD
YOU BEST DESCRIBE YOUR MANAGEMENT APPROACH?

"Enhanced indexing" and an "active quantitative approach" are two phrases
we like to use to describe how we manage Equity Growth. We basically blend two
investment techniques-- quantitative and discretionary (which we'll describe
further as we go along)--to create a disciplined, but still somewhat flexible,
approach to managing the portfolio.

On the quantitative (computer-driven) side, we use the S&P 500 as a
benchmark to measure the fund's performance and structure. With the index in
mind, we employ several computer models to help us choose a core portfolio of
stocks that will closely track the index's performance. We also employ the
models to look for stocks of companies that meet our strict investment criteria.
We weight heavily growth and value factors, including whether the company is
demonstrating solid or improving earnings, and if the stock is attractively
priced compared with similar stocks. Our core portfolio strategy is appealing
because several stock indices, particularly the S&P 500, have historically
outperformed most stock funds. This strategy also allows us to keep the
portfolio well diversified, helping to manage risk.

On the discretionary side (fund manager's decisions), we augment the core
portfolio with stocks that we believe have potential to outperform the core
holdings. To improve our chances of finding these opportunities, we screen, with
our growth and value models, a universe of 1500 stocks, rather than limit the
portfolio to only the stocks in the S&P 500. This allows us to include small-
and mid-cap stocks that offer additional return-enhancing potential. It is
important to note that although the fund can invest in non-equity securities,
the S&P 500 is solely comprised of stocks.

SO YOUR BASIC INTENT IS TO BEAT THE S&P 500?

Exactly. And as demonstrated by the returns on page 5, we have been
successful so far. Of course, investors should keep in mind that the 20-30%
annual returns provided by the S&P 500 and the fund in recent years cannot go on
forever. It's also possible for the fund to underperform the S&P 500.

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

[left margin]

"EQUITY GROWTH'S CONSISTENTLY STRONG PERFORMANCE WAS REFLECTED IN THE FACT THAT
IT ALSO OUTPERFORMED THE S&P 500 AND THE AVERAGE GROWTH FUND FOR THE ONE-,
THREE- AND FIVE-YEAR PERIODS ENDED JUNE 30, 1998."

PORTFOLIO AT A GLANCE
6/30/98 12/31/97
NUMBER OF COMPANIES 178 165
DIVIDEND YIELD 1.50% 1.87%
PRICE/EARNINGS RATIO 19.4 16.8
PORTFOLIO TURNOVER 53%(1) 161%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.69%(3) 0.67%

(1) Six months ended 6/30/98.
(2) Year ended 12/31/97.
(3) Annualized.

Investment terms are defined in the Glossary on page 37.

6 1-800-345-2021

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

CAN YOU GIVE AN EXAMPLE OF WHAT MIGHT CAUSE EQUITY GROWTH TO UNDERPERFORM THE
S&P 500?

Yes. The fund actually underperformed the index during the second quarter
of 1998, when it returned 2.14% compared to 3.28% for the index. Equity Growth's
somewhat defensive position dampened returns slightly. We underweighted several
blue-chip consumer growth stocks, such as Coca-Cola, General Electric and
Gillette, compared with the S&P 500 because our models indicated they were
overvalued. However, these stocks ended up performing better than we thought
they would.

We face the possibility of underperformance against the index anytime we
overweight or underweight a stock or sector compared to the S&P 500. What saves
us from hurting the fund too much is the discipline that's built into our
approach--we have to track the benchmark, maintain broad diversification in the
portfolio and only underweight and overweight stocks and sectors within
specified ranges.

YOU SAID THAT THE FUND WAS IN A "SOMEWHAT DEFENSIVE POSITION." WHAT DO YOU MEAN
BY THAT?

The Asian crisis and its potential impact on corporate earnings made us
more cautious. As we alluded to in the example above, we paid close attention to
the value component of our stock-valuation model. We also shifted some assets
into more defensive (less cyclical) sectors of the market -- ones that we
believe are likely to maintain relatively stable earnings even if the U.S.
economy should suffer an Asia-related downturn. We also increased our holdings
in sectors and companies that have relatively little Asia exposure.

Shifting out of cyclical stocks meant selling auto stocks such as Ford. We
moved instead into banking, financial services, insurance and communications
services companies including Chase Manhattan, Travelers, Allstate and AT&T (each
was a top 10 holding as of June 30). Banks, financial services and insurance
companies have demonstrated solid earnings growth. Operating efficiencies are
also being improved in these industries due to consolidation. Additionally, the
financial sector could benefit from falling interest rates that would likely
accompany an economic downturn.

Communications services companies are considered a defensive holding. Most
of their operations are based in the U.S., and most of their income is derived
domestically. In addition, they have experienced earnings growth and industry
consolidation.

The chart on page 8 shows how we've increased our holdings in financial
services, banking, communications services and insurance. Some of the increase
was due to stock price appreciation. These sectors performed well during the
six-month period.

THE CHART ALSO SHOWS THAT YOU NEARLY DOUBLED YOUR POSITION IN COMPUTER SOFTWARE
COMPANIES. THAT DOESN'T SOUND VERY DEFENSIVE. WHY DID YOU MAKE THIS CHANGE?

Some of the increase was the result of stock price appreciation. Software
firms rebounded from the declines they suffered late last year when the first
wave of bad news about Asia caused the entire technology sector to fall sharply.
Software companies became attractive again for an important reason --many make
products to help companies

[right margin]

"WE MOVED INTO BANKING, FINANCIAL SERVICES, INSURANCE AND COMMUNICATIONS
SERVICES COMPANIES SUCH AS CHASE MANHATTAN, TRAVELERS, ALLSTATE AND AT&T."

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
TRAVELERS GROUP, INC. 4.1% 0.5%

MORGAN STANLEY
DEAN WITTER,
DISCOVER & CO. 3.5% 4.0%

CHASE MANHATTAN
CORP. 3.4% 1.6%

UNITED TECHNOLOGIES
CORP. 2.8% 2.6%

BELLSOUTH CORP. 2.7% 2.5%

MICROSOFT CORP. 2.7% 2.7%

AT&T CORP. 2.6% --

FIRST UNION CORP. 2.4% 2.7%

ALLSTATE CORP. 2.3% --

CATERPILLAR INC. 2.2% 2.0%

www.americancentury.com 7

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

address the Year 2000 (Y2K) problem. The Y2K problem is huge, so investor demand
is high for companies that have any sort of Y2K problem-solving connection.

LOOKING AHEAD, WHAT IS YOUR STOCK MARKET OUTLOOK FOR THE REST OF 1998?

Corporate earnings and U.S. economic growth have clearly been affected by
the Asian crisis, and investors have grown nervous. Until definite plans are set
in motion to alleviate Asia's financial and economic crisis, U.S. corporations
deriving a large portion of their profits from Asia could see continued share
price volatility.

We are also concerned that high stock valuations (especially among larger
stocks) could increase market volatility in the months ahead. Shares of
companies failing to meet or exceed investor expectations for profit growth were
pummeled in 1997 and continue to be hammered in 1998. Another uncertainty is
whether the strong cash flows into stock mutual funds--$130.5 billion in the
first half of this year alone--will continue.

On a positive note, the U.S. economy continues to expand, with historically
low inflation and unemployment. Interest rates are very low, allowing
corporations to borrow funds to finance new projects and expand their
businesses. There seems to be very little likelihood that inflation will
reappear in 1998, and low inflation has typically had a positive impact on stock
market performance. One could argue that there has been a bull market in U.S.
stocks ever since the Federal Reserve brought inflation under control in the
1980s.

WHAT ARE YOUR PLANS FOR MANAGING EQUITY GROWTH IN THE NEXT SIX MONTHS?

Our optimism about inflation notwithstanding, we believe Asian turmoil will
continue to be a key factor in future market movements. As a result, we will
probably maintain the portfolio's slightly defensive stance. The low-inflation
and low-interest-rate environment should provide a potentially ideal climate for
many sectors to continue producing solid returns.

Keeping the fund fully invested in stocks will also remain a priority. This
should enhance returns if the market rallies further. However, if the market
sells off, being fully invested could also hurt returns. To mitigate such a
possibility, we will continue looking to add shares of companies whose earnings
are improving and that appear to be undervalued. We believe this strategy will
provide investors with attractive returns and an acceptable level of risk.

[left margin]

"ON A POSITIVE NOTE, THE U.S. ECONOMY CONTINUES TO EXPAND, WITH HISTORICALLY LOW
INFLATION AND UNEMPLOYMENT."

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
FINANCIAL SERVICES 12.4% 9.6%

BANKING 11.0% 7.8%

COMPUTER SOFTWARE
& SERVICES 9.4% 4.7%

COMMUNICATIONS
SERVICES 7.7% 5.7%

INSURANCE 6.5% 5.0%

8 1-800-345-2021

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

JUNE 30, 1998 (UNAUDITED)

Shares Value
- -------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE--6.2%
121,100 Cordant Technologies Inc. $5,585,738
655,800 General Dynamics Corp. 30,494,700
277,500 Goodrich (B.F.) Company (The) 13,770,938
41,300 Gulfstream Aerospace Corp.(1) 1,920,450
35,000 Raytheon Co. Cl A 2,016,875
478,800 United Technologies Corp. 44,289,000
---------------
98,077,701
---------------
AIRLINES--0.4%
35,800 AMR Corp.(1) 2,980,350
10,600 Delta Air Lines Inc. 1,370,050
17,100 US Airways Group Inc.(1) 1,355,175
---------------
5,705,575
---------------
AUTOMOBILES & AUTO PARTS--2.0%
67,700 Arvin Industries, Inc. 2,458,356
69,800 Chrysler Corp. 3,934,975
99,700 Fleetwood Enterprises, Inc. 3,988,000
358,000 Ford Motor Co. 21,122,000
---------------
31,503,331
---------------
BANKING--11.0%
314,600 Banc One Corp. 17,558,613
242,900 BankAmerica Corp. 20,995,669
60,200 Bankers Trust New York Corp. 6,986,963
713,800 Chase Manhattan Corp.(2) 53,891,900
69,600 First Chicago NBD Corp. 6,168,300
655,500 First Union Corp.(2) 38,182,875
46,900 GreenPoint Financial Corp. 1,764,613
220,600 Imperial Bancorp(1) 6,618,000
276,600 NationsBank Corp. 21,159,900
20,750 Valley National Bancorp 601,750
---------------
173,928,583
---------------
BIOTECHNOLOGY--0.5%
278,700 Genzyme Corp.(1) 7,089,431
---------------

BUILDING & HOME IMPROVEMENTS--0.8%
25,500 Centex Construction Products Inc. 981,750
45,200 Lone Star Industries, Inc. 3,483,225
237,500 Premark International, Inc. 7,659,375
---------------
12,124,350
---------------
BUSINESS SERVICES & SUPPLIES--1.0%
32,700 Cendant Corp.(1) 682,613
256,800 Dun & Bradstreet Corp. (The)(1) 9,276,900
95,400 Omnicom Group Inc. 4,758,075
50,100 True North Communications Inc. 1,465,425
---------------
16,183,013
---------------

Shares Value
- -------------------------------------------------------------------------------
CHEMICALS & RESINS--1.6%
162,700 Dow Chemical Co. $15,731,056
122,600 du Pont (E.I.) de Nemours & Co. 9,149,025
---------------
24,880,081
---------------
COMMUNICATIONS EQUIPMENT--1.1%
200,800 Lucent Technologies Inc. 16,704,050
---------------

COMMUNICATIONS SERVICES--7.7%
716,100 AT&T Corp. 40,907,213
443,000 Ameritech Corp. 19,879,625
647,100 BellSouth Corp.(2) 43,436,588
37,100 GTE Corp. 2,063,688
155,500 SBC Communications Inc. 6,220,000
184,700 U S WEST Communications
Group 8,680,900
---------------
121,188,014
---------------
COMPUTER PERIPHERALS--0.6%
25,000 Cisco Systems Inc.(1) 2,302,344
34,800 Dialogic Corp.(1) 1,030,950
62,100 Lexmark International Group,
Inc. Cl A(1) 3,788,100
50,000 SCI Systems, Inc.(1) 1,881,250
---------------
9,002,644
---------------
COMPUTER SOFTWARE & SERVICES--9.4%
41,800 Arbor Software Corp.(1) 1,323,231
102,300 Autodesk, Inc. 3,941,747
48,800 CDW Computer Centers, Inc.(1) 2,443,050
16,500 Citrix Systems, Inc.(1) 1,128,703
99,800 Compuware Corp.(1) 5,099,156
85,500 Concord EFS, Inc.(1) 2,233,688
153,100 DataWorks Corp.(1) 2,038,144
747,700 Electronic Data Systems Corp. 29,908,000
282,400 HBO & Co. 9,963,425
396,800 Microsoft Corp.(1) 43,015,600
447,000 Oracle Systems Corp.(1) 10,965,469
35,800 PeopleSoft, Inc.(1) 1,681,481
76,400 PLATINUM Technology, Inc.(1) 2,184,563
31,100 Shared Medical Systems Corp. 2,283,906
346,800 Sterling Software, Inc.(1) 10,252,275
274,400 Symantec Corp.(1) 7,151,550
52,600 Systems & Computer Technology
Corp.(1) 1,433,350
330,200 Unisys Corp.(1) 9,328,150
41,700 Visio Corp.(1) 1,996,388
---------------
148,371,876
---------------
COMPUTER SYSTEMS--1.8%
124,500 Apple Computer, Inc.(1) 3,575,484
51,300 Dell Computer Corp.(1) 4,759,678
110,300 Hewlett-Packard Co. 6,604,213

See Notes to Financial Statements

www.americancentury.com 9

Equity Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- -------------------------------------------------------------------------------
22,300 International Business Machines
Corp. $2,560,319
245,800 Sun Microsystems, Inc.(1) 10,684,619
---------------
28,184,313
---------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.5%
42,600 Fluor Corp. 2,172,600
83,400 Harsco Corp. 3,820,763
59,700 McDermott (J. Ray) S.A.(1) 2,477,550
---------------
8,470,913
---------------
CONSUMER PRODUCTS--1.8%
192,500 National Service Industries 9,793,438
44,900 Procter & Gamble Co. (The) 4,088,706
97,000 Russ Berrie and Co., Inc. 2,425,000
164,500 Whirlpool Corp. 11,309,375
---------------
27,616,519
---------------
DIVERSIFIED COMPANIES--0.2%
47,000 Tyco International Ltd. 2,961,000
---------------

ENERGY (PRODUCTION &
MARKETING)--2.0%
28,000 Occidental Petroleum Corp. 756,000
788,000 Sun Company, Inc. 30,584,250
---------------
31,340,250
---------------
ENERGY (SERVICES)--2.0%
83,100 BJ Services Co.(1) 2,415,094
235,700 Ensco International Inc. 4,095,288
254,000 Schlumberger Ltd. 17,351,375
189,400 Tidewater Inc. 6,250,200
28,700 Transocean Offshore 1,277,150
---------------
31,389,107
---------------
FINANCIAL SERVICES--12.4%
91,000 Associates First Capital Corp. 6,995,625
75,400 Donaldson, Lufkin & Jenrette, Inc. 3,831,263
118,000 Equitable Companies Inc. 8,842,625
559,700 Fannie Mae 34,001,775
315,900 Federal Home Loan Mortgage
Corporation 14,867,044
56,400 Lehman Brothers Holdings, Inc. 4,374,525
621,300 Morgan Stanley Dean Witter,
Discover & Co. 56,771,288
1,079,500 Travelers Group, Inc. 65,444,688
---------------
195,128,833
---------------
FOOD & BEVERAGE--3.7%
62,900 Coors (Adolph) Co. Cl B 2,146,463
82,900 Dean Foods Co. 4,554,319
43,700 Earthgrains Company 2,441,738
117,200 Hormel Foods Corp. 4,050,725

Shares Value
- -------------------------------------------------------------------------------
244,600 Interstate Bakeries Corp. $8,117,663
24,800 Lancaster Colony Corp. 939,300
139,100 Lance, Inc. 3,116,709
363,000 Quaker Oats Co. (The) 19,942,294
323,000 Richfood Holdings, Inc. 6,682,063
189,400 Smithfield Foods, Inc.(1) 5,741,188
20,000 Suiza Foods Corp.(1) 1,193,750
---------------
58,926,212
---------------
FURNITURE & FURNISHINGS--0.2%
118,600 Miller (Herman), Inc. 2,879,756
---------------

HEALTHCARE--0.4%
85,900 Mallinckrodt Inc. 2,550,156
220,000 NovaCare, Inc.(1) 2,585,000
47,700 RehabCare Group, Inc.(1) 1,162,688
---------------
6,297,844
---------------
INDUSTRIAL EQUIPMENT &
MACHINERY--3.1%
659,800 Caterpillar Inc.(2) 34,886,925
324,500 Ingersoll-Rand Co. 14,298,281
---------------
49,185,206
---------------
INSURANCE--6.5%
398,800 Allstate Corp. 36,515,125
97,200 Conseco Inc. 4,544,100
74,800 Everest Reinsurance Holdings, Inc. 2,875,125
25,100 First American Financial
Corp. (The) 2,259,000
142,600 Gallagher (Arthur J.) & Co. 6,381,350
45,200 General Re Corp.(2) 11,458,200
79,400 LandAmerica Financial Group, Inc. 4,545,650
279,700 Lincoln National Corp. 25,557,588
23,900 Loews Corp. 2,082,288
100,500 Orion Capital Corp. 5,615,438
---------------
101,833,864
---------------
LEISURE--0.3%
39,500 Anchor Gaming(1) 3,073,594
27,600 Department 56, Inc.(1) 979,800
---------------
4,053,394
---------------
MACHINERY & EQUIPMENT--3.0%
40,100 Cincinnati Milacron Inc. 974,931
357,500 Deere & Co. 18,902,813
24,900 Diebold, Inc. 718,988
129,100 Flowserve Corp. 3,179,088
65,200 Kennametal Inc. 2,722,100
146,300 National-Oilwell, Inc.(1) 3,922,669
238,400 Sundstrand Corp. 13,648,400
77,700 Timken Co. 2,394,131
---------------
46,463,120
---------------

See Notes to Financial Statements

10 1-800-345-2021

Equity Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- -------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES--1.8%
83,500 ATL Ultrasound, Inc.(1) $3,788,813
111,000 AmeriSource Health Corp.(1) 7,291,313
96,000 Arterial Vascular Engineering,
Inc.(1) 3,429,000
112,900 Hillenbrand Industries, Inc. 6,774,000
105,500 PSS World Medical, Inc.(1) 1,542,938
123,600 Teleflex Inc. 4,696,800
---------------
27,522,864
---------------
METALS & MINING--0.3%
22,800 Aluminum Co. of America 1,503,375
84,000 Parker-Hannifin Corp. 3,202,500
---------------
4,705,875
---------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
19,700 Xerox Corp. 2,002,013
---------------

PAPER & FOREST PRODUCTS(3)
7,200 Fort James Corporation 320,400
---------------

PERSONAL SERVICES--0.5%
194,900 Block (H & R), Inc. 8,210,163
---------------

PHARMACEUTICALS--5.1%
41,300 ALPHARMA INC. 908,600
153,500 Bristol-Myers Squibb Co. 17,642,906
192,000 Genentech, Inc.(1) 13,032,000
92,500 Herbalife International, Inc. 2,274,922
64,900 Johnson & Johnson 4,786,375
27,000 Lilly (Eli) & Co. 1,783,688
36,300 Medicis Pharmaceutical Corp.(1) 1,320,413
96,500 Nature's Sunshine Products, Inc. 2,168,234
129,900 Pfizer, Inc. 14,118,506
100,600 Rexall Sundown, Inc.(1) 3,590,163
202,000 Schering-Plough Corp. 18,508,250
---------------
80,134,057
---------------
PRINTING & PUBLISHING--1.6%
716,500 Deluxe Corp. 25,659,656
---------------

RETAIL (APPAREL)--1.3%
5,000 Dress Barn, Inc.(1) 124,688
18,200 Goody's Family Clothing, Inc.(1) 995,313
127,600 Liz Claiborne, Inc. 6,667,100
174,300 Payless ShoeSource, Inc.(1) 12,843,731
---------------
20,630,832
---------------

Shares Value
- -------------------------------------------------------------------------------
RETAIL (FOOD & DRUG)--0.6%
33,800 Albertson's, Inc. $1,751,263
221,000 Universal Corp. 8,259,875
---------------
10,011,138
---------------
RETAIL (GENERAL MERCHANDISE)--1.6%
76,900 Federated Department Stores,
Inc.(1) 4,138,181
20,300 Neiman-Marcus Group, Inc.(1) 881,781
93,000 Penney (J.C.) Company, Inc. 6,725,063
221,000 Wal-Mart Stores, Inc. 13,425,750
---------------
25,170,775
---------------
RETAIL (SPECIALTY)--0.2%
112,700 Zale Corp.(1) 3,585,269
---------------

STEEL--0.1%
10,500 Bethlehem Steel Corporation(1) 130,594
14,200 Nucor Corp. 653,200
14,300 USX-U.S. Steel Group 471,900
---------------
1,255,694
---------------
TEXTILES & APPAREL--0.8%
180,400 Dexter Corp. (The) 5,738,975
146,400 VF Corp. 7,539,600
---------------
13,278,575
---------------
TOBACCO--0.5%
217,400 Philip Morris Companies Inc. 8,560,125
---------------

TRANSPORTATION(3)
5,100 Laidlaw Inc. ADR 62,156
50,000 Laidlaw Inc. ORD 603,926
---------------
666,082
---------------
UTILITIES--1.9%
90,000 Energy East Corp. 3,746,250
202,300 Minnesota Power & Light Co. 8,041,425
205,000 Public Service Co. of New Mexico 4,650,938
363,900 Sempra Energy(1) 10,098,225
118,200 UGI Corp. 2,940,225
---------------
29,477,063
---------------

TOTAL COMMON STOCKS--96.6% 1,520,679,561
---------------
(Cost $1,365,076,133)

See Notes to Financial Statements

www.americancentury.com 11

Equity Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Principal Amount Value
- -------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS
Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.65%, dated 6/30/98,
due 7/1/98 (Delivery value $25,704,033) $25,700,000

Repurchase Agreement, Merrill Lynch & Co.,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.55%, dated 6/30/98,
due 7/1/98 (Delivery value $28,504,394) 28,500,000
---------------

TOTAL TEMPORARY CASH
INVESTMENTS--3.4% 54,200,000
---------------
(Cost $54,200,000)

TOTAL INVESTMENT SECURITIES--100.0% $1,574,879,561
===============
(Cost $1,419,276,133)

FUTURES CONTRACTS
Underlying
Expiration Face Amount Unrealized
Purchased Date at Value Gain
- -------------------------------------------------------------------------------
93 S&P 500 September
Futures 1998 $26,574,750 $687,877
==================================

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) Industry is less than 0.05% of total investment securities.

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

The schedule includes:

* a list of each investment

* the number of shares of each stock

* the market value of each investment

* the percentage of investments in each industry, as applicable

* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

12 1-800-345-2021

<TABLE>
<CAPTION>
Income & Growth--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS(1) AS OF JUNE 30, 1998
INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 12/17/90) (INCEPTION 12/15/97) (INCEPTION 1/28/98)
GROWTH & INCOME FUNDS(2)
INCOME & GROWTH S&P 500 AVERAGE RETURN FUND'S RANKING INCOME & GROWTH S&P 500 INCOME & GROWTH S&P 500
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS ... 17.79% 17.66% 12.11% -- 17.67% 17.66% -- --
1 YEAR ..... 34.46% 30.03% 22.86% 13 OUT OF 668 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS .... 31.26% 30.16% 24.74% 10 OUT OF 432 -- -- -- --
5 YEARS .... 22.66% 23.03% 18.93% 11 OUT OF 275 -- -- -- --
LIFE OF
FUND ...... 22.19% 21.12% 18.29%(3) 4 OUT OF 167(3) 19.17% 19.00% 17.84% 16.81%
</TABLE>

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

(2) According to Lipper Analytical Services, an independent mutual fund ranking
service.

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

See pages 35-37 for more information about share classes, returns, the
comparative index and Lipper fund rankings.

[mountain chart - data below]

GROWTH OF $10,000 OVER LIFE OF FUND

Value on 6/30/98
Income & Growth $45,254
S&P 500 $42,376

Income & Growth S&P 500
DATE ACCT VALUE ACCT VALUE
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
03/31/98 $44,253 $41,030
06/30/98 $45,254 $42,376

$10,000 investment made 12/17/90

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND
(periods ended June 30)

Income & Growth S&P 500
6/91* 17.84% 16.79%
6/92 15.44% 13.36%
6/93 19.82% 13.57%
6/94 -0.40% 1.43%
6/95 23.28% 25.99%
6/96 26.36% 25.92%
6/97 33.10% 34.69%
6/98 34.46% 30.03%

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

* From 12/17/90 (the fund's inception date) to 6/30/91.

www.americancentury.com 13

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

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

HOW DID THE FUND PERFORM FOR THE FIRST HALF OF 1998?

Income & Growth posted exceptional gains compared with historical averages
for the stock market. The fund's return continued to outpace the average of its
peers, returning 17.79%* compared with the 12.11% average return of the 754
"Growth & Income Funds" tracked by Lipper Analytical Services. Income & Growth's
six-month, one-year and three-year returns all outpaced the returns of the S&P
500 and the average growth & income fund. (See the Total Returns table on the
previous page for other fund performance comparisons.)

WHAT HELPED THE FUND PERFORM SO WELL?

The fund's portfolio is comprised predominately of shares of
large-capitalization (large-cap) companies, such as the ones in the S&P 500,
that represent some of the biggest corporations in the U.S. The relatively
consistent earnings that large-cap stocks have traditionally offered over
small-capitalization (small-cap) issues made them more attractive to investors.
That favoritism was driven by uncertainty over economic problems in Asia and
concern that the turmoil would weaken U.S. corporate profits, particularly for
smaller, less-diversified companies. Substantial cash inflows into mutual funds,
often put to work in highly liquid large-cap stocks, helped drive prices higher.
As discussed on pages 3 and 4, the result was a notable outperformance by
large-cap issues over mid- and small-cap ones.

Our quantitative approach to managing the portfolio also boosted returns.
Income & Growth's computer models favored shares of banks, as well as several
other industry stocks, that performed very well. Our policy of remaining fully
invested in U.S. stocks was another return-enhancing element--keeping the fund
fully invested during this bull market helped maximize returns.

YOU MENTIONED THAT YOUR MODELS FAVORED BANK STOCKS. CAN YOU TELL US HOW ONE OF
THESE STOCKS PERFORMED AND WHY IT WAS CHOSEN?

Chase Manhattan is a good example. For the first six months of 1998, Chase
shares returned 39%, compared with a 10% return for the first six months of
1997. The company's strong revenue and earnings growth, combined with the
low-interest-rate environment, made the stock attractive to our models. Chase's
relatively low price, compared with similar stocks, was another attraction. Of
course, not all portfolio holdings are this successful.

WHAT OTHER INDUSTRIES DID YOUR MODELS FAVOR?

Our models favored communications services, utilities and financial
services. Telecommunications companies, such as Ameritech and US WEST
Communications, provided growth potential by expanding their services to benefit
from The Federal Communications Act of 1996.

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

[left margin]

"INCOME & GROWTH'S SIX-MONTH, ONE-YEAR AND THREE-YEAR RETURNS ALL OUTPACED THE
RETURNS OF THE S&P 500 AND THE AVERAGE GROWTH & INCOME FUND."

PORTFOLIO AT A GLANCE
6/30/98 12/31/97
NUMBER OF COMPANIES 276 239
DIVIDEND YIELD 1.73% 2.17%
PRICE/EARNINGS RATIO 20.6 17.5
PORTFOLIO TURNOVER 52%(1) 102%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.69%(3) 0.65%

(1) Six months ended 6/30/98.

(2) Year ended 12/31/97.

(3) Annualized.

Investment terms are defined in the Glossary on page 37.

14 1-800-345-2021

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

Utilities companies that positioned themselves to benefit from partial
industry deregulation looked attractive, too. The electric utility stocks also
provided relatively high yields, helping the portfolio meet its income
objective. Financial services stocks such as Travelers Group benefited from low
inflation and interest rates as well as industry consolidation.

SPEAKING OF INDUSTRY CONSOLIDATION, SEVERAL LARGE MERGERS WERE ANNOUNCED OVER
THE LAST SIX MONTHS. HOW DO MERGERS AFFECT INCOME & GROWTH'S PERFORMANCE?

That depends on how the portfolio is positioned with regard to the
companies involved. If the portfolio is invested in the company to be acquired,
returns are often enhanced. That's because the acquiring company usually pays a
premium to purchase the outstanding shares of the company being bought.
Speculative investors often bid up shares of the company to be acquired in
anticipation of a purchase premium.

If the portfolio is invested in the company making the acquisition, then
returns can suffer if investors believe that too high a premium is being paid,
or if they expect future earnings to be diluted. This can translate into
short-term losses for the acquiring company, reducing the allure of its shares.

Generally speaking, merger announcements by high-profile companies can also
fuel speculation that further industry consolidation lies ahead. As a result,
stocks of companies in the industry as a whole often rise as investors eagerly
bid up shares in anticipation of further activity. The rise in the stock prices
of many Internet browsing companies this year is a good example of such a
situation.

So, even if the portfolio does not directly hold stocks of either of the
merging companies, there can still be an indirect effect on performance.

ARE THERE PENDING MERGERS THAT MIGHT DIRECTLY AFFECT THE PORTFOLIO'S
PERFORMANCE?

Yes. Many of the larger pending mergers are in the banking and financial
services industries, which were the portfolio's two largest industry holdings at
the end of June. For instance, one such announcement was made by Travelers
Group, which intends to merge with Citicorp. Another sizable merger in the works
is between NationsBank and BankAmerica.

In the communications services industry, there is a pending merger between
Ameritech and SBC Communications. Any of these mergers could affect returns.

WHAT TYPES OF STOCKS DID YOUR MODELS UNDERWEIGHT?

Our models led us away from holding large amounts of several blue-chip
consumer growth stocks (compared with the S&P 500's weightings), such as
Coca-Cola, General Electric, and Gillette.

A stock's value--whether it appears appropriately priced based on the
company's earnings growth, intrinsic value, or business fundamentals--is one of
the many factors our models take into consideration. This component tends to
favor stocks that are reasonably priced relative to similar stocks. Despite what
we believed were inflated valuations, many blue-chip growth stocks performed
surprisingly well.

[right margin]

"FINANCIAL SERVICES STOCKS SUCH AS TRAVELERS GROUP WERE ALSO ATTRACTIVE BECAUSE
THEY BENEFITED FROM LOW INFLATION AND INTEREST RATES AS WELL AS INDUSTRY
CONSOLIDATION."

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
TRAVELERS GROUP, INC. 3.0% 1.1%

MICROSOFT CORP. 2.9% 2.5%

CHASE MANHATTAN
CORP. 2.5% 1.5%

FIRST UNION CORP. 2.3% 1.9%

FANNIE MAE 2.2% --

UNITED TECHNOLOGIES
CORP. 2.2% 2.6%

MORGAN STANLEY
DEAN WITTER,
DISCOVER & CO. 2.2% 1.9%

FORD MOTOR CO. 1.9% 3.2%

BELLSOUTH CORP. 1.9% 1.5%

AT&T CORP. 1.7% --

www.americancentury.com 15

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

WHAT IS YOUR OUTLOOK FOR U.S. STOCKS FOR THE REST OF 1998?

Despite some interim volatility, stock returns for the first half of 1998
were well above historical norms. Unfortunately, the odds are against such
returns continuing for the rest of the year. Profits posted by S&P 500 companies
have slowed this year compared with the same period last year. Asian woes are
the main culprit behind the slowing returns. Until concrete plans are put into
action to alleviate Asia's financial and economic crisis, U.S. corporations
deriving a large portion of their profits from Asia could see continued share
price volatility.

On a positive note, the U.S. economy continues to expand with historically
low inflation and unemployment. Interest rates are very low, allowing
corporations to borrow funds to finance new projects and expand their
businesses.

WHAT ARE YOUR PLANS FOR THE PORTFOLIO FOR THE NEXT SIX MONTHS?

From a sector standpoint, we will continue to use our quantitative models
to identify attractive candidates for investment. The low-inflation and
low-interest-rate environment provides a potentially ideal climate for many
sectors to continue producing solid returns. The portfolio's underweighting in
large consumer non-cyclical growth stocks will also likely remain in place.
Though performing relatively well in recent times, we are concerned that the
prices of many of these stocks are unrealistically high.

Staying fully invested in stocks will remain a priority. This will enhance
returns if the market continues to rally. However, if the market declines, being
fully invested could also hurt returns. To mitigate such a possibility, we will
continue looking to add shares of companies with improving earnings forecasts
that appear to be undervalued.

[left margin]

"INTEREST RATES ARE VERY LOW, ALLOWING CORPORATIONS TO BORROW FUNDS TO FINANCE
NEW PROJECTS AND EXPAND THEIR BUSINESSES."

TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
BANKING 10.8% 8.4%

FINANCIAL SERVICES 9.2% 6.5%

COMMUNICATIONS
SERVICES 7.8% 7.4%

PHARMACEUTICALS 7.8% 6.5%

COMPUTER SOFTWARE
& SERVICES 7.7% 4.2%

16 1-800-345-2021

Income & Growth--Schedule of Investments
- --------------------------------------------------------------------------------

JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE--4.3%
60,500 Boeing Co. $2,696,031
35,000 Cordant Technologies Inc. 1,614,375
699,800 General Dynamics Corp. 32,540,700
456,900 Goodrich (B.F.) Company (The) 22,673,663
40,800 Raytheon Co. Cl A 2,351,100
109,100 Raytheon Co. Cl B 6,450,538
779,900 United Technologies Corp. 72,140,750
---------------
140,467,157
---------------
AIRLINES--0.3%
60,600 AMR Corp.(1) 5,044,950
22,800 Delta Air Lines Inc. 2,946,900
22,300 US Airways Group Inc.(1) 1,767,275
---------------
9,759,125
---------------
AUTOMOBILES & AUTO PARTS--2.7%
38,100 Arvin Industries, Inc. 1,383,506
247,300 Chrysler Corp. 13,941,538
20,100 Excel Industries, Inc. 287,681
153,400 Fleetwood Enterprises, Inc. 6,136,000
1,071,600 Ford Motor Co.(2) 63,224,400
12,000 TRW Inc. 655,500
---------------
85,628,625
---------------
BANKING--10.8%
918,600 Banc One Corp. 51,269,363
274,000 BankAmerica Corp. 23,683,875
326,300 Bankers Trust New York Corp. 37,871,194
1,104,000 Chase Manhattan Corp. 83,352,000
66,900 Citicorp 9,984,825
206,600 First Chicago NBD Corp. 18,309,925
1,298,700 First Union Corp. 75,649,275
28,400 Imperial Bancorp(1) 852,000
630,200 NationsBank Corp. 48,210,300
---------------
349,182,757
---------------
BIOTECHNOLOGY--0.3%
307,900 Genzyme Corp.(1) 7,832,206
26,500 Human Genome Sciences, Inc.(1) 946,547
---------------
8,778,753
---------------
BUILDING & HOME IMPROVEMENTS--0.2%
179,200 Premark International, Inc. 5,779,200
---------------

BUSINESS SERVICES & SUPPLIES--1.6%
248,000 Cendant Corp.(1) 5,177,000
24,100 Cognizant Corp.(1) 1,518,300
50,500 Computer Horizons Corp.(1) 1,873,234
529,600 Dun & Bradstreet Corp. (The)(1) 19,131,800
180,300 Kelly Services, Inc. Cl A 6,378,113

Shares Value
- --------------------------------------------------------------------------------
106,600 Ogden Corp. $2,951,488
235,600 Omnicom Group Inc. 11,750,550
50,000 True North Communications Inc. 1,462,500
---------------
50,242,985
---------------
CHEMICALS & RESINS--2.0%
296,700 Dow Chemical Co. 28,687,181
396,000 du Pont (E.I.) de Nemours & Co. 29,551,500
4,800 Ecolab Inc. 148,800
23,400 Grace (W.R.) & Co. (Del.)(1) 399,263
88,000 Lubrizol Corp. 2,662,000
39,600 Monsanto Co. 2,212,650
7,900 Morton International, Inc. 197,500
17,200 Nalco Chemical Co. 604,150
2,500 Rohm and Haas Co. 259,844
2,400 Union Carbide Corp. 128,100
---------------
64,850,988
---------------
COMMUNICATIONS EQUIPMENT--1.4%
37,200 Brightpoint, Inc.(1) 538,238
120,800 DSP Communications, Inc.(1) 1,661,000
475,600 Lucent Technologies Inc. 39,563,975
9,100 Northern Telecom Ltd. 516,425
30,700 Tellabs, Inc.(1) 2,197,928
---------------
44,477,566
---------------
COMMUNICATIONS SERVICES--7.8%
978,500 AT&T Corp. 55,896,813
733,900 Ameritech Corp. 32,933,763
386,200 Bell Atlantic Corp. 17,620,375
926,700 BellSouth Corp. 62,204,738
431,600 GTE Corp. 24,007,750
396,300 SBC Communications Inc. 15,852,000
905,400 U S WEST Communications
Group 42,553,800
---------------
251,069,239
---------------
COMPUTER PERIPHERALS--0.8%
52,000 Cirrus Logic, Inc.(1) 580,125
207,800 Cisco Systems Inc.(1) 19,137,081
39,700 Dialogic Corp.(1) 1,176,113
104,100 Lexmark International Group,
Inc. Cl A(1) 6,350,100
---------------
27,243,419
---------------
COMPUTER SOFTWARE & SERVICES--7.7%
51,400 Arbor Software Corp.(1) 1,627,131
201,900 Autodesk, Inc. 7,779,459
37,000 AXENT Technologies Inc.(1) 1,131,969
76,300 CDW Computer Centers, Inc.(1) 3,819,769
12,000 Cadence Design Systems, Inc.(1) 375,000
28,900 Citrix Systems, Inc.(1) 1,976,941
96,400 Computer Associates
International, Inc. 5,356,225

See Notes to Financial Statements

www.americancentury.com 17

Income & Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
83,300 Compuware Corp.(1) $4,256,109
152,400 Concord EFS, Inc.(1) 3,981,450
127,200 DataWorks Corp.(1) 1,693,350
939,200 Electronic Data Systems Corp. 37,568,000
442,400 HBO & Co. 15,608,425
168,900 Inprise Corporation(1) 1,240,359
875,500 Microsoft Corp.(1) 94,909,672
27,700 Network Associates Inc.(1) 1,325,272
736,500 Oracle Systems Corp.(1) 18,067,266
49,900 PeopleSoft, Inc.(1) 2,343,741
125,700 PLATINUM Technology, Inc.(1) 3,594,234
54,500 Shared Medical Systems Corp. 4,002,344
350,700 Sterling Software, Inc.(1) 10,367,569
328,800 Symantec Corp.(1) 8,569,350
59,000 Systems & Computer Technology
Corp.(1) 1,607,750
499,600 Unisys Corp.(1) 14,113,700
53,600 Vantive Corp.(1) 1,103,825
45,700 Visio Corp.(1) 2,187,888
---------------
248,606,798
---------------
COMPUTER SYSTEMS--2.4%
252,600 Apple Computer, Inc.(1) 7,254,356
99,700 Compaq Computer Corp. 2,828,988
176,100 Dell Computer Corp.(1) 16,338,778
21,300 Gateway 2000, Inc.(1) 1,078,313
264,700 Hewlett-Packard Co. 15,848,913
183,300 International Business Machines
Corp. 21,045,131
323,900 Sun Microsystems, Inc.(1) 14,079,528
---------------
78,474,007
---------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.5%
21,900 D.R. Horton, Inc. 457,163
86,900 Fluor Corp. 4,431,900
243,100 Harsco Corp. 11,137,019
28,700 McDermott (J. Ray) S.A.(1) 1,191,050
---------------
17,217,132
---------------
CONSUMER PRODUCTS--2.3%
5,700 Mattel, Inc. 241,181
299,400 National Service Industries 15,231,975
397,000 Procter & Gamble Co. (The) 36,151,813
63,400 Russ Berrie and Co., Inc. 1,585,000
288,500 Whirlpool Corp. 19,834,375
---------------
73,044,344
---------------
DIVERSIFIED COMPANIES--1.3%
356,400 General Electric Co. (U.S.)(2) 32,432,400
103,800 Tyco International Ltd. 6,539,400
76,200 Viad Corp 2,114,550
---------------
41,086,350
---------------

Shares Value
- --------------------------------------------------------------------------------
ELECTRICAL & ELECTRONIC
COMPONENTS--1.5%
41,800 Cree Research, Inc.(1) $629,613
26,600 DSP Group, Inc.(1) 520,363
62,400 Eaton Corp. 4,851,600
150,600 Hubbell Inc. Cl B 6,268,725
72,800 Integrated Circuit Systems, Inc.(1) 1,208,025
324,500 Intel Corp.(2) 24,043,422
52,100 Level One Communications, Inc.(1) 1,225,978
16,300 Linear Technology Corp. 983,094
17,700 PMC-Sierra, Inc.(1) 828,581
29,800 Qlogic Corp.(1) 1,062,556
94,800 Semtech Corp.(1) 1,682,700
60,600 Thomas & Betts Corp. 2,984,550
62,600 Vitesse Semiconductor Corp.(1) 1,936,688
---------------
48,225,895
---------------
ENERGY (PRODUCTION &
MARKETING)--3.0%
23,500 Ashland Inc. 1,213,188
222,200 Chevron Corp. 18,456,488
15,100 Cooper Cameron Corp.(1) 770,100
446,300 Exxon Corp. 31,826,769
65,900 Occidental Petroleum Corp. 1,779,300
1,087,200 Sun Company, Inc. 42,196,950
---------------
96,242,795
---------------
ENERGY (SERVICES)--1.9%
164,000 BJ Services Co.(1) 4,766,250
334,000 Ensco International Inc. 5,803,250
120,000 Parker Drilling Co.(1) 847,500
72,800 Rowan Companies, Inc.(1) 1,415,050
466,600 Schlumberger Ltd. 31,874,613
368,900 Tidewater Inc. 12,173,700
102,900 Transocean Offshore 4,579,050
---------------
61,459,413
---------------
FINANCIAL SERVICES--9.2%
196,500 Associates First Capital Corp. 15,105,938
89,500 Bear Stearns Companies Inc. 5,090,313
30,000 Donaldson, Lufkin & Jenrette, Inc. 1,524,375
140,700 Equitable Companies Inc. 10,543,706
1,202,000 Fannie Mae 73,021,500
311,000 Federal Home Loan Mortgage
Corporation 14,636,438
33,500 Lehman Brothers Holdings, Inc. 2,598,344
22,700 Merrill Lynch & Co., Inc. 2,094,075
778,900 Morgan Stanley Dean Witter,
Discover & Co. 71,171,988
1,648,700 Travelers Group, Inc. 99,952,438
---------------
295,739,115
---------------

See Notes to Financial Statements

18 1-800-345-2021

Income & Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
FOOD & BEVERAGE--2.3%
88,300 Coors (Adolph) Co. Cl B $3,013,238
94,100 Dean Foods Co. 5,169,619
14,800 Earthgrains Company 826,950
148,700 Hormel Foods Corp. 5,139,444
280,200 Interstate Bakeries Corp. 9,299,138
24,800 Lancaster Colony Corp. 939,300
248,500 Lance, Inc. 5,567,953
546,100 Quaker Oats Co. (The) 30,001,369
338,400 Richfood Holdings, Inc. 7,000,650
176,500 Smithfield Foods, Inc.(1) 5,350,156
23,300 Suiza Foods Corp.(1) 1,390,719
---------------
73,698,536
---------------
FURNITURE & FURNISHINGS(3)
36,800 Miller (Herman), Inc. 893,550
---------------
HEALTHCARE--0.4%
70,700 Access Health, Inc.(1) 1,805,059
30,300 Hooper Holmes, Inc. 636,300
234,900 Mallinckrodt Inc. 6,973,594
158,700 NovaCare, Inc.(1) 1,864,725
10,500 Pediatrix Medical Group Inc.(1) 390,469
37,900 RehabCare Group, Inc.(1) 923,813
---------------
12,593,960
---------------
INDUSTRIAL EQUIPMENT &
MACHINERY--2.3%
1,018,000 Caterpillar Inc. 53,826,750
34,700 Dover Corp. 1,188,475
62,300 Dresser Industries, Inc. 2,745,094
394,100 Ingersoll-Rand Co. 17,365,031
---------------
75,125,350
---------------
INSURANCE--3.8%
432,200 Allstate Corp. 39,573,313
68,700 Conseco Inc. 3,211,725
157,200 Gallagher (Arthur J.) & Co. 7,034,700
58,900 General Re Corp. 14,931,150
45,700 LandAmerica Financial Group,
Inc. 2,616,325
428,700 Lincoln National Corp. 39,172,463
170,100 Marsh & McLennan Companies,
Inc. 10,280,419
74,600 Orion Capital Corp. 4,168,275
13,700 Unitrin, Inc. 948,725
---------------
121,937,095
---------------
LEISURE--0.3%
73,800 Anchor Gaming(1) 5,742,563
48,800 Department 56, Inc.(1) 1,732,400
42,600 International Game Technology 1,033,050
62,300 Marriott International, Inc. 2,016,963
---------------
10,524,976
---------------

Shares Value
- --------------------------------------------------------------------------------
MACHINERY & EQUIPMENT--2.1%
539,000 Deere & Co. $28,499,625
58,900 Diebold, Inc. 1,700,738
177,700 Flowserve Corp. 4,375,863
219,300 Kennametal Inc. 9,155,775
107,000 National-Oilwell, Inc.(1) 2,868,938
289,700 Sundstrand Corp. 16,585,325
182,500 Timken Co. 5,623,281
---------------
68,809,545
---------------
MEDICAL EQUIPMENT & SUPPLIES--1.5%
101,100 ATL Ultrasound, Inc.(1) 4,587,413
16,900 Allegiance Corp. 866,125
102,700 AmeriSource Health Corp.(1) 6,746,106
124,600 Arterial Vascular Engineering,
Inc.(1) 4,450,556
37,400 Cooper Companies, Inc. (The)(1) 1,362,763
52,600 Guidant Corp. 3,751,038
291,500 Hillenbrand Industries, Inc. 17,489,971
203,700 PSS World Medical, Inc.(1) 2,979,113
97,000 Teleflex Inc. 3,686,000
36,200 Thermo Electron Corp.(1) 1,237,588
13,400 VISX, Inc.(1) 800,650
---------------
47,957,323
---------------
METALS & MINING--0.3%
49,700 Aluminum Co. of America 3,277,094
8,800 ASARCO Inc. 195,800
151,450 Parker-Hannifin Corp. 5,774,031
18,700 Vulcan Materials Co. 1,995,056
---------------
11,241,981
---------------
OFFICE EQUIPMENT & SUPPLIES--0.6%
125,100 Pitney Bowes Inc. 6,020,438
122,500 Xerox Corp. 12,449,063
---------------
18,469,501
---------------
PACKAGING & CONTAINERS(3)
2,900 Crown Cork & Seal Co., Inc. 137,750
---------------

PAPER & FOREST PRODUCTS--0.3%
38,400 Fort James Corporation 1,708,800
116,900 Kimberly-Clark Corp. 5,362,788
31,400 Weyerhaeuser Co. 1,450,288
---------------
8,521,876
---------------
PERSONAL SERVICES--0.4%
309,600 Block (H & R), Inc. 13,041,900
---------------

PHARMACEUTICALS--7.8%
343,900 Bristol-Myers Squibb Co.(2) 39,527,006
183,400 Genentech, Inc.(1) 12,448,275
115,100 Herbalife International, Inc. 2,830,741

See Notes to Financial Statements

www.americancentury.com 19

Income & Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
303,300 Johnson & Johnson $22,368,375
208,200 Lilly (Eli) & Co. 13,754,213
46,900 Medicis Pharmaceutical Corp.(1) 1,705,988
319,300 Merck & Co., Inc. 42,706,375
105,900 Nature's Sunshine Products, Inc. 2,379,441
494,000 Pfizer, Inc. 53,691,625
124,600 Rexall Sundown, Inc.(1) 4,446,663
456,100 Schering-Plough Corp. 41,790,163
178,600 Warner-Lambert Co. 12,390,375
---------------
250,039,240
---------------
PRINTING & PUBLISHING--1.4%
1,300,700 Deluxe Corp. 46,581,319
---------------

RETAIL (APPAREL)--0.8%
51,700 Cato Corp. Cl A 899,903
102,400 Dress Barn, Inc.(1) 2,553,600
39,100 Goody's Family Clothing, Inc.(1) 2,138,281
104,000 Liz Claiborne, Inc. 5,434,000
115,900 Payless ShoeSource, Inc.(1) 8,540,381
90,000 Ross Stores, Inc. 3,881,250
33,800 Wet Seal, Inc. (The) Cl A(1) 1,085,825
---------------
24,533,240
---------------
RETAIL (FOOD & DRUG)--0.2%
42,600 Albertson's, Inc. 2,207,213
152,800 Universal Corp. 5,710,900
---------------
7,918,113
---------------
RETAIL (GENERAL MERCHANDISE)--2.5%
102,000 Dayton Hudson Corp. 4,947,000
45,300 Enesco Group, Inc. 1,392,975
114,700 Federated Department Stores,
Inc.(1) 6,172,294
386,500 Penney (J.C.) Company, Inc. 27,948,781
684,200 Wal-Mart Stores, Inc. 41,565,150
---------------
82,026,200
---------------
RETAIL (SPECIALTY)--0.5%
104,000 Home Depot, Inc. 8,638,500
121,200 Jostens, Inc. 2,923,950
67,800 Micro Warehouse, Inc.(1) 1,050,900
116,600 Zale Corp.(1) 3,709,338
---------------
16,322,688
---------------
STEEL--0.1%
24,800 Bethlehem Steel Corporation(1) 308,450
28,700 Nucor Corp. 1,320,200
30,100 USX-U.S. Steel Group 993,300
---------------
2,621,950
---------------

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

TEXTILES & APPAREL--0.9%
262,400 Dexter Corp. (The) $8,347,600
25,100 Kellwood Co. 897,325
70,300 Nautica Enterprises, Inc.(1) 1,889,313
22,100 Tommy Hilfiger Corp. ADR(1) 1,381,250
309,300 VF Corp. 15,928,950
---------------
28,444,438
---------------
TOBACCO--1.0%
708,700 Philip Morris Companies Inc. 27,905,063
202,200 RJR Nabisco Holdings Corp. 4,802,250
---------------
32,707,313
---------------
TRANSPORTATION(3)
85,500 Laidlaw Inc. ADR 1,042,031
19,000 Laidlaw Inc. ORD 229,492
---------------
1,271,523
---------------
UTILITIES--5.5%
75,700 Baltimore Gas & Electric Co. 2,351,431
16,300 CTG Resources, Inc. 383,050
433,850 Conectiv, Inc. 8,893,925
44,375 Conectiv, Inc. Cl A 1,608,594
282,400 Consolidated Edison Co. of New
York, Inc. 13,008,050
464,600 Detroit Edison Company 18,758,225
230,300 Dominion Resources, Inc. (Va.) 9,384,725
105,200 Eastern Enterprises 4,510,450
30,100 Energy East Corp. 1,252,913
40,700 Equitable Resources Inc. 1,241,350
552,700 FIRSTENERGY CORP. 16,995,525
254,000 Hawaiian Electric Industries, Inc. 10,080,625
34,600 KN Energy, Inc. 1,874,888
40,400 MDU Resources Group, Inc. 1,441,775
72,900 MidAmerican Energy Holdings Co. 1,576,463
356,200 Minnesota Power & Light Co. 14,158,950
86,400 Piedmont Natural Gas Co., Inc. 2,905,200
168,900 Public Service Co. of New Mexico 3,831,919
856,800 Sempra Energy(1) 23,776,200
52,300 Southern Co. 1,448,056
64,600 Southwest Gas Corp. 1,578,663
314,600 Texas Utilities Co. 13,095,225
243,600 UGI Corp. 6,059,550
40,300 United Illuminating Co. 2,040,188
364,200 Utilicorp United Inc. 13,725,788
---------------
175,981,728
---------------

TOTAL COMMON STOCKS--97.0% 3,128,976,758
---------------
(Cost $2,665,738,207)

See Notes to Financial Statements

20 1-800-345-2021

Income & Growth--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS--3.0%
Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 5.70%, dated 6/30/98,
due 7/1/98 (Delivery value $96,815,327) $96,800,000
---------------
(Cost $96,800,000)

TOTAL INVESTMENT SECURITIES--100.0% $3,225,776,758
===============
(Cost $2,762,538,207)

FUTURES CONTRACTS
Underlying
Expiration Face Amount Unrealized
Purchased Date at Value Gain
- -------------------------------------------------------------------------------
255 S&P 500 September
Futures 1998 $72,866,250 $1,896,463
==================================

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) Industry is less than 0.05% of total investment securities.

The schedule includes:

* a list of each investment

* the number of shares of each stock

* the market value of each investment

* the percentage of investments in each industry, as applicable

* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

www.americancentury.com 21

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

JUNE 30, 1998 (UNAUDITED) EQUITY GROWTH INCOME & GROWTH

ASSETS
Investment securities, at value
(identified cost of $1,419,276,133 and
$2,762,538,207, respectively) (Note 3) .... $1,574,879,561 $3,225,776,758
Cash ........................................ 5,485,861 41,644,855
Receivable for investments sold ............. 19,682,198 51,744,762
Receivable for capital shares sold .......... 417,708 1,360,935
Dividends and interest receivable ........... 1,604,094 4,304,619
-------------- --------------
1,602,069,422 3,324,831,929
-------------- --------------
LIABILITIES
Disbursements in excess of
demand deposit cash ....................... 1,138,703 1,062,991
Payable for investments purchased ........... 32,704,012 57,558,438
Payable for capital shares redeemed ......... 1,000,193 2,107,953
Payable for variation margin
on futures contracts (Note 1) ............. 197,625 541,875
Accrued management fees (Note 2) ............ 829,150 1,735,011
Distribution fees payable (Note 2) .......... 2,516 2,445
Service fees payable (Note 2) ............... 2,516 2,445
Payable for directors' fees
and expenses .............................. 5,111 10,045
Other liabilities ........................... 1,240 1,490
-------------- --------------
35,881,066 63,022,693
-------------- --------------
Net Assets .................................. $1,566,188,356 $3,261,809,236
============== ==============
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) ..... $1,312,392,161 $2,594,117,758
Undistributed net investment income ......... 664,217 6,797,512
Accumulated undistributed net
realized gain from investments ............ 96,840,673 195,758,958
Net unrealized appreciation
on investments ............................ 156,291,305 465,135,008
-------------- --------------
$1,566,188,356 $3,261,809,236
============== ==============
Investor Class, $10.00 Par Value
Net assets .................................. $1,543,862,870 $3,210,550,229
Shares outstanding .......................... 70,496,568 113,775,298
Net asset value per share ................... $ 21.90 $ 28.22

Advisor Class, $10.00 Par Value
Net assets .................................. $ 14,980,733 $ 13,359,610
Shares outstanding .......................... 684,156 473,959
Net asset value per share ................... $ 21.90 $ 28.19

Institutional Class, $10.00 Par Value
Net assets .................................. $ 7,344,753 $ 37,899,397
Shares outstanding .......................... 335,354 1,341,490
Net asset value per share ................... $ 21.90 $ 28.25

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

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

See Notes to Financial Statements

22 1-800-345-2021

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

FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)

INVESTMENT INCOME EQUITY GROWTH INCOME & GROWTH

Income:
Dividends (net of foreign taxes
withheld of $6,295 and
$23,913, respectively) ............... $ 9,450,173 $ 23,929,201
Interest ............................... 1,068,766 2,298,498
------------ ------------
10,518,939 26,227,699
------------ ------------
Expenses (Note 2):
Management fees ........................ 4,050,818 8,784,881
Distribution fees -- Advisor Class ..... 6,071 8,858
Service fees -- Advisor Class .......... 6,071 8,858
Directors' fees and expenses ........... 18,370 27,117
------------ ------------
4,081,330 8,829,714
------------ ------------
Net investment income .................. 6,437,609 17,397,985
------------ ------------
REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (NOTE 3)
Net realized gain on investments ....... 97,490,163 196,244,800
------------ ------------
Change in net unrealized
appreciation on investments .......... 77,978,685 181,731,369
------------ ------------
Net realized and unrealized
gain on investments .................. 175,468,848 377,976,169
------------ ------------
Net Increase in Net Assets
Resulting from Operations ............ $181,906,457 $395,374,154
============ ============

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

Fund OPERATIONS include:

* income earned from investments (dividends and interest)

* management fees and other expenses

* gains or losses from selling investments (known as realized gains or losses)

* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)

See Notes to Financial Statements

www.americancentury.com 23

<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------

SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1997

EQUITY GROWTH INCOME & GROWTH
Increase in Net Assets 1998 1997 1998 1997

OPERATIONS
<S> <C> <C> <C> <C>
Net investment income ................ $ 6,437,609 $ 7,052,656 $ 17,397,985 $ 22,556,333
Net realized gain on investments ..... 97,490,163 95,280,432 196,244,800 154,430,003
Change in net unrealized
appreciation on investments ........ 77,978,685 44,869,649 181,731,369 178,014,272
--------------- --------------- --------------- ---------------
Net increase in net assets
resulting from operations ......... 181,906,457 147,202,737 395,374,154 355,000,608
--------------- --------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class ..................... (5,997,210) (6,915,205) (12,988,978) (20,589,829)
Advisor Class ...................... (31,148) (1,492) (35,059) (5,232)
Institutional Class ................ (37,033) -- (111,336) --
From net realized gains on
investment transactions:
Investor Class ..................... (27,011,259) (79,748,875) (22,143,379) (152,216,029)
Advisor Class ...................... (46,419) -- (40,692) --
Institutional Class ................ (142,733) (55,620) (242,396) (326,667)
--------------- --------------- --------------- ---------------
Decrease in net assets
from distributions ................. (33,265,802) (86,721,192) (35,561,840) (173,137,757)
--------------- --------------- --------------- ---------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)
Net increase in net assets
from capital share
transactions ....................... 643,569,164 439,064,411 1,103,153,611 899,285,703
--------------- --------------- --------------- ---------------
Net increase in net assets ........... 792,209,819 499,545,956 1,462,965,925 1,081,148,554

NET ASSETS
Beginning of period .................. 773,978,537 274,432,581 1,798,843,311 717,694,757
--------------- --------------- --------------- ---------------
End of period ........................ $ 1,566,188,356 $ 773,978,537 $ 3,261,809,236 $ 1,798,843,311
=============== =============== =============== ===============
Undistributed net
investment income .................. $ 664,217 $ 291,999 $ 6,797,512 $ 2,534,900
=============== =============== =============== ===============
</TABLE>

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

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

* distributions--income and gains distributed to shareholders

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

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

See Notes to Financial Statements

24 1-800-345-2021

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

JUNE 30, 1998 (UNAUDITED)

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

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

FUTURES CONTRACTS--The Funds may enter into stock index futures contracts
in order to manage the Funds' exposure to changes in market conditions. One of
the risks of entering into futures contracts may include the possibility that
the changes 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, received
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
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 or state income taxes.

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 were declared daily

www.americancentury.com 25

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

and distributed monthly. Effective June 26, 1998 distributions from net
investment income will be declared and paid quarterly for Income & Growth.
Distributions from net realized capital gains for the Funds are declared and
paid semi-annually.

The character of distributions made during the year from net investment
income or net realized capital 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. These estimates and assumptions 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-- Funds Distributor, Inc. (FDI) is the Corporation's
distributor. Certain officers of FDI are also officers of the Corporation.

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

The Corporation has entered into a Management Agreement with ACIM that
provides the Funds with investment advisory and management services in exchange
for a single, unified management fee per class. The Agreements provide that all
expenses of the Funds, except brokerage commissions, taxes, portfolio insurance,
interest, fees and expenses of those directors who are not considered
"interested persons" as defined in the Investment Company Act of 1940 (including
counsel fees) and extraordinary expenses, will be paid by ACIM. The 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 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. The Complex Fee

26 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

schedule for the Institutional Class is lower by 0.2000% at each graduated step.

The Board of Directors has adopted the Advisor Class Master Distribution
and Shareholder Services Plan (the Plan), pursuant to Rule 12b-1 of the
Investment Company Act of 1940. The Plan provides that the Funds will pay ACIM
an annual distribution fee equal to 0.25% and service fee equal to 0.25%. The
fees are computed daily and paid monthly based on the Advisor Class's average
daily closing net assets during the previous month. The distribution fee
provides compensation for distribution expenses incurred by financial
intermediaries in connection with distributing shares of the Advisor Class
including, but not limited to, payments to brokers, dealers, and financial
institutions that have entered into sales agreements with respect to shares of
the Funds. The service fee provides compensation for shareholder and
administrative services rendered by ACIM, its affiliates or independent third
party providers. Fees incurred under the Plan during the six months ended June
30, 1998, were $12,142 and $17,716 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, and
the Corporation's transfer agent, American Century Services Corporation.

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

Purchases of investment securities, excluding short-term investments, for
the six months ended June 30,1998, for Equity Growth and Income & Growth totaled
$1,315,412,467 and $2,310,014,813, respectively. Sales of investment securities,
excluding short-term investments, totaled $722,693,949 and $1,294,112,365,
respectively.

As of June 30, 1998, accumulated net unrealized appreciation for Equity
Growth and Income & Growth was $154,787,414 and $462,321,431, respectively,
based on the aggregate cost of investments for federal income tax purposes of
$1,420,092,147 and $2,763,455,327, respectively. Accumulated net unrealized
appreciation consisted of unrealized appreciation of $190,084,232 and
$520,293,502 for Equity Growth and Income & Growth and unrealized depreciation
of $35,296,818 and $57,972,071, respectively.

www.americancentury.com 27

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

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

The Corporation is authorized to issue 2,000,000,000 shares to each Fund.
Transactions in shares of the Funds were as follows:

<TABLE>
EQUITY GROWTH INCOME & GROWTH
SHARES AMOUNT SHARES AMOUNT
INVESTOR CLASS
<S> <C> <C> <C> <C>
Designated shares ............... 1,000,000,000 1,000,000,000
=============== ===============
Six months ended June 30, 1998
Sold ............................ 40,370,507 $ 841,023,889 57,110,787 $ 1,518,357,269
Issued in reinvestment
of distributions .............. 1,519,437 32,036,162 1,259,331 33,822,751
Redeemed ........................ (12,005,858) (250,156,986) (18,451,314) (492,827,952)
--------------- --------------- --------------- ---------------
Net increase .................... 29,884,086 $ 622,903,065 39,918,804 $ 1,059,352,068
=============== =============== =============== ===============

Year ended December 31, 1997
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
=============== =============== =============== ===============

ADVISOR CLASS
Designated shares ............... 250,000,000 250,000,000
=============== ===============
Six months ended June 30, 1998
Sold ............................ 761,638 $ 16,166,883 338,277 $ 9,352,786
Issued in reinvestment
of distributions .............. 3,499 74,217 2,805 75,558
Redeemed ........................ (110,044) (2,340,722) (20,172) (556,351)
--------------- --------------- --------------- ---------------
Net increase .................... 655,093 $ 13,900,378 320,910 $ 8,871,993
=============== =============== =============== ===============

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
=============== =============== =============== ===============

INSTITUTIONAL CLASS
Designated shares ............... 250,000,000 250,000,000
=============== ===============
Period ended June 30, 1998(2)
Sold ............................ 555,622 $ 11,503,838 1,536,898 $ 40,291,074
Issued in reinvestment
of distributions .............. 5,713 120,549 12,211 330,610
Redeemed ........................ (225,981) (4,858,666) (207,619) (5,692,134)
--------------- --------------- --------------- ---------------
Net increase .................... 335,354 $ 6,765,721 1,341,490 $ 34,929,550
=============== =============== =============== ===============
</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.

(2) January 2, 1998 (commencement of sale) through June 30, 1998 for Equity
Growth and January 28, 1998 (commencement of sale) through June 30, 1998
for Income & Growth.

28 1-800-345-2021

<TABLE>
<CAPTION>
Equity Growth--Financial Highlights
- --------------------------------------------------------------------------------

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

Investor Class
1998(1) 1997 1996 1995 1994 1993
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ..........$ 19.04 $ 15.96 $ 14.25 $ 11.53 $ 12.12 $ 11.68
------------- ------------- ------------- ------------- ------------- -------------
Income From Investment
Operations
Net Investment Income ........ 0.10 0.27(2) 0.27 0.26 0.30 0.23
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions ................. 3.36 5.36 3.55 3.70 (0.33) 1.10
------------- ------------- ------------- ------------- ------------- -------------
Total From Investment
Operations ................... 3.46 5.63 3.82 3.96 (0.03) 1.33
------------- ------------- ------------- ------------- ------------- -------------
Distributions
From Net Investment Income ... (0.09) (0.24) (0.26) (0.23) (0.30) (0.23)
From Net Realized Gains on
Investment Transactions ...... (0.51) (2.31) (1.85) (1.01) (0.26) (0.66)
------------- ------------- ------------- ------------- ------------- -------------
Total Distributions .......... (0.60) (2.55) (2.11) (1.24) (0.56) (0.89)
------------- ------------- ------------- ------------- ------------- -------------
Net Asset Value,
End of Period ................$ 21.90 $ 19.04 $ 15.96 $ 14.25 $ 11.53 $ 12.12
============= ============= ============= ============= ============= =============
Total Return(3) .............. 18.34% 36.06% 27.34% 34.56% (0.23)% 11.42%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........ 0.69%(4) 0.67% 0.63% 0.71% 0.75% 0.75%
Ratio of Net Investment Income
to Average Net Assets ........ 1.10%(4) 1.39% 1.74% 1.96% 2.26% 2.04%
Portfolio Turnover Rate ........ 53% 161% 131% 126% 94% 97%
Net Assets, End of Period
(in thousands) ...............$ 1,543,863 $ 773,425 $ 274,433 $ 159,450 $ 97,437 $ 96,284
</TABLE>

(1) Six months ended June 30, 1998 (unaudited).

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

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

(4) Annualized.

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

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

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

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

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

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

See Notes to Financial Statements

www.americancentury.com 29

Equity Growth--Financial Highlights

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

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED

Advisor Class
1998(1) 1997(2)
PER-SHARE DATA

Net Asset Value, Beginning of Period ........ $ 19.04 $ 21.61
---------- ----------
Income From Investment Operations
Net Investment Income .................... 0.07 0.05(3)
Net Realized and Unrealized Gain
(Loss) on Investment Transactions ......... 3.37 (0.25)
---------- ----------
Total From Investment Operations .......... 3.44 (0.20)
---------- ----------
Distributions
From Net Investment Income ................ (0.07) (0.06)
From Net Realized Gains on
Investment Transactions ................... (0.51) (2.31)
---------- ----------
Total Distributions ....................... (0.58) (2.37)
---------- ----------
Net Asset Value, End of Period .............. $ 21.90 $ 19.04
========== ==========
Total Return(4) ........................... 18.23% (0.50)%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ..................... 0.94%(5) 0.94%(5)
Ratio of Net Investment Income
to Average Net Assets ..................... 0.85%(5) 1.14%(5)
Portfolio Turnover Rate ..................... 53% 161%
Net Assets, End of Period
(in thousands) ............................ $ 14,981 $ 553

(1) Six months ended June 30, 1998 (unaudited).

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

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

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total return is not annualized.

(5) Annualized.

See Notes to Financial Statements

30 1-800-345-2021

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

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED

Institutional
Class
1998(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period ..................... $ 19.06
---------
Income From Investment Operations
Net Investment Income .................................. 0.10
Net Realized and Unrealized Gain
on Investment Transactions ............................. 3.37
---------
Total From Investment Operations ....................... 3.47
---------
Distributions
From Net Investment Income ............................. (0.12)
From Net Realized Gains on
Investment Transactions ................................ (0.51)
---------
Total Distributions .................................... (0.63)
---------
Net Asset Value, End of Period ........................... $ 21.90
=========
Total Return(2) ........................................ 18.34%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................................. 0.49%(3)
Ratio of Net Investment Income
to Average Net Assets .................................. 1.33%(3)
Portfolio Turnover Rate .................................. 53%
Net Assets, End of Period
(in thousands) ......................................... $ 7,345

(1) January 2, 1998 (commencement of sale) through June 30, 1998 (unaudited).

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total return is not annualized.

(3) Annualized.

See Notes to Financial Statements

www.americancentury.com 31

<TABLE>
<CAPTION>
Income & Growth--Financial Highlights
- --------------------------------------------------------------------------------

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

Investor Class
1998(1) 1997 1996 1995 1994 1993
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ............$ 24.31 $ 20.16 $ 17.81 $ 13.92 $ 15.08 $ 14.11
------------- ------------- ------------- ------------- ------------- -------------
Income From Investment
Operations
Net Investment Income ....... 0.16 0.43(2) 0.44 0.42 0.44 0.43
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions ................. 4.13 6.40 3.79 4.64 (0.53) 1.15
------------- ------------- ------------- ------------- ------------- -------------
Total From Investment
Operations ................... 4.29 6.83 4.23 5.06 (0.09) 1.58
------------- ------------- ------------- ------------- ------------- -------------
Distributions
From Net Investment Income ... (0.14) (0.39) (0.44) (0.42) (0.43) (0.43)
From Net Realized Gains on
Investment Transactions ...... (0.24) (2.29) (1.44) (0.75) (0.64) (0.18)
------------- ------------- ------------- ------------- ------------- -------------
Total Distributions .......... (0.38) (2.68) (1.88) (1.17) (1.07) (0.61)
------------- ------------- ------------- ------------- ------------- -------------
Net Asset Value, End of Period .$ 28.22 $ 24.31 $ 20.16 $ 17.81 $ 13.92 $ 15.08
============= ============= ============= ============= ============= =============
Total Return(3) ............. 17.79% 34.52% 24.15% 36.88% (0.55)% 11.31%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........ 0.69%(4) 0.65% 0.62% 0.67% 0.73% 0.75%
Ratio of Net Investment Income
to Average Net Assets ........ 1.36%(4) 1.81% 2.32% 2.61% 2.96% 2.90%
Portfolio Turnover Rate ........ 52% 102% 92% 70% 68% 31%
Net Assets, End of Period
(in thousands) .................$ 3,210,550 $ 1,795,124 $ 717,695 $ 373,701 $ 224,939 $ 230,191
</TABLE>

(1) Six months ended June 30, 1998 (unaudited).

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

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

(4) Annualized.

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

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

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

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

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

See Notes to Financial Statements

32 1-800-345-2021

Income & Growth--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIODS INDICATED

Advisor Class
1998(1) 1997(2)
PER-SHARE DATA

Net Asset Value,
Beginning of Period ..................... $ 24.30 $ 26.36
---------- ----------
Income From Investment
Operations
Net Investment Income ................... 0.16 0.01(3)
Net Realized and Unrealized
Gain on Investment Transactions ......... 4.11 0.25
---------- ----------
Total From Investment Operations ........ 4.27 0.26
---------- ----------
Distributions
From Net Investment Income .............. (0.14) (0.03)
From Net Realized Gains on
Investment Transactions ................. (0.24) (2.29)
---------- ----------
Total Distributions ..................... (0.38) (2.32)
---------- ----------
Net Asset Value, End of Period ............ $ 28.19 $ 24.30
========== ==========
Total Return(4) ......................... 17.67% 1.28%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................... 0.94%(5) 0.94%(5)
Ratio of Net Investment Income
to Average Net Assets ................... 1.11%(5) 1.22%(5)
Portfolio Turnover Rate ................... 52% 102%
Net Assets, End of Period
(in thousands) .......................... $ 13,360 $ 3,720

(1) Six months ended June 30, 1998 (unaudited).

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

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

(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total return is not annualized.

(5) Annualized.

See Notes to Financial Statements

www.americancentury.com 33

Income & Growth--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED

Institutional
Class
1998(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period .................... $ 24.29
----------
Income From Investment Operations
Net Investment Income ................................. 0.17
Net Realized and Unrealized
Gain on Investment Transactions ....................... 4.14
----------
Total From Investment Operations ...................... 4.31
----------
Distributions
From Net Investment Income ............................ (0.11)
From Net Realized Gains on
Investment Transactions ............................... (0.24)
----------
Total Distributions ................................... (0.35)
----------
Net Asset Value, End of Period .......................... $ 28.25
==========
Total Return(2) ....................................... 17.84%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................................. 0.49%(3)
Ratio of Net Investment Income
to Average Net Assets ................................. 1.58%(3)
Portfolio Turnover Rate ................................. 52%
Net Assets, End of Period
(in thousands) ....................................... $ 37,899

(1) January 28, 1998 (commencement of sale) through June 30, 1998 (unaudited).

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total return is not annualized.

(3) Annualized.

See Notes to Financial Statements

34 1-800-345-2021

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

SHARE CLASSES

American Century offers three classes of shares for Equity Growth and
Income & Growth. One class is for investors who buy directly from American
Century, one is for investors who buy through financial intermediaries, and the
third is for large institutional customers.

The original class of Equity Growth and Income & Growth 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 do not pay any
commissions or other fees for purchase of fund shares directly from American
Century. Investors who buy Investor Class shares through a broker-dealer may be
required to pay the broker-dealer a transaction fee. 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, which is 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 the total expense ratio
of the Investor Class.

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

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

RETIREMENT ACCOUNT INFORMATION

As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
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
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.

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

www.americancentury.com 35

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

INVESTMENT PHILOSOPHY AND POLICIES

American Century's quantitative equity funds are managed using computer
models as key tools in making investment decisions. A stock-ranking model
analyzes more than 1,500 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, another model 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 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. Rankings 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.

[left margin]

INVESTMENT TEAM LEADERS

EQUITY GROWTH
PORTFOLIO MANAGERS:
JEFF TYLER
BILL MARTIN

INCOME & GROWTH
PORTFOLIO MANAGERS:
JOHN SCHNIEDWIND
KURT BORGWARDT

36 1-800-345-2021

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

RETURNS

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

* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 29-34.

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.

* 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 (P/B) 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.)

www.americancentury.com 37

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

38 1-800-345-2021

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

www.americancentury.com 39

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

40 1-800-345-2021

[inside back cover]

[right margin]

[american century logo(reg.sm)]
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.

[recycled logo]
Recycled

[back cover]

[40 Years]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

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

9808 (c)1998 American Century Services Corporation
SH-BKT-13281 Funds Distributor, Inc.
<PAGE>
[front cover] June 30, 1998

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

[graphic of computer terminal, keyboard and eyeglasses]

AMERICAN CENTURY GROUP
- -----------------------
GLOBAL GOLD
GLOBAL NATURAL RESOURCES

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

A Note from the Founder
- --------------------------------------------------------------------------------

I founded American Century on the belief that if we can make you
successful, you, in turn, will make us successful. That is the principle that
will guide us in the future.

Sincerely,
/s/James E. Stowers

About our New Report Design
- --------------------------------------------------------------------------------

Why We Changed

What's New

The reports are designed to be attractive and easy to use whether you're reading
them in depth or just skimming.

New features include:

* Larger type size in many sections.
* Brief explanations of the financial statements.
* More prominent graphs and charts.
* Quotes in the margins to highlight report content.

THE BOTTOM LINE.

The new reports also use roughly the same amount of paper as the old ones.
Previously, paper was trimmed and thrown away to produce the smaller report
size.

We believe we've come up with a more interesting, informative and user-friendly
publication.

We hope you enjoy it.

[left margin]

American Century Group
Global Gold
(BGEIX)

American Century Group
Global Natural Resources
(BGRIX)

[40 Years logo]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

Global gold and natural resource-related stocks suffered from a difficult
investment environment in the first half of 1998. The economic and currency
crisis in Asia was largely responsible for the poor performance of
commodity-related companies.

Gold and natural resource funds in general produced flat to negative total
returns for the six months; however, American Century Global Gold and Global
Natural Resources each outperformed the average return of their respective peer
groups. Our quantitative equity management team continued to adhere to a
disciplined approach, working to position the portfolios to benefit from any
future rallies in their respective markets.

Despite the disappointing returns from Global Gold and Global Natural
Resources, we continue to believe they can be constructive "hedge" investments
when used as a small part of a well-diversified portfolio. Also, the fact that
these sectors have been out of favor may make them of current interest to
investors who employ a contrarian style of investing.

The uncertain global market conditions reinforce the importance of a
diversified investment portfolio. By holding a mix of domestic and foreign
stocks, bonds and money market funds, you can help cushion your portfolio
against the effects of a decline in any single investment.

Turning to the subject of distributions, please take note of the following
policy changes. Global Gold and Global Natural Resources will pay capital gains
distributions in March and December going forward. The March distribution allows
the funds to promptly distribute capital gains realized between the IRS's
October 31 deadline for December distributions and the funds' December 31 fiscal
year end. Distributions are described in greater detail in the "Distributions"
section of your prospectus.

Finally, we hope you like the new design of this report. It's intended to
make the important information you need about your fund easier to find and read.

We appreciate your investment with American Century.

Sincerely,

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

[right margin]

Table of Contents
Report Highlights ........................................................ 2
Market Perspective ....................................................... 3
GLOBAL GOLD
Performance Information .................................................. 5
Management Q&A ........................................................... 6
Schedule of Investments .................................................. 9
GLOBAL NATURAL RESOURCES
Performance Information .................................................. 11
Management Q&A ........................................................... 12
Schedule of Investments .................................................. 15
FINANCIAL STATEMENTS
Statements of Assets and
Liabilities .............................................................. 17
Statements of Operations ................................................. 18
Statements of Changes
in Net Assets ............................................................ 19
Notes to Financial
Statements ............................................................... 20
Financial Highlights ..................................................... 24
OTHER INFORMATION
Share Class and Retirement
Account Information ...................................................... 27
Background Information
Investment Philosophy
and Policies .......................................................... 28
Comparative Indices ................................................... 28
Lipper Rankings ....................................................... 28
Investment Team
Leaders ............................................................... 28
Glossary ................................................................. 29

www.americancentury.com 1

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

MARKET PERSPECTIVE

Gold

* Gold traded in a narrow range in the first six months of 1998, finishing in
June just under $300 per ounce after reaching an 18-year low of $278 an
ounce in January.

* Two key reasons for weakness in the price of gold were slower Asian
demand--caused by an economic and currency crisis there--and the threat of
more European national central bank gold sales.

* Gold stocks produced disappointing returns for the six months. The FT-SE
gold mine index declined 6%.

* North American stocks fell 5%. Larger-capitalization stocks performed
better than small-cap shares.

* Australian and South African gold stocks produced negative returns in U.S.
dollar terms; however, their returns were positive in local currencies.

Natural Resources

* Commodity prices fell sharply. For the six months, the Goldman Sachs
commodity index declined a whopping 20%.

* Oil prices hit a 12-year low during the second quarter because of rising
production and falling demand.

* Prices of base metals also fell. Slower Asian demand was largely responsible
for the decline in commodity prices.

* Natural resource-related stocks generally performed poorly. Energy stocks
outperformed basic materials shares for the six months.

GLOBAL GOLD

* Global Gold's performance reflected the difficult environment for gold and
gold shares. For the six months, the portfolio fell 8.10%; however, Global
Gold outperformed the average gold fund, according to Lipper Analytical
Services.

* With gold trading below $300 an ounce, we focused on companies with low
production costs, sophisticated hedging techniques and a lot of cash on
their balance sheets.

* We expect gold to continue to trade in a relatively narrow range going
forward.

* We'll continue to try to give our shareholders a pure play on the gold
market, positioning the fund to take advantage of any bounce in gold prices.

GLOBAL NATURAL RESOURCES

* Global Natural Resources' performance reflected the generally poor
investment environment for global commodities and natural resource-related
stocks; however, Global Natural Resources performed well relative to its
peers.

* The key to the portfolio's relative outperformance was our disciplined,
quantitative management approach that attempts to control risk.

* We slightly overweighted energy and underweighted basic materials, which
helped performance because energy-related stocks outperformed basic
materials shares for the six months.

* Because we don't anticipate a big rally in the commodity markets in the near
future, we're likely to continue to carefully manage our level of risk
relative to the benchmark.

[left margin]

"COMMODITY PRICES FELL SHARPLY. FOR THE SIX MONTHS, THE GOLDMAN SACHS COMMODITY
INDEX DECLINED A WHOPPING 20%."

GLOBAL GOLD(1)
(BGEIX)
TOTAL RETURNS: AS OF 6/30/98
6 Months -8.10%(2)
1 Year -31.72%
NET ASSETS: $247 million
INCEPTION DATE: 8/17/88

GLOBAL NATURAL RESOURCES(1)
(BGRIX)
TOTAL RETURNS: AS OF 6/30/98
6 Months 1.21%(2)
1 Year -4.23%
NET ASSETS: $45 million
INCEPTION DATE: 9/15/94

(1) Investor Class.
(2) Not annualized.

See Total Returns on pages 5 and 11. Investment terms are defined in the
Glossary on page 29.

2 1-800-345-2021

Market Perspective from Mark Mallon
- --------------------------------------------------------------------------------

[photo of Mark Mallon]
Mark Mallon, head of conservative equity, specialty, and asset allocation funds
at American Century

GOLD BULLION

The price of gold bullion traded in a relatively narrow range through the
first six months of 1998, closing on June 30 at $296 per troy ounce, up from
$289 at the end of 1997. Though gold prices bounced back modestly after hitting
an 18-year low of $278 per ounce in early January, the tone of the market
remained cautious.

Demand for gold bullion was sharply reduced by slumping Asian economies and
currencies. Weaker currencies relative to the U.S. dollar made gold more
expensive for Asian buyers because gold is priced in dollars. In addition, many
Asian countries sold gold to support their currencies against the dollar.
According to the World Gold Council, worldwide gold demand declined in the first
quarter of 1998 by 55% compared with the first quarter of 1997. The swing factor
was Southeast Asia and South Korea, which turned from big net importers into net
exporters of gold.

In terms of supply, a major issue for the market was gold held by European
central banks. In July, the new European Central Bank announced it would hold
15% of its foreign exchange reserves in gold. But that announcement left open
the question of what will happen to the approximately 12,000 metric tons of gold
remaining in European national central banks. While the bulk of that supply is
in Germany and France and is not expected to be sold, the threat of gold sales
by other European national central banks continued to weigh on the market.

GOLD STOCKS

Gold stocks turned in another poor performance as the industry continued to
adapt to sub-$300 gold prices. The FT-SE gold mine index was down 6% for the six
months.

The performance of North American gold shares can best be understood as a
capitalization story--the larger the company, the better the performance.
Barrick, among the largest North American gold companies, was up 4%, while North
American gold stocks as a whole declined 5%.

Australian gold stocks declined 3% in U.S. dollar terms as gains in local
markets were offset by currency declines. Returns were helped by merger and
acquisition activity. Australian mining companies were attractive buyout
candidates because of their relatively low share prices after a difficult 1997.

South African gold stocks declined 11% in dollar terms, but that negative
return reflects the collapse of the South African currency, the rand. In local
currency terms, South African gold stocks were up 9%. As with Australian
companies, South African gold stocks benefited from consolidation.

COMMODITIES

Commodity prices fell in the first half of 1998. The Goldman Sachs
commodity index declined a whopping 20%. Slower global economic growth was the
key factor behind the decline in commodity prices.

[right margin]

"GOLD STOCKS TURNED IN ANOTHER POOR PERFORMANCE AS THE INDUSTRY CONTINUED TO
ADAPT TO SUB-$300 GOLD PRICES. THE FT-SE GOLD MINE INDEX WAS DOWN 6% FOR THE SIX
MONTHS."

MAJOR INDEX RETURNS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
FT-SE GOLD MINE INDEX -6.08%
SOUTH AFRICA -11.20%
NORTH AMERICA -4.88%
AUSTRALIA -3.15%
SPOT PRICE OF GOLD BULLION +2.80%

Source: Bloomberg Financial Markets

"THE PRICE OF GOLD BULLION TRADED IN A RELATIVELY NARROW RANGE THROUGH THE FIRST
SIX MONTHS OF 1998."

www.americancentury.com 3

Market Perspective from Mark Mallon
- --------------------------------------------------------------------------------
(Continued)

Global economic growth determines the level of world industrial production
and commodity demand. In late 1997, Southeast Asia experienced a currency crisis
that crippled local economies and exacerbated financial weakness in Japan.
Trouble there cast a pall over the commodities markets.

The Goldman Sachs metal commodity index fell about 12% for the six months
(see the graph at left). Copper, which is used in construction, manufacturing,
and electronics, is a good example of the price performance of base metals--a
lack of demand led to large inventory buildups, sending the price of copper to a
low of $0.72 per pound in February. Though many copper mines reduced production
in the second quarter in response to falling prices, analysts expect copper to
continue to trade below $0.80 per pound through 1999.

Energy also performed poorly--crude oil prices hit a 12-year low during the
second quarter. OPEC oil production rose in early 1998, while Asian demand was
shrinking. A relatively mild winter and increased Iraqi supply also depressed
prices. Overall, the Goldman Sachs energy commodity index was down about a
quarter.

NATURAL RESOURCES STOCKS

Lower commodity prices and the ongoing Asian economic crisis contributed to
relatively poor performance by natural resource-related stocks (see the
Performance of Energy and Basic Materials Stocks graph below). Declining oil
prices hurt the performance of energy-related stocks. Small oil exploration
companies, which are closely tied to changes in the price of crude oil,
performed worst. Larger, more diversified oil refiners and producers performed
better because they are less directly tied to the price of oil and have other
arms of their business to support earnings when crude prices fall.

Thanks to brief rallies, basic materials did better than energy-related
shares early in the period, but ultimately underperformed energy companies for
the six months. In particular, steel and paper stocks performed well early in
the year before finishing the six months lower.

By region, emerging market stocks performed worst. Japanese natural
resources stocks also ended the period down, but that masks relatively strong
first-quarter performance. Japanese natural resources stocks bounced in the
first quarter because many investors thought the worst of the Asian crisis had
passed and that Japanese stocks had been oversold. However, the second wave of
the crisis hit Japanese companies very hard, and by April they were again in
free fall.

[left margin]

"LOWER COMMODITY PRICES AND THE ONGOING ASIAN ECONOMIC CRISIS CONTRIBUTED TO
RELATIVELY POOR PERFORMANCE BY NATURAL RESOURCE-RELATED STOCKS."

[line chart - data below]

GOLDMAN SACHS ENERGY AND METAL COMMODITIES INDICES
(Performance of $1.00)

Metal Index Energy Index
1/2/98 $1.0000 $1.0000
1/9/98 $0.9611 $0.9591
1/16/98 $0.9720 $0.9545
1/23/98 $0.9977 $0.9135
1/30/98 $0.9875 $0.9860
2/6/98 $0.9746 $0.9628
2/13/98 $0.9666 $0.9284
2/20/98 $0.9398 $0.9283
2/27/98 $0.9531 $0.8978
3/6/98 $0.9535 $0.8569
3/13/98 $0.9668 $0.8236
3/20/98 $0.9600 $0.8470
3/27/98 $0.9635 $0.9354
4/3/98 $0.9394 $0.9099
4/10/98 $0.9630 $0.8973
4/17/98 $0.9780 $0.8985
4/24/98 $0.9845 $0.8604
5/1/98 $0.9686 $0.8982
5/8/98 $0.9441 $0.8541
5/15/98 $0.9201 $0.8336
5/22/98 $0.9265 $0.8022
5/29/98 $0.9166 $0.8165
6/5/98 $0.8983 $0.7965
6/12/98 $0.8866 $0.7368
6/19/98 $0.8985 $0.7295
6/26/98 $0.8722 $0.7581
6/30/98 $0.8755 $0.7631

Source: Bloomberg Financial Markets

[line chart - data below]

ENERGY & BASIC MATERIALS STOCKS
(Performance of $1.00)

Basic Materials Energy
31-Dec-97 $1.0000 $1.0000
01-Jan-98 $1.0000 $1.0000
02-Jan-98 $1.0069 $1.0036
05-Jan-98 $1.0029 $0.9923
06-Jan-98 $0.9860 $0.9553
07-Jan-98 $0.9762 $0.9607
08-Jan-98 $0.9498 $0.9467
09-Jan-98 $0.9247 $0.9242
12-Jan-98 $0.9031 $0.9195
13-Jan-98 $0.9149 $0.9388
14-Jan-98 $0.9307 $0.9487
15-Jan-98 $0.9258 $0.9504
16-Jan-98 $0.9554 $0.9639
19-Jan-98 $0.9677 $0.9624
20-Jan-98 $0.9739 $0.9718
21-Jan-98 $0.9827 $0.9734
22-Jan-98 $0.9861 $0.9506
23-Jan-98 $1.0011 $0.9346
26-Jan-98 $1.0216 $0.9471
27-Jan-98 $1.0328 $0.9598
28-Jan-98 $1.0437 $0.9603
29-Jan-98 $1.0487 $0.9721
30-Jan-98 $1.0433 $0.9656
02-Feb-98 $1.0631 $0.9710
03-Feb-98 $1.0701 $0.9771
04-Feb-98 $1.0691 $0.9833
05-Feb-98 $1.0823 $0.9886
06-Feb-98 $1.0874 $0.9925
09-Feb-98 $1.0892 $0.9837
10-Feb-98 $1.0941 $0.9828
11-Feb-98 $1.0908 $0.9831
12-Feb-98 $1.0840 $0.9793
13-Feb-98 $1.0732 $0.9786
16-Feb-98 $1.0652 $0.9832
17-Feb-98 $1.0665 $0.9795
18-Feb-98 $1.0645 $0.9913
19-Feb-98 $1.0649 $0.9870
20-Feb-98 $1.0648 $0.9936
23-Feb-98 $1.0596 $0.9777
24-Feb-98 $1.0490 $0.9739
25-Feb-98 $1.0529 $0.9809
26-Feb-98 $1.0645 $1.0015
27-Feb-98 $1.0858 $1.0123
02-Mar-98 $1.1011 $1.0247
03-Mar-98 $1.1024 $1.0321
04-Mar-98 $1.0960 $1.0217
05-Mar-98 $1.0803 $1.0157
06-Mar-98 $1.0932 $1.0190
09-Mar-98 $1.1077 $1.0046
10-Mar-98 $1.1179 $1.0112
11-Mar-98 $1.1209 $1.0133
12-Mar-98 $1.1173 $1.0129
13-Mar-98 $1.1293 $1.0195
16-Mar-98 $1.1306 $1.0179
17-Mar-98 $1.1297 $1.0070
18-Mar-98 $1.1177 $1.0200
19-Mar-98 $1.1215 $1.0365
20-Mar-98 $1.1229 $1.0601
23-Mar-98 $1.1286 $1.0969
24-Mar-98 $1.1294 $1.0879
25-Mar-98 $1.1299 $1.0815
26-Mar-98 $1.1365 $1.0844
27-Mar-98 $1.1350 $1.0818
30-Mar-98 $1.1201 $1.0730
31-Mar-98 $1.1167 $1.0628
01-Apr-98 $1.1144 $1.0761
02-Apr-98 $1.1150 $1.0853
03-Apr-98 $1.1226 $1.0805
06-Apr-98 $1.1370 $1.0835
07-Apr-98 $1.1337 $1.0708
08-Apr-98 $1.1393 $1.0546
09-Apr-98 $1.1470 $1.0632
10-Apr-98 $1.1470 $1.0638
13-Apr-98 $1.1538 $1.0600
14-Apr-98 $1.1799 $1.0595
15-Apr-98 $1.1921 $1.0714
16-Apr-98 $1.1814 $1.0764
17-Apr-98 $1.1808 $1.0827
20-Apr-98 $1.1875 $1.0853
21-Apr-98 $1.1982 $1.0986
22-Apr-98 $1.1981 $1.0945
23-Apr-98 $1.1978 $1.0867
24-Apr-98 $1.1881 $1.0782
27-Apr-98 $1.1612 $1.0679
28-Apr-98 $1.1619 $1.0752
29-Apr-98 $1.1668 $1.0840
30-Apr-98 $1.1807 $1.0938
01-May-98 $1.1802 $1.1234
04-May-98 $1.1867 $1.1220
05-May-98 $1.1802 $1.1143
06-May-98 $1.1752 $1.1113
07-May-98 $1.1603 $1.0972
08-May-98 $1.1678 $1.1006
11-May-98 $1.1791 $1.1023
12-May-98 $1.1696 $1.1055
13-May-98 $1.1615 $1.1095
14-May-98 $1.1557 $1.1128
15-May-98 $1.1516 $1.1088
18-May-98 $1.1328 $1.0875
19-May-98 $1.1338 $1.0910
20-May-98 $1.1404 $1.0871
21-May-98 $1.1442 $1.0875
22-May-98 $1.1410 $1.0841
25-May-98 $1.1358 $1.0862
26-May-98 $1.1199 $1.0785
27-May-98 $1.0946 $1.0695
28-May-98 $1.0919 $1.0730
29-May-98 $1.0867 $1.0709
01-Jun-98 $1.0706 $1.0613
02-Jun-98 $1.0815 $1.0604
03-Jun-98 $1.0815 $1.0549
04-Jun-98 $1.0805 $1.0668
05-Jun-98 $1.0744 $1.0870
08-Jun-98 $1.0766 $1.0794
09-Jun-98 $1.0706 $1.0634
10-Jun-98 $1.0431 $1.0559
11-Jun-98 $1.0199 $1.0318
12-Jun-98 $1.0035 $1.0307
15-Jun-98 $0.9783 $1.0143
16-Jun-98 $0.9835 $1.0271
17-Jun-98 $1.0113 $1.0490
18-Jun-98 $1.0140 $1.0384
19-Jun-98 $1.0143 $1.0293
22-Jun-98 $0.9996 $1.0370
23-Jun-98 $0.9970 $1.0500
24-Jun-98 $0.9965 $1.0601
25-Jun-98 $0.9970 $1.0614
26-Jun-98 $0.9941 $1.0565
29-Jun-98 $0.9994 $1.0547
30-Jun-98 $1.0130 $1.0576

Source: FactSet

4 1-800-345-2021

<TABLE>
<CAPTION>
Global Gold--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS(1) AS OF JUNE 30, 1998
INVESTOR CLASS (INCEPTION 8/17/88) ADVISOR CLASS (INCEPTION 5/6/98)
GLOBAL FUND GOLD-ORIENTED FUNDS(2) GLOBAL FUND
GOLD BENCHMARK AVERAGE RETURN FUND'S RANKING GOLD BENCHMARK
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 MONTHS .............. -8.10% -5.88% -8.98% -- -- --
1 YEAR ................ -31.72% -28.49% -35.01% 15 OUT OF 39 -- --
- -----------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS ............... -19.56% -20.31% -17.61% 23 OUT OF 34 -- --
5 YEARS ............... -12.01% -12.60% -11.19% 18 OUT OF 25 -- --
LIFE OF FUND .......... -4.14% -3.76%(3) -4.26%(4) 13 OUT OF 20(4) -20.30% -9.37%(5)
</TABLE>

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

(2) According to Lipper Analytical Services, an independent mutual fund ranking
service.

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

(4) Since 8/18/88, the date nearest the class's inception for which data are
available.

(5) Since 5/31/98, the date nearest the class's inception for which data are
available.

See pages 27-29 for more information about share classes, returns, the fund's
benchmark and Lipper fund rankings.

[mountain chart - data below]

PERFORMANCE OF $10,000 OVER LIFE OF FUND

Value on 6/30/98
MSCI World Indes $31,477
Benchmark $6,993
Global Gold $6,687

Global Gold Benchmark MSCI World Index
8/31/88* $10,000 $10,000 $10,000
6/30/89 $9,167 $9,344 $11,739
6/30/90 $10,066 $10,530 $12,638
6/30/91 $9,094 $9,585 $12,092
6/30/92 $8,316 $8,855 $12,676
6/30/93 $12,675 $13,641 $14,885
6/30/94 $12,101 $13,049 $16,488
6/30/95 $12,846 $13,744 $18,338
6/30/96 $13,351 $14,160 $21,821
6/30/97 $9,789 $9,780 $26,798
6/30/98 $6,687 $6,993 $31,477

$10,000 investment made 8/31/88

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND
(Periods ended June 30)

Global Gold Fund Benchmark
6/89* -8.33% -6.56%
6/90 9.81% 12.70%
6/91 -9.66% -8.98%
6/92 -8.56% -7.61%
6/93 52.43% 54.04%
6/94 -4.53% -4.34%
6/95 6.16% 5.32%
6/96 3.93% 3.03%
6/97 -26.66% -30.93%
6/98 -31.72% -28.49%

These charts are based on Investor Class shares only; performance for other
classes will vary due to differences in fee structures (see Total Returns table
above). The chart at left shows the performance of a $10,000 investment over the
life of the fund, while the chart below shows the fund's year-by-year
performance. The fund's benchmark and the MSCI World Stock Index are provided
for comparison. Global Gold's returns include operating expenses (such as
transaction costs and management fees) that reduce returns, while the returns of
the indices 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.

* From 8/31/88 (the date nearest the class's inception for which index data are
available).

www.americancentury.com 5

Global Gold--Q&A
- --------------------------------------------------------------------------------

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

HOW DID THE FUND PERFORM FOR THE SIX MONTHS ENDED JUNE 30, 1998?

Global Gold's performance reflected the difficult investment environment
for gold and gold shares. For the first half of the year, Global Gold was down
8.10%. That was slightly better than the -8.98% average return of the 42 gold
funds tracked by Lipper Analytical Services. Returns over the last year tell a
similar story: negative absolute returns, but performance that was better than
the average gold fund. (See the Total Returns table on the previous page for
additional performance comparisons.)

HOW DO YOU MANAGE THE FUND IN AN ENVIRONMENT THAT'S BEEN SO DIFFICULT FOR GOLD
STOCKS?

We continue to stick to our investment strategy, which is to give
shareholders broad exposure to the gold market. To do that, we manage Global
Gold relative to a proprietary benchmark that's currently about two-thirds North
American gold stocks, about 20% African stocks, and 10% or so Australian gold
shares. We think this approach keeps our shareholders positioned to benefit from
any bounce in gold prices.

HOW WOULD YOU SUGGEST INVESTORS USE THE GLOBAL GOLD FUND IN THIS SORT OF
ENVIRONMENT?

Global Gold is a diversification tool. It's not meant to be a complete
investment program by itself. We hope shareholders use the fund to hedge a small
portion of their overall portfolio. An investment in gold may serve as a form of
insurance against the unexpected. But like most insurance, you hope you never
need it. And with global inflation low, governments stable, and financial
markets healthy, gold has suffered, falling below $300 an ounce.

HOW HAS SUB-$300 GOLD AFFECTED THE INDUSTRY?

It's put a premium on efficiency, hurting businesses with higher production
costs the most. At these price levels, about half of the world's gold production
is not profitable.

Sub-$300 gold has also put small exploration companies, which tend to have
weak balance sheets, in a difficult position. Many of these companies are
desperate for cash and can't afford to develop a mine on their own. As a result,
many small companies have been willing to enter joint ventures with larger
partners at less than advantageous prices to keep from losing out entirely.
That's sparked a wave of merger and acquisition activity throughout the
industry, particularly in Australia and South Africa (see the Market Perspective
on page 3).

[left margin]

". . .WITH GLOBAL INFLATION LOW, GOVERNMENTS STABLE, AND FINANCIAL MARKETS
HEALTHY, GOLD HAS SUFFERED, FALLING BELOW $300 AN OUNCE."

PORTFOLIO AT A GLANCE
6/30/98 12/31/97
NUMBER OF COMPANIES 67 54
PORTFOLIO TURNOVER 27% 28%
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.70%* 0.67%

* Annualized.

[pie chart - data below]

1997 GOLD MINE PRODUCTION BY REGION
Americas 41%
Africa 31%
Australia/Oceania 16%
Asia 11%
Europe 1%

Source: Gold Fields Mineral Services, Ltd.

Investment terms are defined in the Glossary on page 29.

6 1-800-345-2021

Global Gold--Q&A
- --------------------------------------------------------------------------------
(Continued)

HOW DID YOU POSITION THE FUND TO RIDE OUT THAT SORT OF TURBULENCE?

With gold trading so low and the industry going through a wave of
consolidation, we've concentrated on companies with low production costs,
because they're better able to maintain profitability even at these low price
levels. We also looked for companies with lots of cash on their balance sheets,
figuring those companies would be best positioned to make an acquisition and to
ride out a prolonged market downturn.

Looking for companies with those traits led us to the big North American
low-cost gold producers. Good examples are Barrick and Newmont, which together
make up more than a quarter of the portfolio (see the Top Ten Holdings table at
right). For example, Barrick, which was up 4% for the six months, reported that
it lowered its production costs over the last six months from $190 an ounce to
$157. While cutting costs, Barrick still had forward sales at around $400 an
ounce.

WHAT DOES IT MEAN TO SELL GOLD FORWARD? HOW CAN COMPANIES SELL GOLD FOR $400 AN
OUNCE WHEN IT'S TRADING AT LESS THAN $300?

Forward selling is used by large, sophisticated gold producers to hedge
future sales against declines in the price of gold. In a forward sale, mining
companies borrow gold, say from a dealer or central bank, to lock in current
prices. Then they repay the dealer out of their own future gold production.
Central banks are willing to lease gold for a forward sale because they're eager
to earn a return on their assets.

Barrick is a good example of a company that used hedging to boost revenues,
hedging its gold production until the year 2000 at a price of $400 an ounce. In
effect, Barrick is repaying dealers for gold borrowed years ago at $400 an ounce
with gold valued at less than $300 today. The company's hedging strategy and low
production costs explain why Barrick is one of the most sought-after names in
the industry.

YOU MENTIONED EARLIER THAT THE INDUSTRY WAS GOING THROUGH SOME CONSOLIDATION.
WERE ANY PORTFOLIO HOLDINGS MERGED OR ACQUIRED DURING THE PERIOD?

Yes. Six of our South African holdings were merged when Anglo Mining Group
combined its gold properties into a single company--Anglogold. In general,
mergers benefit the fund in the long run because they tend to promote efficiency
and reduce costs. Returns didn't receive a boost from the merger because of
weakness in the South African currency and because the acquisition didn't value
the companies at much of a premium.

THE OUTLOOK FOR SOUTH AFRICAN GOLD STOCKS HAS CHANGED SOMEWHAT. CAN YOU EXPLAIN
THE NEW LANDSCAPE FOR THESE COMPANIES?

Sure. South African companies are beginning to look like increasingly
attractive buys after being neglected because of their high production costs and
social and political risks. One reason is the weak South African currency, the
rand. South African companies pay expenses in rand, but sell gold and book
revenues in U.S. dollars. A strong dollar relative to the rand kept profits of
South African gold companies high. Another reason is consolidation, which
brought down production costs slightly for South African companies. For the
industry as a whole, average cash costs of production declined 7% last year,
according to Gold Fields Mineral Services.

[right margin]

"WE CONTINUE TO STICK TO OUR INVESTMENT STRATEGY, WHICH IS TO GIVE SHAREHOLDERS
BROAD EXPOSURE TO THE GOLD MARKET."

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
BARRICK GOLD CORP. 17.0% 16.0%

NEWMONT MINING
CORP. 9.5% 13.7%

PLACER DOME INC. 7.6% 11.4%

ANGLOGOLD LIMITED 7.0% --

HOMESTAKE MINING CO. 5.6% 3.6%

FRANCO NEVADA
MINING CORP. LTD. 4.4% 2.2%

NORMANDY MINING
LIMITED 3.8% 4.5%

EURO-NEVADA MINING
CORPORATION 3.3% 2.5%

BATTLE MOUNTAIN
GOLD CO. 3.2% 2.8%

LIHIR GOLD LIMITED 2.9% 0.5%

www.americancentury.com 7

Global Gold--Q&A
- --------------------------------------------------------------------------------
(Continued)

YOU MODESTLY INCREASED THE FUND'S AUSTRALIAN HOLDINGS (SEE THE GEOGRAPHIC
COMPOSITION CHARTS BELOW). WHY?

As we indicated in our last report, Australian gold stocks looked very
attractive at the end of last year. That's because their share prices were cheap
after a difficult 1997, and because the Australian currency weakened relative to
the U.S. dollar. Australian gold stocks also got a boost in the first quarter
when Homestake Mining, an American company, bought Plutonic Resources, an
Australian gold company. Investors eager to get in on the next acquisition bid
up prices on these stocks. Despite those positives, Australian gold shares
declined 3% in U.S. dollar terms for the six months.

WHAT'S YOUR OUTLOOK FOR THE PRICE OF GOLD BULLION GOING FORWARD?

We expect gold to continue to trade in a relatively narrow range. The price
of gold is a measure of confidence in world central banks and governments.
Central banks have generally kept inflation in check, while governments have
done a good job reining in spending, particularly in the United States and
Europe. As long as those conditions exist, it's very unlikely that the price of
gold will rise significantly. Gold's price will likely be capped on the upside
by fears of central bank sales and forward selling by gold producing countries.
Forward sales are particularly likely in South Africa and Australia, where weak
currencies make forward selling very attractive.

However, a potential positive for gold is the increasing threat of wage
inflation in the U.S. Low unemployment rates in the U.S. mean companies must bid
up wages to attract qualified workers. So far, productivity gains and savings on
health care and benefits costs have helped keep inflation in check even as wages
rise. But it's possible these savings may have already worked through the
system. Moreover, the Federal Reserve may be reluctant to raise interest rates
to fight inflation. That's because higher U.S. rates would draw desperately
needed investment capital away from Asia, likely worsening the economic and
currency crisis there.

GIVEN THAT OUTLOOK, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX MONTHS?

We'll continue to use our disciplined, quantitative approach, managing the
fund to deliver a pure play on gold-related stocks. We'll likely remain neutral
to our internal benchmark. That means a concentration in North American names,
with modest positions in Australian and South African stocks. Within those
weightings, we'll try to pick the best names--companies that have proven
management, sophisticated hedging strategies, and low production costs. In
general, that means a continued focus on the larger, more stable gold companies,
such as Barrick in North America, Anglogold in South Africa, and Normandy in
Australia.

[left margin]

"GOLD'S PRICE WILL LIKELY BE CAPPED ON THE UPSIDE BY FEARS OF CENTRAL BANK SALES
AND FORWARD SELLING BY GOLD PRODUCING COUNTRIES."

[pie charts - data below]

GEOGRAPHIC COMPOSITION

AS OF JUNE 30, 1998

Canada 49%
U.S. 22%
South Africa 14%
Australia 12%
Ghana 2%
Papua-New Guinea 1%

AS OF DECEMBER 31, 1997

Canada 48%
U.S. 25%
South Africa 15%
Australia 10%
Ghana 2%

8 1-800-345-2021

Global Gold--Schedule of Investments
- --------------------------------------------------------------------------------

JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
AUSTRALIA--11.9%
1,981,000 Acacia Resources Limited $2,112,709
600,000 Aurora Gold Limited(1) 450,156
1,431,069 Delta Gold NL 1,756,922
923,300 Goldfields Limited(1) 1,030,486
1,700,000 Great Central Mines Limited 1,623,291
5,580,000 Lihir Gold Limited(1) 6,885,159
1,516,578 Newcrest Mining Limited(1) 1,861,901
10,897,379 Normandy Mining Limited 8,919,134
200,000 Ranger Minerals NL(1) 445,196
1,400,000 Resolute Limited(1) 850,709
925,000 Sons of Gwalia Limited 2,294,185
----------------
28,229,848
----------------
CANADA--49.4%
75,000 Aber Resources Ltd.(1) 663,468
250,000 Agnico-Eagle Mines Ltd. 1,375,000
100,000 America Mineral Fields Inc.(1) 289,204
329,500 Banro Resource Corporation(1) 896,873
79,750 Banro Resource Corporation
Warrants(1) 0
2,111,066 Barrick Gold Corp. 40,505,852
1,264,000 Battle Mountain Gold Co. 7,505,000
392,700 Bema Gold Corp.(1) 635,995
100,000 Breakwater Resources, Ltd.(1) 136,096
470,000 Cambior, Inc. 2,766,493
100,000 Dayton Mining Corp.(1) 64,646
47,900 Dia Met Minerals Ltd. Cl B(1) 733,388
100,000 DiamondWorks Ltd.(1) 94,587
704,800 Echo Bay Mines Ltd.(1) 1,585,800
577,500 Euro-Nevada Mining Corporation 7,879,198
17,100 Farallon Resources Ltd.(1) 33,978
105,000 Francisco Gold Corp.(1) 910,993
524,300 Franco Nevada Mining Corp. Ltd. 10,400,017
85,700 Glamis Gold Ltd.(1) 291,586
300,000 Goldcorp, Inc. Cl A(1) 1,408,594
400,000 Golden Knight Resources, Inc.(1) 225,920
100,000 Golden Star Resources Ltd.(1) 212,500
460,000 Greenstone Resources Ltd.(1) 1,737,267
515,000 IAMGOLD, International African
Mining Gold Corp.(1) 1,314,178
175,000 Indochina Goldfields Ltd.(1) 184,580
1,559,080 Kinross Gold Corp.(1) 5,197,084
924,900 Meridian Gold Inc.(1) 1,943,226
566,300 Miramar Mining(1) 728,323
450,000 Nevsun Resources Ltd.(1) 581,811
74,500 NovaGold Resources Inc.(1) 35,487

Shares Value
- --------------------------------------------------------------------------------
1,530,000 Placer Dome Inc. $17,977,500
225,000 Prime Resources Group, Inc. 1,577,013
100,000 Pure Gold Minerals Inc.(1) 40,829
70,000 Rio Narcea Gold Mines, Ltd.(1) 155,286
395,000 Romarco Minerals, Inc.(1) 510,701
35,500 Samax Gold Inc.(1) 129,240
202,000 Sutton Resources Ltd.(1) 1,147,766
1,090,000 TVX Gold, Inc.(1) 3,300,670
195,000 Teck Corporation Cl B 2,129,734
100,000 Vengold Inc.(1) 101,392
100,000 Viceroy Resource Corp.(1) 156,511
----------------
117,563,786
----------------
GHANA--2.3%
667,773 Ashanti Goldfields Company
Ltd. GDR 5,425,656
----------------
PAPUA-NEW GUINEA--0.4%
557,199 Niugini Mining Limited(1) 829,179
----------------
SOUTH AFRICA--13.9%
420,099 Anglogold Limited 16,664,508
1,442,892 Avgold Ltd.(1) 874,117
50,000 De Beers Centenary AG ADR 871,875
1,158,300 Driefontein Consolidated Ltd. 5,902,043
1,577,600 Eastvaal Gold Holdings Ltd.(1) 1,413,949
1,221,732 Gold Fields Ltd. 5,069,427
100,000 Randfontein Estates Gold Mining
Company, Witwaterstrand, Ltd.(1) 209,129
684,600 Western Areas Gold Mining
Company Ltd.(1) 2,158,905
----------------
33,163,953
----------------
UNITED STATES--21.1%
418,100 Crown Resources, Inc.(1) 1,803,056
190,000 Freeport-McMoRan Copper &
Gold, Inc. Cl A 2,707,500
202,100 Getchell Gold Corp.(1) 3,031,500
1,305,776 Homestake Mining Co.(1) 13,242,119
960,575 Newmont Mining Corp. 22,693,584
250,000 Stillwater Mining Co.
(Acquired 8/18/95,
Cost $5,375,000)(1)(2) 6,781,250
----------------
50,259,009
----------------
TOTAL COMMON STOCKS--99.0% 235,471,431
----------------
(Cost $344,201,922)

See Notes to Financial Statements

www.americancentury.com 9

Global Gold--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

Principal Amount Value
- --------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS--1.0%
Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.65%, dated 6/30/98,
due 7/1/98 (Delivery value $2,300,361) $2,300,000
----------------
(Cost $2,300,000)

TOTAL INVESTMENT SECURITIES--100.0% $237,771,431
================
(Cost $346,501,922)

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 June 30, 1998, was $6,781,250, which represented 2.7% of net
assets.

The schedule includes:

* a list of each investment

* the share amount (stocks) or principal amount (bonds) of each investment

* the market value of each investment

* the percentage of investments in each industry, as applicable

* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

10 1-800-345-2021

<TABLE>
<CAPTION>
Global Natural Res.--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS(1) AS OF JUNE 30, 1998
INVESTOR CLASS (INCEPTION 9/15/94)
GLOBAL NATURAL FUND NATURAL RESOURCES FUNDS(2)
RESOURCES BENCHMARK AVERAGE RETURN FUND'S RANKING
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 MONTHS ................. 1.21% 4.25% -7.29% --
1 YEAR ................... -4.23% -2.38% -10.98% 18 OUT OF 51
- ----------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS .................. 8.60% 10.74% 9.24% 19 OUT OF 37
LIFE OF FUND ............. 7.66% 9.45%(3) 9.15% 17 OUT OF 28
</TABLE>

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

(2) According to Lipper Analytical Services, an independent mutual fund ranking
service.

(3) Since 9/30/94, the date nearest the fund's inception for which data are
available.

See pages 28-29 for more information about returns, the fund's benchmark and
Lipper fund rankings.

[mountain chart - data below]

GROWTH OF $10,000 OVER LIFE OF FUND

Value on 6/30/98
DJ World Index $17,549
Benchmark $14,136
Global Natural Resources $13,412

Global
DJ World Index Benchmark Natural Resources
Sep-94* $10,000 $10,000 $10,000
Dec-94 $9,854 $9,711 $9,789
Mar-95 $10,242 $10,157 $10,227
Jun-95 $10,711 $10,409 $10,471
Sep-95 $11,277 $10,673 $10,728
Dec-95 $11,818 $11,173 $11,199
Mar-96 $12,283 $11,818 $11,870
Jun-96 $12,654 $12,086 $11,996
Sep-96 $12,821 $12,283 $12,113
Dec-96 $13,336 $12,956 $12,929
Mar-97 $13,315 $13,200 $12,952
Jun-97 $15,284 $14,480 $14,006
Sep-97 $15,769 $15,308 $15,016
Dec-97 $15,232 $13,561 $13,254
Mar-98 $17,343 $14,614 $13,969
Jun-98 $17,549 $14,136 $13,412

$10,000 investment made 9/30/94

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND
(Periods ended June 30)

Global
Natural Resources Fund Benchmark
6/95* 4.71% 4.09%
6/96 14.57% 16.12%
6/97 16.73% 19.81%
6/98 -4.23% -2.38%

These charts are based on Investor Class shares only; performance for other
classes will vary due to differences in fee structures. The chart at left shows
the growth of a $10,000 investment over the life of the fund, while the chart
below shows the fund's year-by-year performance. The Dow Jones World Stock Index
and fund benchmark are provided for comparison. Global Natural Resources'
returns include operating expenses (such as transaction costs and management
fees) that reduce returns, while the returns of the indices 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.

* From 9/30/94 (the date nearest the fund's inception for which index data are
available).

www.americancentury.com 11

Global Natural Res.--Q&A
- --------------------------------------------------------------------------------

An interview with Joe Sterling, a portfolio manager on the Global Natural
Resources investment team.

HOW DID THE FUND PERFORM IN THE SIX MONTHS ENDED JUNE 30, 1998?

Global Natural Resources' performance reflected the generally poor
investment environment for global commodities and natural resource-related
stocks. For the six months, the fund returned 1.21%. However, Global Natural
Resources performed very well relative to its peers--the average return of the
58 natural resources funds tracked by Lipper Analytical Services was -7.29% for
the same period. The portfolio's returns also held up better than its peer
group's over the last year. (See the Total Returns table on the previous page
for additional performance comparisons.)

WHAT'S BEHIND GLOBAL NATURAL RESOURCES' RELATIVE OUTPERFORMANCE?

The key was our disciplined, quantitative management approach that attempts
to control risk. While we manage the fund relative to an index of eight
industries from 30 countries, we think many of our peers tend to concentrate
assets in relatively few areas of the market. Because of the Asian economic
crisis, we thought a rally in global commodities was unlikely, so we didn't see
the point in making big bets relative to the benchmark. Taking a more
diversified, disciplined approach helped limit the fund's exposure to any single
industry. That helped returns and goes a long way toward explaining why we were
able to hold our value while many of our peers experienced negative returns.

CAN YOU EXPLAIN MORE ABOUT HOW YOU MANAGE THE FUND? HOW DOES A QUANTITATIVE
APPROACH WORK IN PRACTICE?

We manage Global Natural Resources to give investors a pure play on global
commodity-based industries. The fund provides exposure to global economic growth
trends, which are important for the success of the companies in which the fund
invests. In addition, supply and demand for commodities also play key roles in
fund returns.

We use a computer model to help us determine the level of risk we want to
take. Then we do fundamental analysis to pick what we believe are the best
companies within the sectors or industries we elect to over- and underweight
relative to the benchmark.

Our benchmark consists of companies from two broad categories, energy and
basic materials. The energy industries are oil, oil services and natural gas.
Those companies make up about 75% of the benchmark. The basic materials
companies, which make up the remaining quarter of the index, are in paper
products, steel, nonferrous metals, mining and precious metals.

CAN YOU GIVE EXAMPLES OF SECTORS YOU OVER- OR UNDERWEIGHTED?

In terms of broad sectors, we continued to slightly overweight energy and
underweight basic materials (see the Industry Weightings charts at left). Within
energy, we tended to avoid mid- and small-sized oil services companies, which
have stock prices that are closely tied to the price of crude oil. Instead, we
overweighted large, integrated oil producers that have other sides to their
business, such as refining and chemicals. Those other business arms help

[left margin]

"GLOBAL NATURAL RESOURCES PERFORMED VERY WELL RELATIVE TO ITS PEERS."

PORTFOLIO AT A GLANCE
6/30/98 12/31/97
NUMBER OF COMPANIES 81 77
PORTFOLIO TURNOVER 43% 41%
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.74%* 0.73%

* Annualized.

[pie charts - data below]

INDUSTRY WEIGHTINGS

AS OF JUNE 30, 1998
Energy 77%
Basic Materials 19%
Temporary Cash
Investments 4%

AS OF DECEMBER 31, 1997
Energy 79%
Basic Materials 21%

Investment terms are defined in the Glossary on page 29.

12 1-800-345-2021

Global Natural Res.--Q&A
- --------------------------------------------------------------------------------
(Continued)

support corporate earnings when oil prices fall. As a result, larger oil
companies performed better than small- and mid-cap oil stocks on average over
the last six months.

WHY UNDERWEIGHT BASIC MATERIALS?

We underweighted this sector because we felt that slumping Asian economies
would reduce demand for most basic materials. That strategy helped overall,
because energy outperformed basic materials for the six months. But that
approach wasn't without its drawbacks--a few basic materials, such as paper and
steel stocks, rallied during the first quarter.

WHY ARE JAPAN AND SOUTHEAST ASIA SO IMPORTANT FOR GLOBAL COMMODITY MARKETS?

Because they're such big commodity buyers, particularly of base metals.
According to HSBC Securities, Japan alone accounts for about 12% of the world
demand for base metals; total Asian demand makes up a quarter of the market for
these items (see the Metal Consumption by Region charts at right). Now, however,
Asia is going through a severe economic downturn; Japan's economy contracted
3.5% year over year through the first quarter of 1998. Analysts expect negative
economic growth for Japan in 1998 and 1999 (see the Global Economic Growth chart
below). Weaker economies mean weaker commodity demand.

The Asian slowdown also contributed to negative sentiment for commodities
because analysts worried that a struggling Asia would drag down the broader
global economy. The combination of slower demand and negative sentiment caused
prices for many commodities to fall sharply.

WHAT DOES THAT MEAN FOR COMMODITY COMPANIES?

To get natural resource-related stocks moving, you have to have better
demand. That isn't likely to happen until Japan and Southeast Asia get their
economies growing again. Japan really is the key--if it can stimulate its
economy and resolve the banking crisis, it would be very good for the region and
for commodity demand in general. But even though hopes are high that the new
Japanese prime minister will take drastic steps to revive the economy, real
change will take time.

[right margin]

[pie charts - data below]

METAL CONSUMPTION BY REGION

GLOBAL
North America 29%
Europe 26%
Asia
(excluding China) 25%
China 9%
Other Countries 7%
South America 4%

ASIA (EXCLUDING CHINA)
Japan 56%
South Korea 12%
India 12%
ASEAN 12%
Taiwan 8%

Source: HSBC Securities

[bar chart - data below]

GLOBAL ECONOMIC GROWTH

1996 1997 1998 (e) 1999 (e)
USA 2.8% 3.8% 3.5% 2.9%
Japan 3.9% 0.8% -0.8% -0.1%
EMU-11 1.5% 2.4% 3.0% 2.9%
ASEAN 7.0% 4.2% -6.7% 0.3%
Latin America 3.5% 5.3% 3.5% 4.8%

(e) = estimate

Source: Goldman Sachs

www.americancentury.com 13

Global Natural Res.--Q&A
- --------------------------------------------------------------------------------
(Continued)
WHAT IS THE OUTLOOK FOR ENERGY OVER THE COMING MONTHS?

The price of crude oil dominates the sentiment surrounding energy stocks.
Oil prices fell in early 1998 because production rose at a time when demand was
falling. But after prices bottomed out in January, several OPEC and even
non-OPEC oil-producing countries announced two rounds of production cuts
intended to reduce supply and boost prices. Compliance has been good so far, and
world oil production is down about 2.4 million barrels a day as a result. That's
a reduction of about 3.5%-4% of total global output.

While reduced supply should mean higher oil prices going forward, all those
production cuts mean there is a lot of idle capacity ready to come back on line
if prices rise. In effect, that puts a lid on how high oil prices can go.
Nevertheless, we still have a mildly positive outlook for energy-related stocks
for the second half of the year. We think oil prices could firm up, which we
would expect to lead to better corporate earnings and higher stock prices for
these companies.

WHAT DO YOU SEE FOR BASIC MATERIALS?

The outlook for base metals isn't good--the prices of copper, aluminum and
other nonferrous metals are closely linked to Asian demand. But we think current
low prices have already been discounted for the possibility of a global
recession. And with many metals trading at multi-year lows, it would be
difficult for base metals to do any worse.

The outlook for steel is not encouraging. Steel prices continue to sag
under the expectation of slower U.S. and European demand and concern that Asian
companies may start dumping steel on the market.

Paper also has a relatively poor outlook. Many pulp production facilities
are expected to come back on line soon. If there isn't an increase in demand to
absorb that new supply--and we don't think there will be--then we could see big
supply overhangs and even lower prices for paper. As a result, we could see a
repeat of the first half of 1998, when energy outperformed basic materials.

GIVEN THAT OUTLOOK, WHAT ARE YOUR PLANS FOR THE FUND OVER THE NEXT SIX MONTHS?

We'll continue to try to carefully manage our level of risk relative to the
benchmark. Because we don't think we're likely to see a rally, we don't
anticipate making big sector bets either way. Instead, we'll continue to stay
the course for now, modestly over- and underweighting select sectors or
industries when we think we can help performance. In the near term, that means
we're likely to maintain a slight overweighting in large, diversified oil
producers and an underweighting in some basic materials sectors, including steel
and paper. We'll reevaluate the outlook in the fourth quarter depending on
conditions in the commodity markets and Asia.

[left margin]

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
EXXON CORP. 10.3% 10.7%

ROYAL DUTCH
PETROLEUM CO. 7.4% 7.8%

BRITISH PETROLEUM
CO. PLC 5.0% 5.7%

CHEVRON CORP. 4.1% 4.1%

MOBIL CORP. 3.9% 3.9%

ENI S.P.A. 3.0% 3.3%

TOTAL SA CL B 2.5% 2.4%

SHELL TRANSPORT &
TRADING CO. PLC 2.4% --

ELF AQUITAINE SA 2.3% 2.5%

RESPOL SA 2.3% 1.6%

[pie charts - data below]

GEOGRAPHIC COMPOSITION

AS OF JUNE 30, 1998
U.S. 51%
Europe 38%
Americas
(excluding U.S.) 5%
Asia/Pacific 4%
South Africa 2%

AS OF DECEMBER 31, 1997
U.S. 51%
Europe 33%
Americas
(excluding U.S.) 7%
Asia/Pacific 5%
South Africa 4%

14 1-800-345-2021

Global Natural Res.--Schedule of Investments
- --------------------------------------------------------------------------------

JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
ARGENTINA--1.0%
Energy
15,000 YPF Sociedad Anonima ADR $450,937
-----------------
AUSTRALIA--1.4%
Basic Materials
135,000 Lihir Gold Limited(1) 166,576
260,000 Normandy Mining Limited 212,801
Energy
50,000 Woodside Petroleum Limited 249,880
-----------------
629,257
-----------------
AUSTRIA--0.9%
Basic Materials
10,000 Voest-Alpine Stahl AG 400,677
-----------------
BELGIUM--1.2%
Energy
4,000 Electrafina SA 516,129
-----------------
CANADA--4.7%
Basic Materials
16,000 Abitibi-Consolidated Inc. 205,000
10,000 Barrick Gold Corp. 191,875
12,000 Euro-Nevada Mining Corporation 163,723
15,000 Placer Dome Inc. 176,250
10,000 Rio Algom Ltd. ADR 149,062
Energy
17,500 Anderson Exploration Ltd.(1) 202,443
40,000 Hurricane Hydrocarbons
Ltd. Cl A(1) 193,256
14,000 Petro-Canada 224,831
12,000 Talisman Energy, Inc.(1) 343,779
12,000 Westcoast Energy Inc. 267,429
-----------------
2,117,648
-----------------
FINLAND--0.9%
Basic Materials
15,000 UPM-Kymmene Oyj 412,456
-----------------
FRANCE--5.6%
Energy
2,500 Compagnie Generale de
Geophysique SA(1) 366,045
7,500 Elf Aquitaine SA 1,052,327
8,500 Total SA Cl B 1,102,839
-----------------
2,521,211
-----------------
HONG KONG--0.2%
Basic Materials
1,500,000 Jiangxi Copper Company
Ltd. Cl H 98,748
-----------------

Shares Value
- --------------------------------------------------------------------------------
ITALY--3.0%
Energy
205,000 ENI S.p.A. $1,341,789
-----------------
JAPAN--2.5%
Basic Materials
40,000 Nippon Paper Industries Co. 167,197
120,000 Nippon Steel Corporation 211,744
40,000 Oji Paper Co. Ltd. 174,718
110,000 Sumitomo Metal Industries 177,394
Energy
36,000 General Sekiyu K.K. 139,283
35,000 Nippon Oil Company 113,393
30,000 Showa Shell Sekiyu 134,293
-----------------
1,118,022
-----------------
MEXICO--0.5%
Basic Materials
17,000 Tubos de Acero de Mexico,
SA ADR 217,812
-----------------
NETHERLANDS--7.4%
Energy
60,000 Royal Dutch Petroleum Co. 3,322,941
-----------------
NORWAY--0.9%
Energy
15,000 Saga Petroleum ASA Cl A 231,113
14,000 Smedvig ASA Cl A 170,005
-----------------
401,118
-----------------
PORTUGAL--0.5%
Basic Materials
29,000 Portucel Industrial-Empresa
Produtora de Celulose, SA 230,325
-----------------
SOUTH AFRICA--2.0%
Basic Materials
8,000 Anglo American Corp. of
South Africa 265,560
5,000 Anglogold Limited 198,340
23,000 Driefontein Consolidated Ltd. 117,195
15,000 Gold Fields of South Africa 169,295
25,000 Sasol Ltd. 142,531
-----------------
892,921
-----------------
SPAIN--3.1%
Energy
15,000 Endesa S.A. 327,754
19,000 Respol SA 1,045,622
-----------------
1,373,376
-----------------
SWEDEN--2.0%
Basic Materials
20,000 Assidoman 580,849
12,000 Svenska Cellulosa AB Cl B 310,204
-----------------
891,053
-----------------

See Notes to Financial Statements

www.americancentury.com 15

Global Natural Res.--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
UNITED KINGDOM--11.1%
Basic Materials
80,000 British Steel $175,965
35,416 Rio Tinto plc 399,107
Energy
90,000 BG plc 520,633
155,065 British Petroleum Co. plc 2,262,620
15,000 Burmah Castrol plc 267,955
75,000 Lasmo 300,510
150,000 Shell Transport & Trading Co. PLC 1,058,045
-----------------
4,984,835
-----------------
UNITED STATES--47.1%
Basic Materials
17,000 AK Steel Holding Corp. 303,875
6,000 Aluminum Co. of America 395,625
5,000 Bowater Inc. 236,250
7,000 Fort James Corporation 311,500
13,000 Mead Corp. (The) 412,750
3,000 Nucor Corp. 138,000
5,000 Rayonier, Inc. 230,000
11,000 Stillwater Mining Co.(1) 298,375
6,000 Weyerhaeuser Co. 277,125
9,500 Willamette Industries, Inc. 304,000
Energy
24,000 Amoco Corp. 999,000
7,000 Anadarko Petroleum Corp. 470,313
6,500 Atlantic Richfield Co. 507,813
11,000 Burlington Resources Inc. 473,688
22,000 Chevron Corp. 1,827,375

Shares/Principal Amount Value
- -----------------------------------------------------------------------------
7,000 EVI, Inc.(1) $259,875
18,000 El Paso Natural Gas Co. 688,500
13,000 Enron Corp. 702,813
15,000 Ensco International Inc. 260,625
65,000 Exxon Corp. 4,635,313
13,000 Halliburton Co. 579,313
23,000 Mobil Corp. 1,762,375
12,000 Phillips Petroleum Co. 578,250
15,000 Schlumberger Ltd. 1,024,688
17,200 Texaco Inc. 1,026,625
10,000 Tosco Corp. 293,750
10,000 Transocean Offshore 445,000
14,500 USX-Marathon Group 497,531
12,000 Unocal Corp. 429,000
6,500 Veritas DGC Inc.(1) 324,594
12,000 Williams Companies, Inc. (The) 405,000
-----------------
21,098,941
-----------------
TOTAL COMMON STOCKS --96.0% 43,020,196
-----------------
(Cost $37,096,451)

TEMPORARY CASH INVESTMENTS--4.0%
Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.65%, dated 6/30/98,
due 7/1/98 (Delivery value $1,800,283) 1,800,000
-----------------
(Cost $1,800,000)

TOTAL INVESTMENT SECURITIES--100.0% $44,820,196
=================
(Cost $38,896,451)

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

(1) Non-income producing.

The schedule includes:

* a list of each investment

* the share amount (stocks) or principal amount (bonds) of each investment

* the market value of each investment

* the percentage of investments in each industry, as applicable

* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

16 1-800-345-2021

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

GLOBAL GLOBAL NATURAL
JUNE 30, 1998 (UNAUDITED) GOLD RESOURCES

ASSETS
Investment securities, at value
(identified cost of $346,501,922 and
$38,896,451, respectively) (Note 3) ........ $ 237,771,431 $ 44,820,196
Cash ......................................... 1,335,626 260,780
Receivable for investments sold .............. 2,099 --
Receivable for capital shares sold ........... 8,625,476 --
Dividends and interest receivable ............ 18,605 91,375
------------- -------------
247,753,237 45,172,351
------------- -------------
LIABILITIES
Disbursements in excess of
demand deposit cash ........................ 141,548 9,371
Payable for investments purchased ............ 17,356 403,719
Payable for capital shares redeemed .......... 99,547 40,811
Accrued management fees (Note 2) ............. 134,637 24,910
Distribution and service fees
payable (Note 2) ........................... 11 --
Payable for directors' fees
and expenses ............................... 1,329 735
Accrued expenses and
other liabilities .......................... 200 68
------------- -------------
394,628 479,614
------------- -------------
Net Assets ................................... $ 247,358,609 $ 44,692,737
============= =============
NET ASSETS CONSIST OF:
Capital (par value and
paid-in surplus) .......................... $ 436,286,022 $ 39,863,340
Undistributed net investment
income (loss) .............................. (16,462) 14,653
Accumulated net realized loss
on investment and foreign
currency transactions ...................... (80,180,616) (1,108,693)
Net unrealized appreciation
(depreciation) on investments
and translation of assets
and liabilities in foreign
currencies (Note 3) ........................ (108,730,335) 5,923,437
------------- -------------
$ 247,358,609 $ 44,692,737
============= =============
Investor Class, $10.00 Par Value
Net assets ................................... $ 247,333,022 $ 44,692,737
Shares outstanding ........................... 42,616,613 3,885,318
Net asset value per share .................... $ 5.80 $ 11.50

Advisor Class, $10.00 Par Value
Net assets ................................... $ 25,587 N/A
Shares outstanding ........................... 4,409 N/A
Net asset value per share .................... $ 5.80 N/A

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

See Notes to Financial Statements

www.americancentury.com 17

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

FOR THE SIX MONTHS ENDED GLOBAL GLOBAL NATURAL
JUNE 30, 1998 (UNAUDITED) GOLD RESOURCES

INVESTMENT INCOME
Income:
Dividends (net of foreign taxes
withheld of $77,613 and
$43,863, respectively) ..................... $ 1,845,796 $ 597,901
Interest ..................................... 117,671 39,634
------------ ------------
1,963,467 637,535
------------ ------------
Expenses (Note 2):
Management fees .............................. 909,827 159,589
Distribution fees -- Advisor Class ........... 7 --
Service fees -- Advisor Class ................ 7 --
Directors' fees and expenses ................. 12,363 11,079
------------ ------------
922,204 170,668
------------ ------------
Net investment income ........................ 1,041,263 466,867
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
(NOTE 3)
Net realized gain (loss) on:
Investments .................................. (44,029,568) (620,813)
Foreign currency transactions ................ 25,365 (18,607)
------------ ------------
(44,004,203) (639,420)
------------ ------------
Change in net unrealized
appreciation (depreciation) on:
Investments ................................ 23,537,903 776,627
Translation of assets and liabilities
in foreign currencies ...................... 4,664 916
------------ ------------
23,542,567 777,543
------------ ------------
Net realized and unrealized
gain (loss) on investments
and foreign currency ....................... (20,461,636) 138,123
------------ ------------
Net Increase (Decrease) in
Net Assets Resulting
from Operations ............................ $(19,420,373) $ 604,990
============ ============

Fund OPERATIONS include:
* interest income earned from investments

* management fees and other expenses

* gains or losses from selling investments (known as realized gains or losses)

* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)

See Notes to Financial Statements

18 1-800-345-2021

<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------

SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1997

GLOBAL GOLD GLOBAL NATURAL RESOURCES
Increase (Decrease) in Net Assets 1998 1997 1998 1997

OPERATIONS
<S> <C> <C> <C> <C>
Net investment income ........... $ 1,041,263 $ 3,253,670 $ 466,867 $ 923,805
Net realized gain (loss) on
investments and foreign
currency transactions ......... (44,004,203) (32,125,432) (639,420) 1,041,706
Change in net unrealized
appreciation (depreciation)
on investments and
translation of assets and
liabilities in foreign
currencies .................... 23,542,567 (153,557,529) 777,543 81,557
------------- ------------- ------------- -------------
Net increase (decrease) in
net assets resulting
from operations ............... (19,420,373) (182,429,291) 604,990 2,047,068
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class ................ (1,059,183) (3,534,937) (447,152) (938,125)
Advisor Class ................. (110) -- -- --
From net realized gains on
investment transactions:
Investor Class ................ -- (7,324,988) -- (1,946,841)
Advisor Class ................. -- -- -- --
------------- ------------- ------------- -------------
Decrease in net assets
from distributions ............ (1,059,293) (10,859,925) (447,152) (2,884,966)
------------- ------------- ------------- -------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)
Net increase (decrease)
in net assets from
capital share transactions .... 21,822,963 6,717,979 (2,021,308) (18,627,281)
------------- ------------- ------------- -------------
Net increase (decrease)
in net assets ................. 1,343,297 (186,571,237) (1,863,470) (19,465,179)

NET ASSETS
Beginning of period ............. 246,015,312 432,586,549 46,556,207 66,021,386
------------- ------------- ------------- -------------
End of period ................... $ 247,358,609 $ 246,015,312 $ 44,692,737 $ 46,556,207
============= ============= ============= =============
Undistributed net investment
income (loss) ................. $ (16,462) $ 1,568 $ 14,653 $ (5,062)
============= ============= ============= =============
</TABLE>

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

* distributions--income and gains distributed to shareholders

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

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

See Notes to Financial Statements

www.americancentury.com 19

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

JUNE 30, 1998 (UNAUDITED)

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 Funds are authorized to
issue two classes of shares: the Investor Class and the Advisor Class. The two
classes of shares differ principally in their respective shareholder servicing
and distribution expenses and arrangements. All shares of the Funds represent an
equal pro rata interest in the assets of the class to which such shares belong,
and have identical voting, dividend, liquidation and other rights and the same
terms and conditions, except for class specific expenses and exclusive rights to
vote on matters affecting only individual classes. Sale of the Advisor Class for
Global Gold commenced on May 6, 1998 and sale of the Advisor Class for Global
Natural Resources had not commenced as of the report date. The following
significant accounting policies, related to both classes of 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.

20 1-800-345-2021

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

JUNE 30, 1998 (UNAUDITED)

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
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.

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 or
state 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 capital 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.

At December 31, 1997, Global Gold had accumulated net realized loss
carryovers for federal income tax purposes of approximately $13,900,000
(expiring in 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.

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

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

The Corporation has entered into a Management Agreement with ACIM that
provides each Fund with investment advisory and management services in exchange
for a single, 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:

www.americancentury.com 21

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

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

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

Purchases of securities, excluding short-term investments, for Global Gold
and Global Natural Resources totaled $84,539,497 and $19,996,217, respectively.
Sales of securities, excluding short-term investments, for Global Gold and
Global Natural Resources totaled $71,415,668 and $23,012,622, respectively.

As of June 30, 1998, accumulated net unrealized appreciation (depreciation)
for Global Gold and Global Natural Resources was $(115,884,816) and $5,860,036,
respectively, based on the aggregate cost of investments for federal income tax
purposes of $353,656,247 and $38,960,160, respectively. Accumulated net
unrealized appreciation or depreciation consisted of unrealized appreciation of
$17,656,957 and $9,355,352 for Global Gold and Global Natural Resources and
unrealized depreciation of $133,541,773 and $3,495,316, respectively.

22 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

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

The Corporation is authorized to issue 2,000,000,000 shares to each Fund.
Transactions in shares of the Funds were as follows:
<TABLE>
GLOBAL GOLD GLOBAL NATURAL RESOURCES
SHARES AMOUNT SHARES AMOUNT
INVESTOR CLASS
<S> <C> <C> <C> <C>
Designated shares ........................ 1,000,000,000 1,000,000,000
============== ==============
Six months ended June 30, 1998
Sold ..................................... 54,483,048 $ 360,504,063 3,453,007 $ 40,981,792
Issued in reinvestment of distributions .. 176,088 989,655 37,412 427,626
Redeemed ................................. (50,874,484) (339,700,622) (3,661,942) (43,430,726)
-------------- -------------- -------------- --------------
Net increase (decrease) .................. 3,784,652 $ 21,793,096 (171,523) $ (2,021,308)
============== ============== ============== ==============

Year ended December 31, 1997
Sold ..................................... 56,650,525 $ 498,502,780 5,448,117 $ 68,396,071
Issued in reinvestment of distributions .. 1,572,865 10,054,826 241,208 2,772,120
Redeemed ................................. (57,572,936) (501,839,627) (7,174,926) (89,795,472)
-------------- -------------- -------------- --------------
Net increase (decrease) .................. 650,454 $ 6,717,979 (1,485,601) $ (18,627,281)
============== ============== ============== ==============

ADVISOR CLASS
Designated shares ........................ 250,000,000
==============
Period ended June 30, 1998(1)
Sold ..................................... 4,605 $ 30,963
Issued in reinvestment of distributions .. 20 110
Redeemed ................................. (216) (1,206)
-------------- --------------
Net increase ............................. 4,409 $ 29,867
============== ==============
</TABLE>

(1) May 6, 1998 (commencement of sale) through June 30, 1998.

www.americancentury.com 23

<TABLE>
<CAPTION>
Global Gold--Financial Highlights
- --------------------------------------------------------------------------------

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

Investor Class
1998(1) 1997 1996 1995 1994 1993
PER-SHARE DATA

Net Asset
Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ............$ 6.34 $ 11.33 $ 12.37 $ 11.33 $ 13.67 $ 7.55
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment
Operations
Net Investment Income ........ 0.03 0.09 0.06 0.02 0.03 0.01
Net Realized and Unrealized
Gain (Loss) on Investment
Transactions ................. (0.54) (4.79) (0.40) 1.03 (2.32) 6.12
----------- ----------- ----------- ----------- ----------- -----------
Total From Investment
Operations ................... (0.51) (4.70) (0.34) 1.05 (2.29) 6.13
----------- ----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income ... (0.03) (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 .......... (0.03) (0.29) (0.70) (0.01) (0.05) (0.01)
----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value,
End of Period ..................$ 5.80 $ 6.34 $ 11.33 $ 12.37 $ 11.33 $ 13.67
=========== =========== =========== =========== =========== ===========
Total Return(2) .............. (8.10)% (41.47)% (2.76)% 9.25% (16.75)% 81.22%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........ 0.70%(3) 0.67% 0.62% 0.61% 0.61% 0.72%
Ratio of Net Investment Income
to Average Net Assets ........ 0.79%(3) 0.92% 0.46% 0.17% 0.20% 0.23%
Portfolio Turnover Rate ........ 27% 28% 45% 28% 42% 28%
Net Assets, End of Period
(in thousands) ...............$ 247,333 $ 246,015 $ 432,587 $ 537,693 $ 568,030 $ 616,347
</TABLE>

(1) Six months ended June 30, 1998 (unaudited).

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

(3) Annualized.

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

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

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

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

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

See Notes to Financial Statements

24 1-800-345-2021

Global Gold--Financial Highlights
- --------------------------------------------------------------------------------

FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED

Advisor Class
1998(1)

PER-SHARE DATA

Net Asset Value,
Beginning of Period ................ $ 7.31
------
Income From Investment Operations
Net Realized and Unrealized
Loss on Investment Transactions .. (1.48)
------
Distributions
From Net Investment Income ....... (0.03)
------
Net Asset Value, End of Period ..... $ 5.80
======
Total Return(2) .................. (20.30)%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............ 0.95%(3)
Ratio of Net Investment Loss
to Average Net Assets ............ (0.51)%(3)
Portfolio Turnover Rate ............ 27%
Net Assets, End of Period
(in thousands) ................... $ 26

(1) May 6, 1998 (commencement of sale) through June 30, 1998 (unaudited).

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total return is not annualized.

(3) Annualized.

See Notes to Financial Statements

www.americancentury.com 25

<TABLE>
<CAPTION>
Global Natural Res.--Financial Highlights
- --------------------------------------------------------------------------------

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

1998(1) 1997 1996 1995 1994(2)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period .................. $ 11.48 $ 11.91 $ 10.66 $ 9.61 $ 10.00
---------- ---------- ---------- ---------- ----------
Income From Investment Operations
Net Investment Income .............. 0.12 0.22 0.17 0.16 0.07
Net Realized and Unrealized
Gain (Loss)
on Investment Transactions ......... 0.02 0.08 1.46 1.22 (0.42)
---------- ---------- ---------- ---------- ----------
Total From Investment Operations ... 0.14 0.30 1.63 1.38 (0.35)
---------- ---------- ---------- ---------- ----------
Distributions
From Net Investment Income ......... (0.12) (0.23) (0.17) (0.16) (0.04)
From Net Realized Gains on
Investment Transactions ........... -- (0.50) (0.21) (0.17) --
---------- ---------- ---------- ---------- ----------
Total Distributions ................ (0.12) (0.73) (0.38) (0.33) (0.04)
---------- ---------- ---------- ---------- ----------

Net Asset Value, End of Period ....... $ 11.50 $ 11.48 $ 11.91 $ 10.66 $ 9.61
========== ========== ========== ========== ==========
Total Return(3) .................... 1.21% 2.50% 15.45% 14.41% (3.48)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets .............. 0.74%(4) 0.73%(5) 0.76% 0.76% --

Ratio of Net Investment Income
to Average Net Assets .............. 2.01%(4) 1.55%(5) 1.78% 2.02% 2.74%(4)

Portfolio Turnover Rate .............. 43% 41% 53% 39% --

Net Assets, End of Period
(in thousands) ..................... $ 44,693 $ 46,556 $ 66,021 $ 30,157 $ 18,972
</TABLE>

(1) Six months ended June 30, 1998 (unaudited).

(2) September 15, 1994 (inception) through December 31, 1994.

(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) 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%.

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

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

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

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

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

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

See Notes to Financial Statements

26 1-800-345-2021

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

SHARE CLASSES

American Century offers two classes of shares for Global Gold and Global
Natural Resources. One class is for investors who buy directly from American
Century, the other is for investors who buy through financial intermediaries.

The original class of Global Gold and Global Natural Resources 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 do not
pay any commissions or other fees for purchase of fund shares directly from
American Century. Investors who buy Investor Class shares through a
broker-dealer may be required to pay the broker-dealer a transaction fee. THE
PRICE AND PERFORMANCE OF THE INVESTOR CLASS SHARES ARE LISTED IN NEWSPAPERS. NO
OTHER CLASS IS CURRENTLY LISTED.

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

RETIREMENT ACCOUNT INFORMATION

www.americancentury.com 27

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

INVESTMENT PHILOSOPHY AND POLICIES

The American Century group offers 14 funds, including four "specialty"
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. International investing also involves special risks, such as
political instability and currency fluctuations.

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.

GLOBAL NATURAL RESOURCES seeks to realize a total return consistent with
investment in companies that are engaged in the natural resources industries.

COMPARATIVE INDICES

The indices listed 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 Global Gold fund benchmark was the Benham North American Gold Equities
Index from inception through February 1996. From March 1996 through December
1997, the benchmark was the FT-SE Gold Mines Index. From January 1998 to the
present, the benchmark has been a proprietary index described in more detail on
page 6.

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, 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

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.

(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.

[left margin]
INVESTMENT TEAM LEADERS

GLOBAL GOLD
PORTFOLIO MANAGER:
BILL MARTIN

GLOBAL NATURAL RESOURCES
PORTFOLIO MANAGER:
JOE STERLING

28 1-800-345-2021

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

www.americancentury.com 29

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

30 1-800-345-2021

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

www.americancentury.com 31

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

32 1-800-345-2021

[inside back cover]

[right margin]

[american century logo(reg.sm)]
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

[recycled logo]
Recycled

[back cover]

[40 Years]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

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

9808 (c)1998 American Century Services Corporation
SH-BKT-13280 Funds Distributor, Inc.
<PAGE>
[front cover] June 30, 1998

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

[graphic of computer terminal, keyboard and eyeglasses]

AMERICAN CENTURY GROUP
- -----------------------
UTILITIES

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

A Note from the Founder
- --------------------------------------------------------------------------------

I founded American Century on the belief that if we can make you
successful, you, in turn, will make us successful. That is the principle that
will guide us in the future.

Sincerely,
/s/James E. Stowers

About our New Report Design
- --------------------------------------------------------------------------------

Why We Changed

What's New

The reports are designed to be attractive and easy to use whether you're reading
them in depth or just skimming.

New features include:

* Larger type size in many sections.
* Brief explanations of the financial statements.
* More prominent graphs and charts.
* Quotes in the margins to highlight report content.

THE BOTTOM LINE.

The new reports also use roughly the same amount of paper as the old ones.
Previously, paper was trimmed and thrown away to produce the smaller report
size.

We believe we've come up with a more interesting, informative and user-friendly
publication.

We hope you enjoy it.

[left margin]

American Century Group
Utilities
(BULIX)

[40 Years logo]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

U.S. stocks have posted historic returns over the last few years. The first
six months of 1998 continued this momentum, despite some slowing in the second
quarter due to the economic and financial crisis in Asia. Utilities stocks in
general performed well by historical standards but didn't quite keep pace with
the S&P 500.

We continue to believe U.S. stocks should produce fine results over the
long run. Corporate America is in good health. While the crisis in Asia has
affected earnings in some areas, the overall U.S. economy is sound. Utilities
stocks have benefited from the Asia crisis because utilities are perceived to
have lower Asian exposure than other stock sectors. Utilities are also appealing
when the U.S. economy and the stock market take a downturn because of their
relatively steady income stream, which makes them more bond-like than other
stocks.

The ability of the quantitative equity team that manages American Century
Utilities to find attractive investment opportunities is clearly reflected in
the fund's performance during the first half of the year. The fund outperformed
the average utilities fund, a feat it duplicated for the one-, three- and
five-year periods ended June 30, 1998.

Turning to the subject of distributions, please note the following policy
changes. American Century Utilities paid a capital gains distribution in March
1998 as well as in December 1997. The fund will continue on this March-December
capital gains distribution schedule going forward. The March distribution allows
the fund to promptly distribute capital gains realized between the IRS's October
31 deadline for December distributions and the fund's December 31 fiscal
year-end.

In addition, Utilities, which has historically paid income dividends on a
monthly basis, recently began paying these dividends on a quarterly basis. This
will make the fund's distribution policy consistent with other American Century
income and equity funds. Distributions are described in greater detail in the
"Distributions" section of your prospectus.

Finally, we hope you like the new design of this report. It's intended to
make the important information you need about your fund easier to find and read.

We appreciate your investment with American Century.

Sincerely,

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

[right margin]

Table of Contents
Report Highlights ....................................................... 2
Market Perspective ...................................................... 3
UTILITIES
Performance Information ................................................. 5
Management Q&A .......................................................... 6
Schedule of Investments ................................................. 9
FINANCIAL STATEMENTS
Statement of Assets and
Liabilities ............................................................. 11
Statement of Operations ................................................. 12
Statements of Changes
in Net Assets ........................................................... 13
Notes to Financial
Statements .............................................................. 14
Financial Highlights .................................................... 17
OTHER INFORMATION
Retirement Account
Information ............................................................. 18
Background Information
Investment Philosophy
and Policies ......................................................... 19
Comparative Indices .................................................. 19
Lipper Rankings ...................................................... 19
Investment Team
Leaders .............................................................. 19
Glossary ................................................................ 20

www.americancentury.com 1

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

MARKET PERSPECTIVE

* The U.S stock market's recent climb was very steep. Calendar 1995-1997
marked one of the best three-year performance runs on record for the S&P
500.

* The sharp ascent continued during the first six months of 1998. The S&P 500
gained 17.66%.

* Stocks owed much of their success to a robust economy with minimal
inflation.

* Utilities stocks also performed well, though not quite as well as the
broader market.

* Electric and gas utilities stocks fell a bit out of favor early in 1998 but
rallied later as investors sought haven from the "Asian contagion."

* Telecommunications companies benefited from growing earnings and a wave of
industry consolidation.

* Cautionary notes were sounded in the market as the first half of 1998 ended.
U.S. stock prices in general were expensive by most traditional measures.
Earnings multiples hit historical highs and dividend yields fell to
historical lows.

* An upturn in inflation or a substantial decline in corporate earnings could
derail the stock rally. Investor expectations are running high. In this
environment, stocks could prove vulnerable to disappointments.

MANAGEMENT Q&A

* American Century Utilities performed well, providing a solid return and
outperforming the average utilities fund.

* The portfolio's telecommunications holdings increased. Telecommunications
benefited from growing demand for higher-profit services and from a wave of
merger activity. The industry also offers relatively little exposure to the
economic problems in Asia.

* American Century Utilities was slightly underweighted in electric utilities
stocks but moderately overweighted in natural gas companies. Though electric
companies represented a larger share of the fund's holdings (to match the
fund's benchmark), we found natural gas firms to be more attractive.

* The portfolio's electric and natural gas utility stocks also offer only
limited exposure to the turmoil in Asia.

* The fund's yield declined, primarily because of the rising share price.

* We're optimistic about long-term prospects for utilities. Streamlining
caused by mergers and acquisitions and by deregulation should help earnings
growth.

* Going forward, we'll focus on the long-term prospects for the utilities
industry and avoid overreacting to short-term market developments. We'll
also continue to use the same disciplined investment strategy that helped us
achieve solid long-term performance.

[left margin]

"WE'RE OPTIMISTIC ABOUT LONG-TERM PROSPECTS FOR UTILITIES. STREAMLINING CAUSED
BY MERGERS AND ACQUISITIONS AND BY DEREGULATION SHOULD HELP EARNINGS GROWTH."

UTILITIES
(BULIX)
TOTAL RETURNS: AS OF 6/30/98
6 Months 8.55%*
1 Year 35.25%
NET ASSETS: $221 million
30-DAY SEC YIELD 2.68%
INCEPTION DATE: 3/1/93

* Not annualized.

See Total Returns on page 5.
Investment terms are defined in the Glossary on page 20.

2 1-800-345-2021

Market Perspective from Mark Mallon
- --------------------------------------------------------------------------------

[photo of Mark Mallon]
Mark Mallon, head of conservative equity, specialty, and asset allocation funds
at American Century

A STEEP CLIMB

Just how quickly did the U.S. stock market appreciate over the past few
years? It took approximately 16 years, from 1970-1985, for the S&P 500 to
double. Only six years later, it had doubled again, and roughly five years after
that, in early 1997, it had doubled once more, to 800. At the end of June 1998,
the S&P 500 was over 1100. As the accompanying graph illustrates, the index's
climb was very steep.

Looked at another way, calendar 1995-1997 marked one of the best three-year
performance runs on record. All three years saw returns of more than 20%. During
the first half of 1998, the S&P 500 barely paused to catch its breath, gaining
17.66%. Lower corporate earnings, a tight U.S. labor market, and the ongoing
economic crisis in Asia caused only minor pullbacks in the second quarter.

A POWERHOUSE ECONOMY

U.S. stocks owed much of their success to a robust economy with minimal
inflation. The U.S. economy demonstrated a vigor we hadn't seen in a generation

* U.S. economic growth hit 3.9% in 1997 and 5.5% in the first quarter of 1998.

* Inflation was a mere 1.7% for the year ended June 30.

* Interest rates were among the lowest since the 1960s.

* Unemployment in 1997 was the lowest in 28 years.

* The U.S. government projected the first federal budget surplus in 30 years.

UTILITIES PARTICIPATED TOO

Utilities stocks had a tremendous year in 1997, one that's not likely to be
repeated in 1998. However, utilities continued to perform very well during the
first half, boosted by the strong performance of telecommunications companies
such as AT&T, Ameritech and GTE. Despite this strong performance, the sector
lagged behind the continued exceptional returns of the largest U.S. companies,
represented by the S&P 500. (See the accompanying Market Returns chart.)

Utilities stocks, which are considered a safe haven in times of market
turmoil, posted near-record returns in 1997 in the face of economic and currency
turmoil in Asia. But during the first quarter of 1998, investors recovered from
their Asian gloom and turned their backs on electric and natural gas stocks in
search of faster-growing opportunities elsewhere.

[right margin]

"U.S. STOCKS OWED MUCH OF THEIR SUCCESS TO A ROBUST ECONOMY WITH MINIMAL
INFLATION."

MARKET RETURNS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
S&P 500 17.66%
S&P TELECOMMUNICATIONS
(LONG DISTANCE) INDEX 15.40%
S&P ELECTRIC INDEX 5.54%
S&P NATURAL GAS INDEX 11.98%

[mountain chart - data below]

S&P 500 PERFORMANCE
FROM DECEMBER 1970 TO DECEMBER 1997

Source: Bloomberg Financial Markets

www.americancentury.com 3

Market Perspective from Mark Mallon
- --------------------------------------------------------------------------------
(Continued)

Telecommunications stocks provided some of those growth opportunities.
Their success is owed to two main factors: continued strong earnings growth and
another wave of industry consolidation. Earnings growth was spurred by both
cost-cutting and increased sales of profitable products. As a result of industry
consolidation, many telecom companies realized efficiencies of scale and were
able to cut their expenses. What's more, these companies enjoyed growing profits
from high-margin services, such as cellular service and call waiting.

The new round of telecommunications industry consolidation sparked an
explosion in telecom mega-mergers. In the first quarter of 1998, the $72 billion
merger between Ameritech and SBC Communications was announced, followed in the
second quarter by the $65 billion proposed merger of AT&T and cable company TCI.
This trend continued in the third quarter when Bell Atlantic and GTE announced a
$52 billion merger deal.

SECTOR LEADERSHIP SHIFTS

The tide turned in favor of electric and natural gas stocks late in the
second quarter. Not only were they cheap relative to other market sectors, but
they received a boost from a new round of Asian troubles that surfaced in June.
In addition, the bond market rallied and provided a favorable backdrop for
utilities stocks. (Utilities, because of their relatively high dividend
payments, historically have exhibited bond-like performance characteristics.)
Finally, investors became increasingly concerned about telecommunications and
the ability of large non-utility companies to maintain earnings growth in light
of the Asian crisis and its negative influence on U.S. growth.

EARNINGS, INFLATION, AND INTEREST RATES

What could derail the U.S. stock market? Most likely an upturn in inflation
or a substantial decline in earnings. For a hint of what could happen, you don't
have to look farther than the second and third quarters of 1998, when the Asian
crisis threatened earnings.

If inflation picks up, interest rates are likely to rise too, as the
Federal Reserve tries to head off inflation by pushing rates higher. Higher
interest rates increase the cost of borrowing for everyone, from corporations to
prospective home buyers, and thus tend to slow economic growth and dampen
inflation.

[left margin]

"UTILITIES LAGGED BEHIND THE CONTINUED EXCEPTIONAL RETURNS OF THE S&P 500."

[line chart - data below]

MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE SIX MONTHS ENDED JUNE 30, 1998
Value on 6/30/98
S&P 500 $1.18
S&P Telecomm
(long distance) $1.15
S&P Natural Gas $1.12
S&P Electric $1.06

S&P S&P Electric S&P Natural S&P Telecomm
500 Companies Gas (long distance)
12/31/97 $1.00 $1.00 $1.00 $1.00
1/31/98 $1.01 $0.96 $0.97 $1.06
2/28/98 $1.08 $0.98 $1.04 $1.07
3/31/98 $1.14 $1.06 $1.06 $1.16
4/30/98 $1.15 $1.02 $1.08 $1.11
5/31/98 $1.13 $1.02 $1.08 $1.15
6/30/98 $1.18 $1.06 $1.12 $1.15

4 1-800-345-2021

Utilities--Performance
- --------------------------------------------------------------------------------

TOTAL RETURNS AS OF JUNE 30, 1998
INCEPTION 3/1/93
FUND UTILITY FUNDS(2)
UTILITIES BENCHMARK AVERAGE RETURN FUND'S RANKING
- ------------------------------------------------------------------------------
6 MONTHS(1) ........... 8.55% 11.55% 8.44% --
1 YEAR ................ 35.25% 38.59% 25.93% 8 OUT OF 95
- ------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS ............... 22.79% 25.05% 19.05% 9 OUT OF 81
5 YEARS ............... 13.69% 15.09% 12.20% 11 OUT OF 37
LIFE OF FUND .......... 14.00% 15.04% 12.26%(3) 11 OUT OF 35(3)

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

(2) According to Lipper Analytical Services, an independent mutual fund ranking
service.

(3) Since 3/4/93, the date nearest the fund's inception for which data are
available.

See pages 19-20 for more information about returns, the fund's benchmark and
Lipper fund rankings.

[mountain chart - data below]

GROWTH OF $10,000 OVER LIFE OF FUND
Value on 6/30/98
S&P 500 $29,129
Fund Benchmark $21,107
Utilities $20,111

Utilities S&P 500 Fund Benchmark
DATE ACCT VALUE ACCT VALUE ACCT VALUE
2/28/93 $10,000 $10,000 $10,000
6/30/93 $10,590 $10,335 $10,455
9/30/93 $11,264 $10,601 $11,078
12/31/93 $10,659 $10,847 $10,614
3/31/94 $9,732 $10,440 $9,699
6/30/94 $9,639 $10,484 $9,562
9/30/94 $9,801 $10,997 $9,812
12/31/94 $9,590 $10,996 $9,618
3/31/95 $10,161 $12,064 $10,071
6/30/95 $10,862 $13,212 $10,795
9/30/95 $11,897 $14,234 $11,822
12/31/95 $13,013 $15,089 $12,877
3/31/96 $12,698 $15,898 $12,637
6/30/96 $13,133 $16,609 $13,237
9/30/96 $12,505 $17,118 $12,839
12/31/96 $13,640 $18,547 $13,997
3/31/97 $13,351 $19,048 $13,782
6/30/97 $14,870 $22,371 $15,230
9/30/97 $15,696 $24,034 $16,157
12/31/97 $18,528 $24,722 $18,921
3/31/98 $20,748 $28,165 $21,403
6/30/98 $20,111 $29,129 $21,107

$10,000 investment made 3/1/93

[bar chart - data below]

ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDED JUNE 30)

Utilities Fund Benchmark
6/93* 5.90% 4.55%
6/94 -8.98% -8.54%
6/95 12.68% 12.89%
6/96 20.92% 22.63%
6/97 13.22% 15.05%
6/98 35.25% 38.59%

The chart at left shows the growth of a $10,000 investment over the life of the
fund, while the chart below shows the fund's year-by-year performance. The S&P
500 and fund's benchmark are provided for comparison. Utilities' returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the returns of the indices 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.

* From 3/1/93 (the fund's inception date) to 6/30/93.

www.americancentury.com 5

Utilities--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 DURING THE FIRST HALF OF 1998?

American Century Utilities performed well, providing a solid return and
outperforming the average utilities fund. The fund's total return was 8.55%,
compared with the 8.44% average return of the 105 utilities funds tracked by
Lipper Analytical Services. The portfolio's longer-term returns also beat the
comparable returns of the average utilities fund. (See the Total Returns table
on the pervious page for other fund performance comparisons.)

WHY HAS AMERICAN CENTURY UTILITIES CONTINUED TO OUTPERFORM THE AVERAGE UTILITIES
FUND?

At least part of the fund's good recent performance compared with its peers
is due to the fact that it has remained fully invested in utilities stocks. We
don't try to time the market or boost returns and yields by straying outside of
the utilities sector. We strive to deliver a "pure play" on utilities, primarily
phone, electric and natural gas companies.

The fund's consistent returns might also be attributable to our disciplined
investment approach, based on a benchmark index of utilities companies.

CAN YOU DESCRIBE THE PORTFOLIO'S BENCHMARK AND ITS ROLE?

The benchmark consists of approximately 165 utilities stocks that meet our
investment criteria. We manage the fund to match the benchmark's performance and
risk characteristics. The benchmark's composition by industry group is
approximately 50% telephone and communication services, about 35% electric
utilities and the remaining 15% or so in natural gas companies. The fund's
company and industry weightings typically don't stray too far from the
composition of the benchmark.

HOW WAS THE PORTFOLIO ALLOCATED ACROSS THE THREE SECTORS THAT MAKE UP THE
BENCHMARK?

Because telecommunications stocks outperformed the electric and natural gas
sectors through much of the past six months, our telecommunications weighting
grew to 55% of fund assets, up from about 50% as of December 31, 1997. The
stocks of long-distance companies in particular performed well, thanks largely
to growing demand for higher-profit services such as cellular.

Adding further support to telecom companies was a wave of merger activity.
One of the largest proposed mergers in any industry so far this year was the
planned combination of Ameritech and SBC Communications. Both companies were
among the portfolio's top 10 holdings at the end of the period. AT&T, another of
the fund's larger holdings, also announced a proposed merger with cable giant
TCI.

[left margin]

"AMERICAN CENTURY UTILITIES PERFORMED WELL, PROVIDING A SOLID RETURN AND
OUTPERFORMING THE AVERAGE UTILITIES FUND."

PORTFOLIO AT A GLANCE
6/30/98 12/31/97
NUMBER OF COMPANIES 83 77
30-DAY SEC YIELD 2.68% 2.93%
PRICE/EARNINGS RATIO 17.0 17.2
PORTFOLIO TURNOVER 67%(1) 92%(2)
EXPENSE RATIO (FOR
INVESTOR CLASS) 0.70%(3) 0.72%

(1) Six months ended 6/30/98.

(2) Year ended 12/31/97.

(3) Annualized.

Investment terms are defined in the Glossary on page 20.

6 1-800-345-2021

Utilities--Q&A
- --------------------------------------------------------------------------------
(Continued)

Although telecom stocks experienced a slight downturn in May and June, we
remained committed to them. Not only are they fairly priced, in our view, they
also offer relatively little exposure to the economic problems in Asia.

HOW WAS AMERICAN CENTURY UTILITIES POSITIONED IN ELECTRIC AND NATURAL GAS
STOCKS?

The fund was slightly underweighted in electric utilities stocks but
moderately overweighted in natural gas companies. Both struggled in the first
quarter of this year when investors were focused on finding higher-octane growth
elsewhere in the market. Their fortunes reversed late in the second quarter,
when a renewed bout of nervousness over Asia caused investors to seek stocks
with dependable earnings and little Asian exposure.

Although electric utilities stocks represented a larger share of the fund's
holdings (to match the benchmark), we found natural gas stocks to be slightly
more attractive because they offered better relative value and earnings growth.

WHAT WAS UTILITIES' EXPOSURE TO FOREIGN MARKETS DURING THE PERIOD?

We focused primarily on utilities that generate most of their earnings in
the U.S. That said, roughly 6% of holdings were in ADRs (American Depository
Receipts), which are U.S.-traded securities that represent shares of
foreign-based corporations. Among our largest foreign holdings were Telefonos de
Mexico, the largest Mexican phone service provider, and its Canadian equivalent,
Bell Canada.

The fund had limited exposure to companies that operate or conduct
significant amounts of business in troubled Asian economies.

THE DIVIDEND YIELD DECLINED DURING THE SIX-MONTH PERIOD. WAS THAT A RESULT OF
DIVIDEND CUTS BY UTILITIES COMPANIES?

No. The period didn't include any major dividend cut announcements by
utilities companies. The main reason for the slight decline in the fund's yield
was its rising share price. Other things being equal, the higher the value of
each fund share, the lower its yield. (See the Glossary on page 20 for a
complete definition of the fund's 30-day SEC yield.) But generally speaking,
utilities companies have paid out smaller dividends over the past several years
as more of their money is reinvested for growth and improvements.

WHAT'S YOUR OUTLOOK FOR UTILITIES STOCKS?

We're optimistic about long-term prospects. Telecommunications companies
have enjoyed strong earnings growth thanks mostly to the efficiencies they've
wrung out of mergers and acquisitions. We think that those earnings can continue
to grow, as long as the economy remains relatively healthy.

We expect, however, that merger activity will shift from the telecom arena
to the electric. As more and more states adopt legislation that allows
competition among electric providers, power companies may increasingly look for
opportunities to restructure geographically to gain a foothold in new markets.
Others will likely streamline their operations by divesting themselves of

[right margin]

"ONE OF THE LARGEST PROPOSED MERGERS WAS THE PLANNED COMBINATION OF AMERITECH
AND SBC COMMUNICATIONS. BOTH WERE IN THE PORTFOLIO'S TOP 10 HOLDINGS."

TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
BELLSOUTH CORP. 6.6% 5.6%

AMERITECH CORP. 5.5% 5.0%

SBC COMMUNICATIONS
INC. 5.3% 3.2%

GTE CORP. 5.1% 5.1%

WORLDCOM, INC. 4.9% 3.6%

AT&T CORP. 4.6% 2.7%

BELL ATLANTIC CORP. 4.5% 4.0%

AIRTOUCH
COMMUNICATIONS,
INC. 4.0% 4.3%

U S WEST
COMMUNICATIONS
GROUP 3.9% 3.3%

SEMPRA ENERGY 3.8% --

www.americancentury.com 7

Utilities--Q&A
- --------------------------------------------------------------------------------
(Continued)

non-core units to focus on a core business--be it power generation or power
transmission/distribution.

To the extent that restructuring and consolidation are viewed favorably by
investors, heightened merger activity should bode well for the electric sector.
We anticipate that mergers will also increase in the natural gas sector, which
we believe is the most attractively priced sector in the utilities group.

We think that the short-term prospects for utilities stocks, however, are
less certain. If inflation becomes the by-product of the strong U.S. economy,
interest rates could rise and put bond prices under pressure. Because they pay
relatively high dividends, utilities stocks often mimic the bond market's
performance. On the other hand, if economic growth slows enough to reduce the
earnings prospects for cyclical companies (those that are sensitive to the
economy's ups and downs), utilities stocks could benefit from lower interest
rates and attention from investors who become more conservative.

GIVEN THAT OUTLOOK, WHAT ARE YOUR PLANS FOR THE FUND?

We'll focus on the long-term prospects for the utilities industry and avoid
overreacting to short-term market developments. Furthermore, we'll continue to
manage the fund to deliver a "pure play" in utilities, meaning we'll stay fully
invested in utilities stocks at all times. That means the fund is likely to
underperform the broader market when utilities lag. For the time being, we're
comfortable with our allocation among sectors. Above all, we'll continue to use
the same disciplined investment strategy that helped us achieve solid long-term
performance.

[left margin]

"OUR TELECOMMUNICATIONS WEIGHTING GREW TO ABOUT 55% OF FUND ASSETS, UP FROM
ABOUT 50%."

INDUSTRY BREAKDOWN
% OF FUND INVESTMENTS
AS OF AS OF
6/30/98 12/31/97
COMMUNICATIONS
SERVICES 55% 50%
ELECTRIC 33% 34%
NATURAL GAS 10% 10%
OTHER 2% 6%

8 1-800-345-2021

Utilities--Schedule of Investments
- --------------------------------------------------------------------------------

JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
COMMUNICATIONS SERVICES--55.4%
176,300 AT&T Corp. $10,071,138
149,800 AirTouch Communications, Inc.(1) 8,753,938
24,600 Aliant Communications, Inc. 674,194
71,900 ALLTEL Corp. 3,343,350
271,600 Ameritech Corp. 12,188,050
63,500 BCE Inc. 2,710,656
217,400 Bell Atlantic Corp. 9,918,875
215,100 BellSouth Corp. 14,438,588
10,300 Cable & Wireless plc ADR 379,813
7,200 Cellular Communications
International, Inc.(1) 360,000
19,400 Century Telephone Enterprises,
Inc. 889,975
29,700 Cincinnati Bell Inc. 850,163
19,500 CommNet Cellular Inc.(1) 286,406
8,800 e.spire(tm) Communications Inc.(1) 198,825
200,100 GTE Corp. 11,130,563
49,700 Hong Kong Telecommunications
Ltd. ADR 938,088
20,600 IDT Corp.(1) 619,931
45,200 MCI Communications Corp. 2,625,838
10,100 Nextel Communications, Inc.(1) 250,922
14,200 Pacific Gateway Exchange, Inc.(1) 569,331
34,500 Paging Network, Inc.(1) 481,922
10,500 PanAmSat Corp.(1) 597,844
28,900 Premiere Technologies, Inc.(1) 239,780
290,100 SBC Communications Inc. 11,603,988
22,600 SkyTel Communications Inc.(1) 529,688
6,100 SmarTalk TeleServices, Inc.(1) 86,544
19,500 Sprint Corp. 1,374,750
31,400 Telecom Corporation of New
Zealand Ltd. ADR 1,028,350
83,000 Telefonos de Mexico, S.A. Cl L
ADR 3,989,188
29,400 Transaction Network Services,
Inc.(1) 621,994
183,200 U S WEST Communications
Group 8,610,400
3,900 United States Cellular Corp.(1) 119,925
9,400 West Teleservices Corp.(1) 115,150
1,300 Western Wireless Corp. Cl A(1) 25,878
5,500 WinStar Communications, Inc.(1) 236,328
222,800 WorldCom, Inc.(1) 10,770,988
---------------
121,631,361
---------------

Shares Value
- --------------------------------------------------------------------------------
ENERGY (PRODUCTION &
MARKETING)--1.2%
20,800 Coastal Corp. (The) $1,452,100
3,900 Enron Corp. 210,844
20,600 NICOR Inc. 826,575
---------------
2,489,519
---------------
NATURAL GAS--10.2%
36,000 Atmos Energy Corp. 1,098,000
12,100 Consolidated Natural Gas Co. 712,388
71,500 Eastern Enterprises 3,065,563
103,300 Energen Corp. 2,078,913
63,200 Equitable Resources Inc. 1,927,600
87,100 KN Energy, Inc. 4,719,731
26,700 MCN Energy Group Inc. 664,163
18,900 NUI Corp. 480,769
30,500 National Fuel Gas Co. 1,328,656
12,400 ONEOK, Inc. 494,450
60,100 Piedmont Natural Gas Co., Inc. 2,020,863
61,500 Southwest Gas Corp. 1,502,906
14,800 Washington Gas Light Co. 395,900
89,200 Westcoast Energy Inc. 1,990,275
---------------
22,480,177
---------------
UTILITIES (ELECTRIC)--32.6%
102,700 Allegheny Energy, Inc. 3,093,838
113,900 Baltimore Gas & Electric Co. 3,538,019
28,900 Central Maine Power Co. 563,550
40,250 Conectiv, Inc. 825,125
15,700 Conectiv, Inc. Cl A 569,125
47,400 Consolidated Edison Co. of
New York, Inc. 2,183,363
35,400 Detroit Edison Company 1,429,275
73,500 Dominion Resources, Inc. (Va.) 2,995,125
49,400 Duke Power Co. 2,926,950
14,500 Edison International 428,656
5,200 El Paso Electric Co.(1) 47,775
66,000 Empresa Nacional de Electricidad
S.A. (Chile) ADR 940,500
19,500 Energy East Corp. 811,688
80,500 FIRSTENERGY CORP. 2,475,375
34,600 GPU Inc. 1,308,313
100,700 Hawaiian Electric Industries, Inc. 3,996,531
29,200 Houston Industries Inc. 901,550
56,000 MDU Resources Group, Inc. 1,998,500
131,600 Minnesota Power & Light Co. 5,231,100
19,300 New Century Energies, Inc. 876,944
44,900 Otter Tail Power Co. 1,671,122
15,800 PP&L Resources, Inc. 358,463
156,000 Public Service Co. of New Mexico 3,539,250
304,100 Sempra Energy(1) 8,438,775
211,100 Southern Co. 5,844,831
150,500 Texas Utilities Co. 6,264,563

See Notes to Financial Statements

www.americancentury.com 9

Utilities--Schedule of Investments
- --------------------------------------------------------------------------------
(continued)
JUNE 30, 1998 (UNAUDITED)

Shares Value
- --------------------------------------------------------------------------------
83,400 UGI Corp. $2,074,575
32,500 UniSource Energy Corp.(1) 511,875
300 United Illuminating Co. 15,188
82,500 Utilicorp United Inc. 3,109,219
118,600 Washington Water Power Co. 2,661,088
---------------
71,630,251
---------------
TOTAL COMMON STOCKS--99.4% 218,231,308
---------------
(Cost $178,254,005)

Principal Amount Value
- -------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS--0.6%
Repurchase Agreement, BA Security Services,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.65%, dated 6/30/98,
due 7/1/98 (Delivery value $1,400,220) $1,400,000
---------------
(Cost $1,400,000)

TOTAL INVESTMENT SECURITIES--100.0% $219,631,308
===============
(Cost $179,654,005)

NOTES TO SCHEDULE OF INVESTMENTS

ADR = American Depositary Receipt

(1) Non-income producing.

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

The schedule includes:

* a list of each investment

* the number of shares of each stock

* the market value of each investment

* the percentage of investments in each industry, as applicable

* the percent and dollar breakdown of each investment category

See Notes to Financial Statements

10 1-800-345-2021

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

JUNE 30, 1998 (UNAUDITED)

ASSETS
Investment securities, at value
(identified cost of $179,654,005)
(Note 3) ............................................... $ 219,631,308
Cash ..................................................... 1,110,626
Receivable for investments sold .......................... 2,169,440
Dividends and interest receivable ........................ 649,760
--------------
223,561,134
--------------
LIABILITIES
Disbursements in excess
of demand deposit cash ................................. 116,033
Payable for investments purchased ........................ 2,185,940
Payable for capital shares redeemed ...................... 121,080
Accrued management fees (Note 2) ......................... 124,089
Payable for directors' fees
and expenses ........................................... 1,272
--------------
2,548,414
--------------
Net Assets ............................................... $ 221,012,720
==============
CAPITAL SHARES, $10.00 PAR VALUE
Authorized ............................................... 2,000,000,000
==============
Outstanding .............................................. 14,682,544
==============
Net Asset Value Per Share ................................ $ 15.05
==============
NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) .................. $ 162,854,852
Undistributed net investment income ...................... 645,360
Accumulated undistributed net
realized gain from investment
transactions ........................................... 17,535,273
Net unrealized appreciation
on investments (Note 3) ................................ 39,977,235
--------------
$ 221,012,720
==============

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

See Notes to Financial Statements

www.americancentury.com 11

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

SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)

INVESTMENT INCOME

Income:
Dividends (net of foreign tax
withheld of $25,096) ................................... $ 3,572,184
Interest ................................................. 55,964
------------
3,628,148
------------
Expenses (Note 2):
Management fees .......................................... 755,721
Directors' fees and expenses ............................. 12,170
------------
767,891
------------
Net investment income .................................... 2,860,257
------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized gain on investments ......................... 18,167,440
Change in net unrealized
appreciation on investments ............................ (2,654,485)
------------

Net realized and unrealized
gain on investments .................................... 15,512,955
------------

Net Increase in Net Assets
Resulting from Operations .............................. $ 18,373,212
============

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

Fund OPERATIONS include:

* income earned from investments (dividends and interest)

* management fees and other expenses

* gains or losses from selling investments (known as realized gains or losses)

* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)

See Notes to Financial Statements

12 1-800-345-2021

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

SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1997

Increase in Net Assets

1998 1997
OPERATIONS
Net investment income .................. $ 2,860,257 $ 4,813,402
Net realized gain on
investment transactions .............. 18,167,440 14,150,655
Change in net unrealized
appreciation on investments .......... (2,654,485) 25,220,795
------------- -------------
Net increase in net assets
resulting from operations ............ 18,373,212 44,184,852
------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ............. (2,464,552) (4,602,845)
From net realized gains
from investment transactions ......... (3,439,463) (10,451,945)
------------- -------------
Decrease in net assets
from distributions ................... (5,904,015) (15,054,790)
------------- -------------

CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold .............. 116,488,487 108,091,075
Proceeds from reinvestment
of distributions ..................... 5,266,026 13,016,905
Payments for shares redeemed ........... (123,172,710) (85,409,985)
------------- -------------
Net increase (decrease) in
net assets from capital
share transactions ................... (1,418,197) 35,697,995
------------- -------------
Net increase in net assets ............. 11,051,000 64,828,057

NET ASSETS
Beginning of period .................... 209,961,720 145,133,663
------------- -------------
End of period .......................... $ 221,012,720 $ 209,961,720
============= =============
Undistributed net
investment income ................... $ 645,360 $ 249,655
============= =============

TRANSACTIONS IN SHARES
OF THE FUND
Sold ................................... 7,985,926 8,043,039
Issued in reinvestment
of distributions ..................... 356,904 973,561
Redeemed ............................... (8,406,966) (6,883,378)
------------- -------------
Net increase (decrease) ................ (64,136) 2,133,222
============= =============

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

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

* distributions--income and gains distributed to shareholders

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

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

See Notes to Financial Statements

www.americancentury.com 13

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

JUNE 30, 1998 (UNAUDITED)

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 Utilities Fund (the
Fund) is one of the five funds issued by the Corporation. 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 Fund is
authorized to issue two classes of shares: the Investor Class and the Advisor
Class. The two classes of shares differ principally in their respective
shareholder servicing and distribution expenses and arrangements. All shares of
the Fund represent an equal pro rata interest in the assets of the class to
which such shares belong, and have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except for class specific
expenses and exclusive rights to vote on matters affecting only individual
classes. Sale of the Advisor Class commenced on June 25, 1998. Due to the
immaterial amount of transactions for the Advisor Class, they are not shown
separately on the financial statements. The following significant accounting
policies, related to both classes of 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 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
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 or state income taxes.

DISTRIBUTIONS TO SHAREHOLDERS--Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income were declared
daily and distributed monthly. Effective June 26, 1998, distributions from net
investment income will be declared and paid quarterly. Distributions from net
realized capital gains are expected to be declared and paid semi-annually.

The character of distributions made during the year from net investment
income or net realized capital 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.

14 1-800-345-2021

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

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--Fund's Distributor, Inc. (FDI) is the Corporation's
distributor. Certain officers of FDI are also officers of the Corporation.

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

The Corporation has entered into a Management Agreement with ACIM that
provides the Fund with investment advisory and management services in exchange
for a single, unified management fee. Expenses excluded from this agreement are
brokerage, taxes, portfolio insurance, interest, fees and expenses of those
Directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses. 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 each class's average daily closing 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 (Investor Class) is as follows:

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

www.americancentury.com 15

Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
JUNE 30, 1998 (UNAUDITED)

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

Purchases and sales of securities, excluding short-term investments,
totaled $146,638,177 and $147,964,431, respectively. On June 30, 1998,
accumulated net unrealized appreciation on investments was $39,366,517, based on
the aggregate cost of investments for federal income tax purposes of
$180,264,791, which consisted of unrealized appreciation of $41,539,646 and
unrealized depreciation of $2,173,129.

16 1-800-345-2021

<TABLE>
<CAPTION>
Utilities--Financial Highlights
- --------------------------------------------------------------------------------

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

1998(1) 1997 1996 1995 1994 1993(2)
PER-SHARE DATA

Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period ............. $ 14.24 $ 11.51 $ 11.44 $ 8.79 $ 10.24 $ 10.00
----------- ----------- ----------- ----------- ----------- -----------
Income From Investment
Operations
Net Investment Income ......... 0.23 0.43 0.45 0.42 0.44 0.36
Net Realized and
Unrealized Gain (Loss)
on Investment Transactions .... 1.01 3.57 0.08 2.65 (1.45) 0.30
----------- ----------- ----------- ----------- ----------- -----------
Total From Investment
Operations .................... 1.24 4.00 0.53 3.07 (1.01) 0.66
----------- ----------- ----------- ----------- ----------- -----------
Distributions
From Net Investment Income .... (0.20) (0.42) (0.46) (0.42) (0.44) (0.36)
From Net Realized Gains on
Investment Transactions ....... (0.23) (0.85) -- -- -- (0.06)
----------- ----------- ----------- ----------- ----------- -----------
Total Distributions ........... (0.43) (1.27) (0.46) (0.42) (0.44) (0.42)
----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value, End of Period .. $ 15.05 $ 14.24 $ 11.51 $ 11.44 $ 8.79 $ 10.24
=========== =========== =========== =========== =========== ===========
Total Return(3) ............... 8.55% 35.82% 4.82% 35.70% (10.03)% 6.60%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......... 0.70%(4) 0.72% 0.71% 0.75% 0.75% 0.50%(4)
Ratio of Net Investment Income
to Average Net Assets ......... 2.60%(4) 3.56% 3.88% 4.31% 4.67% 4.23%(4)
Portfolio Turnover Rate ......... 67% 92% 93% 68% 61% 39%
Net Assets, End of Period
(in thousands) ................ $ 221,013 $ 209,962 $ 145,134 $ 218,794 $ 152,570 $ 194,314
</TABLE>

(1) Six months ended June 30, 1998 (unaudited).

(2) March 1, 1993 (inception) through December 31, 1993.

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

(4) Annualized.

On a per-share basis, it includes:

* share price at the beginning of the period

* investment income and capital gains or losses

* income and capital gains distributions paid to shareholders

* share price at the end of the period

It also includes some key statistics for the period:

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

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

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

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

See Notes to Financial Statements

www.americancentury.com 17

Retirement Account Information
- --------------------------------------------------------------------------------

18 1-800-345-2021

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

INVESTMENT PHILOSOPHY AND POLICIES

The American Century Group offers 10 equity funds, including four
"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 following indices are used in the report for 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 FUND BENCHMARK consists of approximately 165 utility stocks that meet
the fund's investment criteria. The benchmark's composition by industry group is
approximately 50% telephone and communication services, 35% electric and 15%
natural gas companies.

The S&P ELECTRIC 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
pipeline companies in the S&P 500.

The S&P TELECOMMUNICATIONS (LONG DISTANCE) INDEX is composed of four
long-distance 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
utilities stocks.

* Investing in these funds involves special risks resulting from their
concentrated investment objectives. They are not intended to serve as a
complete investment program by themselves.

[right margin]

INVESTMENT TEAM LEADERS
PORTFOLIO MANAGERS:
JOHN SCHNIEDWIND
KURT BORGWARDT
JOE STERLING

www.americancentury.com 19

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 17.

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

20 1-800-345-2021

[inside back cover]

[right margin]

[american century logo(reg.sm)]
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

[recycled logo]
Recycled

[back cover]

[40 Years]
Four Decades of Serving Investors
40 Years
American Century
1958-1998

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

9808 (c)1998 American Century Services Corporation
SH-BKT-13279 Funds Distributor, Inc.