SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 20 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 20 [X]
(Check appropriate box or boxes.)
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)
4500 Main Street, Kansas City, MO 64141-6200
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (816) 531-5575
David C. Tucker, Esq., 4500 Main Street, Kansas City, MO 64141-6200
___________________________________________________________________
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: February 14, 2001
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[X] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
--------------------------------------------------------------------------------
<PAGE>
Your
AMERICAN CENTURY
PROSPECTUS
Global Growth Fund
International Growth Fund
International Discovery Fund
International Small Business Fund
Emerging Markets Fund
February 14, 2001
INVESTOR CLASS
International Discovery is closed to new investors. But shareholders who have
open accounts may make additional investments and reinvest dividends and capital
gains distributions.
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
accurate or complete. Anyone who tells you otherwise is
committing a crime.
American Century Investment Services, Inc., Distributor
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read this Prospectus, take a look at the table of contents to
understand how it is organized. The first four sections take a close-up look at
the funds - the funds' investment objectives, strategies and risks.
As you continue to read, the Prospectus will acquaint you with the fund
management team and give you an overview about how to invest and manage your
account. You'll also find important financial information you'll need to make an
informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, an Investor Relations Representative will be
happy to help weekdays, 7 a.m. to 7 p.m., and Saturdays, 9 a.m. to 2 p.m.,
Central time. Give us a call at 1-800-345-2021.
Sincerely,
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
Table of Contents
An Overview of the Funds...........................................X
Fund Performance History...........................................X
Fees and Expenses..................................................X
Objectives, Strategies and Risks...................................X
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
Management.........................................................X
Investing with American Century...................................XX
Share Price and Distributions.....................................XX
Taxes.............................................................XX
Multiple Class Information........................................XX
Financial Highlights..............................................XX
CALLOUTS
Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.
This symbol highlights special information and helpful tips.
An Overview of the Funds
What are the funds' investment objectives?
These funds seek capital growth.
What are the funds' primary investment strategies and principal risks?
The fund managers look for stocks of growing foreign companies. The investment
strategy of these funds is based on the belief that, over the long term, stocks
of companies with earnings and revenue growth have a greater-than-average chance
to increase in value over time
The funds' principal risks include
o MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
o PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
o PRINCIPAL LOSS - As with all funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
o FOREIGN RISK - The funds invest primarily in foreign securities, which are
generally riskier than U.S. stocks. As a result the funds are subject to
foreign risk, meaning that political events (civil unrest, national
elections, imposition of exchange controls), social and economic events
(labor strikes, rising inflation) and natural disasters occurring in a
country where the funds invest could cause the funds' investments in that
country to experience gains or losses.
o CURRENCY RISK - Because the funds' foreign investments are generally held
in foreign currencies, the funds are subject to currency risk, meaning that
the funds could experience gains or losses solely on changes in the
exchange rate between foreign currencies and the U.S. dollar.
The chart below shows the primary differences among the funds.
<TABLE>
Fund Primary Investments Principal Risks
---- ------------------- ---------------
<S> <C> <C>
Global Growth Equity securities of issuers in Invests a significant portion of
the United States and other its assets in foreign securities
developed countries
International Growth Equity securities of issuers Invests primarily in foreign
in developed foreign countries securities
International Small Business(1) Equity securities of foreign issuers Invests primarily in small-
that are small-sized at the sized foreign issuers
time of purchase
International Discovery Equity securities of foreign issuers Invests primarily in small- to
that are small- to medium- sized at the medium-sized foreign issuers
time of purchase
Emerging Markets Equity securities of issuers in Invests primarily in emerging
emerging markets markets
</TABLE>
1International Small Business will close to new investments with the fund's
assets reach $500 million.
A more detailed description of American Century's growth investment style and
the funds' investment strategies and risks begins on page x.
Who may want to invest in the funds? The funds may be a good investment if you
are
o seeking long-term capital growth from your investment
o seeking diversification of your investment portfolio through investment in
foreign securities
o comfortable with the risks associated with investing in U.S. and foreign
growth securities
o comfortable with short-term price volatility
o investing through an IRA or other tax-advantaged retirement plan
Who may not want to invest in the funds? The funds may not be a good investment
if you are
o seeking current income from your investment
o investing for a short period of time
o uncomfortable with the risks associated with investing in foreign securities
o uncomfortable with short-term volatility in the value of your investment
CALLOUT
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
Fund Performance History
Global Growth Fund
International Growth Fund
International Discovery Fund
Emerging Markets Fund
Annual Total Returns
The following bar chart shows the performance of the funds' Investor Class
shares for each of the last 10 calendar years or for each full calendar year in
the life of a fund if less than 10 years. It indicates the volatility of the
funds' historical returns from year to year. International Small Business is not
included because it does not yet have a full calendar year of performance.
INSERT ANNUAL TOTAL RETURN CHART Add 2000 numbers/bar at top of chart as
follows:
Global Growth x%
International Growth x%
International Discovery x%
Emerging Markets x%
The highest and lowest quarterly returns for the period reflected in the bar
chart are:
Highest Lowest
Global Growth 51.95% (4Q 1999) 4.89% (3Q1999)
International Growth 48.19% (4Q 1999) -17.94% (3Q 1998)
International Discovery 50.87% (4Q 1999) -19.91% (3Q 1998)
Emerging Markets 49.04% (4Q 1999) -24.62% (3Q 1998)
Average Annual Total Returns
The following table shows the average annual total returns of the funds'
Investor Class shares for the periods indicated. The benchmarks are unmanaged
indices that have no operating costs and are included in the table for
performance comparison. International Small Business is not included because it
does not yet have a full calendar year of performance.
For the calendar year ended December 31, 2000 1 year 5 years Life of Fund(1)
--------------------------------------------- ------ ------- ---------------
Global Growth x% N/A x%
MSCI World Free Index x% N/A x%
International Growth x% x% x%
MSCI EAFE Index x% x% x%
International Discovery x% x% x%
MSCI EAFE Index x% x% x%
Emerging Markets x% N/A x%
MSCI Emerging Markets Free Index x% N/A x%
1 The inception dates are: Global Growth, December 1, 1998; International
Growth, May 9, 1991; International Discovery, April 1, 1994; and Emerging
Markets, September 30, 1997.
CALLOUT
The performance information on this page is designed to help you see how the
funds' returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.
For current performance information, please call us at 1-800-345-2021 or visit
us at www.americancentury.com.
Fees and Expenses
There are no sales loads, fees or other charges o to buy fund shares directly
from American Century o to reinvest dividends in additional shares
The following table describes the fees and expenses you may pay if you buy and
hold shares of the funds.
Shareholder Fees (fees paid directly from your investment)
<TABLE>
International Discovery and Redemption Fee
International Small Business (as a percentage of amount redeemed/exchanged)
---------------------------- ----------------------------------------------
<S> <C> <C>
Shares held less than 180 days 2.0%
Shares held 180 days or more None
</TABLE>
<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses Operating
Expenses
<S> <C> <C> <C> <C>
Global Growth 1.30% None 0.00%(2) 1.30%
International Growth 1.27% None 0.00%(2) 1.27%
International Small Business x.xx% None 0.00%(3) x.xx%
International Discovery 1.55% None 0.00%(2) 1.55%
Emerging Markets 2.00% None 0.00%(2) 2.00%
</TABLE>
1 Based on expenses incurred during the funds' most recent fiscal year. The
funds have stepped fee schedules. As a result, the funds' management fee rates
generally decrease as fund assets increase.
2 Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, were less than 0.005%
for the most recent fiscal year.
3Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, are expected to be less
than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
o invest $10,000 in the fund
o redeem all of your shares at the end of the periods shown below
o earn a 5% return each year
o incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Global Growth $132 $410 $710 $1,558
International Growth $129 $401 $694 $1,525
International Small Business $XXX $XXX $XXX $XXXXX
International Discovery $157 $487 $840 $1,832
Emerging Markets $202 $623 $1,069 $2,305
CALLOUT
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
CALLOUT
A redemption is the sale of all or a portion of the shares in an account,
including as a part of an exchange to another American Century account.
Objectives, Strategies and Risks
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
What are the funds' investment objectives?
These funds seek capital growth.
How do the funds pursue their investment objectives?
The fund managers use a growth investment strategy developed by American Century
to invest in stocks of companies that they believe will increase in value over
time. This strategy looks for companies with earnings and revenue growth.
Ideally, the fund managers look for companies whose earnings and revenues are
not only growing, but growing at a successively faster, or accelerating, pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with earnings and revenue growth have a greater-than-average chance to
increase in value.
The managers use a bottom-up approach to select stocks to buy for the funds.
That means they first look for strong, growing companies to invest in, rather
than simply buying any company in a growing industry or sector. The managers
track financial information for thousands of companies to identify trends in the
companies' earnings and revenues. This information is used to help the fund
managers select or decide to continue to hold the stocks of companies they
believe will be able to sustain their growth, and to sell stocks of companies
whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers believe that it is important to diversify the funds' holdings
across different countries and geographical regions in an effort to manage the
risks of an international portfolio. For this reason, the fund managers also
consider the prospects for relative economic growth among countries or regions,
economic and political conditions, expected inflation rates, currency exchange
fluctuations and tax considerations when making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the funds essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe it is prudent, the funds may invest a portion of their assets in
convertible debt securities, equity-equivalent securities, foreign securities,
short-term securities, nonleveraged stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the funds' cash assets remain liquid while performing more
like stocks. The funds have a policy governing stock index futures and similar
derivative securities to help manage the risk of these types of investments. For
example, the fund managers cannot invest in a derivative security if it would be
possible for a fund to lose more money than it invested. A complete description
of the derivatives policy is included in the Statement of Additional
Information.
In order to better control the size of companies in which International Small
Business invests, the investment advisor has determined that it will close the
fund when it reaches $500 million in assets. After that time no new investments
will be accepted.
Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period. You may get these
reports at no cost by calling us.
CALLOUT
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
What kinds of securities do the funds buy?
The funds will usually purchase equity securities of foreign companies (except
Global Growth, which will usually purchase equity securities of both U.S. and
foreign companies). The funds can purchase other types of securities as well,
such as domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
In the event of exceptional market or economic conditions, the funds may, as a
temporary defensive measure, invest all or a substantial portion of their assets
in cash or high-quality, short-term debt securities. To the extent the funds
assume a defensive position, they will not be pursuing their objective of
capital growth.
What are the differences between the funds?
o Global Growth invests in both U.S. and foreign companies. The fund's assets
will be primarily invested at all times in equity securities of issuers in
developed countries worldwide (including the United States).
o International Growth's assets will be primarily invested at all times in
securities of companies in developed countries (excluding the United States).
o International Small Business's assets will be primarily invested at all times
in equity securities of foreign companies that are small-sized at the time of
purchase.
o International Discovery's assets will be primarily invested at all times in
equity securities of foreign companies that are small- to medium- sized at
the the time of purchase.
o Emerging Markets' assets will be primarily invested at all times in equity
securities of companies located in emerging market countries and companies
that derive a significant portion of their business from emerging market
countries.
In determining whether a company is foreign, the fund managers will consider
various factors, including where the company is headquartered, where the
company's principal operations are located, where the company's revenues are
derived, where the principal trading market is located and the country in which
the company was legally organized. The weighting given to each of these factors
will vary depending on the circumstances in a given case. The funds consider
developed companies to include Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, the United Kingdom and the United States. In addition, as used in
the Statement of Additional Information, securities of issuers in emerging
market countries means (i) securities of issuers for which the principal
securities trading market is an emerging market country or (ii) securities of
issuers having their principal place of business or principal office in an
emerging market country.
When determining whether a company is small-sized, the fund managers will
consider, among other factors, the capitalization of the company and the amount
of revenues, as well as other information they obtain about the company.
What are the principal risks of investing in the funds?
The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
As with all funds, at any given time your shares may be worth more or less than
the price you paid for them. As a result, it is possible to lose money by
investing in the funds.
Investing in foreign securities has certain unique risks that make it generally
riskier than investing in U.S. stocks. These risks include increased exposure to
political, social and economic events in world markets; limited availability of
public information about a company; less developed trading markets and
regulatory practices; and a lack of uniform financial reporting practices
compared to those that apply in the United States.
In addition, foreign securities are subject to currency risk, meaning that
because the funds' investments are generally held in foreign currencies, the
funds could experience gains or losses based solely on changes in the exchange
rate between foreign currencies and the U.S. dollar.
Investing in smaller foreign companies generally presents unique risks in
addition to the risks of investing in foreign securities. Smaller companies may
have limited resources, trade less frequently and have less publicly available
information. They also may be more sensitive to changing economic conditions.
These factors may cause investments in smaller foreign companies to experience
more price volatility.
Investing in emerging market companies generally is also riskier than investing
in foreign securities. Emerging market countries may have unstable governments
and/or economies that are subject to sudden change. These changes may be
magnified by the countries' emergent financial markets, resulting in significant
volatility to investments in these countries. These countries also may lack the
legal, business and social framework to support securities markets.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if the company's earnings or revenues decline. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of share
price volatility. This volatility can be greater than that of the average stock
fund.
In summary, investing in these funds is intended for investors who find foreign
securities an appropriate investment and who are willing to accept the increased
risk associated with a fund's investment strategy.
Management
Who manages the funds?
The Board of Directors, investment advisor and fund management teams play key
roles in the management of the funds.
The Board of Directors
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor.
The Investment Advisor
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provided to the funds during the most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of the Investor Class shares of each fund. The amount of the
management fee for a fund is calculated on a class-by-class basis daily and paid
monthly.
Out of that fee, the advisor paid all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses. A portion of the management fee may be paid by the funds' advisor to
unaffiliated third parties who provide recordkeeping and administrative services
that would otherwise be performed by an affiliate of the advisor.
Management Fees Paid by the Funds to the Advisor as a Percentage of Average
Net Assets for the Most Recent Fiscal Year Ended November 30, 2000
Global Growth 1.30%
International Growth 1.27%
International Small Business N/A(1)
International Discovery 1.55%
Emerging Markets 2.00%
1The fund was not in operation for the fiscal year ended November 30, 2000. The
fund will pay the advisor a unified management fee of x.xx% of the first $500
million, x.xx% of the next $500 million and x.xx% over $1 billion.
The Fund Management Teams
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for a fund as they see fit, guided by the fund's investment
objectives and strategy.
The portfolio managers on the investment teams are identified below.
Henrik Strabo
Mr. Strabo, Chief Investment Officer-International Equities, has been a member
of the team that manages Global Growth since the fund's inception in December
1998. He also has been a member of the team that manages International Growth
and International Discovery since April 1994. He joined American Century in 1993
as an Investment Analyst and was promoted to Portfolio Manager in April 1994. He
has a bachelor's degree in business from the University of Washington.
Mark S. Kopinski
Mr. Kopinski, Senior Vice President and Senior Portfolio Manager, has been a
member of the team that manages International Growth and International Discovery
since rejoining American Century in April 1997. He also has been a member of the
team that manages Emerging Markets since its inception in September 1997. Before
rejoining American Century, he served as Vice President and Portfolio Manager at
Federated Investors, Inc. from June 1995 to March 1997. From 1990 to 1995 he
served as Vice President and a member of the team that managed International
Growth and International Discovery. He has a bachelor's degree in business
administration from Monmouth College and a master's degree in Asian studies from
the University of Illinois.
Michael J. Donnelly
Mr. Donnelly, Vice President and Portfolio Manager, has been a member of the
team that manages Emerging Markets since the fund's inception in September 1997.
He joined American Century in August 1997. From 1993 to 1997, he served as Vice
President and Portfolio Manager for Federated Investors, Inc. He has a bachelor
of arts from Yale University and an MBA in management, international business
and international finance from Kellogg Graduate School of Management,
Northwestern University. He is a Chartered Financial Analyst.
Bradley Amoils
Mr. Amoils, Portfolio Manager, has been a member of the team that manages Global
Growth since the fund's inception. He joined American Century in July 1997 as an
Investment Analyst and was promoted to Portfolio Manager in November 1998. Prior
to joining American Century, he served as a Securities Analyst for Oppenheimer
Funds from January 1996 to June 1997 and an Analyst at Clay Finlay Asset
Management from March 1995 to December 1995. He has a bachelor of science and
doctorate of medicine from the University of Witwatersrand, Johannesburg, South
Africa and an MBA from Columbia University Graduate School of Business.
Brian Brady
Mr. Brady, Vice President and Portfolio Manager, has been a member of the team
that manages International Discovery since November 1998. He joined American
Century in June 1994 as an Investment Analyst and was promoted to Portfolio
Manager in November 1998. Prior to joining American Century, he served as a
Financial Analyst for Chase Manhattan Bank. He has a bachelor's degree in
finance from Georgetown University and an MBA from Columbia University Graduate
School of Business.
Lynette Schroeder
Ms. Schroeder, Portfolio Manager, has been a member of the team that manages
International Small Business since the fund's inception. She joined American
Century in August 2000 as a Portfolio Manager. Prior to joining American
Century, she served as a Portfolio Manager, Senior Analyst for Driehaus Capital
Management from June 1997 to July 2000 and as an Analyst for Lexington Asset
Management from August 1995 to May 1997. She has a bachelor's degree in
political science from the University of Chicago and an MBA from the Colgate
Darden Graduate School of Business Administration, University of Virginia.
CALLOUT
Code of Ethics
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
Fundamental Investment Policies
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Directors may change any other policies
and investment strategies.
Investing with American Century
Services Automatically Available to You
Most accounts automatically will have access to the services listed below when
the account is opened. If you do not want these services, see Conducting
Business in Writing. If you have questions about the services that apply to your
account type, please call us.
Conducting Business in Writing
If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.
<TABLE>
Ways to Manage Your Account
-------------------------------------------------------------------------------------------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
<S> <C> <C>
By telephone Open an account Make additional investments
Investor Relations If you are a current investor, you can open Call or use our Automated Information Line if
1-800-345-2021 an account by exchanging shares from another you have authorized us to invest from your
American Century account. bank account.
Business, Not-For-Profit
and Employer-Sponsored Exchange shares Sell shares
Retirement Plans Call or use our Automated Information Line Call a Service Representative.
1-800-345-3533 if you have authorized us to accept
telephone instructions.
Automated Information Line
1-800-345-8765
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
Online Open an account Make additional investments
www.americancentury.com If you are a current or new investor, you Make an additional investment into an
can open an account by completing and established American Century account if you
submitting our online application. Current have authorized us to invest from your bank
investors also can open an account by account.
exchanging shares from another American
Century account. Sell shares
Not available.
Exchange shares
Exchange shares from another American
Century account.
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
By mail or fax Open an account Make additional investments
P.O. Box 419200 Send a signed, completed application and Send your check or money order for at least
Kansas City, MO 64141-6200 check or money order payable to American $50 with an investment slip or $250 without
Century Investments. an investment slip. If you don't have an
Fax investment slip, include your name, address
816-340-7962 Exchange shares and account number on your check or money
Send written instructions to exchange your order.
shares from one American Century account to
another. Sell shares
Send written instructions or a redemption
form to sell shares. Call a Service
Representative to request a form.
---------------------------------- ---------------------------------------------- -----------------------------------------------
A Note about Mailings to Shareholders
To reduce expenses and demonstrate respect for our environment, we will deliver
a single copy of most financial reports and prospectuses to investors who share
an address, even if the accounts are registered under different names. If you
would like to receive separate mailings, please call us and we will begin
individual delivery within 30 days. If you'd like to reduce mailbox clutter even
more, visit www.americancentury.com and sign up to receive these documents by
email. In most cases, we also will deliver account statements for all the
investors in a household in a single envelope.
Your Guide to Services and Policies
When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the funds and the transfer agent.
-------------------------------- ------------------------------------------------ -----------------------------------------------
Automatically Open an account Make additional investments
Not available. With the automatic investment privilege, you
can purchase shares on a regular basis. You
Exchange shares must invest at least $600 per year per
Send written instructions to set up an account.
automatic exchange of your shares from one
American Century account to another. Sell shares
If you have at least $10,000 in your account,
you may sell shares automatically by
establishing Check-A-Month or Automatic
Redemption plans.
-------------------------------- ------------------------------------------------ -----------------------------------------------
-------------------------------- ------------------------------------------------ -----------------------------------------------
By wire Open an account Make additional investments
Call to set up your account or mail a Follow the wire instructions.
completed application to the address provided
in the "By mail" section. Give your bank the Sell shares
following information to wire money. You can receive redemption proceeds by wire
Our bank information or electronic transfer.
Please remember, if you Commerce Bank N.A.
request redemptions by wire, Routing No. 101000019
$10 will be deducted from the Account No. Please call for the
amount redeemed. Your bank appropriate account number
also may charge a fee. The fund name Exchange shares
Your American Century account number, if known* Not available.
Your name
The contribution year (for IRAs only)
*For additional investments only
-------------------------------- ------------------------------------------------ -----------------------------------------------
-------------------------------- ------------------------------------------------------------------------------------------------
In person If you prefer to handle your transactions in person, visit one of our Investor Centers and a
representative can help you open an account, make additional investments, and sell or exchange
shares.
4500 Main St. 4917 Town Center Drive
Kansas City, Missouri Leawood, Kansas
8 a.m. to 5:30 p.m., Monday - Friday 8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday
1665 Charleston Road 9445 East County Line Road, Suite A
Mountain View, California Englewood, Colorado
8 a.m. to 5 p.m., Monday - Friday 8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday
-------------------------------- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Minimum Initial Investment Amounts
International Small Business
Global Growth International Discovery(1)
To open an account, the minimum investments are: International Growth Emerging Markets
<S> <C> <C>
Individual or Joint $2,500 $10,000
Traditional IRA $1,000 $10,000
Roth IRA $1,000 $10,000
Education IRA $500 N/A
UGMA/UTMA $2,500 $10,000
403(b) $1,000(2) $10,000
Qualified Retirement Plans $2,500(3) $10,000
</TABLE>
1 This fund is closed to new investors.
2 American Century will waive the minimum if: (a) you contribute at least $50 a
month in each fund you select or (b) your plan contribution is less than $50 a
month and is invested in one fund.
3 The minimum investment requirements may be different for some types of
retirement plans.
Redemptions
If you sell your shares of International Discovery or International Small
Business within 180 days of their purchase, you will pay a redemption fee of
2.0% of the value of the shares sold. The redemption fee does not apply to
shares purchased through reinvested distributions (dividends and capital gains).
The redemption fee is retained by the fund and helps cover transaction and tax
costs long-term investors may bear when the fund realizes capital gains as a
result of selling securities to meet investor redemptions.
Redemption of Shares in Low-Balance Accounts
If your account balance falls below the minimum initial investment amount, we
will notify you and give you 90 days to meet the minimum. If you do not meet the
deadline, American Century will redeem the shares in the account and send the
proceeds to your address of record.
Modifying or Canceling an Investment
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and each fund reserves the right to reject any specific investment
(including a purchase by exchange). Additionally, we may refuse a purchase if,
in our judgment, it is of a size that would disrupt the management of a fund.
Abusive Trading Practices
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
Special Requirements for Large Redemptions
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the value of the fund's assets if that amount is less than $250,000),
we reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. The fund
managers would select these securities from the fund's portfolio. A payment in
securities can help the fund's remaining shareholders avoid tax liabilities that
they might otherwise have incurred had the fund sold securities prematurely to
pay the entire redemption amount in cash.
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice. Also, if payment is made in securities, a shareholder may have to
pay brokerage or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining investors.
Investing through Financial Intermediaries
If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include |X| minimum
investment requirements
|X| exchange policies
|X| fund choices
|X| cutoff time for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statement of Additional Information are available from your
intermediary or plan sponsor.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
The funds have authorized certain financial intermediaries to accept orders on
each fund's behalf. American Century has contracts with these intermediaries
requiring them to track the time investment orders are received and to comply
with procedures relating to the transmission of orders. Orders must be received
by the intermediary on a fund's behalf before the time the net asset value is
determined in order to receive that day's share price. If those orders are
transmitted to American Century and paid for in accordance with the contract,
they will be priced at the net asset value next determined after your request is
received in the form required by the intermediary.
CALLOUT
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
Share Price and Distributions
Share Price
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is closed
(including certain U.S. holidays), we do not calculate the NAV. A fund share's
NAV is the current value of the fund's assets, minus any liabilities, divided by
the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
Distributions
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. The funds may make
more frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
next business day after your purchase is effective. For example, if you purchase
shares on a day a distribution is declared, you will not receive that
distribution. If you redeem shares, you will receive any distribution declared
on the day you redeem. If you redeem all shares, we will include any
distributions received with your redemption proceeds.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For investors investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information about distributions and your options
for receiving them.
CALLOUT
A fund's NET ASSET VALUE, or NAV, is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
Taxes
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a tax
advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the fund and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains (1-5 years) 10% 20%
Long-term capital gains (>5 years 8% 20%(1)
</TABLE>
1 The reduced rate for these gains will not begin until 2006, because the
security holding period must start after December 31, 2000. Once the security
has been held for more than 5 years the rate will be 18%.
The tax status of any distributions of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund, or whether you reinvest your distributions in
additional shares or take them in cash. For taxable accounts, American Century
will inform you of the tax status of fund distributions for each calendar year
in an annual tax mailing (Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that loss realized upon the
sale or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain to you with respect to those shares. If a loss is realized on the
redemption of fund shares, the reinvestment in additional fund shares within 30
days before or after the redemption may be subject to the wash sale rules of the
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and pay 31% of dividends, capital gains
distributions and redemption proceeds to the IRS.
CALLOUT
Buying a Dividend
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that a fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
Multiple Class Information
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Investor Class shares and have no up-front or deferred charges, commissions, or
12b-1 fees.
American Century offers the other classes of shares primarily through
employer-sponsored retirement plans, or through institutions like banks,
broker-dealers and insurance companies. The other classes have different fees,
expenses and/or minimum investment requirements from the Investor Class. The
difference in the fee structures between the classes is the result of their
separate arrangements for shareholder and distribution services and not the
result of any difference in amounts charged by the advisor for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 for Advisor or Institutional Class
shares. You also can contact a sales representative or financial intermediary
who offers those classes of shares.
Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
Financial Highlights
Understanding the Financial Highlights
The tables on the next few pages itemize what contributed to the changes in
share price during the most recently ended fiscal year. They also show the
changes in share price for this period in comparison to changes over the last
five fiscal years.
On a per-share basis, each table includes as appropriate
|X| share price at the beginning of the period
|X| investment income and capital gains or losses
|X| distributions of income and capital gains paid to investors
|X| share price at the end of the period
Each table also includes some key statistics for the period as appropriate
|X| Total Return - the overall percentage of return of the fund, assuming the
reinvestment of all distributions
|X| Expense Ratio - the operating expenses as a percentage of average net assets
|X| Net Income Ratio - the net investment income as a percentage of average net
assets
|X| Portfolio Turnover - the percentage of the fund's buying and selling
activity
The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report are included in the funds' annual
report for the year ended November 30, 2000, which are incorporated by reference
into the Statement of Additional Information, and are available upon request.
Global Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.
International Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXX, PAGE XX.
International Discovery Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
Emerging Markets Fund
Investor Class
INSERT FINANCIAL HIGHLIGHS FROM SH-ANN XXXXX, Page XX
More information about the funds is contained in these documents
Annual and Semiannual Reports Annual and semiannual reports contain more
information about the funds' investments and the market conditions and
investment strategies that significantly affected the funds' performance during
the most recent fiscal period.
Statement of Additional Information (SAI) The SAI contains a more detailed,
legal description of the funds' operations, investment restrictions, policies
and practices. The SAI is incorporated by reference into this Prospectus. This
means that it is legally part of this Prospectus, even if you don't request a
copy.
You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.
You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.
In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for location and hours.
On the Internet oEDGAR database at www.sec.gov
oBy email request at [email protected]
By mail SEC Public Reference Section
Washington, D.C. 20549-0102
Investment Company Act File No. 811-6247
American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200
1-800-345-2021 or 816-531-5575
0103
SH-PRS _______
<PAGE>
Your
AMERICAN CENTURY
PROSPECTUS
Global Growth Fund
International Growth Fund
International Discovery Fund
International Small Business Fund
Emerging Markets Fund
February 14, 2001
INSTITUTIONAL CLASS
International Discovery is closed to new investors. But shareholders who
have open accounts may make additional investments and reinvest dividends
and capital gains distributions.
The Securities and Exchange Commission has not approved or disapproved
these securities or determined if this Prospectus is accurate or complete.
Anyone who tells you otherwise is committing a crime.
American Century Investment Services, Inc., Distributor
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read this Prospectus, take a look at the table of contents to
understand how it is organized. The first four sections take a close-up look at
the funds - the funds' investment objectives, strategies and risks.
As you continue to read, the Prospectus will acquaint you with the fund
management team and give you an overview about how to invest and manage your
account. You'll also find important financial information you'll need to make an
informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, a Service Representative will be happy to
help weekdays, 8 a.m. to 5:30 p.m., Central time. Give us a call at
1-800-345-3533.
Sincerely,
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
Table of Contents
An Overview of the Funds......................................................X
Fund Performance History......................................................X
Fees and Expenses.............................................................X
Objectives, Strategies and Risks..............................................X
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
Management....................................................................X
Investing with American Century..............................................XX
Share Price and Distributions................................................XX
Taxes........................................................................XX
Multiple Class Information...................................................XX
Financial Highlights.........................................................XX
Performance Information of Other Class.......................................XX
CALLOUTS
Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.
This symbol highlights special information and helpful tips.
An Overview of the Funds
What are the funds' investment objectives?
These funds seek capital growth.
What are the funds' primary investment strategies and principal risks?
The fund managers look for stocks of growing foreign companies. The investment
strategy of these funds is based on the belief that, over the long term, stocks
of companies with earnings and revenue growth have a greater-than-average chance
to increase in value over time
The funds' principal risks include
o MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
o PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
o PRINCIPAL LOSS - As with all funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
o FOREIGN RISK - The funds invest primarily in foreign securities, which are
generally riskier than U.S. stocks. As a result the funds are subject to
foreign risk, meaning that political events (civil unrest, national
elections, imposition of exchange controls), social and economic events
(labor strikes, rising inflation) and natural disasters occurring in a
country where the funds invest could cause the funds' investments in that
country to experience gains or losses.
o CURRENCY RISK - Because the funds' foreign investments are generally held
in foreign currencies, the funds are subject to currency risk, meaning that
the funds could experience gains or losses solely on changes in the
exchange rate between foreign currencies and the U.S. dollar.
The chart below shows the primary differences among the funds.
<TABLE>
Fund Primary Investments Principal Risks
---- ------------------- ---------------
<S> <C> <C>
Global Growth Equity securities of issuers in Invests a significant portion of
the United States and other its assets in foreign securities
developed countries
International Growth Equity securities of issuers Invests primarily in foreign
in developed foreign countries securities
International Small Business(1) Equity securities of foreign issuers Invests primarily in small-
that are small-sized at the sized foreign issuers
time of purchase
International Discovery Equity securities of foreign issuers Invests primarily in small- to
that are small- to medium- sized at the medium-sized foreign issuers
time of purchase
Emerging Markets Equity securities of issuers in Invests primarily in emerging
emerging markets markets
</TABLE>
1International Small Business will close to new investments with the fund's
assets reach $500 million.
A more detailed description of American Century's growth investment style and
the funds' investment strategies and risks begins on page x.
Who may want to invest in the funds? The funds may be a good investment if you
are
o seeking long-term capital growth from your investment
o seeking diversification of your investment portfolio through investment in
foreign securities
o comfortable with the risks associated with investing in U.S. and foreign
growth securities
o comfortable with short-term price volatility
o investing through an IRA or other tax-advantaged retirement plan
Who may not want to invest in the funds? The funds may not be a good investment
if you are
o seeking current income from your investment
o investing for a short period of time
o uncomfortable with the risks associated with investing in foreign securities
o uncomfortable with short-term volatility in the value of your investment
CALLOUT
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
Fund Performance History
International Growth Fund
International Discovery Fund
Emerging Markets Fund
Annual Total Returns
The following bar chart shows the performance of the funds' Institutional Class
shares for each of the last 10 calendar years or for each full calendar year in
the life of a fund if less than 10 years. It indicates the volatility of the
funds' historical returns from year to year. Global Growth and International
Small Business are not included because they do not yet have a full calendar
year of performance.
INSERT ANNUAL TOTAL RETURN CHART Add 2000 numbers/bar at top of chart as
follows:
International Growth x%
International Discovery x%
Emerging Markets x%
The highest and lowest quarterly returns for the period reflected in the bar
chart are:
Highest Lowest
International Growth 48.30% (4Q 1999) -17.91% (3Q 1998)
International Discovery 50.87% (4Q 1999) 4.08% (3Q 1999)
Emerging Markets x% (xQ x) x% (xQ x)
Average Annual Total Returns
The following table shows the average annual total returns of the funds'
Institutional Class shares for the periods indicated. The benchmarks are
unmanaged indices that have no operating costs and are included in the table for
performance comparison. Global Growth and International Small Business are not
included because they do not yet have a full calendar year of performance.
<TABLE>
For the calendar year ended December 31, 1999 1 year Life of Fund(1)
<S> <C> <C>
International Growth 64.87% 39.63%
MSCI EAFE Index 26.96% 22.95%(2)
International Discovery 88.82% 49.15%
MSCI EAFE Index 26.96% 23.43%
Emerging Markets X% x%
MSCI Emerging Markets Free Index x% X%
</TABLE>
1 The inception dates are: International Growth, November 20, 1997;
International Discovery, January 2, 1998 and Emerging Markets, January 28,
1999.
2 Since November 20, 1997, the date closest to the fund's inception for which
data are available.
Performance Information of Other Class
The original class of shares of the funds was the Investor Class. For
information about the historical performance of the original class of shares,
see page xx.
CALLOUT
The performance information on this page is designed to help you see how the
funds' returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.
For current performance information, please call us at 1-800-345-3533 or visit
us at www.americancentury.com.
Fees and Expenses
There are no sales loads, fees or other charges
o to buy fund shares directly from American Century
o to reinvest dividends in additional shares
The following table describes the fees and expenses you may pay if you buy and
hold shares of the funds.
Shareholder Fees (fees paid directly from your investment)
<TABLE>
International Discovery and International Small Business Redemption Fee (as a percentage of amount
redeemed/exchanged)
<S> <C>
Shares held less than 180 days 2.0%
Shares held 180 days or more None
</TABLE>
<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees Expenses Operating Expenses
<S> <C> <C> <C> <C>
Global Growth 1.10% None 0.00%(2) 1.10%
International Growth 1.07% None 0.00%(2) 1.07%
International Small Business x.xx% None 0.00%(3) x.xx%
International Discovery 1.35% None 0.00%(2) 1.35%
Emerging Markets 1.80% None 0.00%(2) 1.80%
</TABLE>
1 Based on expenses incurred during the funds' most recent fiscal year. The
funds have stepped fee schedules. As a result, the funds' management fee rates
generally decrease as fund assets increase.
2 Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, were less than 0.005%
for the most recent fiscal year.
3Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, are expected to be less
than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
o invest $10,000 in the fund
o redeem all of your shares at the end of the periods shown below
o earn a 5% return each year
o incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Global Growth $112 $349 $604 $1,334
International Growth $109$339 $588 $1,300
International Small Business $xxx $xxx $xxx $xxxxx
International Discovery $137 $426 $736 $1,614
Emerging Markets $182 $563 $968 $2,098
CALLOUT
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
CALLOUT
A redemption is the sale of all or a portion of the shares in an account,
including as a part of an exchange to another American Century account.
Objectives, Strategies and Risks
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
What are the funds' investment objectives?
These funds seek capital growth.
How do the funds pursue their investment objectives?
The fund managers use a growth investment strategy developed by American Century
to invest in stocks of companies that they believe will increase in value over
time. This strategy looks for companies with earnings and revenue growth.
Ideally, the fund managers look for companies whose earnings and revenues are
not only growing, but growing at a successively faster, or accelerating, pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with earnings and revenue growth have a greater-than-average chance to
increase in value.
The managers use a bottom-up approach to select stocks to buy for the funds.
That means they first look for strong, growing companies to invest in, rather
than simply buying any company in a growing industry or sector. The managers
track financial information for thousands of companies to identify trends in the
companies' earnings and revenues. This information is used to help the fund
managers select or decide to continue to hold the stocks of companies they
believe will be able to sustain their growth, and to sell stocks of companies
whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers believe that it is important to diversify the funds' holdings
across different countries and geographical regions in an effort to manage the
risks of an international portfolio. For this reason, the fund managers also
consider the prospects for relative economic growth among countries or regions,
economic and political conditions, expected inflation rates, currency exchange
fluctuations and tax considerations when making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the fund essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe it is prudent, the funds may invest a portion of their assets in
convertible debt securities, equity-equivalent securities, foreign securities,
short-term securities, nonleveraged stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the funds' cash assets remain liquid while performing more
like stocks. The funds have a policy governing stock index futures and similar
derivative securities to help manage the risk of these types of investments. For
example, the fund managers cannot invest in a derivative security if it would be
possible for a fund to lose more money than it invested. A complete description
of the derivatives policy is included in the Statement of Additional
Information.
In order to better control the size of companies in which International Small
Business invests, the investment advisor has determined that it will close the
fund when it reaches $500 million in assets. After that time no new investments
will be accepted.
Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period. You may get these
reports at no cost by calling us.
CALLOUT
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
What kinds of securities do the funds buy?
The funds will usually purchase equity securities of foreign companies (except
Global Growth, which will usually purchase equity securities of both U.S. and
foreign companies). The funds can purchase other types of securities as well,
such as domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
In the event of exceptional market or economic conditions, the funds may, as a
temporary defensive measure, invest all or a substantial portion of their assets
in cash or high-quality, short-term debt securities. To the extent the funds
assume a defensive position, they will not be pursuing their objective of
capital growth.
What are the differences between the funds?
o Global Growth invests in both U.S. and foreign companies. The fund's assets
will be primarily invested at all times in equity securities of issuers in
developed countries worldwide (including the United States).
o International Growth's assets will be primarily invested at all times in
securities of companies in developed countries (excluding the United States).
o International Small Business's assets will be primarily invested at all times
in equity securities of foreign companies that are small-sized at the time of
purchase.
o International Discovery's assets will be primarily invested at all times in
equity securities of foreign companies that are small- to medium- sized at
the the time of purchase.
o Emerging Markets' assets will be primarily invested at all times in equity
securities of companies located in emerging market countries and companies
that derive a significant portion of their business from emerging market
countries.
In determining whether a company is foreign, the fund managers will consider
various factors, including where the company is headquartered, where the
company's principal operations are located, where the company's revenues are
derived, where the principal trading market is located and the country in which
the company was legally organized. The weighting given to each of these factors
will vary depending on the circumstances in a given case. The funds consider
developed companies to include Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, the United Kingdom and the United States. In addition, as used in
the Statement of Additional Information, securities of issuers in emerging
market countries means (i) securities of issuers for which the principal
securities trading market is an emerging market country or (ii) securities of
issuers having their principal place of business or principal office in an
emerging market country.
When determining whether a company is small-sized, the fund managers will
consider, among other factors, the capitalization of the company and the amount
of revenues, as well as other information they obtain about the company.
What are the principal risks of investing in the funds?
The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
As with all funds, at any given time your shares may be worth more or less than
the price you paid for them. As a result, it is possible to lose money by
investing in the funds.
Investing in foreign securities has certain unique risks
that make it generally riskier than investing in U.S. stocks. These risks
include increased exposure to political, social and economic events in world
markets; limited availability of public information about a company; less
developed trading markets and regulatory practices; and a lack of uniform
financial reporting practices compared to those that apply in the United States.
In addition, foreign securities are subject to currency risk, meaning that
because the funds' investments are generally held in foreign currencies, the
funds could experience gains or losses based solely on changes in the exchange
rate between foreign currencies and the U.S. dollar.
Investing in smaller foreign companies generally presents unique risks in
addition to the risks of investing in foreign securities. Smaller companies may
have limited resources, trade less frequently and have less publicly available
information. They also may be more sensitive to changing economic conditions.
These factors may cause investments in smaller foreign companies to experience
more price volatility.
Investing in emerging market companies generally is also riskier than investing
in foreign securities. Emerging market countries may have unstable governments
and/or economies that are subject to sudden change. These changes may be
magnified by the countries' emergent financial markets, resulting in significant
volatility to investments in these countries. These countries also may lack the
legal, business and social framework to support securities markets.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if the company's earnings or revenues decline. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of share
price volatility. This volatility can be greater than that of the average stock
fund.
In summary, investing in these funds is intended for investors who find foreign
securities an appropriate investment and who are willing to accept the increased
risk associated with a fund's investment strategy.
Management
Who manages the funds?
The Board of Directors, investment advisor and fund management teams play key
roles in the management of the funds.
The Board of Directors
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor.
The Investment Advisor
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provided to the funds during the most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of the Institutional Class shares of each fund. The amount of
the management fee for a fund is calculated on a class-by-class basis daily and
paid monthly.
Out of that fee, the advisor paid all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses. A portion of the management fee may be paid by the funds' advisor to
unaffiliated third parties who provide recordkeeping and administrative services
that would otherwise be performed by an affiliate of the advisor.
Management Fees Paid by the Funds to the Advisor as a Percentage of Average
Net Assets for the Most Recent Fiscal Year Ended November 30, 2000
Global Growth N/A(1)
International Growth 1.07%
International Small Business N/A(1)
International Discovery 1.35%
Emerging Markets 1.80%
1The funds were not in operation for the fiscal year ended November 30, 2000.
The funds will pay the advisor a unified management fee of 1.10% of the first $1
billion, 0.95% of the next $1 billion and 0.85% over $2 billion for Global
Growth and x.xx% of the first $500 million, x.xx% of the next $500 million and
x.xx% over $1 billion for International Small Business.
The Fund Management Teams
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for a fund as they see fit, guided by the fund's investment
objectives and strategy.
The portfolio managers on the investment teams are identified below.
Henrik Strabo
Mr. Strabo, Chief Investment Officer-International Equities, has been a member
of the team that manages Global Growth since the fund's inception in December
1998. He also has been a member of the team that manages International Growth
and International Discovery since April 1994. He joined American Century in 1993
as an Investment Analyst and was promoted to Portfolio Manager in April 1994. He
has a bachelor's degree in business from the University of Washington.
Mark S. Kopinski
Mr. Kopinski, Senior Vice President and Senior Portfolio Manager, has been a
member of the team that manages International Growth and International Discovery
since rejoining American Century in April 1997. He also has been a member of the
team that manages Emerging Markets since its inception in September 1997. Before
rejoining American Century, he served as Vice President and Portfolio Manager at
Federated Investors, Inc. from June 1995 to March 1997. From 1990 to 1995 he
served as Vice President and a member of the team that managed International
Growth and International Discovery. He has a bachelor's degree in business
administration from Monmouth College and a master's degree in Asian studies from
the University of Illinois.
Michael J. Donnelly
Mr. Donnelly, Vice President and Portfolio Manager, has been a member of the
team that manages Emerging Markets since the fund's inception in September 1997.
He joined American Century in August 1997. From 1993 to 1997, he served as Vice
President and Portfolio Manager for Federated Investors, Inc. He has a bachelor
of arts from Yale University and an MBA in management, international business
and international finance from Kellogg Graduate School of Management,
Northwestern University. He is a Chartered Financial Analyst.
Bradley Amoils
Mr. Amoils, Portfolio Manager, has been a member of the team that manages Global
Growth since the fund's inception. He joined American Century in July 1997 as an
Investment Analyst and was promoted to Portfolio Manager in November 1998. Prior
to joining American Century, he served as a Securities Analyst for Oppenheimer
Funds from January 1996 to June 1997 and an Analyst at Clay Finlay Asset
Management from March 1995 to December 1995. He has a bachelor of science and
doctorate of medicine from the University of Witwatersrand, Johannesburg, South
Africa and an MBA from Columbia University Graduate School of Business.
Brian Brady
Mr. Brady, Vice President and Portfolio Manager, has been a member of the team
that manages International Discovery since November 1998. He joined American
Century in June 1994 as an Investment Analyst and was promoted to Portfolio
Manager in November 1998. Prior to joining American Century, he served as a
Financial Analyst for Chase Manhattan Bank. He has a bachelor's degree in
finance from Georgetown University and an MBA from Columbia University Graduate
School of Business.
Lynette Schroeder
Ms. Schroeder, Portfolio Manager, has been a member of the team that manages
International Small Business since the fund's inception. She joined American
Century in August 2000 as a Portfolio Manager. Prior to joining American
Century, she served as a Portfolio Manager, Senior Analyst for Driehaus Capital
Management from June 1997 to July 2000 and as an Analyst for Lexington Asset
Management from August 1995 to May 1997. She has a bachelor's degree in
political science from the University of Chicago and an MBA from the Colgate
Darden Graduate School of Business Administration, University of Virginia.
CALLOUT
Code of Ethics
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
Fundamental Investment Policies
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Directors may change any other policies
and investment strategies.
Investing with American Century
Eligibility for Institutional Class Shares
The Institutional Class shares are made available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
retirement plans, endowments, foundations and financial advisors that meet the
funds' minimum investment requirements. Institutional Class shares are not
available for purchase by insurance companies for variable annuity and variable
life products.
Minimum Initial Investment Amounts
The minimum investment is $5 million ($3 million for endowments and foundations)
per fund. If you invest with us through a financial intermediary, the minimum
investment requirement may be met by aggregating the investments of various
clients of your financial intermediary. The minimum investment requirement may
be waived if you or your financial intermediary, if applicable, has an aggregate
investment in our family of funds of $10 million or more ($5 million for
endowments and foundations). In addition, financial intermediaries or plan
recordkeepers may require retirement plans to meet certain additional
requirements, such as plan size or a minimum level of assets per participant, in
order to be eligible to purchase Institutional Class shares.
Redemptions
If you sell your shares of International Discovery or International Small
Business within 180 days of their purchase, you will pay a redemption fee of
2.0% of the value of the shares sold. The redemption fee does not apply to
shares purchased through reinvested distributions (dividends and capital gains).
The redemption fee is retained by the fund and helps cover transaction and tax
costs long-term investors may bear when the fund realizes capital gains as a
result of selling securities to meet investor redemptions.
Redemption of Shares in Low-Balance Accounts
If your account balance falls below the minimum initial investment amount, we
will notify you and give you 90 days to meet the minimum. If you do not meet the
deadline, American Century will redeem the shares in the account and send the
proceeds to your address of record.
Modifying or Canceling an Investment
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and each fund reserves the right to reject any specific investment
(including a purchase by exchange). Additionally, we may refuse a purchase if,
in our judgment, it is of a size that would disrupt the management of a fund.
Services Automatically Available to You
Most accounts automatically will have access to the services listed below when
the account is opened. If you do not want these services, see Conducting
Business in Writing. If you have questions about the services that apply to your
account type, please call us.
Conducting Business in Writing
If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.
<TABLE>
Ways to Manage Your Account
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
<S> <C> <C>
By telephone Open an account Make additional investments
Service Representative If you are a current investor, you can open Call if you have authorized us to invest from
1-800-345-3533 an account by exchanging shares from another your bank account.
American Century account.
Sell shares
Exchange shares Call a Service Representative.
Call or use our Automated Information Line
if you have authorized us to accept
telephone instructions.
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
By mail or fax Open an account Make additional investments
P.O. Box 419385 Send a signed, completed application and Send your check or money order for at least
Kansas City, MO 64141-6385 check or money order payable to American $50 with an investment slip or $250 without
Century Investments. an investment slip. If you don't have an
Fax investment slip, include your name, address
816-340-4655 Exchange shares and account number on your check or money
Send written instructions to exchange your order.
shares from one American Century account to
another. Sell shares
Send written instructions or a redemption
form to sell shares. Call a Service
Representative to request a form.
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
Automatically Open an account Make additional investments
Not available. With the automatic investment privilege, you
can purchase shares on a regular basis. You
Exchange shares must invest at least $600 per year per
Send written instructions to set up an account.
automatic exchange of your shares from one
American Century account to another. Sell shares
If you have at least $10,000 in your account,
you may sell shares automatically by
establishing Check-A-Month or Automatic
Redemption plans.
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
By wire Open an account Make additional investments
Call to set up your account or mail a Follow the wire instructions.
completed application to the address
provided in the "By mail" section. Give your Sell shares
bank the following information to wire money. You can receive redemption proceeds by wire
Our bank information or electronic transfer.
* Please remember, if you Commerce Bank N.A.
request redemptions by Routing No. 101000019
wire, $10 will be deducted Account No. Please call for the
from the amount redeemed. appropriate account number
Your bank also may charge a The fund name Exchange shares
fee. Your American Century account number* Not available.
Your name
The contribution year (for IRAs only)
*For additional investments only
---------------------------------- ---------------------------------------------- -----------------------------------------------
---------------------------------- ---------------------------------------------- -----------------------------------------------
</TABLE>
Abusive Trading Practices
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
Special Requirements for Large Redemptions
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the value of the fund's assets if that amount is less than $250,000),
we reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. The fund
managers would select these securities from the fund's portfolio. A payment in
securities can help the fund's remaining shareholders avoid tax liabilities that
they might otherwise have incurred had the fund sold securities prematurely to
pay the entire redemption amount in cash.
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice. Also, if payment is made in securities, a shareholder may have to
pay brokerage or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining investors.
Investing through Financial Intermediaries
If you own or are considering purchasing shares through a financial intermediary
or a retirement plan, your ability to purchase, exchange and redeem shares will
depend on the policies of that entity. Some policy differences may include
|X| minimum investment requirements
|X| exchange policies
|X| fund choices
|X| cutoff time for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statement of Additional Information are available from your
intermediary or plan sponsor.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
The funds have authorized certain financial intermediaries to accept orders on
each fund's behalf. American Century has contracts with these intermediaries
requiring them to track the time investment orders are received and to comply
with procedures relating to the transmission of orders. Orders must be received
by the intermediary on a fund's behalf before the time the net asset value is
determined in order to receive that day's share price. If those orders are
transmitted to American Century and paid for in accordance with the contract,
they will be priced at the net asset value next determined after your request is
received in the form required by the intermediary.
CALLOUT
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
Share Price and Distributions
Share Price
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is closed
(including certain U.S. holidays), we do not calculate the NAV. A fund share's
NAV is the current value of the fund's assets, minus any liabilities, divided by
the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
Distributions
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. The funds may make
more frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
next business day after your purchase is effective. For example, if you purchase
shares on a day a distribution is declared, you will not receive that
distribution. If you redeem shares, you will receive any distribution declared
on the day you redeem. If you redeem all shares, we will include any
distributions received with your redemption proceeds.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For investors investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information about distributions and your options
for receiving them.
CALLOUT
A fund's NET ASSET VALUE, or NAV, is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
Taxes
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a tax
advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the fund and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
<S> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains (1-5 years) 10% 20%
Long-term capital gains (>5 years 8% 20%(1)
</TABLE>
1 The reduced rate for these gains will not begin until 2006, because the
security holding period must start after December 31, 2000. Once the security
has been held for more than 5 years the rate will be 18%.
The tax status of any distributions of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund, or whether you reinvest your distributions in
additional shares or take them in cash. For taxable accounts, American Century
will inform you of the tax status of fund distributions for each calendar year
in an annual tax mailing (Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that loss realized upon the
sale or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain to you with respect to those shares. If a loss is realized on the
redemption of fund shares, the reinvestment in additional fund shares within 30
days before or after the redemption may be subject to the wash sale rules of the
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and pay 31% of dividends, capital gains
distributions and redemption proceeds to the IRS.
CALLOUT
Buying a Dividend
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that a fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
Multiple Class Information
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Institutional Class shares and are offered primarily through employer-sponsored
retirement plans, or through institutions like banks, broker-dealers and
insurance companies.
The other classes have different fees, expenses and/or minimum investment
requirements from the Institutional Class. The difference in the fee structures
between the classes is the result of their separate arrangements for shareholder
and distribution services and not the result of any difference in amounts
charged by the advisor for core investment advisory services. Accordingly, the
core investment advisory expenses do not vary by class. Different fees and
expenses will affect performance. For additional information concerning the
other classes of shares not offered by this Prospectus, call us at
|X| 1-800-345-2021 for Investor Class shares
|X| 1-800-345-3533 for Advisor Class shares
You also can contact a sales representative or financial intermediary who offers
those classes of shares.
Except as described below, all classes of shares of the funds have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
<PAGE>
Financial Highlights
Understanding the Financial Highlights
The tables on the next few pages itemize what contributed to the changes in
share price during the most recently ended fiscal year. They also show the
changes in share price for this period in comparison to changes over the last
five fiscal years or less, if the share class is not five years old.
On a per-share basis, each table includes as appropriate
|X| share price at the beginning of the period
|X| investment income and capital gains or losses
|X| distributions of income and capital gains paid to investors
|X| share price at the end of the period
Each table also includes some key statistics for the period as appropriate
|X| Total Return - the overall percentage of return of the fund, assuming the
reinvestment of all distributions
|X| Expense Ratio - the operating expenses as a percentage of average net assets
|X| Net Income Ratio - the net investment income as a percentage of average net
assets
|X| Portfolio Turnover - the percentage of the fund's buying and selling
activity
The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report is included in the funds' annual
report for the year ended November 30, 2000, which is incorporated by reference
into the Statement of Additional Information, and is available upon request.
International Growth Fund
Institutional Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.
International Discovery Fund
Institutional Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.\
Emerging Markets Fund
Institutional Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.
Performance Information of Other Class
The following financial information is provided to show the performance of the
fund's original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.20% higher than the Institutional Class. The
Institutional Class is made available to institutional shareholders or through
financial intermediaries that do not require the same level of shareholder and
administrative services from the advisor as Investor Class shareholders. As a
result, the advisor is able to charge these classes a lower unified management
fee. If the Institutional Class had existed during the periods presented, its
performance would have been higher because of the lower expense.
The table on the next page itemizes what contributed to the changes in share
price during the period. It also shows the changes in share price for this
period in comparison to changes over the last five fiscal years or less, if the
share class is not five years old.
On a per-share basis, the table includes as appropriate
o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to investors
o share price at the end of the period
The table also includes some key statistics for the period as appropriate
o Total Return - the overall percentage of return of the fund, assuming the
reinvestment of all distributions
o Expense Ratio - operating expenses as a percentage of average net assets
o Net Income Ratio - net investment income as a percentage of average net assets
o Portfolio Turnover - the percentage of the fund's buying and selling activity
The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report is included in the funds' annual
report for the year ended November 30, 2000, which is incorporated by reference
into the Statement of Additional Information, and is available upon request.
Global Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.
International Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, PAGE XX.
International Discovery Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
Emerging Markets Fund
Investor Class
INSERT FINANCIAL HIGHLIGHS FROM SH-ANN XXXXX, Page XX
Investment Company Act File No. 811-6247
American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385
1-800-345-3533 or 816-531-5575
0103
SH-PRS
<PAGE>
Your
AMERICAN CENTURY
PROSPECTUS
Global Growth Fund
International Growth Fund
International Discovery Fund
International Small Business Fund
Emerging Markets Fund
February 14, 2001
ADVISOR CLASS
International Discovery is closed to new investors. But shareholders who have
open accounts may make additional investments and reinvest dividends and capital
gains distributions.
The Securities and Exchange Commission has not approved or disapproved these
securities or determined if this Prospectus is accurate or complete. Anyone who
tells you otherwise is committing a crime.
American Century Investment Services, Inc., Distributor
Dear Investor,
Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.
As you begin to read this Prospectus, take a look at the table of contents to
understand how it is organized. The first four sections take a close-up look at
the funds - the funds' investment objectives, strategies and risks.
As you continue to read, the Prospectus will acquaint you with the fund
management team and give you an overview about how to invest and manage your
account. You'll also find important financial information you'll need to make an
informed decision.
Naturally, you may have questions about investing after you read through the
Prospectus. Our Web site, www.americancentury.com, offers information that could
answer many of your questions. Or, a Service Representative will be happy to
help weekdays, 8 a.m. to 5:30 p.m., Central time. Give us a call at
1-800-345-3533.
Sincerely,
Mark Killen
Senior Vice President
American Century Investment Services, Inc.
Table of Contents
An Overview of the Funds..................................................X
Fund Performance History..................................................X
Fees and Expenses.........................................................X
Objectives, Strategies and Risks..........................................X
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
Management................................................................X
Investing with American Century..........................................XX
Share Price and Distributions............................................XX
Taxes....................................................................XX
Multiple Class Information...............................................XX
Financial Highlights.....................................................XX
Performance Information of Other Class...................................XX
CALLOUTS
Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.
This symbol highlights special information and helpful tips.
An Overview of the Funds
What are the funds' investment objectives? These funds seek capital growth.
What are the funds' primary investment strategies and principal risks?
The fund managers look for stocks of growing foreign companies. The investment
strategy of these funds is based on the belief that, over the long term, stocks
of companies with earnings and revenue growth have a greater-than-average chance
to increase in value over time
The funds' principal risks include
o MARKET RISK - The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.
o PRICE VOLATILITY - The value of a fund's shares may fluctuate significantly
in the short term.
o PRINCIPAL LOSS - As with all funds, if you sell your shares when their
value is less than the price you paid, you will lose money.
o FOREIGN RISK - The funds invest primarily in foreign securities, which are
generally riskier than U.S. stocks. As a result the funds are subject to
foreign risk, meaning that political events (civil unrest, national
elections, imposition of exchange controls), social and economic events
(labor strikes, rising inflation) and natural disasters occurring in a
country where the funds invest could cause the funds' investments in that
country to experience gains or losses.
o CURRENCY RISK - Because the funds' foreign investments are generally held
in foreign currencies, the funds are subject to currency risk, meaning that
the funds could experience gains or losses solely on changes in the
exchange rate between foreign currencies and the U.S. dollar.
The chart below shows the primary differences among the funds.
<TABLE>
Fund Primary Investments Principal Risks
---- ------------------- ---------------
<S> <C> <C>
Global Growth Equity securities of issuers in Invests a significant portion of
the United States and other its assets in foreign securities
developed countries
International Growth Equity securities of issuers Invests primarily in foreign
in developed foreign countries securities
International Small Business(1) Equity securities of foreign issuers Invests primarily in small-
that are small-sized at the sized foreign issuers
time of purchase
International Discovery Equity securities of foreign issuers Invests primarily in small- to
that are small- to medium- sized at the medium-sized foreign issuers
time of purchase
Emerging Markets Equity securities of issuers in Invests primarily in emerging
emerging markets markets
</TABLE>
1International Small Business will close to new investments with the fund's
assets reach $500 million.
A more detailed description of American Century's growth investment style and
the funds' investment strategies and risks begins on page x.
Who may want to invest in the funds? The funds may be a good investment if you
are
o seeking long-term capital growth from your investment
o seeking diversification of your investment portfolio through investment in
foreign securities
o comfortable with the risks associated with investing in U.S. and foreign
growth securities
o comfortable with short-term price volatility
o investing through an IRA or other tax-advantaged retirement plan
Who may not want to invest in the funds? The funds may not be a good investment
if you are
o seeking current income from your investment
o investing for a short period of time
o uncomfortable with the risks associated with investing in foreign securities
o uncomfortable with short-term volatility in the value of your investment
CALLOUT
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
Fund Performance History
Global Growth Fund
International Growth Fund
International Discovery Fund
Emerging Markets Fund
Annual Total Returns
The following bar chart shows the performance of the funds' Advisor Class shares
for each of the last 10 calendar years or for each full calendar year in the
life of a fund if less than 10 years. It indicates the volatility of the funds'
historical returns from year to year. International Small Business is not
included because it does not yet have a full calendar year of performance.
INSERT ANNUAL TOTAL RETURN CHART Add 2000 numbers/bars at top of chart as
follows:
Global Growth x%
International Growth x%
International Discovery x%
Emerging Markets x%
The highest and lowest quarterly returns for the period reflected in the bar
chart are:
Highest Lowest
Global Growth x% (4Q 2000) x% (3Q 2000)
International Growth 48.12% (4Q 1999) -18.06% (3Q 1998)
International Discovery 50.78% (4Q 1999) 3.93% (3Q 1999)
Emerging Markets x% (4Q 2000) x% (3Q 2000)
Average Annual Total Returns
The following table shows the average annual total returns of the funds' Advisor
Class shares for the periods indicated. The benchmarks are unmanaged indices
that have no operating costs and are included in the table for performance
comparison. International Small Business is not included because it does not yet
have a full calendar year of performance.
For the calendar year ended December 31, 1999 1 year Life of Fund(1)
Global Growth 64.06% 32.03%
MSCI World Free Index 26.96% 15.01%
International Growth 64.06% 32.03%
MSCI EAFE Index 26.96% 15.01%
International Discovery 88.04% 41.26%
MSCI EAFE Index 26.96% 17.96%
Emerging Markets 88.04% 41.26%
MSCI Emerging Markets Free Index 26.96% 17.96%
1 The inception dates are: Global Growth, February 5, 1999; International
Growth, October 2, 1996; International Discovery, April 28, 1998 and Emerging
Markets, May 12, 1999.
Performance Information of Other Class
The original class of shares of the funds was the Investor Class. For
information about the historical performance of the original class of shares,
see page xx.
CALLOUT
The performance information on this page is designed to help you see how the
funds' returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.
For current performance information, please call us at 1-800-345-3533 or visit
us at www.americancentury.com.
Fees and Expenses
There are no sales loads, fees or other charges
o to buy fund shares directly from American Century
o to reinvest dividends in additional shares
The following table describes the fees and expenses you may pay if you buy and
hold shares of the funds.
Shareholder Fees (fees paid directly from your investment)
International Discovery and International Small Business Redemption Fee (as a
percentage of amount redeemed/exchanged) Shares held less than 180 days 2.0%
Shares held 180 days or more None
<TABLE>
Annual Operating Expenses (expenses that are deducted from fund assets)
Management Distribution and Other Total Annual Fund
Fee(1) Service (12b-1) Fees(2) Expenses Operating Expenses
<S> <C> <C> <C> <C> <C>
Global Growth 1.05% 0.50% 0.00%(3) 1.55%
International Growth 1.02% 0.50% 0.00%(3) 1.52%
International Small Business X.XX% 0.50% 0.00%(4) X,XX%
International Discovery 1.30% 0.50% 0.00%(3) 1.80%
Emerging Markets 1.75% 0.50% 0.00%(3) 2.25%
</TABLE>
1 Based on expenses incurred during the funds' most recent fiscal year. The
funds have stepped fee schedules. As a result, the funds' management fee rates
generally decrease as fund assets increase.
2The 12b-1 fee is designed to permit investors to purchase Advisor Class shares
through broker-dealers, banks, insurance companies and other financial
intermediaries. A portion of the fee is used to compensate them for ongoing
recordkeeping and administrative services that would otherwise be performed by
an affiliate of the advisor, and a portion is used to compensate them for
distribution and other shareholder services. For more information, see Service
and Distribution Fees, page XX.
3 Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, were less than 0.005%
for the most recent fiscal year.
4Other expenses, which include the fees and expenses of the funds' independent
directors and their legal counsel, as well as interest, are expected to be less
than 0.005% for the current fiscal year.
Example
The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .
o invest $10,000 in the fund
o redeem all of your shares at the end of the periods shown below
o earn a 5% return each year
o incur the same operating expenses as shown above
. . . your cost of investing in the fund would be:
1 year 3 years 5 years 10 years
Global Growth $157 $487 $840 $1,832
International Growth $154 $478 $824 $1,800
International Small Business $XXX $XXX $XXXX $XXXX
International Discovery $182 $563 $968 $2,098
Emerging Markets $226 $697 $1,194 $2,558
CALLOUT
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.
A redemption is the sale of all or a portion of the shares in an account,
including as a part of an exchange to another American Century account.
Objectives, Strategies and Risks
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
What are the funds' investment objectives? These funds seek capital growth.
How do the funds pursue their investment objectives?
The fund managers use a growth investment strategy developed by American Century
to invest in stocks of companies that they believe will increase in value over
time. This strategy looks for companies with earnings and revenue growth.
Ideally, the fund managers look for companies whose earnings and revenues are
not only growing, but growing at a successively faster, or accelerating, pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with earnings and revenue growth have a greater-than-average chance to
increase in value.
The managers use a bottom-up approach to select stocks to buy for the funds.
That means they first look for strong, growing companies to invest in, rather
than simply buying any company in a growing industry or sector. The managers
track financial information for thousands of companies to identify trends in the
companies' earnings and revenues. This information is used to help the fund
managers select or decide to continue to hold the stocks of companies they
believe will be able to sustain their growth, and to sell stocks of companies
whose growth begins to slow down.
In addition to locating strong companies with earnings and revenue growth, the
fund managers believe that it is important to diversify the funds' holdings
across different countries and geographical regions in an effort to manage the
risks of an international portfolio. For this reason, the fund managers also
consider the prospects for relative economic growth among countries or regions,
economic and political conditions, expected inflation rates, currency exchange
fluctuations and tax considerations when making investments.
The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the funds essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe it is prudent, the funds may invest a portion of their assets in
convertible debt securities, equity-equivalent securities, foreign securities,
short-term securities, nonleveraged stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the funds' cash assets remain liquid while performing more
like stocks. The funds have a policy governing stock index futures and similar
derivative securities to help manage the risk of these types of investments. For
example, the fund managers cannot invest in a derivative security if it would be
possible for a fund to lose more money than it invested. A complete description
of the derivatives policy is included in the Statement of Additional
Information.
In order to better control the size of companies in which International Small
Business invests, the investment advisor has determined that it will close the
fund when it reaches $500 million in assets. After that time no new investments
will be accepted
Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period. You may get these
reports at no cost by calling us.
CALLOUT
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.
What kinds of securities do the funds buy?
The funds will usually purchase equity securities of foreign companies (except
Global Growth, which will usually purchase equity securities of both U.S. and
foreign companies). The funds can purchase other types of securities as well,
such as domestic and foreign preferred stocks, convertible debt securities,
equity-equivalent securities, nonleveraged futures and options, notes, bonds and
other debt securities of companies, and obligations of domestic or foreign
governments and their agencies.
In the event of exceptional market or economic conditions, the funds may, as a
temporary defensive measure, invest all or a substantial portion of their assets
in cash or high-quality, short-term debt securities. To the extent the funds
assume a defensive position, they will not be pursuing their objective of
capital growth.
What are the differences between the funds?
o Global Growth invests in both U.S. and foreign companies. The fund's assets
will be primarily invested at all times in equity securities of issuers in
developed countries worldwide (including the United States).
o International Growth's assets will be primarily invested at all times in
securities of companies in developed countries (excluding the United States).
o International Small Business's assets will be primarily invested at all times
in equity securities of foreign companies that are small-sized at the time of
purchase.
o International Discovery's assets will be primarily invested at all times in
equity securities of foreign companies that are small- to medium- sized at
the the time of purchase.
o Emerging Markets' assets will be primarily invested at all times in equity
securities of companies located in emerging market countries and companies
that derive a significant portion of their business from emerging market
countries.
In determining whether a company is foreign, the fund managers will consider
various factors, including where the company is headquartered, where the
company's principal operations are located, where the company's revenues are
derived, where the principal trading market is located and the country in which
the company was legally organized. The weighting given to each of these factors
will vary depending on the circumstances in a given case. The funds consider
developed companies to include Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden,
Switzerland, the United Kingdom and the United States. In addition, as used in
the Statement of Additional Information, securities of issuers in emerging
market countries means (i) securities of issuers for which the principal
securities trading market is an emerging market country or (ii) securities of
issuers having their principal place of business or principal office in an
emerging market country.
When determining whether a company is small-sized, the fund managers will
consider, among other factors, the capitalization of the company and the amount
of revenues, as well as other information they obtain about the company.
What are the principal risks of investing in the funds?
The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.
As with all funds, at any given time your shares may be worth more or less than
the price you paid for them. As a result, it is possible to lose money by
investing in the funds.
Investing in foreign securities has certain unique risks that make it generally
riskier than investing in U.S. stocks. These risks include increased exposure to
political, social and economic events in world markets; limited availability of
public information about a company; less developed trading markets and
regulatory practices; and a lack of uniform financial reporting practices
compared to those that apply in the United States.
In addition, foreign securities are subject to currency risk, meaning that
because the funds' investments are generally held in foreign currencies, the
funds could experience gains or losses based solely on changes in the exchange
rate between foreign currencies and the U.S. dollar.
Investing in smaller foreign companies generally presents unique risks in
addition to the risks of investing in foreign securities. Smaller companies may
have limited resources, trade less frequently and have less publicly available
information. They also may be more sensitive to changing economic conditions.
These factors may cause investments in smaller foreign companies to experience
more price volatility.
Investing in emerging market companies generally is also riskier than investing
in foreign securities. Emerging market countries may have unstable governments
and/or economies that are subject to sudden change. These changes may be
magnified by the countries' emergent financial markets, resulting in significant
volatility to investments in these countries. These countries also may lack the
legal, business and social framework to support securities markets.
The fund managers may buy a large amount of a company's stock quickly, and may
dispose of it quickly if the company's earnings or revenues decline. While the
managers believe this strategy provides substantial appreciation potential over
the long term, in the short term it can create a significant amount of share
price volatility. This volatility can be greater than that of the average stock
fund.
In summary, investing in these funds is intended for investors who find foreign
securities an appropriate investment and who are willing to accept the increased
risk associated with a fund's investment strategy.
Management
Who manages the funds?
The Board of Directors, investment advisor and fund management teams play key
roles in the management of the funds.
The Board of Directors
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor.
The Investment Advisor
The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.
The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.
For the services it provided to the funds during the most recent fiscal year,
the advisor received a unified management fee based on a percentage of the
average net assets of the Advisor Class shares of each fund. The amount of the
management fee for a fund is calculated on a class-by-class basis daily and paid
monthly.
Out of that fee, the advisor paid all expenses of managing and operating the
funds except brokerage expenses, taxes, interest, fees and expenses of the
independent directors (including legal counsel fees), and extraordinary
expenses.
Management Fees Paid by the Funds to the Advisor as a Percentage of Average
Net Assets for the Most Recent Fiscal Year Ended November 30, 2000
Global Growth 1.05%
International Growth 1.02%
International Small Business N/A(1)
International Discovery 1.30%
Emerging Markets 1.75%
1The fund was not in operation for the fiscal year ended November 30, 2000. The
fund will pay the advisor a unified management fee of x.xx% of the first $500
million, x.xx% of the next $500 million and x.xx% over $1 billion.
The Fund Management Teams
The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for a fund as they see fit, guided by the fund's investment
objectives and strategy.
The portfolio managers on the investment teams are identified below.
Henrik Strabo
Mr. Strabo, Chief Investment Officer-International Equities, has been a member
of the team that manages Global Growth since the fund's inception in December
1998. He also has been a member of the team that manages International Growth
and International Discovery since April 1994. He joined American Century in 1993
as an Investment Analyst and was promoted to Portfolio Manager in April 1994. He
has a bachelor's degree in business from the University of Washington.
Mark S. Kopinski
Mr. Kopinski, Senior Vice President and Senior Portfolio Manager, has been a
member of the team that manages International Growth and International Discovery
since rejoining American Century in April 1997. He also has been a member of the
team that manages Emerging Markets since its inception in September 1997. Before
rejoining American Century, he served as Vice President and Portfolio Manager at
Federated Investors, Inc. from June 1995 to March 1997. From 1990 to 1995 he
served as Vice President and a member of the team that managed International
Growth and International Discovery. He has a bachelor's degree in business
administration from Monmouth College and a master's degree in Asian studies from
the University of Illinois.
Michael J. Donnelly
Mr. Donnelly, Vice President and Portfolio Manager, has been a member of the
team that manages Emerging Markets since the fund's inception in September 1997.
He joined American Century in August 1997. From 1993 to 1997, he served as Vice
President and Portfolio Manager for Federated Investors, Inc. He has a bachelor
of arts from Yale University and an MBA in management, international business
and international finance from Kellogg Graduate School of Management,
Northwestern University. He is a Chartered Financial Analyst.
Bradley Amoils
Mr. Amoils, Portfolio Manager, has been a member of the team that manages Global
Growth since the fund's inception. He joined American Century in July 1997 as an
Investment Analyst and was promoted to Portfolio Manager in November 1998. Prior
to joining American Century, he served as a Securities Analyst for Oppenheimer
Funds from January 1996 to June 1997 and an Analyst at Clay Finlay Asset
Management from March 1995 to December 1995. He has a bachelor of science and
doctorate of medicine from the University of Witwatersrand, Johannesburg, South
Africa and an MBA from Columbia University Graduate School of Business.
Brian Brady
Mr. Brady, Vice President and Portfolio Manager, has been a member of the team
that manages International Discovery since November 1998. He joined American
Century in June 1994 as an Investment Analyst and was promoted to Portfolio
Manager in November 1998. Prior to joining American Century, he served as a
Financial Analyst for Chase Manhattan Bank. He has a bachelor's degree in
finance from Georgetown University and an MBA from Columbia University Graduate
School of Business.
Lynette Schroeder
Ms. Schroeder, Portfolio Manager, has been a member of the team that manages
International Small Business since the fund's inception. She joined American
Century in August 2000 as a Portfolio Manager. Prior to joining American
Century, she served as a Portfolio Manager, Senior Analyst for Driehaus Capital
Management from June 1997 to July 2000 and as an Analyst for Lexington Asset
Management from August 1995 to May 1997. She has a bachelor's degree in
political science from the University of Chicago and an MBA from the Colgate
Darden Graduate School of Business Administration, University of Virginia.
CALLOUT
Code of Ethics
American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.
Fundamental Investment Policies
Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without a shareholder vote. The Board of Directors may change any other policies
and investment strategies.
Investing with American Century
Eligibility for Advisor Class Shares
The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative and distribution services.
Redemptions
If you sell your shares of International Discovery or International Small
Business within 180 days of their purchase, you will pay a redemption fee of
2.0% of the value of the shares sold. The redemption fee does not apply to
shares purchased through reinvested distributions (dividends and capital gains).
The redemption fee is retained by the fund and helps cover transaction and tax
costs long-term investors may bear when the fund realizes capital gains as a
result of selling securities to meet investor redemptions.
Investing through Financial Intermediaries
If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include
|X| minimum investment requirements
|X| exchange policies
|X| fund choices
|X| cutoff time for investments
Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statement of Additional Information are available from your
intermediary or plan sponsor.
Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.
Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.
The funds have authorized certain financial intermediaries to accept orders on
each fund's behalf. American Century has contracts with these intermediaries
requiring them to track the time investment orders are received and to comply
with procedures relating to the transmission of orders. Orders must be received
by the intermediary on a fund's behalf before the time the net asset value is
determined in order to receive that day's share price. If those orders are
transmitted to American Century and paid for in accordance with the contract,
they will be priced at the net asset value next determined after your request is
received in the form required by the intermediary.
Modifying or Canceling an Investment
Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and each fund reserves the right to reject any specific investment
(including a purchase by exchange). Additionally, we may refuse a purchase if,
in our judgment, it is of a size that would disrupt the management of a fund.
Abusive Trading Practices
We do not permit market timing or other abusive trading practices in our funds.
Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds--up to seven days--or to honor
certain redemptions with securities, rather than cash, as described in the next
section.
Special Requirements for Large Redemptions
If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the value of the fund's assets if that amount is less than $250,000),
we reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. The fund
managers would select these securities from the fund's portfolio. A payment in
securities can help the fund's remaining shareholders avoid tax liabilities that
they might otherwise have incurred had the fund sold securities prematurely to
pay the entire redemption amount in cash.
We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice. Also, if payment is made in securities, a shareholder may have to
pay brokerage or other transaction costs to convert the securities to cash.
If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining investors.
CALLOUT
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.
Share Price and Distributions
Share Price
American Century determines the NET ASSET VALUE (NAV) of each fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is closed
(including certain U.S. holidays), we do not calculate the NAV. A fund share's
NAV is the current value of the fund's assets, minus any liabilities, divided by
the number of fund shares outstanding.
If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.
We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.
Distributions
Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as capital gains realized on the
sale of investment securities. Each fund generally pays distributions from net
income, if any, once a year in December. Distributions from realized capital
gains are paid twice a year, usually in March and December. The funds may make
more frequent distributions, if necessary, to comply with Internal Revenue Code
provisions.
You will participate in fund distributions, when they are declared, starting the
next business day after your purchase is effective. For example, if you purchase
shares on a day a distribution is declared, you will not receive that
distribution. If you redeem shares, you will receive any distribution declared
on the day you redeem. If you redeem all shares, we will include any
distributions received with your redemption proceeds. All distributions from the
fund will be invested in additional shares.
Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For investors investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information about distributions and your options
for receiving them.
CALLOUT
A fund's NET ASSET VALUE, or NAV, is the price of the fund's shares.
CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.
Taxes
The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also result from sales of fund shares by investors
after the net asset value has increased or decreased.
Tax-Deferred Accounts
If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a tax
advisor.
Taxable Accounts
If you own fund shares through a taxable account, distributions by the fund and
your sales of fund shares may cause you to be taxed on your investment.
If you invest through a taxable account, you may be able to claim a foreign tax
credit for any foreign income taxes paid by the funds. In order to qualify for
this tax credit, certain requirements must be satisfied. Please consult the
Statement of Additional Information for a more complete discussion of the tax
consequences of owning shares of the funds.
Taxability of Distributions
Fund distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:
<TABLE>
Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
<S> <C> <C> <C>
Short-term capital gains Ordinary income rate Ordinary income rate
Long-term capital gains (1-5 years) 10% 20%
Long-term capital gains (>5 years 8% 20%(1)
</TABLE>
1 The reduced rate for these gains will not begin until 2006, because the
security holding period must start after December 31, 2000. Once the security
has been held for more than 5 years the rate will be 18%.
The tax status of any distributions of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund, or whether you reinvest your distributions in
additional shares or take them in cash. For taxable accounts, American Century
will inform you of the tax status of fund distributions for each calendar year
in an annual tax mailing (Form 1099-DIV).
Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.
Taxes on Transactions
Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that loss realized upon the
sale or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain to you with respect to those shares. If a loss is realized on the
redemption of fund shares, the reinvestment in additional fund shares within 30
days before or after the redemption may be subject to the wash sale rules of the
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.
If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and pay 31% of dividends, capital gains
distributions and redemption proceeds to the IRS.
CALLOUT
Buying a Dividend
Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.
The risk in buying a dividend is that a fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.
If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.
Multiple Class Information
American Century offers three classes of the funds: Investor Class,
Institutional Class and Advisor Class. The shares offered by this Prospectus are
Advisor Class shares and are offered primarily through employer-sponsored
retirement plans, or through institutions like banks, broker-dealers and
insurance companies.
The other classes have different fees, expenses and/or
minimum investment requirements from the Advisor Class. The difference in the
fee structures between the classes is the result of their separate arrangements
for shareholder and distribution services and not the result of any difference
in amounts charged by the advisor for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class.
Different fees and expenses will affect performance. For additional information
concerning the other classes of shares not offered by this Prospectus, call us
at
1-800-345-2021 for Investor Class shares
1-800-345-3533 for Institutional Class shares
You also can contact a sales representative or financial intermediary who offers
those classes of shares.
Except as described below, all classes of shares of the funds have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.
Service and Distribution Fees
Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay certain expenses associated with the distribution of their shares out of
fund assets. The funds' Advisor Class shares have a 12b-1 Plan. Under the Plan,
the funds' Advisor Class pays an annual fee of 0.50% of Advisor Class average
net assets, half for certain shareholder and administrative services and half
for distribution services. The advisor, as paying agent for the funds, pays all
or a portion of such fees to the banks, broker-dealers and insurance companies
that make such shares available. Because these fees are paid out of the funds'
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. For
additional information about the Plan and its terms, see Multiple Class
Structure - Master Distribution and Shareholder Services Plan in the Statement
of Additional Information.
Financial Highlights
Understanding the Financial Highlights
The tables on the next few pages itemize what contributed to the changes in
share price during the most recently ended fiscal year. They also show the
changes in share price for this period in comparison to changes over the last
five fiscal years or less, if the share class is not five years old.
On a per-share basis, each table includes as appropriate
|X| share price at the beginning of the period
|X| investment income and capital gains or losses
|X| distributions of income and capital gains paid to investors
|X| share price at the end of the period
Each table also includes some key statistics for the period as appropriate
|X| Total Return - the overall percentage of return of the fund, assuming the
reinvestment of all distributions
|X| Expense Ratio - the operating expenses as a percentage of average net
assets
|X| Net Income Ratio - the net investment income as a percentage of average net
assets
|X| Portfolio Turnover - the percentage of the fund's buying and selling
activity
The Financial Highlights
have been audited by Deloitte & Touche LLP, independent auditors. Their
Independent Auditors' Report is included in the funds' annual report for the
year ended November 30, 2000, which is incorporated by reference into the
Statement of Additional Information, and is available upon request.
Global Growth Fund
Advisor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
International Growth Fund
Advisor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
International Discovery Fund
Advisor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
Emerging Markets Fund
Advisor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
Performance Information of Other Class
The following financial information is provided to show the performance of the
funds' original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.25% lower than the Advisor Class. If the Advisor Class
had existed during the periods presented, its performance would have been lower
because of the additional expense.
The tables on the next few pages itemize what contributed to the changes in
share price during the most recently ended fiscal year. They also show the
changes in share price for this period in comparison to changes over the last
five fiscal years, or less, if the share class is not five years old.
On a per-share basis, each table includes as appropriate
o share price at the beginning of the period
o investment income and capital gains or losses
o distributions of income and capital gains paid to investors
o share price at the end of the period
Each table also includes some key statistics for the period as appropriate
o Total Return - the overall percentage of return of the fund, assuming the
reinvestment of all distributions
o Expense Ratio - the operating expenses as a percentage of average net assets
o Net Income Ratio - the net investment income as a percentage of average net
assets
o Portfolio Turnover - the percentage of the fund's buying and selling activity
The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report is included in the funds' annual
report for the year ended November 30, 2000, which is incorporated by reference
into the Statement of Additional Information, and is available upon request.
Global Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
International Growth Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
International Discovery Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX1.
Emerging Markets Fund
Investor Class
INSERT FINANCIAL HIGHLIGHTS FROM SH-ANN XXXXX, Page XX.
More information about the funds is contained in these documents
Annual and Semiannual Reports Annual and semiannual reports contain more
information about the funds' investments and the market conditions and
investment strategies that significantly affected the funds' performance during
the most recent fiscal period.
Statement of Additional Information (SAI) The SAI contains a more detailed,
legal description of the funds' operations, investment restrictions, policies
and practices. The SAI is incorporated by reference into this Prospectus. This
means that it is legally part of this Prospectus, even if you don't request a
copy.
You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.
You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.
In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for location and hours.
On the Internet oEDGAR database at www.sec.gov
oBy email request at [email protected]
By mail SEC Public Reference Section
Washington, D.C. 20549-0102
Investment Company Act File No. 811-6247
American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385
1-800-345-3533 or 816-531-5575
0103
SH-PRS-
<PAGE>
Global Growth Fund
International Growth Fund
International Small Business Fund
International Discovery Fund
Emerging Markets Fund
February 14, 2001
American Century World
Mutual Funds, Inc.
This Statement of Additional Information adds to the discussion in the funds'
Prospectus, dated February 14, 2001, but is not a Prospectus. The Statement of
Additional Information should be read in conjunction with the funds' current
Prospectus. If you would like a copy of the Prospectus, please contact us at one
of the addresses or telephone numbers listed on the back cover or visit American
Century's Web site at www.americancentury.com.
This Statement of Additional Information incorporates by reference certain
information that appears in the funds' annual and semiannual reports, which are
delivered to all investors. You may obtain a free copy of the funds' annual or
semiannual reports by calling 1-800-345-2021.
American Century Investment Services, Inc., Distributor
Table of Contents
The Funds' History X
Fund Investment Guidelines X
Fund Investments and Risks X
Investment Strategies and Risks X
Investment Policies X
Portfolio Turnover X
Management X
The Board of Directors X
Officers
Code of EthicsX
The Funds' Principal Shareholders X
Service Providers X
Investment Advisor X
Transfer Agent and Administrator X
Distributors X
Other Service Providers X
Custodian Banks X
Independent Auditors X
Brokerage Allocation X
Information about Fund Shares X
Multiple Class Structure X
Buying and Selling Fund Shares X
Valuation of a Fund's Securities X
Taxes X
Federal Income Tax X
State and Local Income Tax X
How Fund Performance Information Is Calculated X
Performance Comparisons X
Permissible Advertising Information X
Multiple Class Performance Advertising X
Financial Statements X
Explanation of Fixed-Income Securities Ratings X
THE FUNDS' HISTORY
American Century World Mutual Funds, Inc., is a registered open-end management
investment company that was organized in 1990 as a Maryland corporation under
the name Twentieth Century World Investors, Inc. In January 1997 it changed its
name to American Century World Mutual Funds, Inc. Throughout this Statement of
Additional Information we refer to American Century World Mutual Funds, Inc. as
the corporation.
Each fund described in this Statement of Additional Information is a separate
series of the corporation and operates for many purposes as if it were an
independent company. Each fund has its own investment objective, strategy,
management team, assets, tax identification and stock registration numbers.
<TABLE>
Investor Class Advisor Class Institutional Class
Ticker Inception Ticker Inception Ticker Inception
<S> <C> <C> <C> <C> <C> <C>
Fund Symbol Date Symbol Date Symbol Date
Global Growth TWGGX 12/1/1998 N/A 2/5/1999 N/A N/A
International Growth TWIEX 5/9/1991 TWGAX 10/1/1996 TGRIX 1/20/1997
International Small Business N/A N/A N/A N/A N/A N/A
International Discovery TWEGX 4/1/1994 N/A 4/28/1998 TIDIX 1/2/1998
Emerging Markets TWMIX 9/30/1997 N/A N/A N/A 1/28/1999
</TABLE>
FUND INVESTMENT GUIDELINES
This section explains the extent to which the funds' advisor, American Century
Investment Management, Inc., can use various investment vehicles and strategies
in managing a fund's assets. Descriptions of the investment techniques and risks
associated with each appear in the section, Investment Strategies and Risks,
which begins on page 3. In the case of the funds' principal investment
strategies, these descriptions elaborate upon discussions contained in the
Prospectus.
Each fund is diversified as defined in the Investment Company Act of 1940 (the
Investment Company Act). Diversified means that, with respect to 75% of its
total assets, each fund will not invest more than 5% of its total assets in the
securities of a single issuer or own more than 10% of the outstanding voting
securities of a single issuer. To meet federal tax requirements for
qualification as a regulated investment company, each fund must limit its
investments so that at the close of each quarter of its taxable year
(1) no more than 25% of its total assets are invested in the securities of a
single issuer (other than the U.S government or a regulated investment
company), and
(2) with respect to at least 50% of its total assets, no more than 5% of its
total assets are invested in the securities of a single issuer.
In general, within the restrictions outlined here and in the funds' Prospectus,
the fund managers have broad powers to decide how to invest fund assets,
including the power to hold them uninvested.
Investments are varied according to what is judged advantageous under changing
economic conditions. It is the advisor's policy to retain maximum flexibility in
management without restrictive provisions as to the proportion of one or another
class of securities that may be held, subject to the investment restrictions
described below. It is the advisor's intention that each fund will generally
consist of foreign (and U.S. in the case of Global Growth) equity securities.
However, subject to the specific limitations applicable to a fund, the funds'
management teams may invest the assets of each fund in varying amounts in other
instruments, such as those reflected in Table 1 on page 3, when such a course is
deemed appropriate in order to attempt to attain a fund's investment objective.
Senior securities that, in the opinion of the managers, are high-grade issues
also may be purchased for defensive purposes.
So long as a sufficient number of acceptable securities are available, the fund
managers intend to keep the funds fully invested in equity securities,
regardless of the movement of stock prices, generally. In most circumstances,
the funds' actual level of cash and cash equivalents will be less than 10%. The
managers may use stock index futures as a way to expose the funds' cash assets
to the market, while maintaining liquidity. As mentioned in the Prospectus, the
managers may not leverage the funds' portfolios; so there is no greater market
risk to the funds than if they purchase stocks. See Short-term Securities, page
10, Futures and Options, page 10, and Derivative Securities, page 7.
<TABLE>
Table 1
Global Growth International Small Business,International Discovery
and and
International Growth Emerging Markets
<S> <C> <C>
Foreign Securities X X
Equity Equivalents X X
Debt Securities X X
Sovereign Debt Obligations X X
Convertible Securities X X
Short Sales X X
Portfolio Lending X X
Derivative Securities X X
Investments in Companies with Limited
Operating Histories 5% 10%
Other Investment Companies X X
Repurchase Agreements X X
When-Issued and Forward Commitment Agreements X X
Restricted and Illiquid Securities X X
Short-Term Securities X X
Futures & Options X X
Forward Currency Exchange Contracts X X
</TABLE>
FUND INVESTMENTS AND RISKS
INVESTMENT STRATEGIES AND RISKS
This section describes investment vehicles and techniques that the fund managers
can use in managing a fund's assets. It also details the risks associated with
each, because each investment vehicle and technique contributes to a fund's
overall risk profile. To determine whether a fund may invest in a particular
investment vehicle, consult Table 1.
Foreign Securities
A description of the funds' investment strategy regarding foreign securities is
contained in the funds' Prospectus. Investing in securities of foreign issuers
generally involves greater risks than investing in the securities of domestic
companies including:
Currency Risk. The value of the foreign investments held by the funds may be
significantly affected by changes in currency exchange rates. The dollar value
of a foreign security generally decreases when the value of the dollar rises
against the foreign currency in which the security is denominated and tends to
increase when the value of the dollar falls against such currency. In addition,
the value of fund assets may be affected by losses and other expenses incurred
in converting between various currencies in order to purchase and sell foreign
securities, and by currency restrictions, exchange control regulation, currency
devaluations and political developments.
Political and Economic Risk. The economies of many of the countries in which the
funds invest are not as developed as the economy of the United States and may be
subject to significantly different forces. Political or social instability,
expropriation, nationalization, or confiscatory taxation, and limitations on the
removal of funds or other assets, could also adversely affect the value of
investments. Further, the funds may encounter difficulties or be unable to
enforce ownership rights, pursue legal remedies or obtain judgments in foreign
courts.
Regulatory Risk. Foreign companies generally are not subject to the regulatory
controls imposed on U.S. issuers and, in general, there is less publicly
available information about foreign securities than is available about domestic
securities. Many foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic companies. Income from foreign
securities owned by the funds may be reduced by a withholding tax at the source,
which would reduce dividend income payable to shareholders.
Market and Trading Risk. Brokerage commission rates in foreign countries, which
are generally fixed rather than subject to negotiation as in the United States,
are likely to be higher. The securities markets in many of the countries in
which the funds invest will have substantially less trading volume than the
principal U.S. markets. As a result, the securities of some companies in these
countries may be less liquid and more volatile than comparable U.S. securities.
Furthermore, one securities broker may represent all or a significant part of
the trading volume in a particular country, resulting in higher trading costs
and decreased liquidity due to a lack of alternative trading partners. There is
generally less government regulation and supervision of foreign stock exchanges,
brokers and issuers, which may make it difficult to enforce contractual
obligations.
Clearance and Settlement Risk. Foreign securities markets also have different
clearance and settlement procedures, and in certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions.
Delays in clearance and settlement could result in temporary periods when assets
of the funds are uninvested and no return is earned thereon. The inability of
the funds to make intended security purchases due to clearance and settlement
problems could cause the funds to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to clearance and settlement
problems could result either in losses to the funds due to subsequent declines
in the value of the portfolio security or, if the fund has entered into a
contract to sell the security, liability to the purchaser.
Ownership Risk. Evidence of securities ownership may be uncertain in many
foreign countries. In many of these countries, the most notable of which is the
Russian Federation, the ultimate evidence of securities ownership is the share
register held by the issuing company or its registrar. While some companies may
issue share certificates or provide extracts of the company's share register,
these are not negotiable instruments and are not effective evidence of
securities ownership. In an ownership dispute, the company's share register is
controlling. As a result, there is a risk that a fund's trade details could be
incorrectly or fraudulently entered on the issuer's share register at the time
of the transaction, or that a fund's ownership position could thereafter be
altered or deleted entirely, resulting in a loss to the fund. While the funds
intend to invest directly in Russian companies that utilize an independent
registrar, there can be no assurance that such investments will not result in a
loss to the funds.
As a result, these funds are intended for aggressive investors seeking
significant gains through investments in foreign securities. Those investors
must be willing and able to accept the significantly greater risks associated
with the investment strategy that the funds will pursue. An investment in the
funds is not appropriate for individuals with limited investment resources or
who are unable to tolerate fluctuations in the value of their investment.
Equity Equivalents
The funds may make foreign investments either directly in foreign securities or
indirectly by purchasing depositary receipts, depositary shares or similar
instruments (DRs) for foreign securities. DRs are securities that are listed on
exchanges or quoted in over-the-counter markets in one country but represent
shares of issuers domiciled in another country. The funds also may purchase
securities of such issuers in foreign markets, either on foreign securities
exchanges, electronic trading networks or in over-the-counter markets.
In addition to investing in common stocks, the funds may invest in other equity
securities and equity equivalents including securities that permit a fund to
receive an equity interest in an issuer, the opportunity to acquire an equity
interest in an issuer, or the opportunity to receive a return on its investment
that permits the fund to benefit from the growth over time in the equity of an
issuer. Examples of equity securities and equity equivalents include preferred
stock, convertible preferred stock and convertible debt securities. Equity
equivalents also may include securities whose value or return is derived from
the value or return of a different security. An example of one type of
derivative security in which the funds might invest is a depositary receipt.
Debt Securities
The managers believe that common stocks and other equity and equity-equivalent
securities ordinarily offer the greatest potential for capital appreciation. The
funds may invest, however, in any security the managers believe has the
potential for capital appreciation. When the managers believe that the total
return potential of other securities equals or exceeds the potential return of
equity securities, each fund may invest up to 35% in such other securities. The
other securities the funds may invest in are bonds, notes and debt securities of
companies, and obligations of domestic or foreign governments and their
agencies. The funds will attempt to stay fully invested regardless of the
movement of stock and bond prices generally.
In the event of exceptional market or economic conditions, the funds may, as a
temporary defensive measure, invest all or a substantial portion of their assets
in cash or high-quality, short-term debt securities. To the extent a fund
assumes a defensive position, it will not be pursuing its objective of capital
growth. International Growth and Global Growth will limit their purchases of
debt securities to investment-grade obligations. For long-term debt obligations,
this includes securities that are rated Baa or better by Moody's Investors
Service, Inc. or BBB or better by Standard & Poor's Corporation (S&P), or that
are not rated but are considered by the managers to be of equivalent quality.
According to Moody's, bonds rated Baa are medium-grade and possess some
speculative characteristics. A BBB rating by S&P indicates S&P's belief that a
security exhibits a satisfactory degree of safety and capacity for repayment,
but is more vulnerable to adverse economic conditions or changing circumstances
than is the case with higher-quality debt securities. See Explanation of
Fixed-Income Securities Ratings, page 36.
With respect to International Discovery and Emerging Markets, there are no
credit quality or maturity restrictions with regard to the bonds, corporate debt
securities and government obligations in which the funds may invest, although
less than 35% of each fund's assets will be invested in below-investment-grade
fixed income securities. See Explanation of Fixed-Income Securities Ratings,
page 36. Debt securities, especially those of issuers in emerging market
countries, may be of poor quality and speculative in nature. While these
securities will be chosen primarily for their appreciation potential, the fund
also may take the potential for income into account when selecting investments.
In addition to other factors that will affect its value, the value of a fund's
investments in fixed income securities will change as prevailing interest rates
change. In general, the prices of such securities vary inversely with interest
rates. As prevailing interest rates fall, the prices of bonds and other
securities that trade on a yield basis rise. When prevailing interest rates
rise, bond prices generally fall. These changes in value may, depending upon the
particular amount and type of fixed-income securities holdings of a fund, impact
the net asset value of that fund's shares.
Sovereign Debt Obligations
The funds may purchase sovereign debt instruments issued or guaranteed by
foreign governments or their agencies, including debt of emerging market
countries. Sovereign debt may be in the form of conventional securities or other
types of debt instruments, such as loans or loan participations. Sovereign debt
of emerging market countries may involve a high degree of risk and may present a
risk of default or renegotiation or rescheduling of debt payments.
Convertible Debt Securities
A convertible debt security is a fixed-income security that offers the potential
for capital appreciation through a conversion feature that enables the holder to
convert the fixed-income security into a stated number of shares of common
stock. As fixed-income securities, convertible debt securities provide a stable
stream of income, with generally higher yields than common stocks. Convertible
debt securities offer the potential to benefit from increases in the market
price of the underlying common stock, however, they generally offer lower yields
than non-convertible securities of similar quality. Of course, as with all
fixed-income securities, there can be no assurance of current income because the
issuers of the convertible debt securities may default on their obligations. In
addition, there can be no assurance of capital appreciation because the value of
the underlying common stock will fluctuate.
Convertible debt securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible
securities typically have lower ratings than similar non-convertible securities.
Unlike a convertible security that is a single security, a synthetic convertible
security is comprised of two distinct securities that together resemble
convertible securities in certain respects. Synthetic convertible securities are
created by combining non-convertible bonds or preferred stocks with warrants or
stock call options. The options that will form elements of synthetic convertible
securities will be listed on a securities exchange or NASDAQ. The two components
of a synthetic convertible security, which will be issued with respect to the
same entity, generally are not offered as a unit, and may be purchased and sold
by the fund at different times. Synthetic convertible securities differ from
convertible securities in certain respects. Each component of a synthetic
convertible security has a separate market value and responds differently to
market fluctuations. Investing in a synthetic convertible security involves the
risk normally found in holding the securities comprising the synthetic
convertible security.
Short Sales
A fund may engage in short sales if, at the time of the short sale, the fund
owns or has the right to acquire securities equivalent in kind and amount to the
securities being sold short.
In a short sale, the seller does not immediately deliver the securities sold and
is said to have a short position in those securities until delivery occurs. To
make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a fund engages in a short sale, the collateral account will be
maintained by the fund's custodian. While the short sale is open, the fund will
maintain in a segregated custodial account an amount of securities convertible
into, or exchangeable for, such equivalent securities at no additional cost.
These securities would constitute the fund's long position.
A fund may make a short sale, as described above, when it wants to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes. There will be
certain additional transaction costs associated with short sales, but the fund
will endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.
Portfolio Lending
In order to realize additional income, a fund may lend its portfolio securities.
Such loans may not exceed one-third of the fund's total net assets valued at
market except
o through the purchase of debt securities in accordance with its investment
objectives, policies and limitations, or
o by engaging in repurchase agreements with respect to portfolio securities.
Derivative Securities
To the extent permitted by its investment objectives and policies, each of the
funds may invest in securities that are commonly referred to as derivative
securities. Generally, a derivative is a financial arrangement the value of
which is based on, or derived from, a traditional security, asset, or market
index. Certain derivative securities are more accurately described as
index/structured securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators (reference indices). For example, Standard & Poor's Depositary
Receipts, also known as spiders, track the price performance and dividend yield
of the S&P Index by providing a stake in the stocks that make up that index.
Some derivatives, such as mortgage-related and other asset-backed securities,
are in many respects like any other investment, although they may be more
volatile or less liquid than more traditional debt securities.
There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect a fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.
No fund may invest in a derivative security unless the reference index or the
instrument to which it relates is an eligible investment for the fund. The
return on a derivative security may increase or decrease, depending upon changes
in the reference index or instrument to which it relates.
There is a range of risks associated with derivative investments, including:
o the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the fund managers anticipate;
o the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a position
when desired;
o the risk that adverse price movements in an instrument can result in a loss
substantially greater than a fund's initial investment; and
o the risk that the counterparty will fail to perform its obligations.
The Board of Directors has approved the advisor's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities. The policy also
establishes a committee that must review certain proposed purchases before the
purchases can be made. The advisor will report on fund activity in derivative
securities to the Board of Directors as necessary.
Investments in Companies with Limited Operating Histories
The funds may invest a portion of their assets in the securities of issuers with
limited operating history. The fund managers consider an issuer to have a
limited operating history if that issuer has a record of less than three years
of continuous operation. The managers will consider periods of capital
formation, incubation, consolidations, and research and development in
determining whether a particular issuer has a record of three years of
continuous operation.
Investments in securities of issuers with limited operating history may involve
greater risks than investments in securities of more mature issuers. By their
nature, such issuers present limited operating history and financial information
upon which the managers may base their investment decision on behalf of the
funds. In addition, financial and other information regarding such issuers, when
available, may be incomplete or inaccurate.
Repurchase Agreements
Each fund may invest in repurchase agreements when they present an attractive
short-term return on cash that is not otherwise committed to the purchase of
securities pursuant to the investment policies of that fund.
A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to purchase it on a specified
date in the future at an agreed-upon price. The repurchase price reflects an
agreed-upon interest rate during the time the fund's money is invested in the
security.
Because the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collateralized by
the security purchased. The fund's risk is the ability of the seller to pay the
agreed-upon repurchase price on the repurchase date. If the seller defaults, the
fund may incur costs in disposing of the collateral, which would reduce the
amount realized thereon. If the seller seeks relief under the bankruptcy laws,
the disposition of the collateral may be delayed or limited. To the extent the
value of the security decreases, the fund could experience a loss.
The fund will limit repurchase agreement transactions to securities issued by
the U.S. government, its agencies and instrumentalities, and will enter into
such transactions with those banks and securities dealers who are deemed
creditworthy by the funds' advisor.
Repurchase Agreements maturing in more than seven days would count toward a
fund's 15% limit on illiquid securities.
When-Issued and Forward Commitment Agreements
The funds may sometimes purchase new issues of securities on a when-issued or
forward commitment basis in which the transaction price and yield are each fixed
at the time the commitment is made, but payment and delivery occur at a future
date (typically 15 to 45 days later).
When purchasing securities on a when-issued or forward commitment basis, a fund
assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. Market rates of interest on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
security. Accordingly, the value of the security may decline prior to delivery,
which could result in a loss to the fund. While the fund will make commitments
to purchase or sell securities with the intention of actually receiving or
delivering them, it may sell the securities before the settlement date if doing
so is deemed advisable as a matter of investment strategy.
In purchasing securities on a when-issued or forward commitment basis, a fund
will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents or other appropriate liquid securities in
an amount sufficient to meet the purchase price. When the time comes to pay for
the when-issued securities, a fund will meet its obligations with available
cash, through the sale of securities, or, although it would not normally expect
to do so, by selling the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). Selling
securities to meet when-issued or forward commitment obligations may generate
taxable capital gains or losses.
Restricted and Illiquid Securities
The funds may, from time to time, purchase restricted or illiquid securities,
including Rule 144A securities, when they present attractive investment
opportunities that otherwise meet the funds' criteria for selection. Rule 144A
securities are securities that are privately placed with and traded among
qualified institutional investors rather than the general public. Although Rule
144A securities are considered restricted securities, they are not necessarily
illiquid.
With respect to securities eligible for resale under Rule 144A, the staff of the
Securities and Exchange Commission (SEC) has taken the position that the
liquidity of such securities in the portfolio of a fund offering redeemable
securities is a question of fact for the Board of Directors to determine, such
determination to be based upon a consideration of the readily available trading
markets and the review of any contractual restrictions. Accordingly, the Board
of Directors is responsible for developing and establishing the guidelines and
procedures for determining the liquidity of Rule 144A securities. As allowed by
Rule 144A, the Board of Directors of the funds has delegated the day-to-day
function of determining the liquidity of Rule 144A securities to the fund
managers. The Board retains the responsibility to monitor the implementation of
the guidelines and procedures it has adopted.
Since the secondary market for such securities is limited to certain qualified
institutional investors, the liquidity of such securities may be limited
accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the fund managers will consider
appropriate remedies to minimize the effect on such fund's liquidity.
Short-Term Securities
In order to meet anticipated redemptions, to hold pending the purchase of
additional securities for a fund's portfolio, or, in some cases, for temporary
defensive purposes, these funds may invest a portion of their assets in money
market and other short-term securities.
Examples of those securities include:
o Securities issued or guaranteed by the U.S. government and its agencies and
instrumentalities;
o Commercial Paper;
o Certificates of Deposit and Euro Dollar Certificates of Deposit;
o Bankers' Acceptances;
o Short-term notes, bonds, debentures, or other debt instruments; and
o Repurchase agreements.
Under the Investment Company Act, a fund's investment in other investment
companies (including money market funds) currently is limited to (a) 3% of the
total voting stock of any one investment company, (b) 5% of the fund's total
assets with respect to any one investment company and (c) 10% of the fund's
total assets in the aggregate. These investments may include investments in
money market funds managed by the advisor. Any investments in money market funds
must be consistent with the investment policies and restrictions of the fund
making the investment.
Other Investment Companies
Each of the funds may invest up to 10% of its total assets in other mutual funds
provided that the investment is consistent with the fund's investment policies
and restrictions. Under the Investment Company Act, a fund's investment in such
securities, subject to certain exceptions, currently is limited to
(a) 3% of the total voting stock of any one investment company,
(b) 5% of the fund's total assets with respect to any one investment company and
(c) 10% of the fund's total assets in the aggregate.
Such purchases will be made in the open market where no commission or profit to
a sponsor or dealer results from the purchase other than the customary brokers'
commissions. As a shareholder of another investment company, a fund would bear,
along with other shareholders, its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses would be in addition
to the management fee that each fund bears directly in connection with its own
operations.
The funds are considering investing in India through a Republic of Mauritius
company to take advantage of the favorable tax treaty between the countries.
There can be no assurance such an investment structure would be effective. As
noted in the paragraph above, each fund may invest in the securities of other
investment companies. A Mauritius holding company will not be considered an
investment company for this purpose.
Futures and Options
Each fund may enter into futures contracts, options or options on futures
contracts. Generally, futures transactions will be used to:
o protect against a decline in market value of the fund's securities (taking a
short futures position), or
o protect against the risk of an increase in market value for securities in
which the fund generally invests at a time when the fund is not fully-invested
(taking a long futures position), or
o provide a temporary substitute for the purchase of an individual security that
may be purchased in an orderly fashion.
Some futures and options strategies, such as selling futures, buying puts and
writing calls, hedge a fund's investments against price fluctuations. Other
strategies, such as buying futures, writing puts and buying calls, tend to
increase market exposure. Although other techniques may be used to control a
fund's exposure to market fluctuations, the use of futures contracts may be a
more effective means of hedging this exposure. While a fund pays brokerage
commissions in connection with opening and closing out futures positions, these
costs are lower than the transaction costs incurred in the purchase and sale of
the underlying securities.
For example, the sale of a future by a fund means the fund becomes obligated to
deliver the security (or securities, in the case of an index future) at a
specified price on a specified date. The purchase of a future means the fund
becomes obligated to buy the security (or securities) at a specified price on a
specified date. Futures contracts provide for the sale by one party and purchase
by another party of a specific security at a specified future time and price.
The fund managers may engage in futures and options transactions based on
securities indexes that are consistent with the fund's investment objectives.
Examples of indices that may be used include the MSCI EAFE Index and MSCI
Emerging Markets Free Index. The managers also may engage in futures and options
transactions based on specific securities, such as U.S. Treasury bonds or notes.
Futures contracts are traded on national futures exchanges. Futures exchanges
and trading are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission (CFTC), a U.S. government agency.
Index futures contracts differ from traditional futures contracts in that when
delivery takes place, no stocks or bonds change hands. Instead, these contracts
settle in cash at the spot market value of the index. Although other types of
futures contracts by their terms call for actual delivery or acceptance of the
underlying securities, in most cases the contracts are closed out before the
settlement date. A futures position may be closed by taking an opposite position
in an identical contract (i.e., buying a contract that has previously been sold
or selling a contract that has previously been bought).
Unlike when the fund purchases or sells a bond, no price is paid or received by
the fund upon the purchase or sale of the future. Initially, the fund will be
required to deposit an amount of cash or securities equal to a varying specified
percentage of the contract amount. This amount is known as initial margin. The
margin deposit is intended to ensure completion of the contract (delivery or
acceptance of the underlying security) if it is not terminated prior to the
specified delivery date. A margin deposit does not constitute margin
transactions for purposes of the funds' investment restrictions. Minimum initial
margin requirements are established by the futures exchanges and may be revised.
In addition, brokers may establish margin deposit requirements that are higher
than the exchange minimums. Cash held in the margin accounts generally are not
income producing. Coupon bearing securities, such as treasury bills and bonds,
held in margin accounts generally will earn income. Subsequent payments, to and
from the broker, called variation margin, will be made on a daily basis as the
price of the underlying debt securities or index fluctuates, making the future
more or less valuable, a process known as marking the contract to market.
Changes in variation margin are recorded by the fund as unrealized gains or
losses. At any time prior to expiration of the future, the fund may elect to
close the position by taking an opposite position that will operate to terminate
its position in the future. A final determination of variation margin is then
made; additional cash is required to be paid by or released to the fund and the
fund realizes a loss or gain.
Risks Related to Futures and Options Transactions
Futures and options prices can be volatile, and trading in these markets
involves certain risks. If the fund managers apply a hedge at an inappropriate
time or judge interest rate or equity market trends incorrectly, futures and
options strategies may lower a fund's return.
A fund could suffer losses if it were unable to close out its position because
of an illiquid secondary market. Futures contracts may be closed out only on an
exchange that provides a secondary market for these contracts, and there is no
assurance that a liquid secondary market will exist for any particular futures
contract at any particular time. Consequently, it may not be possible to close a
futures position when the fund managers consider it appropriate or desirable to
do so. In the event of adverse price movements, a fund would be required to
continue making daily cash payments to maintain its required margin. If the fund
had insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when the fund managers would not otherwise elect
to do so. In addition, a fund may be required to deliver or take delivery of
instruments underlying futures contracts it holds. The fund managers will seek
to minimize these risks by limiting the contracts entered into on behalf of the
funds to those traded on national futures exchanges and for which there appears
to be a liquid secondary market.
A fund could suffer losses if the prices of its futures and options positions
were poorly correlated with its other investments, or if securities underlying
futures contracts purchased by a fund had different maturities than those of the
portfolio securities being hedged. Such imperfect correlation may give rise to
circumstances in which a fund loses money on a futures contract at the same time
that it experiences a decline in the value of its hedged portfolio securities. A
fund also could lose margin payments it has deposited with a margin broker, if,
for example, the broker became bankrupt.
Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
Options on Futures
By purchasing an option on a futures contract, a fund obtains the right, but not
the obligation, to sell the futures contract (a put option) or to buy the
contract (a call option) at a fixed strike price. A fund can terminate its
position in a put option by allowing it to expire or by exercising the option.
If the option is exercised, the fund completes the sale of the underlying
security at the strike price. Purchasing an option on a futures contract does
not require a fund to make margin payments unless the option is exercised.
Although they do not currently intend to do so, the funds may write (or sell)
call options that obligate it to sell (or deliver) the option's underlying
instrument upon exercise of the option. While the receipt of option premiums
would mitigate the effects of price declines, the funds would give up some
ability to participate in a price increase on the underlying security. If a fund
were to engage in options transactions, it would own the futures contract at the
time a call were written and would keep the contract open until the obligation
to deliver it pursuant to the call expired.
Restrictions on the Use of Futures Contracts and Options
Each fund may enter into futures contracts, options or options on futures
contracts.
Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for other than hedging
purposes, provided that assets committed to initial margin and option premiums
do not exceed 5% of the fund's total assets. To the extent required by law, each
fund will segregate cash or securities on its records in an amount sufficient to
cover its obligations under the futures contracts and options.
Forward Currency Exchange Contracts
Each fund may purchase and sell foreign currency on a spot (i.e., cash) basis
and may engage in forward currency contracts, currency options and futures
transactions for hedging or any other lawful purpose. See Derivative Securities,
page 7.
The funds expect to use forward contracts under two circumstances:
(1) When the fund managers wish to lock in the U.S. dollar price of a security
when a fund is purchasing or selling a security denominated in a foreign
currency, the fund would be able to enter into a forward contract to do so;
or
(2) When the fund managers believe that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, a fund
would be able to enter into a forward contract to sell foreign currency for
a fixed U.S. dollar amount approximating the value of some or all of its
portfolio securities either denominated in, or whose value is tied to, such
foreign currency.
In the first circumstance, when a fund enters into a trade for the purchase or
sale of a security denominated in a foreign currency, it may be desirable to
establish (lock in) the U.S. dollar cost or proceeds. By entering into forward
contracts in U.S. dollars for the purchase or sale of a foreign currency
involved in an underlying security transaction, the fund will be able to protect
itself against a possible loss between trade and settlement dates resulting from
the adverse change in the relationship between the U.S. dollar and the subject
foreign currency.
Under the second circumstance, when the fund managers believe that the currency
of a particular country may suffer a substantial decline relative to the U.S.
dollar, a fund could enter into a forward contract to sell for a fixed dollar
amount the amount in foreign currencies approximating the value of some or all
of its portfolio securities either denominated in, or whose value is tied to,
such foreign currency. The fund will segregate on its records cash or securities
in an amount sufficient to cover its obligations under the contract.
The precise matching of forward contracts in the amounts and values of
securities involved generally would not be possible because the future values of
such foreign currencies will change as a consequence of market movements in the
values of those securities between the date the forward contract is entered into
and the date it matures. Predicting short-term currency market movements is
extremely difficult, and the successful execution of short-term hedging strategy
is highly uncertain. The fund managers do not intend to enter into such
contracts on a regular basis. Normally, consideration of the prospect for
currency parities will be incorporated into the long-term investment decisions
made with respect to overall diversification strategies. However, the managers
believe that it is important to have flexibility to enter into such forward
contracts when they determine that a fund's best interests may be served.
At the maturity of the forward contract, the fund may either sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate the obligation to deliver the foreign currency by
purchasing an offsetting forward contract with the same currency trader
obligating the fund to purchase, on the same maturity date, the same amount of
the foreign currency.
It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the forward contract. Accordingly, it
may be necessary for a fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency the fund is obligated to
deliver and if a decision is made to sell the security and make delivery of the
foreign currency the fund is obligated to deliver.
INVESTMENT POLICIES
Unless otherwise indicated, with the exception of the percentage limitations on
borrowing, the restrictions described below apply at the time a fund enters into
a transaction. Accordingly, any later increase or decrease beyond the specified
limitation resulting from a change in a fund's net assets will not be considered
in determining whether it has complied with its investment restrictions.
Fundamental Investment Policies
The funds' fundamental investment policies are set forth below. These investment
policies may not be changed without approval of a majority of the outstanding
votes of shareholders of a fund, as determined in accordance with the Investment
Company Act.
Subject Policy
Senior Securities A fund may not issue senior securities, except as permitted
under the Investment Company Act.
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or
investment) in an amount not exceeding 33-1/3% of the fund's
total assets (including the amount borrowed) less
liabilities (other than borrowings).
Lending A fund may not lend any security or make any other loan if,
as a result, more than 33-1/3% of the fund's total assets
would be lent to other parties, except, (i) through the
purchase of debt securities in accordance with its
investment objective, policies and limitations or (ii) by
engaging in repurchase agreements with respect to portfolio
securities.
Real Estate A fund may not purchase or sell real estate unless
acquired as a result of ownership of securities or other
instruments. This policy shall not prevent a fund from
investing in securities or other instruments backed by real
estate or securities of companies that deal in real estate
or are engaged in the real estate business.
Concentration A fund may not concentrate its investments in securities of
issuers in a particular industry (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities).
Underwriting A fund may not act as an underwriter of securities issued by
others, except to the extent that the fund may be considered
an underwriter within the meaning of the Securities Act of
1933 in the disposition of restricted securities.
Commodities A fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments; provided that this limitation shall not
prohibit the fund from purchasing or selling options and
futures contracts or from investing in securities or other
instruments backed by physical commodities.
Control A fund may not invest for purposes of exercising control
over management.
For purposes of the investment restrictions relating to lending and borrowing,
the funds have received an exemptive order from the SEC regarding interfund
lending. Under the terms of the exemptive order, the funds may borrow money from
or lend money to other funds, ACIM-advised, that permit such transactions. All
such transactions will be subject to the limits for borrowing and lending set
forth above. The funds will borrow money through the program only when the costs
are equal to or lower than the cost of short-term bank loans. Interfund loans
and borrowings normally extend only overnight, but can have a maximum duration
of seven days. The funds will lend through the program only when the returns are
higher than those available from other short-term instruments (such as
repurchase agreements). The funds may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
For purposes of the investment restriction relating to concentration, a fund
shall not purchase any securities that would cause 25% or more of the value of
the fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that
a) there is no limitation with respect to obligations issued or guaranteed by
the U.S. government, any state, territory or possession of the United
States, the District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions and repurchase agreements
secured by such instruments,
b) wholly owned finance companies will be considered to be in the industries
of their parents if their activities are primarily related to financing the
activities of the parents,
c) utilities will be divided according to their services, for example, gas,
gas transmission, electric and gas, electric and telephone will each be
considered a separate industry, and
d) personal credit and business credit businesses will be considered separate
industries.
Nonfundamental Investment Policies
In addition, the funds are subject to the following investment policies that are
not fundamental and may be changed by the Board of Directors.
Subject Policy
Leveraging A fund may not purchase additional investment securities at
any time during which outstanding borrowings exceed 5% of the
total assets of the fund.
Liquidity A fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of its net
assets (10% for the money market funds) would be invested in
repurchase agreements not entitling the holder to payment of
principal and interest within seven days and in securities
that are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily available
market.
Short Sales A fund may not sell securities short, unless it owns or
has the right to obtain securities equivalent in kind and
amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed
to constitute selling securities short.
Margin A fund may not purchase securities on margin, except that the
fund may obtain such short-term credits as are necessary for
the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on
futures contracts shall not constitute purchasing securities
on margin.
Futures and A fund may enter into futures conracts and write and buy
put and call options relating to futures contracts. A fund may
not, however, enter into leveraged futures transactions if it
would be possible for the fund to lose more money than it
invested.
Issuers with A fund may invest a portion of its assets in the securities of
Limited issuers with limited operating histories. An issuer is
Operating considered to have a limited operating history if that issuer
Histories has a record of less than three years of continuous operation.
Periods of capital formation,incubation, consolidations, and
research and development may be considered in determing
whether a particular issuer has a record of three years of
continuous operation.
The Investment Company Act imposes certain additional restrictions of the funds'
ability to acquire securities issued by insurance companies, broker-dealers,
underwriters or investment advisors, and upon transactions with affiliated
persons as therein defined. It also defines and forbids the creation of cross
and circular ownership. Neither the SEC nor any other agency of the federal or
state government participates in or supervises the management of the funds or
their investment practices or policies.
PORTFOLIO TURNOVER
The funds'portfolio turnover rates are listed in the Financial Highlights tables
in the Prospectus.
The fund managers will purchase and sell securities without regard to the length
of time the security has been held. Accordingly, each fund's rate of portfolio
turnover may be substantial.
The fund managers intend to purchase a given security whenever they believe it
will contribute to the stated objective of the fund. In order to achieve each
fund's investment objective, the fund managers may sell a given security, no
matter for how long or for how short a period it has been held in the portfolio,
and no matter whether the sale is at a gain or at a loss, if the managers
believe that the security is not fulfilling its purpose, either because, among
other things, it did not live up to the managers' expectations, or because it
may be replaced with another security holding greater promise, or because it has
reached its optimum potential, or because of a change in the circumstances of a
particular company or industry or in general economic conditions, or because of
some combination of such reasons.
When a general decline in security prices is anticipated, the equity funds may
decrease or eliminate entirely their equity positions and increase their cash
positions, and when a rise in price levels is anticipated, the equity funds may
increase their equity positions and decrease their cash positions. However, it
should be expected that the funds will, under most circumstances, be essentially
fully invested in equity securities.
Because investment decisions are based on the anticipated contribution of the
security in question to the funds' objectives, the managers believe that the
rate of portfolio turnover is irrelevant when they believe a change is in order
to achieve those objectives. As a result, a fund's annual portfolio turnover
rate cannot be anticipated and may be higher than that of other mutual funds
with similar investment objectives. Higher turnover would generate
correspondingly greater brokerage commissions, which is a cost the funds pay
directly. Portfolio turnover also may affect the character of capital gains
realized and distributed by the fund, if any, since short-term capital gains are
taxable as ordinary income. This disclosure regarding portfolio turnover is a
statement of fundamental policy and may be changed only by a vote of the
shareholders.
Because the managers do not take portfolio turnover rate into account in making
investment decisions, (1) the managers have no intention of accomplishing any
particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as representative
of the rates that will be attained in the future.
MANAGEMENT
The Board of Directors
The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired the advisor to do so.
Two-thirds of the directors are independent of the funds' advisor; that is, they
are not employed by and have no financial interest in the advisor.
The individuals listed in the table below whose names are marked by an asterisk
(*) are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with either the
funds; the advisor, American Century Investment Management, Inc. (ACIM); the
funds' agent for transfer and administrative services, American Century Services
Corporation (ACSC); the parent corporation, American Century Companies, Inc.
(ACC) or ACC's subsidiaries (including ACIM and ACSC); the funds' distribution
agent American Century Investment Services, Inc. (ACIS); or other funds advised
by the advisor. Each director listed below (except James E. Stowers III) serves
as a director of five other registered investment companies in the American
Century family of funds, which are also advised by the advisor. James E. Stowers
III serves as director of 12 other registered investment companies in the
American Century family of funds.
<TABLE>
Name (Age) Position(s) Held With Fund Principal Occupation(s) during Past five Years
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
James E. Stowers, Jr.* (76) Director, Chairman, Director and controlling shareholder, ACC,
4500 Main Street Chairman of the Board Chairman, ACIM, ACSC, ACIS and six other ACC
Kansas City, MO 64111 subsidiaries
Director, ACIM, ACSC, ACIS and 10 other ACC subsidiaries(1)
------------------------------------------------------------------------------------------------------------------------------------
James E. Stowers III* (41) Director Co-Chairman and Director, ACC
4500 Main Street Chief Executive Officer, ACIM, ACSC, ACIS and six other
Kansas City, MO 64111 ACC subsidiaries
Director, ACIM, ACSC, ACIS and 11 other ACC subsidiaries(2)
------------------------------------------------------------------------------------------------------------------------------------
Thomas A. Brown (60) Director Area Vice President, Plains States Development, Applied
4500 Main Street Industrial Technologies, Inc., a corporation engaged
Kansas City, MO 64111 in the sale of bearings and power transmission products
------------------------------------------------------------------------------------------------------------------------------------
Robert W. Doering, M.D. (67) Director Retired, formerly a general surgeon
4500 Main Street
Kansas City, MO 64111
------------------------------------------------------------------------------------------------------------------------------------
Andrea C. Hall, Ph.D. (55) Director Senior Vice President and Director, Midwest
4500 Main Street Research Institute
Kansas City, MO 64111
------------------------------------------------------------------------------------------------------------------------------------
D.D. (Del) Hock (65) Director Retired, formerly Chairman, Public Service Company
4500 Main Street of Colorado; Director, RMI.NET Inc., Hathaway
Kansas City, MO 64111 Corporation, and J.D. Edwards & Company
------------------------------------------------------------------------------------------------------------------------------------
Donald H. Pratt (62) Director, Chairman and Director, Butler Manufacturing
4500 Main Street Vice Chairman of the Board Company; Director, Atlas-Copco North America, Inc.
Kansas City, MO 64111
------------------------------------------------------------------------------------------------------------------------------------
Gale E. Sayers (57) Director President, Chief Executive Officer and Founder,
4500 Main Street Sayers Computer Source
Kansas City, MO 64111
------------------------------------------------------------------------------------------------------------------------------------
M. Jeannine Strandjord (54) Director Senior Vice President, Long Distance Finance, Sprint
4500 Main Street Corporation; Director, DST Systems, Inc.
Kansas City, MO 64111
------------------------------------------------------------------------------------------------------------------------------------
(1)Father of James E. Stowers III
(2)Son of James E. Stowers, Jr.
Committees
The Board has four standing committees to oversee specific functions of the
funds' operations. Information about these committees appears in the table
below. The director first named acts as chairman of the committee.
Committee Members Function of Committee
------------------------------------------------------------------------------------------------------------------------------------
Executive James E. Stowers, Jr. The Executive Committee performs the functions of the Board of
James E. Stowers III Directors between Board meetings, subject to the limitations on its
Donald H. Pratt power set out in the Maryland General Corporation Law, and except
for matters required by the Investment Company Act to be acted
upon by the whole Board.
------------------------------------------------------------------------------------------------------------------------------------
Compliance and Thomas A. Brown The Compliance and Communications Committee reviews the results of the funds'
Communications Donald H. Pratt compliance testing program, reviews quarterly reports from the
Andrea C. Hall Ph.D advisor to the Board regarding various compliance
Gale E. Sayers matters and monitors the implementation of the funds' Code of Ethics,
including any violations.
------------------------------------------------------------------------------------------------------------------------------------
Audit Jeannine Strandjord The Audit Committee recommends the engagement of the funds'
Robert W. Doering, M.D. independent auditors and oversees its activities. The Committee
D.D. (Del) Hock receives reports from the advisor's Internal Audit Department, which
is accountable to the Committee. The Committee also receives
reporting about compliance matters affecting the funds.
------------------------------------------------------------------------------------------------------------------------------------
Nominating Donald H. Pratt The Nominating Committee primarily considers and recommends
D.D. (Del) Hock individuals for nomination as directors. The names of potential
Andrea C. Hall, PhD director candidates are drawn from a number of sources, including
recommendations from members of the Board, management and
shareholders. This committee also reviews and makes
recommendations to the Board with respect to the composition of
Board committees and other Board-related matters, including its
organization, size, composition, responsibilities, functions and compensation.
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Compensation of Directors
The directors also serve as directors for five American Century investment
companies other than the corporation. Each director who is not an interested
person as defined in the Investment Company Act receives compensation for
service as a member of the Board of all six such companies based on a schedule
that takes into account the number of meetings attended and the assets of the
funds for which the meetings are held. These fees and expenses are divided among
the six investment companies based, in part, upon their relative net assets.
Under the terms of the management agreement with the advisor, the funds are
responsible for paying such fees and expenses.
The following table shows the aggregate compensation paid by the corporation for
the periods indicated and by the six investment companies served by this Board
to each director who is not an interested person as defined in the Investment
Company Act.
<TABLE>
Aggregate Director Compensation for Fiscal Year Ended November 30, 2000
Total Compensation Total Compensation from the
Name of Director from the Funds(1) American Century Family of Funds(2)
<S> <C> <C>
Thomas A. Brown $x $x
Robert W. Doering, M.D. $x $x
Andrea C. Hall, Ph.D. $x $x
D.D. (Del) Hock $x $x
Donald H. Pratt $x $x
Lloyd T. Silver, Jr.(3) $x $x
M. Jeannine Strandjord $x $x
</TABLE>
1 Includes compensation paid to the directors during the fiscal year ended
November 30, 2000, and also includes amounts deferred at the election of
the directors under the American Century Mutual Funds Deferred Compensation
Plan for Non-Interested Directors. The total amount of deferred
compensation included in the preceding table is as follows: Mr. Brown, $x;
Dr. Hall, $x; Mr. Hock, $x; Mr. Pratt, $x; Mr. Silver, $x and Ms.
Strandjord, $x.
2 Includes compensation paid by the six investment company members of the
American Century family of funds served by this Board.
3 Mr. Silver retired from the board on March 4, 2000.
The funds have adopted the Amended and Restated American Century Mutual Funds
Deferred Compensation Plan for Non-Interested Directors. Under the plan, the
independent directors may defer receipt of all or any part of the fees to be
paid to them for serving as directors of the funds.
All deferred fees are credited to an account established in the name of the
directors. The amounts credited to the account then increase or decrease, as the
case may be, in accordance with the performance of one or more of the American
Century funds that are selected by the director. The account balance continues
to fluctuate in accordance with the performance of the selected fund or funds
until final payment of all amounts credited to the account. Directors are
allowed to change their designation of mutual funds from time to time.
No deferred fees are payable until such time as a director resigns, retires or
otherwise ceases to be a member of the Board of Directors. Directors may receive
deferred fee account balances either in a lump sum payment or in substantially
equal installment payments to be made over a period not to exceed 10 years. Upon
the death of a director, all remaining deferred fee account balances are paid to
the director's beneficiary or, if none, to the director's estate.
The plan is an unfunded plan and, accordingly, the funds have no obligation to
segregate assets to secure or fund the deferred fees. To date, the funds have
voluntarily funded their obligations. The rights of directors to receive their
deferred fee account balances are the same as the rights of a general unsecured
creditor of the funds. The plan may be terminated at any time by the
administrative committee of the plan. If terminated, all deferred fee account
balances will be paid in a lump sum.
No deferred fees were paid to any director under the plan during the fiscal year
ended November 30, 2000.
OFFICERS
Background information about the officers of the funds is provided in the table
below. All persons named as officers of the funds also serve in similar
capacities for the 12 other investment companies advised by ACIM. Not all
officers of the funds are listed; only those officers with policy-making
functions for the funds are listed. No officer is compensated for his or her
service as an officer of the funds. The individuals listed in the following
table are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with either the
funds, ACC, ACC's subsidiaries (including ACIM, ACSC and ACIS).
<TABLE>
------------------------------------- ----------------------------------- -----------------------------------
Name (Age) Positions Held with Principal Occupation(s)
Address the Funds During Past Five Years
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
<S> <C> <C>
William M. Lyons (45) President President, ACC (June 1997 to
4500 Main St. present)
Kansas City, MO 64111 Chief Operating Officer, ACC
(June 1995 to present)
General Counsel, ACC, ACIM, ACIS,
ACSC and other ACC subsidiaries
(June 1989 to June 1998)
Executive Vice President, ACC,
(January 1995 to June 1997)
Also serves as: Executive Vice
President and Chief Operating
Officer, ACIM, ACIS, ACSC and
other ACC subsidiaries, and
Executive Vice President of other
ACC subsidiaries
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Robert T. Jackson (54) Executive Vice President and Chief Administrative Officer and
4500 Main St. Chief Financial Officer Chief Financial Officer, ACC
Kansas City, MO 64111 (August 1997 to present)
President, ACSC (January 1999 to
present)
Executive Vice President, ACC
(May 1995 to present)
Also serves as: Executive Vice
President, ACIM, ACIS and other
ACC subsidiaries, and Treasurer
of ACC and other ACC subsidiaries
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Maryanne Roepke, CPA (44) Senior Vice President, Treasurer Senior Vice President and
4500 Main St. and Chief Accounting Officer Assistant Treasurer, ACSC
Kansas City, MO 64111
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
David C. Tucker (42) Senior Vice President Senior Vice President, ACIM,
4500 Main St. And General Counsel ACIS, ACSC and other ACC
Kansas City, MO 64111 subsidiaries (June 1998 to
present)
General Counsel, ACC, ACIM, ACIS,
ACSC and other ACC subsidiaries
(June 1998 to present)
Consultant to mutual fund
industry (May 1997 to April 1998)
Vice President and General
Counsel, Janus Companies (1990 to
1997)
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Charles A. Etherington (43) Vice President Vice President (October 1996 to
4500 Main St. present) and Associate General
Kansas City, MO 64111 Counsel (December 1998 to
present), ACSC
Counsel to ACSC (February 1994 to
December 1998)
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Charles C. S. Park (33) Vice President Vice President (February 2000 to
1665 Charleston Road present) and Assistant General
Mountain View, CA 94043 Counsel (January 1998 to
present), ACSC
Counsel to ACSC (October 1995 to
January 1998)
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
David H. Reinmiller (37) Vice President Vice President (February 2000 to
4500 Main Street present) and Assistant General
Kansas City, MO 64111 Counsel (August 1996 to present),
ACSC
Counsel to ACSC (January 1994 to
August 1996)
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Paul Carrigan Jr. (51) Secretary Secretary, ACC (February 1998 to
4500 Main St. present)
Kansas City, MO 64111 Director of Legal Operations,
ACSC (February 1996 to present)
Board Communications Manager
(April 1994 to January 1996)
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Robert J. Leach (34) Controller Vice President, ACSC (February
4500 Main St. 2000 to present)
Kansas City, MO 64111 Controller-Fund Accounting, ACSC
------------------------------------- ----------------------------------- -----------------------------------
------------------------------------- ----------------------------------- -----------------------------------
Jon Zindel (33) Tax Officer Vice President of Taxation, ACSC
4500 Main Street (1996 to present)
Kansas City, MO 64111 Vice President, ACIM, ACIS and
other ACC subsidiaries (April
1999 to present)
President, American Century
Employee Benefit Services, Inc.
(January 2000 to present)
Treasurer, American Century
Ventures, Inc. (December 1999 to
present)
Tax Manager, Price Waterhouse LLP
(1989 to 1996)
------------------------------------- ----------------------------------- -----------------------------------
</TABLE>
Code of Ethics
The funds, their investment advisor and principal underwriters have adopted
codes of ethics under Rule 17j-1 of the Investment Company Act and the code of
ethics permits personnel subject to the code to invest in securities that may be
purchased or held by the funds, provided that they first obtain approval from
the compliance department before making such investments.
<TABLE>
THE FUNDS' PRINCIPAL SHAREHOLDERS
As of February 5, 2001, the following companies were the record owners of more
than 5% of the outstanding shares of any class of a fund:
Percentage of
Fund Shareholder Shares Outstanding
---- ----------- ------------------
<S> <C> <C>
Global Growth
Advisor Donaldson Lufkin Jenrette
Securities Corporation, Inc. XXX%
Jersey City, NJ
International Growth
Investor Charles Schwab & Co. Inc. XXX%
San Francisco, CA
Morgan Guaranty Trust of NY XXX%
Newark, DE
Advisor Nationwide 401K Public
Nationwide Insurance Co. XXX%
Columbus, OH
American Chamber of Commerce Executives XXX%
Amended and Restated MPP Plan & Trust
Springfield, MO
Institutional Dingle & Co. XXX%
Detroit, MI
Charles Schwab & Co. Inc. XXX%
San Francisco, CA
Chase Manhattan Bank, Trustee XXX%
Robert Bosch Corporation New Star Plan & Trust
New York, NY
Morgan Guaranty Trust Company, Trustee XXX%
Deferred Profit Sharing Plan of
Morgan Guaranty Trust Co. of NY
Affiliated Companies for US Employees
New York, NY
American Century Profit Sharing & 401K XXX%
Savings Plan & Trust
Kansas City, MO
UMB Bank NA, Trustee XXX%
Navistar International Transportation Corp
401k Retirement Savings Plan & Trust
Kansas City, MO
International Discovery
Investor Charles Schwab & Co., Inc. XXX%
San Francisco, CA
Advisor Jato & Co. XXX%
Minneapolis, MN
Luther & Co. XXX%
Farmington Hills, MI
IFTC, Custodian, XXX%
Lizardtech, Inc.
Kansas City, MO
Arrowhead Trust, Inc. XXX%
San Bernardino, CA
Institutional Morgan Guaranty Trust Company, Trustee XXX%
Deferred PS Plan of Morgan Guaranty Trust Co.
of NY & Affiliated Companies for US Employees
New York, NY
Pell Rudman Trust Company NA XXX%
Boston, MA
US Bank NA Trustee XXX%
Ceridian Corporation Master Trust
St. Paul, MN
Charles Schwab & Co., Inc. XXX%
San Francisco, CA
American Century Profit Sharing & 401K XXX%
Savings Plan & Trust
Kansas City, MO
Mitra & Co. XXX%
Milwaukee, WI
Goodness Ltd. XXX%
Nassau, The Bahamas
Percentage of
Fund Shareholder Shares Outstanding
---- ----------- ------------------
Emerging Markets
Investor Charles Schwab & Co., Inc. XXX%
San Francisco, CA
Advisor Pershing Kay & Herbert Mills, Trustee XXX%
FBO Professional Serv Defined
Benefit Pension Plan
Palo Alto, CA
Donaldson Lufkin Jenrette
Securities Corporation, Inc. XXX%
Jersey City, NJ
Suntrust Bank Central Florida NA, Trustee XXX%
Conitex Sonoco Inc. Subsidiaries 401K Plan
Englewood, CO
AG Edwards & Sons Inc FBO Michael Chaney TTE XXX%
Michael Chaney Interv
St Louis, MO
Institutional Charles Schwab & Co., Inc. XXX%
San Francisco, CA
American Century Profit Sharing & 401K XXX%
Savings Plan & Trust
Kansas City, MO
Henry R. Fett, Trustee XXX%
1999 Irrevocable US Annuity & Gift Trust
Clayton, MO
Goodness Ltd. XXX%
Nassau, The Bahamas
American Century Services Corporation XXX%
Stock Option Surrender PlanTrust
Kansas City, MO
</TABLE>
The funds are unaware of any other shareholders, beneficial or of record, who
own more than 5% of any class of a fund's outstanding shares. As of February 5,
2001, the officers and directors of the funds, as a group, owned less than 1% of
any class of a fund's outstanding shares.
SERVICE PROVIDERS
The funds have no employees. To conduct the funds' day-to-day activities, the
funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds and is described below.
ACIM and ACSC are both wholly owned by ACC. James E. Stowers Jr., Chairman of
ACC, controls ACC by virtue of his ownership of a majority of its voting stock.
INVESTMENT ADVISOR
American Century Investment Management, Inc. (ACIM) serves as the investment
advisor for each of the funds. A description of the responsibilities of the
advisor appears in the Prospectus under the heading Management.
For the services provided to the fund, the advisor receives a monthly fee based
on a percentage of the average net assets of the fund. The funds have a stepped
fee structure, as follows:
<TABLE>
Fund Class Percent of Average Net Assets
---- ----- -----------------------------
<S> <C> <C>
Global Growth Investor 1.30% of first $1 billion
1.15% of the next $1 billion
1.05% over $2 billion
----------------------------------------------------------------------------------
Institutional 1.10% of first $1 billion
0.95% of the next $1 billion
0.85% over $2 billion
----------------------------------------------------------------------------------
Advisor 1.05% of first $1 billion
0.90% of the next $1 billion
0.80% over $2 billion
----------------------------------------------------------------------------------
International Growth Investor 1.50% of first $1 billion
1.20% of the next $1 billion
1.10% over $2 billion
Institutional 1.30 of first $1 billion
1.00% of the next $1 billion
0.90% over $2 billion
Advisor 1.25% of first $1 billion
0.95% of the next $1 billion
0.85% over $2 billion
----------------------------------------------------------------------------------
International Small Business Investor XXX% of first $500 million
XXX% of the next $500 million
XXX% over $1 billion
Institutional XXX% of first $500 million
XXX% of the next $500 million
XXX% over $1 billion
Advisor XXX% of first $500 million
XXX% of the next $500 million
XXX% over $1 billion
----------------------------------------------------------------------------------
International Discovery Investor 1.75% of first $500 million
1.40% of the next $500 million
1.20% over $1 billion
Institutional 1.55% of first $500 million
1.20% of the next $500 million
1.00% over $1 billion
Advisor 1.50% of first $500 million
1.15% of the next $500 million
0.75% over $1 billion
----------------------------------------------------------------------------------
Emerging Markets Investor 2.00% of first $500 million
1.50% of the next $500 million
1.25% over $1 billion
Institutional 1.80% of first $500 million
1.30% of the next $500 million
1.05% over $1 billion
Advisor 1.55% of first $500 million
1.25% of the next $500 million
1.00% over $1 billion
----------------------------------------------------------------------------------
</TABLE>
On the first business day of each month, the funds pay a management fee to the
advisor for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of a fund's net assets during the previous
month. This number is then multiplied by a fraction, the numerator of which is
the number of days in the previous month and the denominator of which is 365
(366 in leap years).
The management agreement between the corporation and the advisor shall continue
in effect until the earlier of the expiration of two years from the date of its
execution or until the first meeting of shareholders following such execution
and for as long thereafter as its continuance is specifically approved at least
annually by
(1) the funds' Board of Directors, or a majority of outstanding shareholder
votes (as defined in the Investment Company Act) and
(2) the vote of a majority of the directors of the funds who are not parties to
the agreement or interested persons of the advisor, cast in person at a
meeting called for the purpose of voting on such approval.
The management agreement states that the funds' Board of Directors or a majority
of outstanding shareholder votes may terminate the management agreement at any
time without payment of any penalty on 60 days' written notice to the advisor.
The management agreement shall be automatically terminated if it is assigned.
The management agreement states that the advisor shall not be liable to the
funds or their shareholders for anything other than willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations and duties.
The management agreement also provides that the advisor and its officers,
directors and employees may engage in other business, devote time and attention
to any other business whether of a similar or dissimilar nature, and render
services to others.
Certain investments may be appropriate for the funds and also for other clients
advised by the advisor. Investment decisions for the funds and other clients are
made with a view to achieving their respective investment objectives after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investment generally. A particular security
may be bought or sold for only one client or fund, or in different amounts and
at different times for more than one but less than all clients or funds. In
addition, purchases or sales of the same security may be made for two or more
clients or funds on the same date. Such transactions will be allocated among
clients in a manner believed by the advisor to be equitable to each. In some
cases this procedure could have an adverse effect on the price or amount of the
securities purchased or sold by a fund.
The advisor may aggregate purchase and sale orders of the funds with purchase
and sale orders of its other clients when the advisor believes that such
aggregation provides the best execution for the funds. The corporation's Board
of Directors has approved the policy of the advisor with respect to the
aggregation of portfolio transactions. Where portfolio transactions have been
aggregated, the funds participate at the average share price for all
transactions in that security on a given day and allocate transaction costs on a
pro rata basis. The advisor will not aggregate portfolio transactions of the
funds unless it believes such aggregation is consistent with its duty to seek
best execution on behalf of the funds and the terms of the management agreement.
The advisor receives no additional compensation or remuneration as a result of
such aggregation.
Unified management fees incurred by each fund by class for the fiscal periods
ended November 30, 2000, 1999 and 1998, are
indicated in the following table.
Unified Management Fees
Fund 2000 1999 1998
Global Growth(1)
Investor x $1,644,937 N/A
Advisor x 483 N/A
International Growth
Investor x 36,878,929 $29,196,029
Advisor x 364,444 155,228
Institutional x 444,815 251,829
International Small Business(2)
Investor N/A N/A N/A
Advisor N/A N/A N/A
Institutional N/A N/A N/A
International Discovery
Investor x 14,437,198 12,121,551
Advisor x 285 85
Institutional x 1,531,868 648,372
Emerging Markets
Investor x 876,060 387,349
Advisor x 838 N/A
Institutional x 192,678 N/A
1 Commenced operations December 1, 1998.
2 Commenced operations March 31, 2001.
TRANSFER AGENT AND ADMINISTRATOR
American Century Services Corporation, 4500 Main Street, Kansas City, Missouri
64111, acts as transfer agent and dividend-paying agent for the funds. It
provides physical facilities, computer hardware and software and personnel, for
the day-to-day administration of the funds and the advisor. The advisor pays
ACSC for these services.
From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the advisor.
DISTRIBUTOR
The funds' shares are distributed by ACIS, a registered broker-dealer. The
distributor is a wholly owned subsidiary of ACC, and its principal business
address is 4500 Main Street, Kansas City, Missouri 64111.
The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best efforts underwriting of the funds' shares.
This means the distributor has no liability for unsold shares.
OTHER SERVICE PROVIDERS
Custodian Banks
Chase Manhattan Bank, 770 Broadway, 10th Floor, New York, New York 10003-9598,
and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105, each serves
as custodian of the funds' assets. The custodians take no part in determining
the investment policies of the funds or in deciding which securities are
purchased or sold by the funds. The funds, however, may invest in certain
obligations of the custodians and may purchase or sell certain securities from
or to the custodians.
Independent AuditorS
Deloitte & Touche LLP is the independent auditors of the funds. The address of
Deloitte & Touche LLP is 1010 Grand Boulevard, Kansas City, Missouri 64106. As
the independent auditor of the funds, Deloitte & Touche LLP provides services
including:
(1) audit of the annual financial statements for each fund,
(2) assistance and consultation in connection with SEC filings and
(3) review of the annual federal income tax return filed for each fund.
BROKERAGE ALLOCATION
Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers and dealers to execute portfolio
transactions. The funds' policy is to secure the most favorable prices and
execution of orders on its portfolio transactions. So long as that policy is
met, the advisor may take into consideration the factors discussed below when
selecting brokers.
The advisor receives statistical and other information and services, including
research, without cost from brokers and dealers. The advisor evaluates such
information and services, together with all other information that it may have,
in supervising and managing the investments of the funds. Because such
information and services may vary in amount, quality and reliability, their
influence in selecting brokers varies from none to very substantial. The advisor
proposes to continue to place some of the funds' brokerage business with one or
more brokers who provide information and services. Such information and services
will be in addition to and not in lieu of services required to be performed by
the advisor. The advisor does not utilize brokers that provide such information
and services for the purpose of reducing the expense of providing required
services to the funds.
In the years ended November 30, 2000, 1999 and 1998, the brokerage commissions
of each fund were:
Fund 2000 1999 1998
Global Growth(1) x $557,921 N/A
International Growth x $11,652,482 $15,309,281
International Small Business(2) N/A N/A N/A
International Discovery x $5,484,404 $6,874,602
Emerging Markets x $814,884 $384,373
1 Commenced operations December 1, 1998.
2 Commenced operations March 31, 2001
The brokerage commissions paid by the funds may exceed those which another
broker might have charged for effecting the same transactions, because of the
value of the brokerage and research services provided by the broker. Research
services furnished by brokers through whom the funds effect securities
transactions may be used by the advisor in servicing all of its accounts, and
not all such services may be used by the advisor in managing the portfolios of
the funds.
The staff of the SEC has expressed the view that the best price and execution of
over-the-counter transactions in portfolio securities may be secured by dealing
directly with principal market makers, thereby avoiding the payment of
compensation to another broker. In certain situations, the officers of the funds
and the advisor believe that the facilities, expert personnel and technological
systems of a broker often enable the funds to secure as good a net price by
dealing with a broker instead of a principal market maker, even after payment of
the compensation to the broker. The funds regularly place its over-the-counter
transactions with principal market makers, but may also deal on a brokerage
basis when utilizing electronic trading networks or as circumstances warrant.
INFORMATION ABOUT FUND SHARES
Each of the four funds named on the front of this Statement of Additional
Information is a series of shares issued by the corporation, and shares of each
fund have equal voting rights. In addition, each series (or fund) may be divided
into separate classes. See Multiple Class Structure which follows. Additional
funds and classes may be added without a shareholder vote.
Each fund votes separately on matters affecting that fund exclusively. Voting
rights are not cumulative, so that investors holding more than 50% of the
corporation's (i.e., all funds') outstanding shares may be able to elect a Board
of Directors. The corporation undertakes dollar-based voting, meaning that the
number of votes a shareholder is entitled to is based upon the dollar amount of
your investment. The election of directors is determined by the votes received
from all the corporation's shareholders without regard to whether a majority of
shares of any one fund voted in favor of a particular nominee or all nominees as
a group.
The assets belonging to each series or class of shares are held separately by
the custodian and the shares of each series or class represent a beneficial
interest in the principal, earnings and profit (or losses) of investment and
other assets held for each series or class. Your rights as a shareholder are the
same for all series or class of securities unless otherwise stated. Within their
respective series or class, all shares have equal redemption rights. Each share,
when issued, is fully paid and non-assessable.
In the event of complete liquidation or dissolution of the funds, shareholders
of each series or class of shares will be entitled to receive, pro rata, all of
the assets less the liabilities of that series or class.
Each shareholder has rights to dividends and distributions declared by the fund
he or she owns and to the net assets of such fund upon its liquidation or
dissolution proportionate to his or her share ownership interest in the fund.
MULTIPLE CLASS STRUCTURE
The corporation's Board of Directors has adopted a multiple class plan (the
Multiclass Plan) pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such
plan, the funds may issue up to four classes of shares: an Investor Class, an
Institutional Class, a Service Class and an Advisor Class. Not all funds offer
all four classes.
The Investor Class is made available to investors directly without any load or
commission, for a single unified management fee. The Institutional, Service and
Advisor Classes are made available to institutional shareholders or through
financial intermediaries that do not require the same level of shareholder and
administrative services from the advisor as Investor Class shareholders. As a
result, the advisor is able to charge these classes a lower total management
fee. In addition to the management fee, however, the Advisor Class shares are
subject to a Master Distribution and Shareholder Services Plan (described
beginning on this page). The plan has been adopted by the funds' Board of
Directors and initial shareholder in accordance with Rule 12b-1 adopted by the
SEC under the Investment Company Act.
Rule 12b-1
Rule 12b-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by the its Board of
Directors and approved by its shareholders. Pursuant to such rule, the Board of
Directors and initial shareholder of the funds' Advisor Class have approved and
entered into a Master Distribution and Shareholder Services Plan, with respect
to the Advisor Class (the Plan). The Plan is described below.
In adopting the Plan, the Board of Directors (including a majority of directors
who are not interested persons of the funds as defined in the Investment Company
Act, hereafter referred to as the independent directors) determined that there
was a reasonable likelihood that the Plan would benefit the funds and the
shareholders of the affected class. Pursuant to Rule 12b-1, information with
respect to revenues and expenses under the Plan is presented to the Board of
Directors quarterly for its consideration in connection with its deliberations
as to the continuance of the Plan. Continuance of the Plan must be approved by
the Board of Directors (including a majority of the independent directors)
annually. The Plan may be amended by a vote of the Board of Directors (including
a majority of the independent directors), except that the Plan may not be
amended to materially increase the amount to be spent for distribution without
majority approval of the shareholders of the affected class. The Plan terminates
automatically in the event of an assignment and may be terminated upon a vote of
a majority of the independent directors or by vote of a majority of the
outstanding voting securities of the affected class.
All fees paid under the Plan will be made in accordance with Section 26 of the
Rules of Fair Practice of the National Association of Securities Dealers (NASD).
Master Distribution and Shareholder Services Plan
As described in the Prospectus, the funds' Advisor Class shares are made
available to participants in employer-sponsored retirement or savings plans and
to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. The funds' distributor enters into
contracts with various banks, broker-dealers, insurance companies and other
financial intermediaries with respect to the sale of the funds' shares and/or
the use of the funds' shares in various investment products or in connection
with various financial services.
Certain recordkeeping and administrative services that are provided by the
funds' transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for shareholders in
the Advisor Class shareholders. In addition to such services, the financial
intermediaries provide various distribution services.
To enable the funds' shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the funds'
advisor has reduced its management fee by 0.25% per annum with respect to the
Advisor Class shares and the funds' Board of Directors has adopted a Master
Distribution and Shareholder Services Plan. Pursuant to the Plan, the Advisor
Class pays the distributor a fee of 0.50% annually of the aggregate average
daily asset value of the funds' Advisor Class shares, 0.25% of which is paid for
Shareholder Services (described below) and 0.25% of which is paid for
distribution services. During the fiscal year ended November 30, 2000, the
aggregate amount of fees paid under the Plan were:
Global Growth $x
International Discovery $x
International Growth $x
Emerging Markets $x
Payments may be made for a variety of shareholder services, including, but are
not limited to,
(a) receiving, aggregating and processing purchase, exchange and redemption
requests from beneficial owners (including contract owners of insurance
products that utilize the funds as underlying investment media) of shares
and placing purchase, exchange and redemption orders with the funds'
distributor
(b) providing shareholders with a service that invests the assets of their
accounts in shares pursuant to specific or pre-authorized instructions
(c) processing dividend payments from a fund on behalf of shareholders and
assisting shareholders in changing dividend options, account designations
and addresses
(d) providing and maintaining elective services such as check writing and wire
transfer services
(e) acting as shareholder of record and nominee for beneficial owners
(f) maintaining account records for shareholders and/or other beneficial owners
(g) issuing confirmations of transactions
(h) providing subaccounting with respect to shares beneficially owned by
customers of third parties or providing the information to a fund as
necessary for such subaccounting
(i) preparing and forwarding shareholder communications from the funds (such as
proxies, shareholder reports, annual and semi-annual financial statements
and dividend, distribution and tax notices) to shareholders and/or other
beneficial owners; and
(j) providing other similar administrative and sub-transfer agency services.
Shareholder Services do not include those activities and expenses that are
primarily intended to result in the sale of additional shares of the funds.
Shareholder services do not include those activities and expenses that are
primarily intended to result in the sale of additional shares of the funds.
During the fiscal year ended November 30, 2000, the amount of fees paid under
the Plan for shareholder services were:
Global Growth $x
International Discovery $x
International Growth $x
Emerging Markets $x
Distribution services include any activity undertaken or expense incurred that
is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to
(a) the payment of sales commissions, on going commissions and other payments
to brokers, dealers, financial institutions or others who sell Advisor
Class shares pursuant to Selling Agreements;
(b) compensation to registered representatives or other employees of
Distributor who engage in or support distribution of the funds' Advisor
Class shares
(c) compensation to, and expenses (including overhead and telephone expenses)
of, Distributor
(d) the printing of prospectuses, statements of additional information and
reports for other than existing shareholders
(e) the preparation, printing and distribution of sales literature and
advertising materials provided to the funds' shareholders and prospective
shareholders
(f) receiving and answering correspondence from prospective shareholders,
including distributing prospectuses, statements of additional information,
and shareholder reports
(g) the providing of facilities to answer questions from prospective investors
about fund shares
(h) complying with federal and state securities laws pertaining to the sale of
fund shares
(i) assisting investors in completing application forms and selecting dividend
and other account options
(j) the providing of other reasonable assistance in connection with the
distribution of fund shares
(k) the organizing and conducting of sales seminars and payments in the form of
transactional and compensation or promotional incentives
(l) profit on the foregoing
(m) the payment of "service fees" for the provision of personal, continuing
services to investors, as contemplated by the Rules of Fair Practice of the
NASD; and
(n) such other distribution and services activities as the advisor determines
may be paid for by the funds pursuant to the terms of the agreement between
the corporation and the funds' distributor and in accordance with Rule
12b-1 of the Investment Company Act.
During the fiscal year ended November 30, 2000, the amount of fees paid under
the Plan for distribution services were:
Global Growth $x
International Discovery $x
International Growth $x
Emerging Markets $x
BUYING AND SELLING FUND SHARES
Information about buying, selling and exchanging fund shares is contained in the
funds' Prospectus and in Your Guide to American Century Services. The Prospectus
and guide are available to investors without charge and may be obtained by
calling us.
VALUATION OF A FUND'S SECURITIES
Each fund's net asset value (NAV) is calculated as of the close of business of
the New York Stock Exchange (the Exchange), each day the Exchange is open for
business. The Exchange usually closes at 4 p.m. Eastern time. The Exchange
typically observes the following holidays: New Year's Day, Martin Luther King
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day and Christmas Day. Although the funds expect the same
holiday schedule to be observed in the future, the Exchange may modify its
holiday schedule at any time. Each fund's NAV is calculated by adding the value
of all portfolio securities and other assets, deducting liabilities and dividing
the result by the number of shares outstanding. Expenses and interest earned on
portfolio securities are accrued daily.
The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges are generally valued at the preceding closing values of such
securities on the exchange where primarily traded or as of the close of the New
York Stock Exchange, if that is earlier. That value is then converted to U.S.
dollars at the prevailing foreign exchange rate. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.
Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.
Securities maturing within 60 days of the valuation date may be valued at cost,
plus or minus any amortized discount or premium, unless the directors determine
that this would not result in fair valuation of a given security. Other assets
and securities for which quotations are not readily available are valued in good
faith at their fair value using methods approved by the Board of Directors.
The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then translated to dollars at the prevailing foreign
exchange rate.
Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.
Trading of these securities in foreign markets may not take place on every New
York Stock Exchange business day. In addition, trading may take place in various
foreign markets and on some electronic trading networks on Saturdays or on other
days when the New York Stock Exchange is not open and on which the fund's net
asset value is not calculated. Therefore, such calculation does not take place
contemporaneously with the determination of the prices of many of the portfolio
securities used in such calculation and the value of the fund's portfolio may be
affected on days when shares of the fund may not be purchased or redeemed.
TAXES
Federal Income Taxes
Each fund intends to qualify annually as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). By so
qualifying, a fund will be exempt from federal income taxes to the extent that
it distributes substantially all of its net investment income and net realized
capital gains (if any) to shareholders. If a fund fails to qualify as a
regulated investment company, it will be liable for taxes, significantly
reducing its distributions to shareholders and eliminating shareholders' ability
to treat distributions received from the funds in the same manner in which they
were realized by the funds.
If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. Dividends from domestic corporations may qualify for the 70%
dividends received deduction for corporations to the extent that the fund held
shares receiving the dividend for more than 45 days. Distributions from gains on
assets held greater than 12 months are taxable as long-term gains regardless of
the length of time you have held the shares. However, you should note that any
loss realized upon the sale or redemption of shares held for six months or less
will be treated as a long-term capital loss to the extent of any distributions
of long-term capital gain to you with respect to such shares.
Dividends and interest received by a fund on foreign securities may give rise to
withholding and other taxes imposed by foreign countries. Tax conventions
between certain countries and the United States may reduce or eliminate such
taxes. Foreign countries generally do not impose taxes on capital gains in
respect of investments by non-resident investors. The foreign taxes paid by a
fund will reduce its dividends.
If more than 50% of the value of a fund's total assets at the end of its fiscal
year consists of securities of foreign corporations, the fund may qualify for
and make an election with the Internal Revenue Service with respect to such
fiscal year so that fund shareholders may be able to claim a foreign tax credit
in lieu of a deduction for foreign income taxes paid by the fund. If such an
election is made, the foreign taxes paid by the fund will be treated as income
received by you. In order for you to utilize the foreign tax credit, the mutual
fund shares must have been held for 16 days or more during the 30-day period,
beginning 15 days prior to the ex-dividend date for the mutual fund shares. The
mutual fund must meet a similar holding period requirement with respect to
foreign securities to which a dividend is attributable. Any portion of the
foreign tax credit that is ineligible as a result of the fund not meeting the
holding period requirement will be deducted in computing net investment income.
If a fund purchases the securities of certain foreign investment funds or trusts
called passive foreign investment companies (PFIC), capital gains on the sale of
such holdings will be deemed to be ordinary income regardless of how long the
fund holds its investment. The fund also may be subject to corporate income tax
and an interest charge on certain dividends and capital gains earned from these
investments, regardless of whether such income and gains are distributed to
shareholders. In the alternative, the fund may elect to recognize cumulative
gains on such investments as of the last day of its fiscal year and distribute
them to shareholders. Any distribution attributable to a PFIC is characterized
as ordinary income.
If you have not complied with certain provisions of the Internal Revenue Code
and Regulations, either American Century or your financial intermediary is
required by federal law to withhold and remit to the IRS 31% of reportable
payments (which may include dividends, capital gains distributions and
redemptions) to the IRS. Those regulations require you to certify that the
Social Security number or tax identification number you provide is correct and
that you are not subject to 31% withholding for previous under-reporting to the
IRS. You will be asked to make the appropriate certification on your
application. Payments reported by us that omit your Social Security number or
tax identification number will subject us to a penalty of $50, which will be
charged against your account if you fail to provide the certification by the
time the report is filed, and is not refundable.
Redemption of shares of a fund (including redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
you will generally recognize gain or loss in an amount equal to the difference
between the basis of the shares and the amount received. If a loss is realized
on the redemption of fund shares, the reinvestment in additional fund shares
within 30 days before or after the redemption may be subject to the "wash sale"
rules of the Code, resulting in a postponement of the recognition of such loss
for federal income tax purposes.
State and Local Taxes
Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.
HOW FUND PERFORMANCE INFORMATION IS CALCULATED
The funds may quote performance in various ways. Fund performance may be shown
by presenting one or more performance measurements, including cumulative total
return, average annual total return or yield.
All performance information advertised by the funds is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.
Total returns quoted in advertising and sales literature reflect all aspects of
a fund's return, including the effect of reinvesting dividends and capital gain
distributions (if any) and any change in the fund's NAV during the period.
Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in a fund during a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual return of 7.18%, which is the
steady annual rate that would equal 100% growth on a compounded basis in 10
years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that the funds' performance is
not constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.
The tables on page xx and xx set forth the average annual total return for the
various classes of the funds for the one-, five- and 10-year periods (or the
period since inception) ended November 30, 2000, the last day of the funds'
fiscal year.
In addition to average annual total returns, each fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period, including periods other than one, five and 10 years.
Average annual and cumulative total returns may be quoted as percentages or as
dollar amounts and may be calculated for a single investment, a series of
investments, or a series of redemptions over any time period. Total returns may
be broken down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of these
factors and their contributions to total return.
<TABLE>
Average Annual Total Returns-- Investor Class (insert new numbers)
Fund 1 year 5 years 10 years From Inception Inception Date
<S> <C> <C> <C> <C> <C>
Global Growth x% N/A N/A x% 12/01/1998
International Growth x% x% N/A x% 05/09/1991
International Discovery x% x% N/A x% 04/01/1994
Emerging Markets x% N/A N/A x% 09/30/1997
Average Annual Total Returns -- Institutional Class
Fund 1 year 5 years 10 years From Inception Inception Date
International Growth x% N/A N/A x% 11/20/1997
International Discovery x% N/A N/A x% 01/01/1998
Emerging Markets x% N/A N/A x% 01/28/1999
Average Annual Total Returns -- Advisor Class
Fund 1 year 5 years 10 years From Inception Inception Date
International Growth x% N/A N/A x% 10/02/1996
International Discovery x% N/A N/A x% 04/28/1998
Emerging Markets x% N/A N/A x% 05/12/1999
</TABLE>
Performance Comparisons
The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indexes of market
performance. This may include comparisons with funds that, unlike the American
Century funds, are sold with a sales charge or deferred sales charge. Sources of
economic data that may be used for such comparisons may include, but are not
limited to, U.S. Treasury bill, note and bond yields, money market fund yields,
U.S. government debt and percentage held by foreigners, the U.S. money supply,
net free reserves, and yields on current-coupon GNMAs (source: Board of
Governors of the Federal Reserve System); the federal funds and discount rates
(source: Federal Reserve Bank of New York); yield curves for U.S. Treasury
securities and AA/AAA-rated corporate securities (source: Bloomberg Financial
Markets); yield curves for AAA-rated tax-free municipal securities (source:
Telerate); yield curves for foreign government securities (sources: Bloomberg
Financial Markets and Data Resources, Inc.); total returns on foreign bonds
(source: J.P. Morgan Securities Inc.); various U.S. and foreign government
reports; the junk bond market (source: Data Resources, Inc.); the CRB Futures
Index (source: Commodity Index Report); the price of gold (sources: London
a.m./p.m. fixing and New York Comex Spot Price); rankings of any mutual fund or
mutual fund category tracked by Lipper, Inc. or Morningstar, Inc.; mutual fund
rankings published in major, nationally distributed periodicals; data provided
by the Investment Company Institute; Ibbotson Associates, Stocks, Bonds, Bills,
and Inflation; major indices of stock market performance; and indexes and
historical data supplied by major securities brokerage or investment advisory
firms. The funds also may utilize reprints from newspapers and magazines
furnished by third parties to illustrate historical performance or to provide
general information about the funds.
Permissible Advertising Information
From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders:
(1) discussions of general economic or financial principles (such as the
effects of compounding and the benefits of dollar-cost averaging)
(2) discussions of general economic trends
(3) presentations of statistical data to supplement such discussions
(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds
(5) descriptions of investment strategies for one or more of the funds
(6) descriptions or comparisons of various savings and investment products
(including, but not limited to, qualified retirement plans and individual
stocks and bonds), which may or may not include the funds
(7) comparisons of investment products (including the funds) with relevant
market or industry indices or other appropriate benchmarks
(8) discussions of fund rankings or ratings by recognized rating organizations;
and
(9) testimonials describing the experience of persons that have invested in one
or more of the funds. The funds may also include calculations, such as
hypothetical compounding examples, which describe hypothetical investment
results in such communications. Such performance examples will be based on
an express set of assumptions and are not indicative of the performance of
any of the funds.
Multiple Class Performance Advertising
Pursuant to the Multiple Class Plan, the corporation may issue additional
classes of existing funds or introduce new funds with multiple classes available
for purchase. To the extent a new class is added to an existing fund, the
managers may, in compliance with SEC and NASD rules, regulations and guidelines,
market the new class of shares using the historical performance information of
the original class of shares. When quoting performance information for the new
class of shares for periods prior to the first full quarter after inception, the
original class' performance will be restated to reflect the expenses of the new
class and for periods after the first full quarter after inception, actual
performance of the new class will be used.
FINANCIAL STATEMENTS
The financial statements of the funds are included in the Annual Report to
shareholders for the fiscal year ended November 30, 2000. The Annual Report is
incorporated herein by reference. You may receive copies of the report without
charge upon request to American Century at the address and telephone number
shown on the back cover of this Statement of Additional Information.
EXPLANATION OF FIXED-INCOME SECURITIES RATINGS
As described in the Prospectus and in this SAI, the funds may invest in
fixed-income securities. Those investments, however, are subject to certain
credit quality restrictions as noted in the Prospectus. The following is a
summary of the rating categories referenced in the Prospectus.
Bond Ratings
<TABLE>
S&P Moody's Description
<S> <C> <C>
AAA Aaa These are the highest ratings assigned by S&P and Moody's to a debt obligation and indicates an
extremely strong capacity to pay interest and repay principal.
AA Aa Debt rated in this category is considered to have a very strong capacity to pay interest and repay
principal and differs from AAA/Aaa issues only in a small degree.
A A Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.
BBB Baa Debt rated BBB/Baa is regarded as having an adequate capacity to pay interest and repay principal.
Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
BB Ba Debt rated BB/Ba has less near-term vulnerability to default than other speculative issues. However, it
faces major ongoing uncertainties or exposure to adverse business, financial or economic conditions that
could lead to inadequate capacity to meet timely interest and principal payments. The BB rating category
also is used for debt subordinated to senior debt that is assigned an actual or implied BBB- rating.
B B Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest
payments and principal repayments. Adverse business, financial or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB/Ba or BB-/Ba3 rating.
CCC Caa Debt rated CCC/Caa has a currently identifiable vulnerability to default and is dependent upon favorable
business, financial and economic conditions to meet timely payment of interest and repayment of
principal. In the event of adverse business, financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The CCC/Caa rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or B-/B3 rating.
CC Ca The rating CC/Ca typically is applied to debt subordinated to senior debt that is assigned an actual or
implied CCC/Caa rating.
C C The rating C typically is applied to debt subordinated to senior debt, which is assigned an actual or
implied CCC-/Caa3 debt rating. The C rating may be used to cover a situation where a bankruptcy petition
has been filed, but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is being paid.
D D Debt rated D is in payment default. The D rating category is used when interest payments or principal
payments are not made on the date due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The D rating also will be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized.
To provide more detailed indications of credit quality, the Standard & Poor's
ratings from AA to CCC may be modified by the addition of a plus or minus sign
to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.
Commercial Paper Ratings
S&P Moody's Description
--- ------- -----------
A-1 Prime-1 This indicates that the degree of safety regarding timely payment is strong.
(P-1) Standard & Poor's rates those issues determined to possess extremely strong
safety characteristics as A-1+.
A-2 Prime-2 Capacity for timely payment on commercial paper is satisfactory, but the relative
(P-2) degree of safety is not as high as for issues designated A-1. Earnings trends and
coverage ratios, while sound, will be more subject to variation. Capitalization
characteristics, while still appropriated, may be more affected by external conditions.
Ample alternate liquidity is maintained.
A-3 Prime-3 Satisfactory capacity for timely repayment. Issues that carry this rating are somewhat
(P-3) more vulnerable to the adverse changes in circumstances than obligations carrying
the higher designations.
Note Ratings
S&P Moody's Description
--- ------- -----------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality
enjoying strong protection from established cash
flows of funds for their servicing or from
established and broad-based access to the market for
refinancing, or both.
SP-2 MIG-2; VMIG-2 Notes are of high quality with margins
of protection ample, although not so large as in the
preceding group.
SP-3 MIG-3; VMIG-3 Notes are of favorable quality with all
security elements accounted for, but lacking the
undeniable strength of the preceding grades. Market
access for refinancing, in particular, is likely to
be less well established.
SP-4 MIG-4; VMIG-4 Notes are of adequate quality carrying
specific risk but having protection and not
distinctly or predominantly speculative.
</TABLE>
More information about the funds is contained in these documents
Annual and Semiannual Reports
Annual and Semiannual Reports contain more information about the funds'
investments and the market conditions and investment strategies that
significantly affected the funds' performance during the most recent fiscal
period. You can receive a free copy of the annual and semiannual reports, and
ask questions about the funds and your accounts, by contacting American Century
at the address or telephone numbers listed below.
If you own or are considering purchasing fund shares through
o an employer-sponsored retirement plan
o a bank
o a broker-dealer
o an insurance company
o another financial intermediary
you can receive the annual and semiannual reports directly from them.
You also can get information about the funds from the Security and Exchange
Commission (SEC). The SEC charges a duplicating fee to provide copies of this
information.
o In person SEC Public Reference Room
Washington, D.C.
Call 1-202-942-8090 for location and hours.
o On the Internet oEDGAR database at www.sec.gov
oBy email request at [email protected]
o By mail SEC Public Reference Section
Washington, D.C.
20549-0102
Investment Company Act File No. 811-6247
American Century Investments
P.O. Box 419200
Kansas City, Missouri 64141-6200
Investor Relations
1-800-345-2021 or 816-531-5575
Automated Information Line
1-800-345-8765
www.americancentury.com
Fax
816-340-7962
Telecommunications Device for the Deaf
1-800-634-4113 or 816-444-3485
Business; Not-For-Profit and
Employer-Sponsored Retirement Plans
1-800-345-3533
SH-SAI-------- 0003
<PAGE>
PART C OTHER INFORMATION
ITEM 23. Exhibits (all exhibits not filed herewith are being incorporated
herein by reference).
(a) (1) Articles of Incorporation of Twentieth Century World Investors,
Inc. (filed electronically as an Exhibit to Post-Effective Amendment
No. 6 to the Registration Statement of the Registrant on March 29,
1996, File No. 33-39242).
(2) Articles of Amendment of Twentieth Century World Investors, Inc.,
dated August 10, 1993 (filed electronically as an Exhibit to
Post-Effective Amendment No. 9 to the Registration Statement of the
Registrant on March 30, 1998, File No. 33-39242).
(3) Articles Supplementary of Twentieth Century World Investors, Inc.,
dated November 8, 1993 (filed electronically as an Exhibit to
Post-Effective Amendment No. 6 to the Registration Statement of the
Registrant on March 29, 1996, File No. 33-39242).
(4) Articles Supplementary of Twentieth Century World Investors, Inc.,
dated April 24, 1995 (filed electronically as an Exhibit to
Post-Effective Amendment No. 6 to the Registration Statement of the
Registrant on March 29, 1996, File No. 33-39242).
(5) Articles Supplementary of Twentieth Century World Investors, Inc.,
dated March 11, 1996 filed electronically as an Exhibit to
Post-Effective Amendment No. 7 to the Registration Statement of the
Registrant on June 13, 1996, File No. 33-9242).
(6) Articles Supplementary of Twentieth Century World Investors, Inc.,
dated September 9, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 9 to the Registration Statement of the
Registrant on March 30, 1998, File No. 33-39242).
(7) Articles of Amendment of Twentieth Century World Investors, Inc.
dated December 2, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 8 to the Registration Statement of the
Registrant on March 31, 1997, File No. 33-39242).
(8) Articles Supplementary of American Century World Mutual Funds,
Inc. dated December 2, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 8 to the Registration Statement of the
Registrant on March 31, 1997, File No. 33-39242).
(9) Articles Supplementary of American Century World Mutual Funds,
Inc. dated November 13, 1998 (filed electronically as an Exhibit to
Post-Effective Amendment No. 12 to the Registration Statement of the
Registrant on November 13, 1998, File No. 33-39242).
(10) Articles Supplementary of American Century World Mutual Funds,
Inc. dated February 16, 1999 (filed electronically as an Exhibit to
Post-Effective Amendment No. 15 to the Registration Statement of the
Registrant on March 31, 1999, File No. 33-39242).
(11) Articles Supplementary of American Century World Mutual Funds,
Inc. (filed electronically as an Exhibit to Post-Effective Amendment
No. 19 to the Registration Statement of the Registrant on May 24,
2000, File No. 33-39242).
(12) Articles Supplementary of American Century World Mutual Funds,
Inc. (to be filed by amendment).
(b) (1) By-Laws of Twentieth Century World Investors, Inc. (filed
electronically as an Exhibit to Post-Effective Amendment No. 6 to the
Registration Statement of the Registrant on March 29, 1996, File No.
33-39242).
(2) Amendment to By-Laws of American Century World Mutual Funds, Inc.
(filed electronically as an Exhibit to Post-Effective Amendment No. 9
to the Registration Statement of American Century Capital Portfolios,
Inc. on February 17, 1998, File No. 33-64872).
(c) Registrant hereby incorporates by reference, as though set forth fully
herein, Article Fifth, Article Seventh, Article Eighth, and Article
Ninth of Registrants Articles of Incorporation, appearing as Exhibit
(a)(1) to Post- Effective Amendment No. 6 on Form N-1A of the
Registrant, and Article Fifth of Registrants Articles of Amendment,
appearing as Exhibit (a)(2) to Post-Effective Amendment No. 9 to the
Registration Statement on March 30, 1998; and Sections 3, 4, 5, 7, 8,
9, 10, 11, 22, 25, 30, 31, 33, 39, 45 and 46 of Registrants By-Laws
appearing as Exhibit (b)(1) to Post-Effective Amendment No. 6 on Form
N-1A, and Sections 25, 30 & 31 of Registrants By-Laws appearing as
Exhibit (b)(2) to Post-Effective Amendment No. 9 on Form N-1A of
American Century Capital Portfolios, Inc., Commission No. 33-64872.
(d) (1) Management Agreement between American Century World Mutual Funds,
Inc. and American Century Investment Management, Inc. dated August 1,
1997 (filed electronically as an Exhibit to Post-Effective Amendment
No. 12 to the Registration Statement of the Registrant on November 13,
1998, File No. 33-39242).
(2) Addendum to Management Agreement between American Century World
Mutual Funds, Inc. and American Century Investment Management, Inc.
dated December 1, 1998 (filed electronically as an Exhibit to
Post-Effective Amendment No. 15 to the Registration Statement of the
Registrant on March 31, 1999, File No. 33-39242).
(3) Addendum to Management Agreement between American Century World
Mutual Funds, Inc. and American Century Investment Management, Inc.
(filed electronically as an Exhibit to Post-Effective Amendment No. 19
to the Registration Statement of the Registrant on May 24, 2000, File
No. 33-39242).
(4) Addendum to Management Agreement between American Century World
Mutual Funds, Inc. and American Century Investment Management, Inc.
(to be filed by amendment).
(e) (1) Distribution Agreement between American Century World Mutual
Funds, Inc. and Funds Distributor, Inc. dated January 15, 1998 (filed
electronically as an Exhibit to Post-Effective Amendment No. 28 to the
Registration Statement of American Century Target Maturities Trust on
January 30, 1998, File No. 2-94608).
(2) Amendment No. 1 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
June 1, 1998 (filed electronically as an Exhibit to Post-Effective
Amendment No. 11 to the Registration Statement of American Century
Capital Portfolios, Inc. on June 26, 1998, File No. 33-64872).
(3) Amendment No. 2 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
December 1, 1998 (filed electronically as an Exhibit to Post-Effective
Amendment No. 12 to the Registration Statement of the Registrant on
November 13, 1998, File No. 33-39242).
(4) Amendment No. 3 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
January 29, 1999 (filed electronically as an Exhibit to Post-Effective
Amendment No. 28 to the Registration Statement of American Century
California Tax-Free and Municipal Funds, on December 28, 1998, File
No. 2-82734).
(5) Amendment No. 4 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. dated
July 30, 1999 (filed electronically as an Exhibit to Post-Effective
Amendment No. 16 to the Registration Statement of American Century
Capital Portfolios, Inc., on July 29, 1999, File No. 33-64872).
(6) Amendment No. 5 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. (filed
electronically as an Exhibit to Post-Effective Amendment No. 87 to the
Registration Statement of American Century Mutual Funds, Inc., on
on November 29, 1999, File No. 2-14213).
(7) Amendment No. 6 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and Funds Distributor, Inc. (filed
electronically as an Exhibit to Post-Effective Amendment No. 19 to the
Registration Statement of the Registrant on May 24, 2000, File No.
33-39242).
(8) Distribution Agreement between American Century World Mutual
Funds, Inc., and American Century Investment Services, Inc. dated
March 13, 2000 (filed electronically as an Exhibit to Post-Effective
Amendment No. 17 to the Registration Statement of the Registrant on
March 30, 2000, File No. 33-39242).
(9) Amendment No. 1 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and American Century Investment
Services, Inc. dated June 1, 2000 (filed electronically as an Exhibit
to Post-Effective Amendment No. 19 to the Registration Statement of
the Registrant on May 24, 2000, File No. 33-39242).
(10) Amendment No. 2 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and American Century Investment
Services, Inc. dated November 20, 2000 (filed electronically as an
Exhibit to Post-Effective Amendment No. 29 to the Registration
Statement of American Century Variable Portfolios, Inc. on December 1,
2000, File No. 33-14567).
(11) Amendment No. 3 to the Distribution Agreement between American
Century World Mutual Funds, Inc. and American Century Investment
Services, Inc. (to be filed by amendment).
(f) Not applicable.
(g) (1) Global Custody Agreement between The Chase Manhattan Bank and the
Twentieth Century and Benham funds, dated August 6, 1996 (filed
electronically as an Exhibit to Post-Effective Amendment No. 31 to the
Registration Statement of American Century Government Income Trust,
File No. 2-99222).
(2) Master Agreement by and between Twentieth Century Services, Inc.
and Commerce Bank, N. A. dated January 22, 1997 (filed electronically
as an Exhibit to Post-Effective Amendment No. 76 to the Registration
Statement of American Century Mutual Funds, Inc., File No. 2-14213).
(h) (1) Transfer Agency Agreement dated as of March 1, 1991, by and
between Twentieth Century World Investors, Inc. and Twentieth Century
Services, Inc. (filed electronically as an Exhibit to Post-Effective
Amendment No. 6 to the Registration Statement of the Registrant on
March 29, 1996, File No. 33-39242).
(2) Supplemental Agreement dated July 30, 1999, by and between
American Century International Discovery Fund, American Century
Emerging Markets Fund and American Century Global Growth Fund and The
Chase Manhattan Bank (filed electronically as an Exhibit to Post-
Effective Amendment No. 16 to the Registration Statement of the
Registrant on March 10, 2000, File No. 33-39242).
(3) Credit Agreement between American Century Funds and the Chase
Manhattan Bank, as Administrative Agent dated as of December 21, 1999
(filed electronically as an Exhibit to Post-Effective Amendment No. 29
to the Registration Statement of American Century California Tax-Free
and Municipal Funds, on December 29, 1999, File No. 2-82734).
(i) Opinion and Consent of Counsel (filed herewith).
(j) (1) Consent of Deloitte & Touche LLP (to be filed by amendment).
(2) Power of Attorney dated November 18, 2000 (filed herewith).
(k) Not applicable.
(l) Not applicable.
(m) (1) Master Distribution and Shareholder Services Plan of Twentieth
Century Capital Portfolios, Inc., Twentieth Century Investors, Inc.,
Twentieth Century Strategic Asset Allocations, Inc. and Twentieth
Century World Investors, Inc. (Advisor Class) dated September 3, 1996
(filed electronically as an Exhibit to Post-Effective Amendment No. 9
to the Registration Statement of American Century Capital Portfilios,
Inc., File No. 33-64872).
(2) Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) dated
June 13, 1997 (filed electronically as an Exhibit to Post-Effective
Amendment No. 77 to the Registration Statement of American Century
Mutual Funds, Inc., File No. 2-14213).
(3) Amendment No. 2 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) dated
September 30, 1997 (filed electronically as an Exhibit to Post-
Effective Amendment No. 78 to the Registration Statement of American
Century Mutual Funds, Inc., File No. 2-14213).
(4) Amendment No. 3 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc., and American Century World Mutual Funds, Inc. (Advisor Class)
dated June 30, 1998 (filed electronically as an Exhibit to
Post-Effective Amendment No. 11 to the Registration Statement of
American Century Capital Portfolios, Inc., File No. 33-64872).
(5) Amendment No. 4 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations,
Inc., and American Century World Mutual Funds, Inc. (Advisor Class)
dated November 13, 1998 (filed electronically as an Exhibit to
Post-Effective Amendment No. 12 to the Registration Statement of the
Registrant on November 13, 1998, File No. 33-39242).
(6) Amendment No. 5 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) dated
February 16, 1999 (filed electronically as an Exhibit to
Post-Effective Amendment No. 83 to the Registration Statement of
American Century Mutual Funds, Inc., File No. 2-14213).
(7) Amendment No. 6 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) dated
July 30, 1999 (filed electronically as an Exhibit to Post-Effective
Amendment No. 16 to the Registration Statement of American Century
Capital Portfolios, Inc., on July 29, 1999, File No. 33-64872).
(8) Amendment No. 7 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocations, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) (filed
electronically as an Exhibit to Post-Effective Amendment No. 87 to the
Registration Statement of American Century Mutual Funds, Inc. on
Form N-1A on November 29, 1999, File No. 2-14213).
(9) Amendment No. 8 to Master Distribution and Shareholder Services
Plan of American Century Capital Portfolios, Inc., American Century
Mutual Funds, Inc., American Century Strategic Asset Allocation, Inc.
and American Century World Mutual Funds, Inc. (Advisor Class) (filed
electronically as an Exhibit to Post-Effective Amendment No. 19 to the
Registration Statement of the Registrant on May 24, 2000, File No.
33-39242).
(10) Shareholder Services Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc., Twentieth Century
Strategic Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. (Service Class) dated September 3, 1996 (filed
electronically as an Exhibit to Post-Effective Amendment No. 9 to the
Registration Statement of American Century Capital Portfolios, Inc.,
File No. 33-64872).
(o) (1) Multiple Class Plan of Twentieth Century Capital Portfolios, Inc.,
Twentieth Century Investors, Inc., Twentieth Century Strategic Asset
Allocations, Inc. and Twentieth Century World Investors, Inc. dated
September 3, 1996 (filed electronically as an Exhibit to
Post-Effective Amendment No. 9 to the Registration Statement of
American Century Capital Portfolios, Inc., File No. 33-64872).
(2) Amendment No. 1 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated June 13, 1997 (filed electronically as an
Exhibit to Post-Effective Amendment No. 77 to the Registration
Statement of American Century Mutual Funds, Inc., File No. 2-14213).
(3) Amendment No. 2 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated September 30, 1997 (filed electronically as
an Exhibit to Post-Effective Amendment No. 78 to the Registration
Statement of American Century Mutual Funds, Inc., File No. 2-14213).
(4) Amendment No. 3 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated June 30, 1998 (filed electronically as an
Exhibit to Post-Effective Amendment No. 11 to the Registration
Statement of American Century Capital Portfolios, Inc., File No.
33-64872).
(5) Amendment No. 4 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated November 13, 1998 (filed electronically as an
Exhibit to Post-Effective Amendment No. 12 to the Registration
Statement of the Registrant on November 13, 1998, File No. 33-39242).
(6) Amendment No. 5 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated January 29, 1999 (filed electronically as an
Exhibit to Post-Effective Amendment No. 14 to the Registration
Statement of American Century Capital Portfolios, Inc. on December 29,
1998, File No. 33-64872).
(7) Amendment No. 6 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. dated July 30, 1999 (filed electronically as an
Exhibit to Post-Effective Amendment No. 16 to the Registration
Statement of American Century Capital Portfolios, Inc., on July 29,
1999 File No. 33-64872).
(8) Amendment No. 7 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. (filed electronically as an Exhibit to
Post-Effective Amendment No. 87 to the Registration Statement of
American Century Mutual Funds, Inc. on November 29, 1999, File No.
2-14213).
(9) Amendment No. 8 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc. (filed electronically as an Exhibit to
Post-Effective Amendment No. 19 to the Registration Statement of the
Registrant on May 24, 2000, File No. 33-39242).
(p) (1) American Century Investments Code of Ethics (filed electronically
as an Exhibit to Post-Effective Amendment No. 16 to the Registration
Statement on March 10, 2000, File No. 33-39242).
(2) Funds Distributor, Inc. Code of Ethics (filed electronically as an
Exhibit to Post-Effective Amendment No. 16 to the Registration
Statement of the Registrant on March 10, 2000, File No. 33-39242).
ITEM 24 Persons Controlled by or Under Common Control with Registrant - None.
ITEM 25 Indemnification.
The Registrant is a Maryland Corporation. Section 2-418 of the
Maryland General Corporation Law allows a Maryland corporation to
indemnify its officers, directors, employees and agents to the extent
provided in such statute.
Article XIII of the Registrant's Articles of Incorporation, requires
the indemnification of the Registrant's directors and officers to the
extent permitted by Section 2-418 of the Maryland General Corporation
Law, the Investment Company Act of 1940 and all other applicable
laws.
The Registrant has purchased an insurance policy insuring its
Officers and directors against certain liabilities which such
officers and directors may incur while acting in such capacities and
providing reimbursement to the Registrant for sums which it may be
permitted or required to pay to its officers and directors by way of
indemnification against such liabilities, subject in either case to
clauses respecting deductibility and participation.
ITEM 26 Business and Other Connections of Investment Advisor.
American Century Investment Management, Inc., the investment advisor,
is engaged in the business of managing investments for registered
investment companies, deferred compensation plans and other
institutional investors.
ITEM 27 Principal Underwriters.
I. (a) Funds Distributor, Inc. (FDI) acts as principal
underwriter for the following investment companies.
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
CDC MPT+ Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Global Funds, Inc.
Dresdner RCM Investment Funds, Inc.
GMO Trust
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Nomura Pacific Basin Fund, Inc.
Orbitex Group of Funds
The Saratoga Advantage Trust
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
The Skyline Funds
St. Clair Funds, Inc.
TD Waterhouse Family of Funds, Inc.
TD Waterhouse Trust
FDI is registered with the Securities and Exchange
Commission as a broker-dealer and is a member of the National
Association of Securities Dealers. FDI is located at 60 State
Street, Suite 1300, Boston, Massachusetts 02109. FDI is an
indirect wholly-owned subsidiary of Boston Institutional Group,
Inc., a holding company all of whose outstanding shares are owned
by key employees.
(b) The following is a list of the executive officers, directors and
partners of FDI:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
--------------------------------------------------------------------------------
<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer
George A. Rio Executive Vice President none
Charles W. Carr Executive Vice President none
William S. Nichols Executive Vice President none
Margaret W. Chambers Senior Vice President, none
General Counsel, Chief
Compliance Officer,
Secretary and Clerk
Joseph F. Tower, III Senior Vice President none
and Treasurer
Gary S. MacDonald Executive Vice President and none
Chief Administrative Officer
Judith K. Benson Senior Vice President none
William J. Nutt Chairman and Director none
William J. Stetter Senior Vice President and none
Chief Financial Officer
Christopher J. Kelley Senior Vice President and none
Deputy General Counsel
John Lehning Senior Vice President none
John Prosperi Senior Vice President none
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
(c) Not applicable.
</TABLE>
II. (a) American Century Investment Services, Inc. (ACIS) acts as principal
underwriter for the following investment companies:
American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
ACIS is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of
Securities Dealers. ACIS is located at 4500 Main Street, Kansas
City, Missouri 64111. ACIS is a wholly-owned subsidiary of American
Century Companies, Inc.
(b) The following is a list of the executive officers and partners of ACIS:
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
--------------------------------------------------------------------------------
W. Gordon Snyder President none
James E. Stowers III Co-Chairman and Director Director
William M. Lyons Chief Executive Officer, President
Executive Vice President
and Director
Robert T. Jackson Executive Vice President Executive Vice
and Chief Financial Officer President and
Chief Financial
Officer
Kevin Cuccias Senior Vice President none
Joseph Greene Senior Vice President none
Brian Jeter Senior Vice President none
Mark Killen Senior Vice President none
Tom Kmak Senior Vice President none
David C. Tucker Senior Vice President and none
General Counsel
James E. Stowers, Jr. Chairman and Director Chairman and
Director
--------------------
* All addresses are 4500 Main Street, Kansas City, Missouri 64111
(c) Not applicable.
ITEM 28 Location of Accounts and Records.
All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder,
are in the possession of Registrant, American Century Services
Corporation and American Century Investment Management, Inc., all
located at American Century Tower, 4500 Main Street, Kansas City,
Missouri 64111.
ITEM 29. Management Services.
Not Applicable.
ITEM 30 Undertakings.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, American Century World Mutual Funds, Inc., the
Registrant, certifies that it meets all the requirements for effectiveness of
this Post-Effective Amendment No. 20 to it's Registration Statement pursuant to
Rule 485(a) promulgated under the Securities Act of 1933, as amended, and has
duly caused this Post-Effective Amendment No. 20 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Kansas City, State of
Missouri on the 1st day of December, 2000.
American Century World Mutual Funds, Inc.
(Registrant)
By: /*/William M. Lyons
William M. Lyons
President and Principal Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 20 has been signed below by the following persons
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
*William M. Lyons President December 1, 2000
William M. Lyons and Principal Executive Officer
*Maryanne Roepke Senior Vice President, Treasurer December 1, 2000
Maryanne Roepke and Chief Accounting Officer
*James E. Stowers, Jr. Chairman of the Board and December 1, 2000
James E. Stowers, Jr. Director
*James E. Stowers III Director December 1, 2000
James E. Stowers III
*Thomas A. Brown Director December 1, 2000
Thomas A. Brown
*Robert W. Doering, M.D. Director December 1, 2000
Robert W. Doering, M.D.
*Andrea C. Hall, Ph.D. Director December 1, 2000
Andrea C. Hall, Ph.D.
*D. D. (Del) Hock Director December 1, 2000
D. D. (Del) Hock
*Donald H. Pratt Director December 1, 2000
Donald H. Pratt
*Gayle E. Sayers Director December 1, 2000
Gale E. Sayers
*M. Jeannine Strandjord Director December 1, 2000
M. Jeannine Strandjord
*By /s/Charles A. Etherington
Charles A. Etherington
Attorney-in-Fact
