[front cover]
November 30, 1999
AMERICAN CENTURY(reg.sm)
ANNUAL REPORT
[graphic of runners]
[graphic of person looking at computer screen]
International Growth
International Discovery
Emerging Markets
Global Growth
[american century logo (reg.sm)]
American
Century
[inside front cover]
INTERNATIONAL GROWTH
(TWIEX)
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INTERNATIONAL DISCOVERY
(TWEGX)
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EMERGING MARKETS
(TWMIX)
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GLOBAL GROWTH
(TWGGX)
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TURN TO THE INSIDE BACK COVER OF THIS REPORT TO SEE A LIST OF AMERICAN CENTURY
FUNDS CLASSIFIED BY OBJECTIVE AND RISK.
Investing with American Century Brokerage
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Our Message to You
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[photo of James E. Stowers III and James E. Stowers, Jr.]
James E. Stowers III, seated, with James E. Stowers, Jr.
The twelve months ended November 30, 1999, was an outstanding period for
American Century's global and international equity funds. Recovery in many parts
of Asia and strengthening in the more-established markets of Europe provided a
wealth of exciting opportunities for American Century's quartet of international
stock funds. Three of the four produced returns in excess of 60%. Our
disciplined focus on earnings growth continued to direct our investment teams
toward the markets and individual companies demonstrating the fastest and most
sustainable growth.
While we are very pleased with our funds' performance, we wish to stress
that results like these are the exception, rather than the norm, and are not
indefinitely sustainable. It is important to remember that international
investing can involve significant volatility, and that market corrections are an
inevitable, even necessary part of the investment process. For that reason, it
is wise to maintain reasonable expectations for your funds' future performance.
American Century introduced International Discovery Fund in 1994. Since
then, the fund has built an enviable record by investing primarily in smaller
overseas companies that are experiencing sharp growth. To enable the fund to
maintain its emphasis on smaller growth companies, we will be closing
International Discovery to new investors on January 28, 2000. We will continue
to accept investments into existing accounts after that date.
We are also pleased to announce that American Century has been named by
Fortune magazine as one of its "100 Best Companies to Work For." We do
not take this recognition lightly; it is acknowledgement like this that enables
us to recruit talented and dedicated people, from service representatives to
investment professionals. This "intellectual capital" is our most
valuable resource and one that is essential in our effort to provide you, our
shareholders, with excellent investment management and service.
As always, we appreciate your continued confidence in American Century.
Sincerely,
/s/James E. Stowers, Jr.
James E. Stowers, Jr.
Chairman of the Board and Founder
/s/James E. Stowers III
James E. Stowers III
Vice Chairman of the Board and Chief Executive Officer
[right margin]
Table of Contents
Report Highlights ...................................................... 2
Market Perspective ..................................................... 3
INTERNATIONAL GROWTH
Performance Information ................................................ 4
Management Q&A ................................................. 5
Schedule of Investments ................................................ 8
INTERNATIONAL DISCOVERY
Performance Information ................................................ 12
Management Q&A ..................................................... 13
Schedule of Investments ................................................ 16
EMERGING MARKETS
Performance Information ................................................ 21
Management Q&A ..................................................... 22
Schedule of Investments ................................................ 25
GLOBAL GROWTH
Performance Information ................................................ 29
Management Q&A ..................................................... 30
Schedule of Investments ................................................ 33
FINANCIAL STATEMENTS
Statements of Assets and Liabilities ................................... 38
Statements of Operations ............................................... 39
Statements of Changes in Net Assets .................................... 40
Notes to Financial Statements .......................................... 42
Financial Highlights ................................................... 48
OTHER INFORMATION
Independent Auditors' Report ........................................... 59
Share Class and Retirement Account Information ......................... 60
Background Information
Portfolio Managers .................................................. 61
Investment Philosophy and Policies .................................. 61
How Currency Returns Affect Fund Performance ........................ 61
Comparative Indices ................................................. 62
Glossary ............................................................... 63
www.americancentury.com 1
Report Highlights
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MARKET PERSPECTIVE
* This was a remarkable year for international markets, but it was far from
easy. There were some very dramatic shifts of investment capital.
* Capital flooded out of large European growth stocks and into Japanese and
Asian economically sensitive companies.
* Emerging markets saw a tremendous comeback as developing economies stabilized
and moved forward after a rough 1998.
* In Europe and Asia, entrepreneurialism is having a profound effect, spurred by
an American-style equity culture that is taking hold in both regions.
INTERNATIONAL GROWTH
* International Growth posted a strong gain for the year, more than twice that
of the fund's benchmark.
* The fund's best contributors were companies involved in information
technology, particularly wireless and other telecommunications services. A
move into Japanese stocks during the second half of the period also helped the
fund outperform its benchmark and the majority of its peers.
* Positions in food and beverage companies dampened performance, and the fund's
financial services stocks were slowed by interest rate increases in the United
States.
INTERNATIONAL DISCOVERY
* International Discovery had one of its best years ever, rewarding investors
with a gain that was more than three times that of its benchmark.
* One factor behind the fund's strong gain was its focus on technology- oriented
firms, many of them in telecommunications fields. Those investments helped the
fund gain slightly more than 42% from June through November.
EMERGING MARKETS
* The fund handily outpaced both its benchmark index and peer group this year.
Since its inception on September 30, 1997, Emerging Markets has performed well
in both good markets and bad.
* This year, the fund had extensive exposure to technology and
telecommunications, and to basic industries.
* The rise in commodity prices has improved the prospects for many commodity
producers, while the demand for computer systems and products, Internet
services, and cellular communications has helped the technology and telecom
areas.
GLOBAL GROWTH
* Global Growth dramatically outperformed the 19.76% gain posted by its
benchmark, the Morgan Stanley Capital International World Free Index, and
ranked among the top 7% of global funds tracked by Lipper.*
* The fund's strong performance was the result of our bottom-up approach, which
focuses on selecting fast- growing companies worldwide.
* The United States, Japan and the United Kingdom represented Global Growth's
largest country weightings. In the United States, Internet companies and
selected biotech firms added significantly to performance. In Europe and
Japan, the fund's stake in fast-growing telephone and information
service-related companies boosted returns.
*Standardized ranking information is provided on page 30.
[left margin]
INTERNATIONAL GROWTH(1)
(TWIEX)
TOTAL RETURNS: AS OF 11/30/99
6 Months 33.81%(2)
1 Year 43.22%
INCEPTION DATE: 5/9/91
NET ASSETS: $3.9 billion(3)
INTERNATIONAL DISCOVERY(1)
(TWEGX)
TOTAL RETURNS: AS OF 11/30/99
6 Months 42.06%(2)
1 Year 65.12%
INCEPTION DATE: 4/1/94
NET ASSETS: $1.6 billion(3)
EMERGING MARKETS(1)
(TWMIX)
TOTAL RETURNS: AS OF 11/30/99
6 Months 29.79%(2)
1 Year 61.03%
INCEPTION DATE: 9/30/97
NET ASSETS: $99.0 million(3)
GLOBAL GROWTH(1)
(TWGGX)
TOTAL RETURNS: AS OF 11/30/99
6 Months 40.47%(2)
Since Inception 66.60%
INCEPTION DATE: 12/1/98
NET ASSETS: $233.9 million(3)
(1) Investor Class.
(2) Not annualized.
(3) Includes Investor, Advisor, and Institutional classes.
Investment terms are defined in the Glossary on pages 63-64.
2 1-800-345-2021
Market Perspective from Henrik Strabo
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[photo of Henrik Strabo]
Henrik Strabo, Chief Investment Officer of international investments at
American Century
A YEAR OF OUTSTANDING RETURNS
This was a remarkable year for international markets. Our team has been
involved in global markets for many years, but we have rarely seen a year with
so many powerful and positive changes.
Yet the year was far from easy. It also contained some very dramatic shifts
of investment capital. Early in the year, when Asia began to recover, capital
flooded out of large European growth stocks and into Japanese and Asian
economically sensitive companies. At the same time, the Japanese yen appreciated
dramatically at the expense of the euro and U.S. dollar. As the year progressed,
investors turned to the big growth opportunities now available from the
revolution taking place in global telecommunications and Internet usage. This
helped fuel strong gains in growth stocks globally, including the emerging
markets where we saw an impressive turnaround.
POSITIVE CHANGES AROUND THE GLOBE
U.S.-style capitalism, specifically the restructuring that swept the United
States in the 1980s and '90s, has fostered a similar transformation in Europe.
Merger and acquisition activity is at record levels and is transforming the
corporate landscape in a significant way. Shareholder value and corporate
governance have become focal points. Privatizations and labor and pension
reforms are moving ahead, paving the way for more efficient and competitive
economies and corporations. In Euroland and the U.K., corporations are realizing
that not only must they compete in the global marketplace to sell their goods
and services, but also for capital and human talent.
Japan is becoming reform-minded as well, though for now changes there are
likely to be more gradual. Nevertheless, deregulation and the breakdown of
cross-owner relationships among the Keiretsu, the large conglomerates that
dominate the Japanese economy, are driving change. Entrepreneurs are also
gaining in importance as the changing economy opens up new
opportunities--witness the recent introduction of MOTHERS, a stock exchange for
small Japanese companies.
In emerging markets, developing economies stabilized and moved forward
after a rough 1998. Reforms and privatizations are at the forefront there as
well. Technology and telecommunications are transforming many economies as
governments step aside and allow industry to leapfrog into the most advanced
infrastructure.
GOING FORWARD
We believe deregulation and the success of U.S.-style capitalism will very
likely continue to drive Europe and Asia's transformation, with Internet and
e-commerce acting as major catalysts. These trends are currently creating an
unprecedented number of investment opportunities globally, and should they
continue, will have a profound impact on corporations and investors alike.
Whatever the market environment, we are confident our earnings growth
discipline will continue to generate competitive returns.
[right margin]
"WE BELIEVE DEREGULATION AND THE SUCCESS OF U.S.-STYLE CAPITALISM WILL VERY
LIKELY CONTINUE TO DRIVE EUROPE AND ASIA'S TRANSFORMATION, WITH INTERNET AND
E-COMMERCE ACTING AS MAJOR CATALYSTS."
MARKET RETURNS
FOR THE YEAR ENDED NOVEMBER 30, 1999
MSCI EUROPE 9.72%
MSCI FAR EAST 57.25%
MSCI EMERGING LATIN AMERICA 30.75%
Source: Lipper Inc.
MARKET PERFORMANCE (GROWTH OF $1.00)
FOR THE YEAR ENDED NOVEMBER 30, 1999
[data shown in line chart]
MSCI Emerging
Latin America MSCI Europe Index MSCI Far East Index
11/30/1998 $1.00 $1.00 $1.00
12/31/1998 $0.92 $1.04 $1.03
1/31/1999 $0.82 $1.04 $1.03
2/28/1999 $0.87 $1.01 $1.01
3/31/1999 $1.07 $1.02 $1.15
4/30/1999 $1.22 $1.05 $1.22
5/31/1999 $1.18 $1.00 $1.16
6/30/1999 $1.23 $1.02 $1.27
7/31/1999 $1.14 $1.03 $1.37
8/31/1999 $1.10 $1.04 $1.37
9/30/1999 $1.13 $1.03 $1.44
10/31/1999 $1.16 $1.07 $1.50
11/30/1999 $1.31 $1.10 $1.57
Value on 11/30/99
MSCI Emerging Latin America $1.31
MSCI Europe Index $1.10
MSCI Far East Index $1.57
www.americancentury.com 3
International Growth--Performance
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TOTAL RETURNS AS OF NOVEMBER 30, 1999
INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 5/9/91) (INCEPTION 10/2/96) (INCEPTION 11/20/97)
INTERNATIONAL INTERNATIONAL INTERNATIONAL
GROWTH MSCI EAFE GROWTH MSCI EAFE GROWTH MSCI EAFE
6 MONTHS(1) 33.81% 16.43% 33.64% 16.43% 33.98% 16.43%
1 YEAR 43.22% 21.10% 42.86% 21.10% 43.40% 21.10%
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AVERAGE ANNUAL RETURNS
3 YEARS 25.43% 11.99% 25.22% 11.99% -- --
5 YEARS 19.47% 11.05% -- -- -- --
LIFE OF FUND 17.19% 9.47%(2) 25.24% 12.33%(3) 28.88% 18.75%(4)
(1) Returns for periods less than one year are not annualized.
(2) Since 4/30/91, the date nearest the class's inception for which data are
available.
(3) Since 9/30/96, the date nearest the class's inception for which data are
available.
(4) Since 11/30/97, the date nearest the class's inception for which data are
available.
See pages 60-63 for information about share classes, the MSCI EAFE Index, and
returns.
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/99
International Growth $38,898
MSCI EAFE $21,762
$10,000 investment made 5/9/91
[data shown in mountain chart]
International MSCI EAFE
Date Growth Value Value
5/9/1991 $10,000 $10,000
6/30/1991 $9,784 $9,362
9/30/1991 $10,431 $10,164
12/31/1991 $11,014 $10,335
3/31/1992 $11,642 $9,108
6/30/1992 $12,348 $9,300
9/30/1992 $11,838 $9,441
12/31/1992 $11,547 $9,077
3/31/1993 $12,541 $10,165
6/30/1993 $13,069 $11,187
9/30/1993 $13,921 $11,929
12/31/1993 $16,472 $12,032
3/31/1994 $15,872 $12,453
6/30/1994 $16,086 $13,089
9/30/1994 $16,664 $13,102
12/31/1994 $15,687 $12,969
3/31/1995 $15,170 $13,210
6/30/1995 $16,048 $13,306
9/30/1995 $16,905 $13,861
12/31/1995 $17,552 $14,422
3/31/1996 $17,958 $14,839
6/30/1996 $18,815 $15,074
9/30/1996 $18,860 $15,054
12/31/1996 $20,084 $15,293
3/31/1997 $21,194 $15,053
6/30/1997 $24,070 $17,007
9/30/1997 $24,978 $16,888
12/31/1997 $24,044 $15,566
3/31/1998 $28,360 $17,856
6/30/1998 $30,268 $18,045
9/30/1998 $24,838 $15,481
12/31/1998 $28,616 $18,679
3/31/1999 $28,976 $18,939
6/30/1999 $30,648 $19,420
9/30/1999 $31,755 $20,272
11/30/1999 $38,898 $21,762
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The MSCI
EAFE Index is provided for comparison in each graph. Index performance is based
on returns since 4/30/91, the date nearest the class's inception for which data
are available. International Growth's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the MSCI EAFE Index do not. The graphs are based on Investor
Class shares only; performance for other classes will vary due to differences in
fee structures (see the Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING NOVEMBER 30)
[data shown in bar chart]
International MSCI EAFE Index
Date Growth Return Return
11/30/1991 2.50% -2.74%
11/30/1992 8.77% -8.11%
11/30/1993 31.04% 24.27%
11/30/1994 7.28% 14.84%
11/30/1995 5.93% 7.57%
11/30/1996 16.35% 11.76%
11/30/1997 18.12% -0.40%
11/30/1998 16.74% 16.45%
11/30/1999 43.22% 21.10%
* From 5/31/91 to 11/30/91.
4 1-800-345-2021
International Growth--Q&A
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[photo of Mark Kopinski and Henrik Strabo]
An interview with Mark Kopinski and Henrik Strabo, portfolio managers on
the International Growth team.
HOW DID INTERNATIONAL GROWTH PERFORM FOR THE 12 MONTHS ENDED NOVEMBER 30, 1999?
International Growth gained 43.22%, far above the 21.10% increase posted by
its benchmark, the Morgan Stanley Capital International EAFE Index (EAFE).(1)
The fund also outperformed the majority of its peers. The average international
fund tracked by Lipper Inc. gained 29.00% for the period. International Growth's
one-year results placed it in the top 14th percentile of its peer group (84th
out of 604 international funds), according to Lipper.(2)
Our results for the second half of the year were especially strong. The
fund gained 33.81% from June through November, more than twice the 16.43%
increase posted by the EAFE Index. In November alone, International Growth was
up 15.32%, while its benchmark rose 3.47%.
We're pleased with these short-term returns, but our overarching goal is to
provide you with solid performance over time. Those investors who have been
invested in International Growth for the last five years have received an
average annual return of 19.47%. The average annual return for the EAFE Index
for the same period is 11.05%. According to Lipper, International Growth's
five-year results place it in the top 4th percentile (8th out of 222
international funds).
WHAT FACTORS HELPED INTERNATIONAL GROWTH POST SUCH A LARGE GAIN?
We think the credit goes to an investment process that enables our team to
focus on fast-growing successful companies, wherever they may be. We combine
earnings information from our proprietary database with extensive company
analysis, including management interviews and industry research. We believe this
helps us put together a portfolio of strong, growing companies.
We found a number of such opportunities in Europe and Japan where wireless
telephone and information service-related companies performed very well. These
sectors are benefiting from the explosion of cellular phone usage and expansion
of the Internet. This was a major factor behind our higher weighting in Japanese
stocks. When we closed the fund's November books, Japanese companies accounted
for nearly 27% of investments--our largest single-country weighting--and those
holdings contributed most to performance. International Growth is still
predominantly invested in Europe, with almost 60% of assets spread across 13
European countries. England and France lead the list.
In our last report to you, we described the cautious approach we were
taking in Japan. At the time, too many restructuring announcements coming from
Japanese companies appeared to be more bark than bite. The situation is about
the same today, but there are a number of firms in our portfolio that are
actively tackling their problems. There are also signs that a quiet
(1) All fund returns referenced in this interview are for Investor Class shares.
(2) Lipper rankings are based on average annual total returns.
[right margin]
"WE'RE PLEASED WITH THESE SHORT-TERM RETURNS, BUT OUR OVERARCHING GOAL IS TO
PROVIDE YOU WITH SOLID PERFORMANCE OVER TIME. THOSE INVESTORS WHO HAVE BEEN
INVESTED IN INTERNATIONAL GROWTH FOR THE LAST FIVE YEARS HAVE RECEIVED AN
AVERAGE ANNUAL RETURN OF 19.47%."
PORTFOLIO AT A GLANCE
11/30/99 11/30/98
NO. OF COMPANIES 137 155
MEDIAN MARKET $13.4 $6.31
CAPITALIZATION BILLION BILLION
PORTFOLIO TURNOVER 117% 190%
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.27% 1.33%
Investment terms are defined in the Glossary on pages 63-64.
www.americancentury.com 5
International Growth--Q&A
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(Continued)
"corporate revolution" is underway in the world's second-largest economy. A
"new Japan" is emerging.
YOU HAVE NEARLY 13% OF YOUR ASSETS IN FIRMS INVOLVED IN WIRELESS COMMUNICATIONS.
WHAT IS ATTRACTING YOU TO THESE COMPANIES?
There is a revolution occurring worldwide in information technology,
especially in wireless and other telecommunications services. In the United
States, cellular service is booming, but that doesn't come close to what's
happening overseas. Across Europe and in Japan (and in many emerging economies),
the portable phone has become the communications medium of choice.
That theme is hinged to another--the Internet and the explosion of data
riding the Web. We are in an age of information instancy. Cell-phone users
around the world are now able to dial remote databases, to access email or scour
the Internet for information from wherever they may be--in a car or walking
through an airport. As a result, portable phones are fast becoming hand-held
computers in every sense of the word. The marriage of the Internet and wireless
communications is one of the major growth stories of the decade, and we're
approaching it from several angles.
WHICH OF YOUR INVESTMENTS ILLUSTRATE SOME OF THOSE ANGLES?
We can begin with our largest holding, Mannesmann. We've held a position in
this German firm since 1994. Mannesmann's initial claim to fame was as a
successful industrial firm making steel tubes, auto parts and machinery. Today,
the company is focusing on telecommunications, and is Germany's largest wireless
service provider.
In electrical equipment, we own shares in Finland's Nokia, the world's
biggest maker of cellular handsets, and now Europe's largest company in terms of
market capitalization (the number of shares outstanding, multiplied by the share
price). In September, Nokia introduced its first cellular phone with Wireless
Application Protocol (WAP) technology that lets users send emails or pull data
from the Internet. Owning a market share of about 25%, Nokia could produce 68
million phones in 1999, including models that have become very popular with
teen-agers (who have turned out to be tremendously active cell-phone users).
There are 450 million cellular subscribers worldwide, a number Nokia
expects to more than triple to over one billion by 2003. At that point, there
will be more portable phones connected to the Internet than personal computers.
Nokia is an aggressive, smart company that has impressed investors with its
ability to produce increasingly smarter handsets.
NTT Mobile Communications Network, Inc. (sometimes referred to as NTT
DoCoMo), Japan's largest cellular operator, is also benefiting from this
technology. The firm started its "i-mode" service in April 1999, and
by the end of November 1999, the service had nearly 2.7 million users accessing
email and Internet Web sites with their cellular phones.
WHAT ARE OTHER FIRMS THAT CONTRIBUTED TO INTERNATIONAL GROWTH'S STRONG
PERFORMANCE?
Hennes & Mauritz AB, Sweden's largest clothing retailer, has been on a
growth curve for years. We first purchased the company in 1997 and have owned it
since. H&M has been a fine long-term performer--its shares have climbed
10-fold in the last five years.
Another Swedish firm, Skandia Forsakrings AB, a leading provider of
financial services and insurance, also has been a successful investment. The
Nordic region's largest insurer, Skandia
[left margin]
TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
MANNESMANN AG 3.5% 2.9%
SOFTBANK CORP. 2.9% --
SONY CORP. 2.7% 1.5%
NTT MOBILE
COMMUNICATIONS
NETWORK, INC. 2.2% 0.9%
CHINA TELECOM
(HONG KONG) LTD. 2.1% --
NTT DATA CORP. 1.8% 0.2%
VIVENDI 1.7% 2.0%
JDS UNIPHASE CORP. 1.7% 0.9%*
SONERA GROUP OYJ 1.7% 0.3%
NORTEL NETWORKS CORP. 1.7% 0.9%
TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
ELECTRICAL EQUIPMENT 18.1% 10.2%
TELEPHONE 13.0% 12.6%
WIRELESS
TELECOMMUNICATIONS 12.7% 10.8%
INFORMATION SERVICES 6.3% 2.8%
MEDIA 5.3% 5.0%
*Uniphase Corp. merged with JDS Fitel Inc. on 7/6/99. Surviving name is JDS
Uniphase Corp. Percentage represents JDS Fitel Inc. shares owned by the fund.
6 1-800-345-2021
International Growth--Q&A
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(Continued)
is now focusing on the U.S. market for variable annuities, mutual funds,
and other savings products.
In addition, Tokyo-based Softbank Corporation, our second-largest position,
is one of the world's largest investors in Internet companies. Its $32 billion
portfolio holds significant investments in hugely successful firms such as
Yahoo! and E*Trade Group.
Shares of NTT Data Corp., Japan's largest information services company,
also fared well. NTT Data Corp. supplies computer systems to governments, banks
and other businesses. The company is benefiting from restructuring and mergers
occurring in Japan's financial services industry.
WHICH STOCKS DIDN'T WORK OUT AS YOU EXPECTED?
Several investments in food and beverage companies were disappointments; in
fact, throughout the world, food stocks generally underperformed. One of our
holdings, Groupe Danone, is a case in point. A French company, Danone produces a
number of packaged foods, including Dannon Yogurt, Evian water, and Lea &
Perrins worcestershire sauce. More than anything else, consolidation in food
retailing is pressuring margins of food manufacturers. In this country and
abroad, the retailing model is moving toward giant national food outlets
(Wal-Mart or Target in the United States, for example) that can exert pricing
leverage.
WHAT ARE YOUR THOUGHTS CONCERNING THE EURO, THE NEW EUROPEAN CURRENCY THAT HAS
WEAKENED CONSIDERABLY SINCE ITS INTRODUCTION IN JANUARY 1999?
A declining euro is not necessarily bad for the European Monetary Union; in
fact, it has already given a boost to economic growth there. Germany and France
are big exporters, and their goods are now attractively priced to consumers in
the United States and elsewhere. In addition, the common currency has already
begun to "harmonize" the business environment across the Continent,
particularly in terms of pricing from country to country.
In Japan, meanwhile, the yen has strengthened in part at the expense of the
euro, as investors have sold European stocks to put their money in Japanese
companies. Over the short term, a strong currency normally slows the earning
power of exporters because their products grow more expensive to foreign buyers
and demand falls. Over the long term, which is the lens through which we view
our investments, we think companies with good products and good management will
succeed and overcome the relative strength or weakness of their country's
currency.
WHAT IS YOUR OUTLOOK ON INTERNATIONAL INVESTING AS WE HEAD INTO 2000?
Many constructive, positive trends are changing the investment landscape in
Europe and Japan. Falling economic boundaries are forcing consolidation in
virtually every industry in Europe, Japanese companies are transforming
themselves, and an American-style equity culture is catching hold in both
regions. In fact, what is happening in Europe, and to a lesser extent in Japan,
is similar to the restructuring American companies went through at the start of
this decade, which spurred the U.S. economy on to new heights. This is a
powerful combination of events that we feel should have huge positive
implications for international investors.
[right margin]
TYPES OF INVESTMENTS IN THE PORTFOLIO
AS OF NOVEMBER 30, 1999
[data shown in pie chart]
Common Stocks 98.6%
Preferred Stocks 0.7%
Temporary Cash Investments 0.7%
AS OF MAY 31, 1999
[data shown in pie chart]
Common Stocks 94.8%
Preferred Stocks 1.3%
Temporary Cash Investments 3.9%
INTERNATIONAL GROWTH'S INVESTMENTS BY COUNTRY
[data shown in bar chart]
11/30/99 5/31/99
Japan 26.8% 12.8%
U.K. 15.7% 18.0%
France 11.1% 12.2%
Netherlands 7.1% 7.4%
Germany 5.4% 5.7%
United States* 4.8% 6.4%
Sweden 4.7% 3.3%
Other 24.4% 34.2%
*Includes temporary cash investments.
www.americancentury.com 7
International Growth--Schedule of Investments
--------------------------------------------------------------------------------
This schedule lists all investments owned by the fund, as well as each
security's market value, as of the last day of the reporting period. The
securities are grouped by asset class (such as common stocks, corporate bonds,
temporary cash investments, as applicable), and some asset classes are further
broken down by industry or country.
NOTE: For securities denominated in foreign currencies, the market value is
translated into U.S. dollars based on exchange rates as of the last day of the
reporting period.
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS - 98.6%
AUSTRALIA - 0.4%
5,970,363 Cable & Wireless Optus Limited(1) $ 15,579,333
------------------
(wireless telecommunications)
BELGIUM - 0.3%
300,629 Fortis (B) 10,370,282
------------------
(property & casualty insurance)
CANADA - 2.2%
311,500 Celestica Inc. New York Shares(1) 21,882,875
(semiconductor)
879,000 Nortel Networks Corp.
New York Shares 65,046,000
------------------
(electrical equipment)
86,928,875
------------------
DENMARK - 1.3%
160,150 ISS International Service
System A/S(1) 9,325,420
(industrial services)
128,621 Novo Nordisk A/S Cl B 16,807,852
(drugs)
403,900 Tele Danmark A/S 26,034,775
------------------
(telephone)
52,168,047
------------------
FINLAND - 3.2%
432,000 Nokia Corp. Cl A ADR 59,697,000
(electrical equipment)
1,590,790 Sonera Group Oyj 65,743,895
------------------
(wireless telecommunications)
125,440,895
------------------
FRANCE - 11.1%
68,433 Accor SA 15,544,340
(hotels)
209,187 Alcatel Alsthom Compagnie Generale 40,580,578
(information services)
76,398 Altran Technologies SA 36,377,815
(information services)
224,148 Axa 30,246,021
(property & casualty insurance)
103,461 Cap Gemini SA 18,308,552
(information services)
204,820 Carrefour SA 35,708,472
(specialty stores)
90,707 Groupe Danone 21,051,718
(food & beverage)
114,300 Lafarge SA 10,787,153
(construction & real property)
Shares Value
--------------------------------------------------------------------------------
160,000 Pinault-Printemps-Redoute SA $ 33,376,680
(department stores)
105,600 Societe Generale Cl A 22,773,538
(banks)
113,400 Societe Television Francaise 1 41,140,386
(media)
374,400 STMicroelectronics N.V.
New York Shares 46,753,200
(semiconductor)
102,600 Total SA Cl B 13,658,499
(oil refining)
845,527 Vivendi 67,740,347
------------------
(multi-industry)
434,047,299
------------------
GERMANY - 5.4%
183,730 DePfa Deutsche Pfandbriefbank AG 13,886,543
(banks)
184,700 Douglas Holding AG 7,938,505
(specialty stores)
159,653 EM.TV & Merchandising AG 12,404,643
(media)
60,937 Intershop Communications AG(1) 12,157,192
(computer software)
650,590 Mannesmann AG 137,027,103
(wireless telecommunications)
271,600 Siemens AG 27,343,120
------------------
(electrical equipment)
210,757,106
------------------
HONG KONG - 2.5%
15,050,000 China Telecom (Hong Kong) Ltd.(1) 80,806,670
(wireless telecommunications)
16,322 i-CABLE Communications Limited(1) 25,114
(media)
6,528,828 Wharf (Holdings) Ltd. 16,560,602
------------------
(multi-industry)
97,392,386
------------------
IRELAND - 0.3%
488,327 CRH plc 9,783,177
------------------
(multi-industry)
ISRAEL - 0.3%
84,400 Check Point Software
Technologies Ltd.(1) 11,958,425
------------------
(computer software)
ITALY - 3.4%
2,510,600 Banca Intesa S.p.A. 10,727,442
(banks)
1,679,000 Mediaset SpA 19,119,738
(media)
8 1-800-345-2021 See Notes to Financial Statements
International Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
1,860,200 Mediolanum SpA $ 16,309,164
(life & health insurance)
1,417,300 Mondadori (Arnoldo) Editore SpA 29,051,298
(media)
9,151,733 Seat Pagine Gialle SpA 18,629,771
(internet)
3,597,700 Telecom Italia SpA 39,663,869
------------------
(telephone)
133,501,282
------------------
JAPAN - 26.8%
1,304,000 Dai-Ichi Kangyo Bank Ltd. 15,064,861
(banks)
1,063,000 Fujitsu Ltd. 37,770,514
(electrical equipment)
4,032,000 Hitachi Ltd. 55,802,120
(electrical equipment)
1,187 Japan Telecom Co. Ltd. 46,603,848
(telephone)
1,127,000 Kao Corporation 33,517,962
(home products)
258,000 KDD Corp. 35,706,714
(telephone)
64,500 Keyence Corporation 18,359,835
(electrical equipment)
509,000 KYOCERA CORP. 61,501,669
(semiconductor)
131,000 Matsushita Communication
Industrial Co., Ltd. 25,202,199
(electrical equipment)
738,000 Matsushita Electric Industrial Co., Ltd. 18,725,265
(electrical equipment)
783,000 NEC Corp. 18,329,947
(electrical equipment)
2,619 Nippon Telegraph & Telephone 47,043,286
(telephone)
1,755,000 Nomura Securities Co., Ltd. 31,351,590
(securities & asset management)
2,874 NTT Data Corp. 70,242,049
(information services)
2,416 NTT Mobile Communications
Network, Inc. 84,896,741
(wireless telecommunications)
820,000 Omron Corp. 20,081,468
(electrical equipment)
125,700 Ryohin Keikaku Co. Limited 29,672,998
(department stores)
61,800 SMC Corp. 10,930,860
(industrial parts)
156,500 Softbank Corp. 113,212,112
(internet)
561,400 Sony Corp. 104,146,643
(electrical equipment)
1,770,000 Sumitomo Bank, Ltd. (The) 27,189,340
(banks)
393,000 Takeda Chemical Industries, Ltd. 23,222,026
(drugs)
699,800 Tokyo Electric Power Co. 19,747,988
(electrical utilities)
Shares Value
--------------------------------------------------------------------------------
463,000 Tokyo Electron Ltd. $ 48,172,360
(electrical equipment)
1,240,000 Toyota Motor Corp. 42,112,289
(motor vehicles & parts)
52,000 Trend Micro Inc. 11,075,775
------------------
(computer software)
1,049,682,459
------------------
MEXICO - 1.2%
277,200 Grupo Televisa S.A. GDR(1) 13,530,825
(media)
378,800 Telefonos de Mexico, S.A. Cl L ADR 35,062,675
------------------
(telephone)
48,593,500
------------------
NETHERLANDS - 7.1%
227,000 ASM Lithography Holding
N.V. New York Shares(1) 21,245,781
(semiconductor)
199,327 ASR Verzekeringsgroep N.V. 11,530,040
(life & health insurance)
511,300 Getronics N.V. 31,302,201
(information services)
295,000 Gucci Group N.V. New York Shares 24,558,750
(apparel & textiles)
467,813 ING Groep N.V. 26,329,843
(financial services)
285,536 Koninklijke Ahold NV 9,095,743
(grocery stores)
265,402 KPNQwest N.V.(1) 9,936,097
(telephone)
408,120 Phillips Electronics N.V.
New York Shares 48,770,340
(electrical equipment)
395,900 Randstad Holdings N.V. 19,868,618
(industrial services)
361,839 United Pan-Europe
Communications NV(1) 35,552,717
(telephone)
687,500 VNU N.V. 27,262,787
(publishing)
348,234 Wolters Kluwer NV 10,510,438
------------------
(publishing)
275,963,355
------------------
PORTUGAL - 0.3%
286,891 PT MULTIMEDIA(1) 11,310,156
------------------
(internet)
SINGAPORE - 1.7%
915,281 DBS Group Holdings Ltd. 11,869,795
(banks)
580,300 Singapore Press Holdings Ltd. 10,874,152
(media)
14,070,000 Singapore Technologies
Engineering Ltd. 21,008,745
(industrial services)
1,428,451 United Overseas Bank Ltd. 12,746,440
(banks)
See Notes to Financial Statements www.americancentury.com 9
International Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
1,074,000 Venture Manufacturing
(Singapore) Ltd. $ 10,861,392
------------------
(semiconductor)
67,360,524
------------------
SOUTH KOREA - 1.2%
223,029 Samsung Electronics 46,173,784
------------------
(electrical equipment)
SPAIN - 1.9%
458,100 Argentaria SA 10,479,461
(banks)
286,541 Sogecable, S.A.(1) 9,064,230
(media)
2,710,765 Telefonica S.A.(1) 56,493,074
------------------
(telephone)
76,036,765
------------------
SWEDEN - 4.7%
758,900 Assa Abloy AB Cl B 8,876,493
(consumer durables)
446,100 Ericsson (L.M.) Telephone Co. ADR 21,510,384
(electrical equipment)
1,113,300 Europolitan Holdings AB 14,003,280
(wireless telecommunications)
1,826,800 Hennes & Mauritz AB Cl B 57,981,380
(specialty stores)
420,985 Modern Times Group MTG AB Cl B(1) 14,005,120
(media)
831,000 Securitas AB Cl B 13,822,648
(industrial services)
2,268,800 Skandia Forsakrings AB 54,274,322
------------------
(financial services)
184,473,627
------------------
SWITZERLAND - 3.5%
470,090 ABB Ltd. 46,479,912
(specialty stores)
142,100 Credit Suisse Group 26,581,206
(financial services)
12,519 Holderbank Financiere Glarus
AG Cl B 15,688,108
(construction & real property)
8,321 Nestle S.A. 14,974,033
(food & beverage)
20,010 Novartis AG 31,190,135
(drugs)
1,400 PubliGroupe S.A. 1,302,817
------------------
(media)
136,216,211
------------------
UNITED KINGDOM - 15.7%
2,787,938 Amvescap Plc 28,837,908
(financial services)
320,111 ARM Holdings plc(1) 15,747,865
(semiconductor)
492,700 AstraZeneca Group plc 22,022,729
(drugs)
Shares Value
-------------------------------------------------------------------------------
509,900 Barclays PLC $ 14,743,631
(banks)
1,405,600 BBA Group plc 11,249,684
(industrial parts)
253,000 BP Amoco Plc ADR 15,417,188
(oil refining)
864,489 British Aerospace PLC 4,954,413
(defense/aerospace)
2,656,250 British Telecommunications plc 53,402,678
(telephone)
1,371,000 Cable & Wireless
Communications plc(1) 15,462,618
(telephone)
1,179,900 Capita Group Plc 21,384,080
(industrial services)
6,048,461 Centrica plc 17,972,095
(gas & water utilities)
268,100 CMG plc 14,172,108
(information services)
1,110,017 COLT Telecom Group plc(1) 41,972,879
(telephone)
1,388,000 Compass Group PLC 16,851,708
(industrial services)
362,836 Energis plc(1) 14,774,782
(telephone)
3,026,500 Invensys plc 14,117,715
(industrial parts)
1,460,700 Lloyds TSB Group plc 18,726,083
(banks)
1,543,315 Logica plc 37,351,503
(information services)
2,016,100 Marconi plc 25,814,069
(electrical equipment)
1,080,614 Orange plc(1) 32,713,022
(wireless telecommunications)
1,264,691 Pearson plc 30,264,751
(media)
1,025,700 Prudential Corporation PLC 16,868,931
(property & casualty insurance)
5,229,490 TeleWest Communications plc(1) 24,623,740
(telephone)
2,796,169 Thus plc(1) 17,554,838
(wireless telecommunications)
5,586,355 Vodafone AirTouch 26,348,707
(wireless telecommunications)
445,500 Vodafone AirTouch ADR 21,022,031
(wireless telecommunications)
2,610,300 WPP Group plc 38,384,429
------------------
(media)
612,756,185
------------------
UNITED STATES - 4.1%
471,000 Amdocs Ltd.(1) 16,573,312
(computer software)
172,500 Comverse Technology, Inc.(1) 20,850,938
(computer software)
718,100 Global TeleSystems Group, Inc.(1) 22,934,319
(telephone)
10 1-800-345-2021 See Notes to Financial Statements
International Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares/Principal Amount Value
--------------------------------------------------------------------------------
294,854 JDS Uniphase Corp.(1) $ 67,438,638
(electrical equipment)
157,900 NTL Inc.(1) 14,398,506
(telephone)
418,600 Tyco International Ltd. 16,770,162
------------------
(industrial parts)
158,965,875
------------------
TOTAL COMMON STOCKS 3,855,459,548
------------------
(Cost $2,477,260,848)
PREFERRED STOCKS - 0.7%
BRAZIL
144,860,000 Petroleo Brasileiro S.A. 29,265,788
------------------
(energy reserves & production)
(Cost $22,884,674)
CORPORATE BONDS(2)
UNITED KINGDOM
GBP 273,038 British Aerospace PLC, 7.45%,
11/29/03 428,545
------------------
(defense/aerospace)
(Cost $0)
Value
-------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS - 0.7%
Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.57%, dated 11/30/99,
due 12/1/99 (Delivery value $26,904,162) $ 26,900,000
------------------
(Cost $26,900,000)
TOTAL INVESTMENT SECURITIES - 100.0% $3,912,053,881
==================
(Cost $2,527,045,522)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain
-------------------------------------------------------------------------------
60,568,100 EURO 12/30/99 $61,186,743 $118,471
=====================================
(Value on Settlement Date $61,305,214)
Forward foreign currency exchange contracts are designed to protect the fund's
foreign investments against declines in foreign currencies (also known as
hedging). The contracts are called "forward" because they allow the
fund to exchange a foreign currency for U.S. dollars on a specific date in the
future--and at a prearranged exchange rate.
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
GBP - British Pound
GDR = Global Depositary Receipt
(1) Non-income producing.
(2) Category is less than 0.05% of total investment securities.
See Notes to Financial Statements www.americancentury.com 11
International Discovery--Performance
--------------------------------------------------------------------------------
TOTAL RETURNS AS OF NOVEMBER 30, 1999
INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 4/1/94) (INCEPTION 4/28/98) (INCEPTION 1/2/98)
INTERNATIONAL INTERNATIONAL INTERNATIONAL
DISCOVERY MSCI EAFE DISCOVERY MSCI EAFE DISCOVERY MSCI EAFE
6 MONTHS(1) 42.06% 16.43% 41.89% 16.43% 42.16% 16.43%
1 YEAR 65.12% 21.10% 64.82% 21.10% 65.37% 21.10%
--------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
3 YEARS 30.66% 11.99% -- -- -- --
5 YEARS 25.91% 11.05% -- -- -- --
LIFE OF FUND 24.22% 10.35% 29.26% 12.69%(2) 38.79% 19.07%
(1) Returns for periods less than one year are not annualized.
(2) Since 4/30/98, the date nearest the class's inception for which data are
available.
See pages 60-63 for information about share classes, the MSCI EAFE Index, and
returns.
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/99
International Growth $34,113
MSCI EAFE $17,476
$10,000 investment made 4/1/94
[data shown in mountain chart]
International MSCI EAFE
Date Discovery Value Value
4/1/1994 $10,000 $10,000
6/30/1994 $10,760 $10,511
9/30/1994 $11,420 $10,522
12/31/1994 $10,760 $10,414
3/31/1995 $10,100 $10,608
6/30/1995 $11,020 $10,685
9/30/1995 $11,800 $11,131
12/31/1995 $11,825 $11,582
3/31/1996 $12,931 $11,916
6/30/1996 $14,480 $12,105
9/30/1996 $14,561 $12,089
12/31/1996 $15,513 $12,281
3/31/1997 $16,714 $12,088
6/30/1997 $18,295 $13,657
9/30/1997 $19,792 $13,562
12/31/1997 $18,224 $12,500
3/31/1998 $21,958 $14,339
6/30/1998 $23,590 $14,491
9/30/1998 $18,893 $12,432
12/31/1998 $21,478 $15,000
3/31/1999 $22,713 $15,208
6/30/1999 $25,811 $15,595
9/30/1999 $26,843 $16,279
11/30/1999 $34,113 $17,476
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The MSCI
EAFE Index is provided for comparison in each graph. International Discovery's
total returns include operating expenses (such as transaction costs and
management fees) that reduce returns, while the total returns of the MSCI EAFE
Index do not. The graphs are based on Investor Class shares only; performance
for other classes will vary due to differences in fee structures (see the Total
Returns table above). Past performance does not guarantee future results.
Investment return and principal value will fluctuate, and redemption value may
be more or less than original cost.
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING NOVEMBER 30)
[data shown in bar chart]
International MSCI EAFE Index
Date Discovery Return Return
11/30/1994 7.80% 3.49%
11/30/1995 5.75% 7.57%
11/30/1996 34.06% 11.76%
11/30/1997 17.76% -0.40%
11/30/1998 14.79% 16.45%
11/30/1999 65.12% 21.10%
* From 4/1/94 to 11/30/94.
12 1-800-345-2021
International Discovery--Q&A
--------------------------------------------------------------------------------
[photo of Brian Brady, Henrik Strabo, Mark Kopinski]
An interview with Brian Brady, Henrik Strabo, and Mark Kopinski, portfolio
managers on the International Discovery team.
HOW DID INTERNATIONAL DISCOVERY PERFORM FOR THE 12 MONTHS ENDED NOVEMBER 30,
1999?
International Discovery had a great year. The fund gained 65.12%--more than
three times the 21.10% increase posted by its benchmark, the Morgan Stanley
Capital International EAFE Index.* The fund also performed above its peers. The
average international small-cap fund tracked by Lipper Inc. gained 57.88% for
the period.
International Discovery also has rewarded long-term investors. The fund
has an average annual return for the last five years of 25.91%, versus 14.82%
for the average international small-cap fund and 11.05% for the EAFE Index.
WHICH INDUSTRIES OR STOCKS CONTRIBUTED THE MOST TO RETURNS?
International Discovery's best-performing stock was a Japanese clothing
firm, Fast Retailing. A newcomer to the portfolio, Fast Retailing makes and
sells its own line of low-priced casual clothes. The company's recent decision
to stop selling other apparel makers' clothes and design its own brand led to
record profits in 1999.
Satyam Computer Services Limited was another bright spot. Until recently,
this Indian software company was concentrating on helping companies around the
world prepare their computer systems for Year 2000. With revenues from its Y2K
work beginning to slow, Satyam has transformed itself into an Internet service
provider and is India's first Internet company that isn't connected in some way
to the government.
The Internet is the major force behind corporate ad spending here and
abroad. Companies that initially advertised their Web sites in the United States
are now doing the same in Europe. Havas Advertising, Europe's largest
advertising company and International Discovery's third-largest holding, also
contributed to results. A French firm, Havas, derives about a third of its
revenues from clients in the United States, where 75% of the world's
multinational firms are headquartered.
JAPAN IS NOW YOUR LARGEST COUNTRY WEIGHTING. WHAT ARE THE CHANGES OCCURRING IN
JAPAN'S CORPORATE CULTURE?
A spirit of entrepreneurialism is taking hold in corporate Japan,
especially among smaller companies involved in high-technology pursuits. Across
Japanese industry, firms are reinventing themselves. This "creative
destruction" is very positive. Companies are shedding the traditional,
bureaucracy-filled ways of doing business, which no longer fit an
information-based, Internet-wired global economy. Japanese executives we talk
with are outlining dramatic, exciting business strategies--and they're taking
action.
* All fund returns referenced in this interview are for Investor Class shares.
[right margin]
"ACROSS JAPANESE INDUSTRY, FIRMS ARE REINVENTING THEMSELVES. THIS 'CREATIVE
DESTRUCTION' IS VERY POSITIVE."
PORTFOLIO AT A GLANCE
11/30/99 11/30/98
NO. OF COMPANIES 168 176
MEDIAN MARKET $1.1 $593
CAPITALIZATION BILLION MILLION
PORTFOLIO TURNOVER 110% 178%
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.55% 1.64%
Investment terms are defined in the Glossary on pages 63-64.
www.americancentury.com 13
International Discovery--Q&A
--------------------------------------------------------------------------------
(Continued)
HOW ABOUT EUROPE? WHAT FACTORS THERE CONTRIBUTED TO RESULTS?
We've been taking advantage of a growing economic trend in Europe--what we
call "quiet privatization." Over the past several years, services
traditionally provided by government agencies, such as telephone service,
transportation, or utilities, have been farmed out to corporations. Continuing
that theme, the public sector is quietly outsourcing white-collar administrative
activities, such as human resources, payroll, or data processing. Take the
United Kingdom, for example. Today, 15% of local governments in the UK have
turned to private firms for support services.
Incidentally, perhaps the ultimate in outsourcing is occurring in the area
of financial services. In the past, most Europeans could look to their
governments to provide cradle-to-grave financial security. That equation is
changing as a result of demographics (older people leaving the workforce) and
greatly reduced social spending. Faced with funding their own retirements,
millions of Europeans are turning to financial services firms for help.
That's good news for our largest holding, Marschollek, Lautenschlaeger und
Partner (MLP), the largest independent insurance broker in Germany. The firm is
benefiting greatly as state-run pension plans give way to privately funded
vehicles, such as mutual funds, annuities, and 401(k)-type investments. MLP has
a unique distribution system. The company hires professionals--doctors,
dentists, engineers, lawyers--right out of school, who end up selling financial
services to their former classmates. MLP has been a great stock for
International Discovery--we've owned it since 1994. Marschollek's shares fell
during the first half of the year, amid concerns about controversial tax
reforms, even though the firm was delivering strong results. Our research
convinced us to hold the stock, and it gained 72% for the last six months of the
period.
WERE THERE SPECIFIC INVESTMENT THEMES THAT PROPELLED THE BEST-PERFORMING STOCKS
OR SECTORS?
One theme that helped the fund was telecommunications, particularly
wireless service, Internet and data services, and communications equipment.
Anyone walking through an airport in Asia or Europe recently would have
seen--and heard--the exploding demand for cellular service overseas. It seems as
if everyone has a portable handset to their ear. Around the world, more than 450
million people have cell phones; in three years, the number is expected to reach
one billion. By that time, another walk through an overseas airport may find
more people looking at their portable phones than speaking into them. New
technology is turning portable phones into computers, giving users the ability
to send and receive data--words and pictures--over wireless networks. In many
countries, it is cell phones, not PCs, that people are using to access the
Internet.
WHICH STOCKS PERFORMED BELOW YOUR EXPECTATIONS?
We were disappointed by Open Text Corporation, a Canadian company that
makes intranet and Internet software for businesses. Its flagship product
enables users to search intranets, and manage documents and workflow. The firm's
revenues apparently slowed as a result of clients delaying their spending on
[left margin]
TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
MARSCHOLLEK,
LAUTENSCHLAEGER UND
PARTNER AG 3.6% 3.4%
ESAT TELECOM GROUP
PLC ADR 2.6% 2.0%
HAVAS ADVERTISING SA 2.5% 1.9%
EPCOS AG 2.3% --
FAST RETAILING CO. LTD. 2.0% 0.2%
CGI GROUP, INC. 1.8% 2.4%
UNITEDGLOBALCOM CL A 1.5% 2.0%
SATYAM COMPUTER 1.5% 0.8%
GRUPPO EDITORIALE
L'ESPRESSO 1.4% 1.0%
EIDOS PLC 1.4% 0.4%
TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
INFORMATION SERVICES 12.7% 16.1%
MEDIA 10.3% 8.0%
COMPUTER SOFTWARE 9.1% 3.5%
SEMICONDUCTOR 7.6% 2.7%
ELECTRICAL EQUIPMENT 5.7% 1.8%
14 1-800-345-2021
International Discovery--Q&A
--------------------------------------------------------------------------------
(Continued)
software until after Year 2000, but we thought increased competition was also a
factor. We sold the stock.
WHAT'S YOUR OUTLOOK AS WE ENTER 2000?
These are exciting times for international common stock investors. We have
more growth stocks to choose from than we did just a few years ago. In Europe,
we're seeing a whole new equity culture take shape, driven by deregulation of
growth industries and a wave of entreprenuerialism made possible by
privatization. The growth in the number of companies listed on Germany's Neuer
Markt Exchange is a prime example of this. In Japan and Asia, corporations are
also viewing equity with more respect, and banking reform and corporate
restructurings are renewing investor confidence in those markets. We are eagerly
awaiting the development of new exchanges for smaller, fast-growing companies,
such as MOTHERS and Japan NASDAQ. Framing all this is information technology, in
the form of the Internet, which is quickly removing the barriers to global
competition, as it brings opportunities--especially for smaller companies--for
products and services that would never have been thought of only a few years
ago. We think this is a great setting for an investment approach like ours,
which seeks successful, growing companies.
[right margin]
TYPES OF INVESTMENTS IN THE PORTFOLIO
AS OF NOVEMBER 30, 1999
[data shown in pie chart]
Common Stocks 92.6%
Preferred Stocks & Rights 4.9%
Temporary Cash Investments 2.5%
AS OF MAY 31, 1999
[data shown in pie chart]
Common Stocks 86.6%
Preferred Stocks 5.4%
Temporary Cash Investments 8.0%
INTERNATIONAL DISCOVERY'S INVESTMENTS BY COUNTRY
[data shown in bar chart]
11/30/99 5/31/99
Japan 14.7% 6.5%
U.K. 13.6% 9.0%
Germany 13.4% 7.5%
France 9.0% 5.1%
United States* 7.2% 16.3%
Canada 6.0% 6.4%
Switzerland 4.9% 4.3%
Netherlands 4.3% 6.3%
Italy 4.1% 4.1%
Other 22.8% 34.5%
*Includes temporary cash investments.
www.americancentury.com 15
International Discovery--Schedule of Investments
--------------------------------------------------------------------------------
This schedule lists all investments owned by the fund, as well as each
security's market value, as of the last day of the reporting period. The
securities are grouped by asset class (such as common stocks, corporate bonds,
temporary cash investments, as applicable), and some asset classes are further
broken down by industry or country.
NOTE: For securities denominated in foreign currencies, the market value is
translated into U.S. dollars based on exchange rates as of the last day of the
reporting period.
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS - 92.6%
AUSTRALIA - 0.5%
1,812,000 Computershare Limited $ 8,235,340
------------------
(computer software)
BELGIUM - 0.6%
91,470 Telinfo NV 9,678,779
(information services)
7,831 Telinfo NV-STRIPS 79
------------------
(information services)
9,678,858
------------------
CANADA - 6.0%
116,300 Biovail Corp. International(1) 8,090,119
(drugs)
316,800 Celestica Inc. New York Shares(1) 22,255,200
(semiconductor)
1,084,700 CGI Group, Inc.(1) 27,890,183
(information services)
263,800 Dorel Industries Inc. Cl B(1) 4,205,767
(consumer durables)
217,300 Penn West Petroleum Ltd.(1) 4,348,948
(energy reserves & production)
474,900 QLT PhotoTherapeutics Inc.(1) 21,264,179
(drugs)
644,500 St. Laurent Paperboard Inc.
(Acquired 6/11/99-11/25/99,
Cost $8,150,574)(1)(2) 7,586,211
------------------
(forest products & paper)
95,640,607
------------------
DENMARK - 1.6%
67,900 Falck A/S 6,758,186
(industrial services)
113,695 Vestas Wind Systems A/S(1) 18,013,589
------------------
(heavy machinery)
24,771,775
----------------
EGYPT - 0.8%
390,319 Egyptian Mobile Phone Network(1) 13,321,448
----------------
(wireless telecommunications)
FINLAND - 0.7%
252,105 Data Fellows Oyj(1) 6,186,332
(computer software)
219,346 Talentum Oyj 4,199,873
----------------
(media)
10,386,205
----------------
Shares Value
-------------------------------------------------------------------------------
FRANCE - 9.0%
23,645 Altran Technologies $ 11,258,848
(information services)
50,500 Business Objects S.A. ADR(1) 4,444,000
(computer software)
87,190 Clarins 8,742,639
(home products)
41,928 FI System(1) 9,506,912
(information services)
88,925 Galeries Lafayette 13,558,624
(department stores)
210,659 GFI Informatique 21,993,411
(information services)
103,801 Havas Advertising SA 39,331,652
(media)
116,100 Integra-Net SA(1) 11,348,978
(information services)
312,136 Neopost SA(1) 12,896,757
(heavy machinery)
20,149 NRJ SA 9,198,235
------------------
(media)
142,280,056
------------------
GERMANY - 8.9%
42,106 ADVA AG Optical Networking(1) 5,728,363
(electrical equipment)
46,769 Aixtron AG 6,426,846
(semiconductor)
220,570 Dialog Semiconductor plc(1) 14,003,603
(semiconductor)
99,170 DIS Deutscher Industrie Service AG 7,495,393
(industrial services)
145,222 ELMOS Semiconductor AG(1) 4,170,903
(semiconductor)
571,521 Epcos AG(1) 35,708,918
(semiconductor)
52,618 Fantastic Corp.(1) 6,363,095
(computer software)
20,571 Heyde AG Beratung Software(1) 1,699,895
(computer software)
64,671 Intershop Communications AG(1) 12,902,140
(computer software)
145,733 Kamps AG 10,104,135
(food & beverage)
99,232 Kamps AG New Shares(1) 6,510,068
(food & beverage)
123,363 PrimaCom AG(1) 5,625,438
(media)
232,046 SCM Microsystems, Inc.(1) 13,948,816
(electrical equipment)
16 1-800-345-2021 See Notes to Financial Statements
International Discovery--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
122,834 Software AG(1) $ 7,420,969
(computer software)
53,026 Tecis Holding AG(1) 2,244,352
------------------
(financial services)
140,352,934
------------------
GREECE - 2.1%
36,760 Alpha Finance S.A. 3,120,717
(financial services)
96,100 Alpha Leasing, S.A. 4,979,275
(financial services)
296,670 Delta Informatics S.A. 7,813,089
(information services)
195,620 Folli-Follie Abee 9,506,015
(specialty stores)
218,500 Maillis 7,871,279
------------------
(industrial parts)
33,290,375
------------------
INDIA - 1.8%
9,900 Corporation Bank 26,401
(banks)
12,818 Hero Honda Motors Ltd. 320,856
(motor vehicles & parts)
146 Larsen & Toubro Ltd. 1,319
(heavy machinery)
1,125 NIIT Limited 60,909
(information services)
197,382 Pentafour Software & Exports Ltd. 3,946,503
(information services)
550,000 Satyam Computer 24,303,652
------------------
(information services)
28,659,640
------------------
IRELAND - 3.1%
1,744,601 Anglo Irish Bank Corp. plc 4,138,695
(banks)
629,700 Esat Telecom Group PLC ADR(1) 40,950,178
(wireless telecommuncations)
88,000 Ryanair Holdings plc ADR(1) 4,339,500
------------------
(airlines)
49,428,373
------------------
ISRAEL - 1.0%
170,600 Orbotech Ltd.(1) 15,652,550
------------------
(electrical equipment)
ITALY - 4.1%
216,225 Banca Popolare Commercio
e Industria 5,316,778
(banks)
43,514 Banca Popolare Commercio
e Industria New 99(1) 1,009,017
(banks)
242,310 Bipop-Carire SPA 12,209,395
(banks)
772,759 Buffetti SpA 6,993,156
(specialty stores)
804,772 Gruppo Editoriale L'Espresso 22,708,252
(media)
Shares Value
--------------------------------------------------------------------------------
1,650,600 Premafin(1) $ 856,647
(property & casualty insurance)
93,845 Tiscali SpA(1) 15,065,367
------------------
(internet)
64,158,612
------------------
JAPAN - 14.7%
26,000 Alpha Systems Inc. 4,644,680
(electrical equipment)
4,600 Bellsystem 24, Inc. 5,282,686
(information services)
44,500 Benesse Corporation 10,692,580
(industrial services)
54,500 Data Communication System Co. 6,686,788
(information services)
62,000 Diamond Computer Service Co. 1,524,441
(information services)
16,400 Don Quijote Co., Ltd. 4,040,440
(specialty stores)
54,200 Doutor Coffee Co., Ltd. 5,798,783
(specialty stores)
40,217 Fancl Corp. 14,289,904
(specialty stores)
83,600 Fast Retailing Co. Ltd. 31,181,782
(department stores)
9,400 Fuji Seal, Inc. 572,046
(chemicals)
266,000 Fujitsu Devices Inc. 10,365,332
(semiconductor)
257,000 Fuso Lexel Inc. 4,111,798
(construction & real property)
163,500 Homac 4,782,391
(specialty stores)
400,000 Ichiyoshi Securities Co., Ltd. 2,398,901
(financial services)
86,000 Mandom 2,447,978
(specialty stores)
493,000 Marusan Securities Co., Ltd. 3,290,538
(financial services)
250,000 Mimasu Semiconductor Industry
Co., Ltd. 5,042,697
(semiconductor)
7 Mobilephone Telecommunications
International Ltd. 5,324,892
(specialty stores)
53,100 Mycal Card Inc. 2,553,887
(financial services)
95,000 Nitori Co. 3,869,749
(department stores)
24,600 Otsuka Kagu Limited 7,702,591
(specialty stores)
174,000 Pasona Softbank, Inc. 18,616,019
(industrial services)
631 Round One Corp. 11,148,410
(leisure)
366,000 Shibaura Mechatronics Corp. 4,724,087
(electrical equipment)
141,100 Shinkawa Ltd. 4,584,227
(semiconductor)
See Notes to Financial Statements www.americancentury.com 17
International Discovery--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
76,000 Skylark Co., Ltd. $ 1,656,066
(restaurants)
54,000 Sumisho Computer Systems Corp. 4,028,269
(information services)
238,400 Sunkus & Associates Inc. 14,508,049
(specialty stores)
48,700 Techno Quartz Inc.(1) 1,438,820
(semiconductor)
36,000 TOUEI HOUSING CORP.(1) 1,007,067
(equity real estate investment trust)
40,000 UNION TOOL CO. 4,632,901
(electrical equipment)
60,000 Venture Link Co. Limited 6,065,960
(multi-industry)
154,000 Yamada Denki 15,871,614
(specialty stores)
99,600 Yushin Precision Equipment Co., Ltd. 7,820,966
------------------
(electrical equipment)
232,707,339
------------------
LIECHTENSTEIN - 0.3%
1,170 Verwaltungs-und Privat-Bank AG 4,781,816
------------------
(banks)
NETHERLANDS - 4.3%
252,475 Athlon Groep N.V. 5,152,242
(motor vehicles & parts)
251,783 Computer Services Solutions
Holding NV 4,719,458
(information services)
193,220 Exact Holding NV(1) 9,346,438
(computer software)
276,017 Fox Kids Europe NV(1) 3,769,016
(media)
90,300 Fugro N.V. 3,626,343
(oil services)
205,630 IHC Caland N.V. 7,957,387
(heavy machinery)
204,889 Kempen & Company NV 7,949,360
(securities & asset management)
55,740 OpenTV Corp.(1) 4,307,657
(computer software)
94,600 QIAGEN N.V.(1) 6,320,462
(drugs)
183,553 Unique International NV 4,245,189
(industrial services)
349,082 Versatel Telecom International NV(1) 9,850,047
------------------
(telephone)
67,243,599
------------------
NORWAY - 0.7%
490,900 Tandberg ASA(1) 10,952,971
------------------
(computer hardware &
business machines)
PEOPLES REPUBLIC OF CHINA - 0.1%
2,434,912 Eastern Communications
Co., Ltd. Cl B 1,543,734
------------------
(electrical equipment)
Shares Value
--------------------------------------------------------------------------------
POLAND - 0.3%
156,316 Softbank S.A. GDR $ 5,041,191
------------------
(computer software)
PORTUGAL - 2.2%
360,100 Companhia de Seguros Mundial
Confianca, SA(1) 18,961,043
(life & health insurance)
692,200 Portucel Industrial-Empresa
Produtora de Celulose, SA 4,652,756
(forest products & paper)
297,638 PT MULTIMEDIA(1) 11,733,836
------------------
(internet)
35,347,635
------------------
SINGAPORE - 1.5%
3,385,000 Datacraft Asia Limited 16,383,400
(information services)
1,512,800 Keppel Bank 3,077,797
(banks)
908,000 Sembcorp Logistics Limited(1) 3,538,013
------------------
(industrial services)
22,999,210
------------------
SOUTH AFRICA - 0.1%
654,025 Ixchange Technology Holdings
Limited(1) 1,746,749
------------------
(computer software)
SOUTH KOREA - 1.2%
28,528 Dacom Corp. 7,136,614
(telephone)
109,800 Shinsegae Department Store Co. 6,772,223
(department stores)
203,620 Telson Electronics Co. Ltd.(1) 5,181,617
------------------
(electrical equipment)
19,090,454
------------------
SPAIN - 0.6%
739,400 NH Hoteles S.A.(1) 8,814,892
------------------
(hotels)
SWEDEN - 2.7%
157,787 Connecta AB(1) 5,082,245
(information services)
61,159 Effnet Group AB(1) 1,955,524
(electrical equipment)
157,800 IBS AB(1) 3,134,927
(information services)
39,030 Icon Medialab International AB(1) 4,243,987
(information services)
1,040,952 Mandator AB 9,605,813
(information services)
454,212 Modern Times Group MTG AB Cl B(1) 15,110,499
(media)
297,322 Sigma AB Cl B 3,320,354
------------------
(information services)
42,453,349
------------------
18 1-800-345-2021 See Notes to Financial Statements
International Discovery--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
SWITZERLAND - 4.9%
1,065 Bank Sarasin & Cie Cl B $ 1,895,089
(banks)
2,822 Disetronic Holding AG 12,101,383
(medical products & supplies)
109,726 Gretag Imaging Group 13,660,556
(semiconductor)
2,905 Kudelski SA(1) 13,407,130
(electrical equipment)
28,100 Logitech International S.A.(1) 6,555,018
(computer hardware &
business machines)
18,790 PubliGroupe S.A. 17,485,664
(media)
38,000 Swisslog Holding AG 6,753,305
(industrial parts)
3,630 Vontobel Holding AG Cl B 6,071,303
------------------
(securities & asset management)
77,929,448
------------------
THAILAND - 0.5%
5,541,500 Industrial Finance Corporation
of Thailand (The)(1) 2,415,216
(financial services)
777,000 Shin Corporations Public Co.,
Limited(1) 4,940,290
------------------
(wireless telecommunications)
7,355,506
------------------
UNITED KINGDOM - 13.6%
1,038,550 Atlantic Telecom Group PLC(1) 12,111,310
(wireless telecommunications)
260,599 Baltimore Technologies plc(1) 12,166,569
(computer software)
525,000 Capital Radio plc 11,406,150
(media)
314,600 Cobham PLC 3,666,274
(defense/aerospace)
253,800 Eidos plc(1) 22,494,116
(computer software)
483,991 Fibernet Group plc(1) 9,664,695
(telephone)
377,300 Go-Ahead Group PLC (The) 3,489,846
(railroads)
822,800 Iceland Group Plc 3,036,317
(grocery stores)
564,100 Independent Energy Holdings plc
ADR(1) 15,248,328
(electrical utilities)
1,632,900 J.D. Wetherspoon plc 10,447,274
(restaurants)
886,159 Kingston Communication (Hull) PLC(1) 9,916,551
(telephone)
104,714 London Bridge Software Holdings plc 7,452,351
(computer software)
1,019,800 Man (E D & F) Group plc 6,703,872
(financial services)
175,833 Matalan PLC 3,911,438
(department stores)
144,600 NDS Group plc ADR(1) 4,328,962
(computer software)
Shares Value
--------------------------------------------------------------------------------
602,727 NXT plc(1) $ 12,661,561
(electrical equipment)
984,850 Parity plc 4,224,305
(information services)
485,800 Psion plc 19,898,319
(computer hardware &
business machines)
3,043,738 Saatchi & Saatchi plc 14,878,857
(media)
143,200 Sage Group plc (The) 9,907,682
(computer software)
1,253,900 Shire Pharmaceuticals Group PLC(1) 13,390,759
(drugs)
257,100 Trafficmaster plc(1) 3,727,259
------------------
(electrical equipment)
214,732,795
------------------
UNITED STATES - 4.7%
538,700 Amdocs Ltd.(1) 18,955,506
(computer software)
571,300 Global TeleSystems Group, Inc.(1) 18,245,894
(telephone)
25,700 SCM Microsystems, Inc.(1) 1,615,888
(electrical equipment)
234,100 UnitedGlobalCom Cl A(1) 24,382,978
(telephone)
281,900 Viatel, Inc.(1) 11,769,326
------------------
(telephone)
74,969,592
------------------
TOTAL COMMON STOCKS 1,463,567,053
------------------
(Cost $866,721,935)
PREFERRED STOCKS & RIGHTS - 4.9%
BRAZIL - 0.4%
1,543,000 Usinas Siderurgicas de Minas
Gerais S.A. Cl A 6,531,472
------------------
(mining & metals)
GERMANY - 4.5%
22,400 Fielmann AG 702,039
(specialty stores)
196,490 Marschollek, Lautenschlaeger und
Partner AG 57,027,686
(financial services)
4,700 Porsche AG 12,622,573
------------------
(motor vehicles & parts)
70,352,298
------------------
SOUTH KOREA(3)
18,651 Shinsegae Department Store
Co. Rights(1) 719,172
------------------
(department store)
TOTAL PREFERRED STOCKS & RIGHTS 77,602,942
------------------
(Cost $18,959,218)
See Notes to Financial Statements www.americancentury.com 19
International Discovery--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Value
--------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS - 2.5%
Repurchase Agreement, Morgan Stanley Group,
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.57%, dated 11/30/99,
due 12/1/99 (Delivery value $39,106,050) $ 39,100,000
------------------
(Cost $39,100,000)
TOTAL INVESTMENT SECURITIES - 100.0% $1,580,269,995
==================
(Cost $924,781,153)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain
------------------------------------------------------------------------------
27,630,559 EURO 12/30/99 $27,912,778 $54,045
================================
(Value on Settlement Date $27,966,823)
Forward foreign currency exchange contracts are designed to protect the fund's
foreign investments against declines in foreign currencies (also known as
hedging). The contracts are called "forward" because they allow the
fund to exchange a foreign currency for U.S. dollars on a specific date in the
future--and at a prearranged exchange rate.
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
(1) Non-income producing.
(2) Security was purchased under Rule 144A of the Securities Act of 1933 and,
unless registered under the Act or exempted from registration, may only be
sold to qualified institutional investors. The aggregate value of
restricted securities at November 30, 1999, was $7,586,211 which
represented 0.5% of net assets.
(3) Country is less than 0.05% of total investment securities.
20 1-800-345-2021 See Notes to Financial Statements
Emerging Markets--Performance
--------------------------------------------------------------------------------
TOTAL RETURNS AS OF NOVEMBER 30, 1999
INVESTOR CLASS ADVISOR CLASS INSTITUTIONAL CLASS
(INCEPTION 9/30/97) (INCEPTION 5/12/99) (INCEPTION 1/28/99)
EMERGING EMERGING EMERGING
MARKETS MSCI EMF MARKETS MSCI EMF MARKETS MSCI EMF
6 MONTHS(1) 29.79% 17.53% 29.56% 17.53% 30.02% 17.53%
1 YEAR 61.03% 45.49% -- -- -- --
--------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
LIFE OF FUND 5.54% -4.29% 26.35%(1) 17.53%(2) 66.08%(1) 50.05%(3)
(1) Returns for periods less than one year are not annualized.
(2) Since 5/31/99, the date nearest the class's inception for which data are
available.
(3) Since 1/31/99, the date nearest the class's inception for which data are
available.
See pages 60-63 for information about share classes, the MSCI Emerging Markets
Free Index and returns.
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/99
Emerging Markets $11,240
MSCI EMF $9,093
$10,000 investment made 9/30/97
[data shown in mountain chart]
Emerging Markets MSCI EMF Index
Date Value Value
9/30/1997 $10,000 $10,000
10/31/1997 $8,480 $8,359
11/30/1997 $8,300 $8,054
12/31/1997 $8,360 $8,248
1/31/1998 $7,800 $7,601
2/28/1998 $8,700 $8,395
3/31/1998 $9,060 $8,759
4/30/1998 $9,400 $8,664
5/31/1998 $8,500 $7,477
6/30/1998 $7,800 $6,693
7/31/1998 $8,320 $6,905
8/31/1998 $6,001 $4,909
9/30/1998 $5,880 $5,220
10/31/1998 $6,500 $5,769
11/30/1998 $6,980 $6,249
12/31/1998 $6,780 $6,159
1/31/1999 $6,799 $6,060
2/28/1999 $6,640 $6,118
3/31/1999 $7,440 $6,925
4/30/1999 $8,539 $7,781
5/31/1999 $8,660 $7,736
6/30/1999 $9,759 $8,614
7/31/1999 $9,479 $8,380
8/31/1999 $9,559 $8,456
9/30/1999 $9,379 $8,170
10/31/1999 $9,879 $8,344
11/30/1999 $11,240 $9,093
The graph at left shows the growth of a $10,000 investment over the life of the
fund, while the graph below shows the fund's year-by-year performance. The MSCI
Emerging Markets Free Index is provided for comparison in each graph. Emerging
Market's total returns include operating expenses (such as transaction costs and
management fees) that reduce returns, while the total returns of the MSCI
Emerging Markets Free Index do not. The graphs are based on Investor Class
shares only; performance for other classes will vary due to differences in fee
structures (see the Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDING NOVEMBER 30)
[data shown in bar chart]
Emerging Markets MSCI EMF Index
Date Return Return
11/30/1997 -17.00% -19.46%
11/30/1998 -15.90% -22.42%
11/30/1999 61.03% 45.49%
* From 9/30/97 to 11/30/97.
www.americancentury.com 21
Emerging Markets--Q&A
--------------------------------------------------------------------------------
[photo of Mark Kopinski and Michael Donnelly]
An interview with Mark Kopinski and Michael Donnelly, portfolio managers on
the Emerging Markets team.
HOW DID EMERGING MARKETS PERFORM IN FISCAL 1999?
Emerging Markets gained 61.03% for the twelve months ended November 30,
1999, handily beating its benchmark index, the Morgan Stanley Capital
International (MSCI) Emerging Markets Free Index, which rose 45.49%.(1) Emerging
Markets also outpaced the average emerging markets fund tracked by Lipper Inc.,
which was up 42.36%.
In fiscal 1999, the performance of developing capital markets was far
better than it was in fiscal 1998 when the MSCI Emerging Markets Free Index lost
22.42%. Emerging Markets lost considerably less; however, declining 15.90% in
fiscal 1998. That placed the fund in the top 10% of its Lipper peer group for
the year--13th out of the 152 emerging markets funds Lipper tracked.(2)
Emerging Markets' performance has been very competitive over its brief life
as well, especially compared to its Lipper peers. Since its inception on
September 30, 1997, through November 30, 1999, the fund has had an average
annual return of 5.54%. The average Lipper peer lost 6.93%, and the MSCI
Emerging Markets Free Index was down 4.29% during the same period. The fund's
returns were good enough to rank it number one for the period out of the 143
emerging markets funds tracked by Lipper.
HAS THE PORTFOLIO'S BROAD DIVERSIFICATION HELPED?
Yes, it has. The fund typically has broad-based regional exposure to Asia,
Latin America, and emerging Europe and Africa. It holds about 100-120 stocks,
which we feel helps keep volatility down. However, the 10 largest holdings
occupy about 20% of the portfolio because we tend to give our successes a
greater weight in the portfolio. For example, seven of the top ten holdings were
also among our best contributors to performance.
WHAT WERE THE MAJOR EVENTS IN FISCAL 1999?
One event in emerging markets this past 12 months was the recovery in Asia.
Many of the major macro-economic fundamentals stabilized, which in turn helped
support local currencies and brought about the return of foreign investment and
economic growth.
We identified a number of opportunities in technology in Taiwan, Singapore,
and South Korea. On the subcontinent, India was interesting, especially in the
software and Internet areas. Companies in emerging markets are being affected by
technology in much the same way as companies in the United States.
Another event was the turnaround in commodity prices. Commodity prices have
been severely depressed since mid-1997, but with the Asian recovery and the
coordinated economic growth that's occurring worldwide, prices have started to
turn higher. Producers of raw materials and basic industries such as steel
should be the beneficiaries. The portfolio had significant exposure to basic
industry, commodity and natural resource stocks.
(1) All fund returns referenced in this interview are for Investor Class shares
(2) Lipper rankings are based on average annual total returns.
[left margin]
"COMPANIES IN EMERGING MARKETS ARE BEING AFFECTED BY TECHNOLOGY IN MUCH THE
SAME WAY AS COMPANIES IN THE UNITED STATES."
PORTFOLIO AT A GLANCE
11/30/99 11/30/98
NO. OF COMPANIES 120 121
MEDIAN MARKET $1.19 $658
CAPITALIZATION BILLION MILLION
PORTFOLIO TURNOVER 168% 270%
EXPENSE RATIO (FOR
INVESTOR CLASS) 2.00% 2.00%
Investment terms are defined in the Glossary on pages 63-64.
22 1-800-345-2021
Emerging Markets--Q&A
--------------------------------------------------------------------------------
(Continued)
BASIC INDUSTRY AND COMPANIES THAT PRODUCE RAW MATERIALS ARE USUALLY CONSIDERED
CYCLICAL STOCKS. THEY NEED HELP FROM A STRONG ECONOMIC CYCLE TO GROW REVENUE AND
EARNINGS. HOW DO THEY FIT YOUR GROWTH DISCIPLINE?
If a company can demonstrate sustainable revenue and earnings growth, then
it is a candidate for the portfolio. We believe coordinated global economic
growth will help these companies. But many of them are experiencing exciting
changes at the corporate level as well.
Petrobras, for example, is the national oil company of Brazil. The company
is currently partially privatized (a portion has been sold to the public) and we
are confident it will be completely privatized. In the meantime, Petrobras is
restructuring to become more efficient and profitable, and this is already
showing up in stronger earnings and upgrades to earnings estimates.
Besides Petrobras, the fund held steel producers Usiminas and Companhia
Siderurgica (CSN). They both produce flat and galvanized steel, and are
benefiting from the recovery of the local economy, especially the auto and
appliance industries, and from foreign demand as well.
We also own stocks of platinum mines in South Africa--Impala Platinum is an
example--and energy companies like Lukoil and Surgutneftegaz, two major Russian
producers. Once again, most of these companies are showing earnings growth due
to significantly improved prices for their products.
LET'S TURN TO THE TECHNOLOGY AND TELECOMMUNICATIONS SECTORS, WHERE EMERGING
MARKETS HAS SUBSTANTIAL EXPOSURE.
Telecommunications and technology are very exciting areas internationally.
Demand for cellular services is exploding and many markets are underpenetrated
(have relatively few users), and have less than reliable fixed-line
infrastructures, so there is huge potential in countries like China and Egypt,
to name only two.
One of our largest positions and best contributors was China Telecom (Hong
Kong), which is a subsidiary of the major telecommunications company in China.
The parent company resembles AT&T before the breakup. China Telecom (HK) has
a significant share of the cellular services business. Cellular subscriber
growth is off the charts, and China Telecom (HK)'s earnings are growing at
30-40% per year. Less than 5% of the population of mainland China has cell
phones, and the fixed-line infrastructure is poorly-equipped so the market
potential is enormous.
Egyptian Mobile Phone Network is a similar story. The penetration rate in
Egypt is about 10%. Subscriber growth is averaging roughly 50% per quarter, and
the company continues to beat the most optimistic revenue and earnings
estimates.
WHAT ABOUT THE INTERNET? IS IT REVOLUTIONIZING COMMERCE IN EMERGING ECONOMIES
COMPARABLY TO IN THE UNITED STATES AND EUROPE?
Not to the same extent at present, but the potential is definitely there.
Some foreign Internet stocks are already beginning to behave like the
".com" stocks in the United States. Satyam Infoway is one of the most
dramatic examples we've seen to date--it was the largest contributor to
performance by year-end. The company, an Internet Service Provider (ISP), has an
Indian portal, and develops Internet solutions for business. Recently Satyam
purchased Indiaworld, a provider of Internet services to Indians living abroad,
and the stock began to
[right margin]
TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
CHINA TELECOM
(HONG KONG) LTD. 3.0% --
PETROLEO BRASILEIRO S.A. 2.1% 1.9%
SAMSUNG ELECTRONICS 2.1% 0.4%
EGYPTIAN MOBILE
PHONE NETWORK 1.9% 2.1%
AUDIOCODES LTD. 1.8% 0.3%
DATATEC LIMITED 1.8% 0.8%
SATYAM INFOWAY
LIMITED ADR 1.8% --
GRUPO TELEVISA S.A.
GDR 1.7% 1.5%
FOLLI-FOLLIE ABEE 1.7% 0.6%
TAIWAN SEMICONDUCTOR
MANUFACTURING CO.
LTD. ADR 1.7% 1.5%
TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
WIRELESS
TELECOMMUNICATIONS 10.6% 10.8%
MINING & METALS 8.8% 5.0%
BANKS 6.7% 9.4%
SEMICONDUCTOR 6.3% 2.4%
COMPUTER SOFTWARE 6.0% 2.7%
www.americancentury.com 23
Emerging Markets--Q&A
--------------------------------------------------------------------------------
(Continued)
attract more international attention. India is becoming a strong player in the
global technology explosion. As India's telecommunications infrastructure
strengthens, more people will access the Internet.
WHAT ARE SOME OF THE OTHER STOCKS REPRESENTING TECHNOLOGY AND TELECOMMUNICATIONS
INDUSTRIES IN THE PORTFOLIO?
One of our better contributors was AudioCodes, an Israeli company that
makes hardware and software that allow users to send voice over the Internet
fused with data and video, a technology known as voice over Internet protocol.
AudioCodes is a small company, but revenues and earnings are growing at over
200% annually.
Other large tech-related contributors included Samsung Electronics,
headquartered in Korea, and Taiwan Semiconductor. Samsung is the world's largest
maker of LCD screens (flat panel displays), and is set to grow significantly
over the next several years. Samsung's semiconductor and microchip business is
also extremely strong, but LCD's should be the best contributor to earnings
growth. Taiwan Semiconductor is a similar story. The company owns and operates
foundries in Asia and is benefiting from robust chip demand.
THERE WERE A NUMBER OF MAJOR EARTHQUAKES IN YOUR MARKETS THIS YEAR. DID THIS
AFFECT THE PORTFOLIO?
Not significantly. This year there were major earthquakes in three
countries where we had exposure: Taiwan, Turkey, and Greece. These were genuine
tragedies, but after knee-jerk corrections, the markets assessed the damage and
focused on the countries' long-term prospects, which remained very promising.
EMERGING MARKETS' RETURNS WERE VERY STRONG. WERE THERE ANY DISAPPOINTMENTS THIS
YEAR?
There is no such thing as a perfect portfolio, but stocks that didn't meet
our expectations were relatively few. After poor performance in the first half
of the year, Brazil bounced back in the second half. Our biggest drag on
performance was Hartwall, a Finnish brewer that has exposure to the Russian
market. We believe the fundamentals are still in place, so we're holding on. The
Russian economy, which had collapsed, has shown a few signs of picking up. The
younger generation is drinking more beer and fewer distilled spirits. Under the
Soviets, per capita beer consumption was about 30 liters per year. It's now just
under 20 liters per year, so there is ample room for the market to expand.
WHAT IS YOUR OUTLOOK FOR EMERGING MARKETS HEADING INTO 2000?
Barring an unforeseen political or economic upheaval, we believe sustained
global economic growth bodes well for emerging markets. The technology and
telecommunications revolution should also continue to provide good investment
opportunities worldwide. Whatever the market does, however, our investment
discipline of identifying individual companies with sustainable revenue and
earnings growth should continue to produce competitive returns.
[left margin]
TYPES OF INVESTMENTS IN THE PORTFOLIO
AS OF NOVEMBER 30, 1999
[data shown in pie chart]
Common Stocks, Rights & Warrants 92.1%
Preferred Stocks & Warrants 7.9%
AS OF MAY 31, 1999
[data shown in pie chart]
Common Stocks 90.5%
Preferred Stocks 9.5%
EMERGING MARKETS' INVESTMENTS BY COUNTRY
[data shown in bar chart]
11/30/99 5/31/99
Mexico 11.6% 12.3%
Brazil 10.5% 12.2%
South Africa 8.4% 5.5%
Hong Kong 7.3% 3.1%
India 7.1% 4.1%
Taiwan (Republic of China) 6.9% 6.5%
South Korea 6.3% 10.3%
Greece 5.0% 4.5%
Russian Federation 4.1% 4.3%
Singapore 4.1% 5.6%
Other 28.7% 31.6%
24 1-800-345-2021
Emerging Markets--Schedule of Investments
--------------------------------------------------------------------------------
This schedule lists all investments owned by the fund, as well as each
security's market value, as of the last day of the reporting period. The
securities are grouped by asset class (such as common stocks, corporate bonds,
temporary cash investments, as applicable), and some asset classes are further
broken down by industry or country.
NOTE: For securities denominated in foreign currencies, the market value is
translated into U.S. dollars based on exchange rates as of the last day of the
reporting period.
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS, RIGHTS & WARRANTS - 92.1%
ARGENTINA - 1.7%
132,000 Banco Rio de la Plata S.A. Cl B $ 838,334
(banks)
400,000 Siderca S.A.I.C. 800,120
------------------
(mining & metals)
1,638,454
------------------
BRAZIL - 2.9%
33,000 Aracruz Celulose S.A. ADR 672,375
(forest products & paper)
30,000,000 Companhia Siderurgica Nacional 1,029,641
(mining & metals)
60,000 Embratel Participacoes S.A. ADR 1,117,500
------------------
(telephone)
2,819,516
------------------
EGYPT - 3.5%
36,000 Al-Ahram Beverages Co. GDR
(Acquired 6/4/98-5/12/99,
Cost $580,760)(1)(2) 581,400
(food & beverage)
76,000 Commercial International Bank(1) 977,700
(banks)
53,628 Egyptian Mobile Phone Network(1) 1,830,304
------------------
(wireless telecommunications)
3,389,404
------------------
ESTONIA - 0.6%
95,000 Hansabank Ltd.(1) 569,788
------------------
(banks)
FINLAND - 0.7%
54,000 Hartwall Oyj Abp 681,320
------------------
(food & beverage)
GREECE - 5.0%
36,600 Delta Informatics S.A. 963,896
(information services)
33,705 Folli-Follie Abee 1,637,871
(specialty stores)
34,000 Lavipharm S.A. 452,923
(drugs)
32,850 Lavipharm S.A. Rights(1) 135,964
(drugs)
22,000 Maillis 792,532
(industrial parts)
8,000 Titan Cement Company S.A. 941,840
------------------
(construction & real property)
4,925,026
------------------
Shares Value
-------------------------------------------------------------------------------
HONG KONG - 7.3%
600,000 ASM Pacific Technology Limited $ 961,823
(semiconductor)
670,000 China Everbright Limited 500,354
(financial services)
550,000 China Telecom (Hong Kong) Ltd.(1) 2,953,068
(wireless telecommunications)
56,000 Hutchison Whampoa Limited 688,598
(multi-industry)
350,000 i-CABLE Communications Limited(1) 538,531
(media)
145,000 Johnson Electric Holdings Limited 1,036,181
(electrical equipment)
500,000 Pacific Century CyberWorks Limited(1) 428,121
------------------
(internet)
7,106,676
------------------
HUNGARY - 2.8%
17,000 BorsodChem Rt. 518,685
(chemicals)
33,500 North American Bus Industries Rt.(1) 638,241
(motor vehicles & parts)
18,000 Richter Gedeon Rt. 924,248
(drugs)
40,000 Tisza Vegyi Kombinat Rt 648,679
------------------
(chemicals)
2,729,853
------------------
INDIA - 7.1%
57,000 Gujarat Ambuja Cements Ltd. 751,158
(construction & real property)
1,805 Hero Honda Motors Ltd. 45,182
(motor vehicles & parts)
6,500 Infosys Technologies Limited 1,385,209
(information services)
89,995 Larsen & Toubro Ltd. 812,764
(heavy machinery)
450,000 National Aluminium Co. Ltd. 642,783
(mining & metals)
12,000 Pentafour Software & Exports Ltd. 239,931
(information services)
15,000 Satyam Infoway Limited ADR(1) 1,755,938
(internet)
20,000 Wipro Limited 585,186
(computer software)
5,000 Zee Telefilms Ltd. 786,954
------------------
(media)
7,005,105
------------------
INDONESIA - 0.2%
25,000 PT Telekomunikasi Indonesia ADR 210,938
------------------
(telephone)
See Notes to Financial Statements www.americancentury.com 25
Emerging Markets--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
ISRAEL - 4.4%
30,000 AudioCodes Ltd.(1) $ 1,786,875
(computer software)
2,000 Check Point Software
Technologies Ltd.(1) 283,375
(computer software)
11,000 Orbotech Ltd.(1) 1,009,250
(electrical equipment)
37,000 Partner Communications
Company Ltd. ADR(1) 694,906
(wireless telecommunications)
39,000 Point of Sale Ltd.(1) 533,812
------------------
(computer software)
4,308,218
------------------
MEXICO - 11.6%
60,000 Carso Global Telecom Cl A1(1) 475,796
(telephone)
223,841 Cemex SA de CV Cl A 1,093,066
(construction & real property)
330,000 Corporacion GEO, S.A.
de C.V. Series B(1) 1,121,019
(construction & real property)
364,972 Corporacion Interamericana
de Entretenimiento S.A. Cl B(1) 1,220,448
(entertainment)
230,000 Fomento Economico Mexica UBD 871,656
(food & beverage)
2,700,000 Grupo Financiero Bancomer,
S.A. de C.V. Cl O 988,854
(banks)
530,000 Grupo Financiero Banorte
S.A. de C.V. Cl O(1) 753,928
(banks)
115,000 Grupo Iusacell S.A. de
C.V. Series L ADR(1) 1,437,500
(wireless telecommunications)
35,000 Grupo Televisa S.A. GDR(1) 1,708,438
(media)
13,400 Telefonos de Mexico, S.A. Cl L ADR 1,240,338
(telephone)
35,000 Tubos de Acero de Mexico, SA ADR 439,688
------------------
(industrial parts)
11,350,731
------------------
PEOPLES REPUBLIC OF CHINA - 0.8%
478,000 Eastern Communications
Co., Ltd. Cl B 303,052
(electrical equipment)
2,700,000 Shanghai Petrochemical Co.,
Ltd. Cl H 490,182
------------------
(oil refining)
793,234
------------------
PERU - 0.8%
500,000 Banco Wiese Sudameris 207,736
(banks)
40,000 Southern Peru Copper Corp. 595,000
------------------
(mining & metals)
802,736
------------------
Shares Value
--------------------------------------------------------------------------------
PHILIPPINES - 1.5%
750,000 La Tondena Distillers Inc. $ 612,805
(food & beverage)
6,000,000 Music Corp.(1) 907,317
(semiconductor)
271,294 Music Corp. Warrants(1) -
------------------
(semiconductor)
1,520,122
------------------
POLAND - 2.2%
52,500 Polski Koncern Naftowy SA GDR
(Acquired 11/22/99,
Cost $512,366)(1)(2) 542,062
(oil refining)
16,000 Softbank S.A. 464,231
(computer software)
19,380 Softbank S.A. GDR 625,005
(computer software)
87,000 Telekomunikacja Polska S.A. ADR
(Acquired 10/25/99-10/29/99,
Cost $445,225)(2) 487,200
------------------
(telephone)
2,118,498
------------------
RUSSIAN FEDERATION - 4.1%
33,000 Gorkovsky Auto Plant (GAZ) Rights 969,375
(motor vehicles & parts)
23,500 Lukoil Holding ADR 803,406
(energy reserves & production)
112,000 Sun Interbrew Ltd. GDR(1) 378,000
(food & beverage)
119,000 Surgutneftegaz ADR(1) 1,130,500
(energy reserves & production)
100,000 Unified Energy Systems ADR 737,500
------------------
(electrical utility)
4,018,781
------------------
SINGAPORE - 4.1%
23,000 Chartered Semiconductor
Manufacturing ADR(1) 1,231,938
(semiconductor)
163,000 Datacraft Asia Limited 788,920
(information services)
380,000 GES International Limited 343,605
(computer hardware &
business machines)
470,000 OMNI Industries Limited 601,130
(computer hardware &
business machines)
25,000 Singapore Press Holdings Ltd. 468,471
(media)
63,360 United Overseas Bank Ltd. 565,378
------------------
(banks)
3,999,442
------------------
SOUTH AFRICA - 8.4%
22,000 Anglo American Platinum
Corp. Limited 658,789
(mining & metals)
26 1-800-345-2021 See Notes to Financial Statements
Emerging Markets--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
48,000 Compagnie Financiere Richemont
AG Depositary Receipts $ 1,065,976
(multi-industry)
25,000 Coronation Holdings Limited(1) 497,734
(financial services)
131,000 DataTec Limited 1,764,196
(computer hardware &
business machines)
174,885 Dimension Data Holdings Ltd.(1) 905,847
(information services)
200,000 Foschini Limited 496,925
(specialty stores)
25,000 Impala Platinum Holdings Limited 910,489
(mining & metals)
166,000 Ixchange Technology Holdings
Limited(1) 443,347
(computer software)
1,000,000 Profurn Limited 987,375
(department stores)
380,000 Softline Limited(1) 520,363
------------------
(computer software)
8,251,041
------------------
SOUTH KOREA - 6.3%
21,000 Halla Climate Control Co. 960,104
(motor vehicles & parts)
17,000 Hite Brewery Co., Ltd.(1) 483,934
(food & beverage)
25,000 Hyundai Electronics Industries Co.(1) 513,263
(semiconductor)
3,900 Hyundai Electronics Industries Co.
Rights()(1) 21,195
(semiconductor)
31,456 Korea Data System 613,246
(computer hardware &
business machines)
25,370 LG Investment & Securities
Co. Limited 599,645
(securities & asset management)
3,000 Pohang Iron & Steel Co., Ltd. 411,154
(mining & metals)
9,982 Samsung Electronics 2,066,578
(electrical equipment)
20,930 Telson Electronics Co. Ltd.(1) 532,616
------------------
(electrical equipment)
6,201,735
------------------
SPAIN - 1.1%
32,000 Terra Networks, S.A.(1) 1,103,204
------------------
(internet)
TAIWAN (REPUBLIC OF CHINA) - 6.9%
47,817 Asustek Computer Inc. GDR 504,211
(computer hardware &
business machines)
23,799 Asustek Computer Inc. GDR
(Acquired 1/22/98-9/16/98,
Cost $130,543)(2) 374,239
(computer hardware &
business machines)
Shares Value
--------------------------------------------------------------------------------
529,000 China Development Industrial Bank(1) $ 764,900
(financial services)
1,606,500 China Steel Corp. 1,141,160
(mining & metals)
155,400 Hon Hai Precision Industry(1) 1,108,773
(computer hardware &
business machines)
133,600 President Chain Store Corp. 373,279
(specialty stores)
145,000 Ritek Inc.(1) 869,771
(computer hardware &
business machines)
45,600 Taiwan Semiconductor Manufacturing
Co. Ltd. ADR 1,633,050
------------------
(semiconductor)
6,769,383
------------------
THAILAND - 0.6%
40,000 Advanced Info Service Public
Co. Limited(1) 572,234
------------------
(wireless telecommunications)
TURKEY - 3.9%
12,000,000 Akcansa Cimento A.S. 180,685
(construction & real property)
15,000,000 Cimsa Cimento Sanayi ve Ticaret A.S. 260,604
(construction & real property)
87,000,000 Dogan Sirketler Grubu Holding A.S. 1,427,531
(multi-industry)
30,000,000 Trakya Cam Sanayii A.S. 561,746
(home products)
75,000,000 Yapi ve Kredi Bankasi A.S. 1,375,410
------------------
(banks)
3,805,976
------------------
UNITED KINGDOM - 0.8%
115,000 Antofagasta Holdings plc 774,348
------------------
(mining & metals)
UNITED STATES - 2.8%
10,000 Comverse Technology, Inc.(1) 1,208,750
(computer software)
70,000 FirstCom Corp.(1) 1,507,188
------------------
(telephone)
2,715,938
------------------
TOTAL COMMON STOCKS,
RIGHTS & WARRANTS 90,181,701
------------------
(Cost $66,160,028)
PREFERRED STOCKS & WARRANTS - 7.9%
BRAZIL - 7.6%
16,000 Companhia Vale do Rio Doce Cl A 384,982
(mining & metals)
10,300,000 Petroleo Brasileiro S.A. 2,080,889
(energy reserves & production)
400,000,000 Tele Cellular Sul Participacoes S.A. 809,152
(wireless telecommunications)
67,000,000 Tele Centro Sul Participacoes S.A. 930,265
(telephone)
See Notes to Financial Statements www.americancentury.com 27
Emerging Markets--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
60,000,000 Tele Norte Leste Participacoes S.A. $ 1,089,236
(telephone)
290,000 Usinas Siderurgicas de Minas
Gerais S.A. Cl A 1,227,561
(gold)
27,000,000 Votorantim Celulose e Papel S.A. 904,072
------------------
(forest products & paper)
7,426,157
------------------
THAILAND - 0.3%
245,000 Siam Commercial Bank Public
Co. Limited(1) (banks) 259,101
174,000 Siam Commercial Bank Public
Co. Limited Warrants(1) 59,108
------------------
(banks)
318,209
------------------
TOTAL PREFERRED STOCKS & WARRANTS 7,744,366
------------------
(Cost $6,140,020)
TOTAL INVESTMENT SECURITIES - 100.0% $97,926,067
==================
(Cost $72,300,048)
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
(1) Non-income producing.
(2) Security was purchased under Rule 144A of the Securities Act of 1933 or is a
private placement and, unless registered under the Act or exempted from
registration, may only be sold to qualified institutional investors. The
aggregate value of restricted securities at November 30, 1999, was
$1,984,901 which represented 2.0% of net assets.
28 1-800-345-2021 See Notes to Financial Statements
Global Growth--Performance
--------------------------------------------------------------------------------
TOTAL RETURNS AS OF NOVEMBER 30, 1999
INVESTOR CLASS ADVISOR CLASS
(INCEPTION 12/1/98) (INCEPTION 2/5/99)
MSCI MSCI
GLOBAL GROWTH WORLD FREE GLOBAL GROWTH WORLD FREE
6 MONTHS* 40.47% 10.84% 40.13% 10.84%
1 YEAR/LIFE OF FUND 66.60% 19.76% 48.92%* 14.60%*
* Returns for periods less than one year are not annualized.
See pages 60-63 for information about share classes, the MSCI World Free Index
and returns.
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/99
Global Growth $16,660
MSCI World Free $11,974
$10,000 investment made 12/1/98
[data shown in mountain chart]
Global Growth MSCI World Free Index
Date Value Value
12/1/1998 $10,000 $10,000
12/31/1998 $10,860 $10,477
1/31/1999 $11,540 $10,693
2/28/1999 $11,120 $10,397
3/31/1999 $11,720 $10,816
4/30/1999 $12,140 $11,232
5/31/1999 $11,859 $10,804
6/30/1999 $12,679 $11,296
7/31/1999 $12,959 $11,249
8/31/1999 $13,019 $11,216
9/30/1999 $13,299 $11,063
10/31/1999 $14,319 $11,658
11/30/1999 $16,660 $11,974
The graph at left shows the growth of a $10,000 investment over the life of the
fund. The MSCI World Free Index is provided for comparison. Global Growth's
total returns include operating expenses (such as transaction costs and
management fees) that reduce returns, while the total returns of the MSCI World
Free Index do not. The graph is based on Investor Class shares only; performance
for other classes will vary due to differences in fee structures (see the Total
Returns table above). Past performance does not guarantee future results.
Investment return and principal value will fluctuate, and redemption value may
be more or less than original cost.
www.americancentury.com 29
Global Growth--Q&A
--------------------------------------------------------------------------------
[photo of Bradley Amoils and Henrik Strabo]
An interview with Bradley Amoils and Henrik Strabo, portfolio managers on
the Global Growth team.
GLOBAL GROWTH CELEBRATED ITS FIRST ANNIVERSARY ON DECEMBER 1, 1999. HOW DID THE
FUND PERFORM DURING ITS FIRST FULL YEAR IN OPERATION?
Global Growth posted an impressive 66.60% gain for the year ended November
30, 1999.(1) It dramatically outperformed its benchmark, the Morgan Stanley
Capital International World Free Index, which was up 19.76%. The average global
fund tracked by Lipper Inc. gained 31.13% for the year. Global Growth's one-year
performance placed it in the top 7% of its peers, ranking it 17 out of 246
global funds tracked by Lipper.(2)
Much of the fund's performance occurred during the second half of the
fiscal year. Global Growth gained 40.47% between May 31 and November 30, versus
a 10.84% gain for its benchmark.
WHAT EXPLAINS THE FUND'S STRONG PERFORMANCE?
Quite honestly, it was the investment process and the single-minded focus
on selecting fast growing successful companies, wherever they may be around the
globe. We combine the information from our proprietary database with extensive
company analysis, including management interviews and industry research. We
firmly believe this helps us put together a portfolio packed with strong,
growing companies.
A number of those opportunities were in Europe and Japan where telephone
and information service-related companies performed very well. A number of
specialty retailers and selected financial services stocks also did well. In the
United States, Internet-related stocks contributed handsomely, driven by
infrastructure enhancements and broadening consumer use. The fund also benefited
from the performance of select biotech companies.
THE UNITED STATES REMAINS YOUR LARGEST COUNTRY WEIGHTING. WHERE ARE YOU FINDING
THE BEST OPPORTUNITIES HERE AT HOME?
Certainly one of the dominant themes we're seeing in the United States--
and frankly around the globe -- is the explosion taking place in information
technology. Companies that make electronic equipment are benefiting from strong
demand for computers, the boom in e-commerce, and wireless communications. Two
U.S. companies that are reaping the benefits of this trend are JDS Uniphase and
Sun Microsystems, both of which were among our largest holdings.
JDS Uniphase is a leading supplier of communications equipment and
components. The company is getting a big boost from telecommunication firms'
large capital outlays to increase the capacity of fiberoptic networks that must
carry greater data traffic.
Sun Microsystems makes computer workstations, servers and operating
systems. Demand for their products has remained strong, fueled by the continued
move by corporations to company-wide networking and expanded use of the
Internet. The company is also moving into the financial services market,
[left margin]
"CERTAINLY ONE OF THE DOMINANT THEMES WE'RE SEEING IN THE UNITED STATES--AND
FRANKLY AROUND THE GLOBE --IS THE EXPLOSION TAKING PLACE IN INFORMATION
TECHNOLOGY."
PORTFOLIO AT A GLANCE
11/30/99
NO. OF COMPANIES 182
MEDIAN MARKET $18.3
CAPITALIZATION BILLION
PORTFOLIO TURNOVER 133%
EXPENSE RATIO (FOR
INVESTOR CLASS) 1.30%
Investment terms are defined in the Glossary on pages 63-64.
(1) All fund returns referenced in this interview are for Investor Class shares
(2) Lipper rankings are based on average annual total returns.
30 1-800-345-2021
Global Growth--Q&A
--------------------------------------------------------------------------------
(Continued)
where three major U.S. banks have announced their electronic bill-paying
systems will use Sun technologies.
WHAT DO YOU SEE DRIVING THE RECOVERY IN JAPAN AND EUROPE?
Several factors are at work. Japan's financial markets are rebounding,
thanks to corporate restructuring, continued strength in the U.S. economy, and
the recovery in Southeast Asia.
But this masks what is really happening in Japan. We're seeing a "new
Japan" emerge as globalization of the world economy is forcing firms to
adopt western ways of managing their operations. Some corporations are realizing
that innovation, driven by the Internet, is dealing a death blow to inefficient
use of capital.
The story is similar in Europe, which is now many months into its effort to
create a new business environment. Pension reform, privatization, and Europeans'
changing attitudes about personal investing continue to act as powerful
catalysts for growth. European businesses are also adopting western management
styles, with a greater focus on profits, shareholder value and global marketing
The technology theme driving growth in the United States is even more
pronounced throughout Europe and in Japan. While a smaller percentage of people
in Europe and Japan own personal computers than in the United States, the level
of cellular phone ownership in those regions is much greater. Convenience and
price are driving the popularity of cellular service in Europe and Japan, and
demand for wireless phone service and Internet access in those countries is
soaring.
HOW ARE YOU APPROACHING THIS SITUATION?
The most obvious approach, of course, is owning leading wireless service
providers and information technology firms.
We can begin with wireless communications companies, which represented one
of Global Growth's largest and most rewarding industry stakes this year. Our
biggest position was Mannesman AG, Germany's largest wireless provider.
Deregulation of Europe's telecommunications industry created a highly
competitive arena in which Mannesman has been an aggressive player. The company
strategically expanded into France and Italy, effectively capturing market share
for wireless and fixed-line service and is establishing itself as one of
Europe's leading providers of electronic commerce and high-speed data
communications.
China Telecom (Hong Kong) is another telephone company that contributed.
Mobile service is showing explosive growth among China's population, and China
Telecom (HK) is moving to capitalize on that trend. The company's network is
expanding and now covers most of the Eastern Seaboard. China Telecom (HK) is
adding nearly 500,000 subscribers monthly. Given the underdeveloped state of
telecommunications infrastructure in the People's Republic of China, this
subscriber growth should continue in the future.
Growth in the computer arena was equally robust. Global Growth's top
contributor for the year was NTT Data Corporation, a large Japanese information
services provider that supplies computer systems to central and local
governments, banks and companies. NTT Data's data services business generates
half its sales from the public sector and is benefiting from steadily
TOP TEN HOLDINGS
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
MANNESMANN AG 2.7% 1.8%
SOFTBANK CORP. 2.3% --
CHINA TELECOM
(HONG KONG) LTD. 1.6% --
SONY CORP. 1.6% 1.1%
MICROSOFT CORP. 1.5% 1.7%
QUALCOMM INC. 1.5% 0.4%
NTT DATA CORP. 1.5% 0.2%
NOKIA CORP. CL A ADR 1.4% 0.9%
VIVENDI 1.4% 1.5%
AMERICA ONLINE INC. 1.2% 0.7%
TOP FIVE INDUSTRIES
% OF FUND INVESTMENTS
AS OF AS OF
11/30/99 5/31/99
ELECTRICAL EQUIPMENT 13.4% 8.2%
MEDIA 10.3% 8.4%
WIRELESS
COMMUNICATIONS 9.4% 6.0%
TELEPHONE 9.1% 11.6%
INFORMATION SERVICES 6.8% 2.0%
www.americancentury.com 31
Global Growth--Q&A
--------------------------------------------------------------------------------
(Continued)
increasing demand from government ministries. The stock almost tripled this
year, driven in part by merger activity within Japan's financial industry, which
has forced many banks, brokerages and insurance companies to invest in new
computer systems.
WHICH INDUSTRIES OUTSIDE OF TECHNOLOGY ADDED TO PERFORMANCE?
We are seeing growth among selected retailers, which reflects a new and
distinct theme in consumer behavior, particularly in Europe, the United States
and Japan. Consumers are demonstrating they are willing to pay up for one or two
luxury items, but then will look for value elsewhere. Stores in the middle are
struggling. That's why we've built our retail holding with high-end names, such
as jewelry retailer, Tiffany, and Hennes & Mauritz AB, a Swedish clothing
company.
Tiffany has been an outstanding performer. This U.S.-based firm has seen
its domestic sales increase 28% as a booming economy sent shoppers into their
stores, and demand in Japan and Europe pushed the company's international sales
up 31%. Tiffany's success is the result of its strong marketing and brand
development and a strong focus on new product development.
Hennes & Mauritz designs and markets upscale fashion clothing and
cosmetics, which it markets through more than 550 retail outlets across Europe.
The company has enjoyed great success extending its lines into Europe's most
fashionable shopping areas, and will expand into the United States with the
upcoming launch of several stores in New York City.
We're also seeing dramatic growth in media, which is among our heaviest
industry positions. Profits are being fueled in part by the consumer boom in the
United States and the recovery in the Asia-Pacific region. Demand is
particularly great for so-called "out-of-home" media, such as
billboards and car radios, which are seeing an unprecedented boom in ad sales.
Two portfolio names that illustrate this trend are London-based Saatchi &
Saatchi, which creates advertising for Proctor & Gamble and Hewlett-Packard,
and Infiniti Broadcasting, the New York-based radio and outdoor advertising arm
of CBS. Advertising spending worldwide in 1999 topped $300 billion and is
expected to rise more than 6% in 2000.
WHICH HOLDINGS WERE DISAPPOINTING?
Banks and financial services companies detracted from performance. They
struggled in the wake of uncertainty about interest rates following increases in
the United States. When rates rise, the value of bonds held in banks' portfolios
drops. This group is also facing increasing competition from non-bank financial
service providers (including new Internet companies), which is making it harder
for them to grow their revenues.
In the United States, pharmaceutical firms and telecommunications companies
were affected by regulatory uncertainty. Gillette also detracted from
performance as revenues were slowed by reduced demand from emerging markets and
pricing pressures in Europe and the United States.
[left margin]
TYPES OF INVESTMENTS IN THE PORTFOLIO
AS OF NOVEMBER 30, 1999
[data shown in pie chart]
Common Stocks & Rights 93.6%
Temporary Cash Investments 4.5%
Preferred Stocks 1.9%
AS OF MAY 31, 1999
[data shown in pie chart]
Common Stocks & Rights 91.8%
Temporary Cash Investments 7.2%
Preferred Stocks 1.0%
GLOBAL GROWTH'S INVESTMENTS BY COUNTRY
[data shown in bar chart]
11/30/99 5/31/99
United States* 35.9% 48.5%
Japan 15.7% 7.2%
U.K. 9.1% 9.6%
France 7.9% 6.5%
Germany 7.7% 4.3%
Other 23.7% 23.9%
*Includes temporary cash investments.
32 1-800-345-2021
Global Growth--Schedule of Investments
--------------------------------------------------------------------------------
This schedule lists all investments owned by the fund, as well as each
security's market value, as of the last day of the reporting period. The
securities are grouped by asset class (such as common stocks, corporate bonds,
temporary cash investments, as applicable), and some asset classes are further
broken down by industry or country.
NOTE: For securities denominated in foreign currencies, the market value is
translated into U.S. dollars based on exchange rates as of the last day of the
reporting period.
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
COMMON STOCKS - 93.6%
AUSTRALIA - 0.2%
186,810 Cable & Wireless Optus Limited(1) $ 487,470
------------------
(wireless telecommunications)
BELGIUM - 0.2%
15,915 Fortis (B) 548,992
------------------
(property & casualty insurance)
CANADA - 1.2%
26,800 Nortel Networks Corp.
New York Shares 1,983,200
(electrical equipment)
20,000 QLT PhotoTherapeutics Inc.(1) 895,522
------------------
(drugs)
2,878,722
------------------
DENMARK - 0.9%
9,000 ISS International Service
System A/S(1) 524,064
(industrial services)
5,085 Novo Nordisk A/S Cl B 664,494
(drugs)
13,200 Tele Danmark A/S 850,852
------------------
(telephone)
2,039,410
------------------
FINLAND - 2.6%
24,400 Nokia Corp. Cl A ADR 3,371,775
(electrical equipment)
66,663 Sonera Group Oyj 2,755,037
------------------
(wireless telecommunications)
6,126,812
------------------
FRANCE - 7.9%
8,209 Alcatel Alsthom Compagnie Generale 1,592,479
(information services)
3,209 Altran Technologies SA 1,528,003
(information services)
7,746 Axa 1,045,228
(property & casualty insurance)
2,830 Cap Gemini SA 500,799
(information services)
6,544 Carrefour SA 1,140,886
(specialty stores)
15,000 GFI Informatique 1,566,044
(information services)
3,400 Groupe Danone 789,088
(food & beverage)
4,400 Havas Advertising SA 1,667,222
(media)
Shares Value
--------------------------------------------------------------------------------
5,700 Lafarge SA $ 537,942
(construction & real property)
3,700 NRJ SA 1,689,090
(media)
4,600 Pinault-Printemps-Redoute SA 959,580
(department stores)
5,000 Societe Television Francaise 1 1,813,950
(media)
3,800 Total SA Cl B 505,870
(oil refining)
41,245 Vivendi 3,304,390
------------------
(multi-industry)
18,640,571
------------------
GERMANY - 6.1%
4,600 DePfa Deutsche Pfandbriefbank AG 347,674
(banks)
8,600 Douglas Holding AG 369,633
(specialty stores)
5,650 EM.TV & Merchandising AG 438,991
(media)
40,237 Epcos AG(1) 2,514,028
(semiconductor)
50,000 GfK AG(1) 1,612,400
(media)
3,075 Heyde AG Beratung Software(1) 254,104
(computer software)
3,500 Intershop Communications AG(1) 698,265
(computer software)
29,860 Mannesmann AG 6,289,106
(wireless telecommunications)
10,000 PrimaCom AG(1) 456,007
(media)
13,000 SCM Microsystems, Inc.(1) 781,460
(electrical equipment)
6,800 Siemens AG 684,585
------------------
(electrical equipment)
14,446,253
------------------
HONG KONG - 1.9%
714,000 China Telecom (Hong Kong) Ltd.(1) 3,833,619
(wireless telecommunications)
580 i-CABLE Communications Limited(1) 892
(media)
232,171 Wharf (Holdings) Ltd. 588,910
------------------
(multi-industry)
4,423,421
------------------
ISRAEL - 0.3%
5,100 Check Point Software
Technologies Ltd.(1) 722,606
------------------
(computer software)
See Notes to Financial Statements www.americancentury.com 33
Global Growth--Schedule of Investments
--------------------------------------------------------------------------------
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
ITALY - 2.6%
144,400 Banca Intesa S.p.A. $ 617,001
(banks)
80,509 Buffetti SpA 728,574
(specialty stores)
34,486 Gruppo Editoriale L'Espresso 973,091
(media)
87,500 Mediolanum SpA 767,150
(life & health insurance)
45,200 Mondadori (Arnoldo) Editore SpA 926,493
(media)
335,711 Seat Pagine Gialle SpA 683,392
(internet)
126,300 Telecom Italia SpA 1,392,430
------------------
(telephone)
6,088,131
------------------
JAPAN - 15.7%
45,000 Fujitsu Ltd. 1,598,940
(electrical equipment)
200,000 Hitachi Ltd. 2,767,962
(electrical equipment)
26 Japan Telecom Co. Ltd. 1,020,809
(telephone)
26,000 Kao Corporation 773,263
(home products)
8,600 KDD Corp. 1,190,224
(telephone)
3,300 Keyence Corporation 939,340
(electrical equipment)
16,000 KYOCERA CORP. 1,933,255
(semiconductor)
3,000 Matsushita Communication
Industrial Co., Ltd. 577,150
(electrical equipment)
21,000 Matsushita Electric Industrial Co., Ltd. 532,833
(electrical equipment)
46,000 NEC Corp. 1,076,855
(electrical equipment)
93 Nippon Telegraph & Telephone 1,670,495
(telephone)
50,000 Nomura Securities Co., Ltd. 893,208
(securities & asset management)
146 NTT Data Corp. 3,568,316
(information services)
76 NTT Mobile Communications
Network, Inc. 2,670,593
(wireless telecommunications)
40,000 Omron Corp. 979,584
(electrical equipment)
4,800 Ryohin Keikaku Co. Limited 1,133,098
(department stores)
3,100 SMC Corp. 548,312
(industrial parts)
7,500 Softbank Corp. 5,425,501
(internet)
20,400 Sony Corp. 3,784,453
(electrical equipment)
Shares Value
-------------------------------------------------------------------------------
52,000 Sumitomo Bank, Ltd. (The) $ 798,783
(banks)
9,000 Tokyo Electron Ltd. 936,396
(electrical equipment)
41,000 Toyota Motor Corp. 1,392,422
(motor vehicles & parts)
4,000 Trend Micro Inc. 851,983
------------------
(computer software)
37,063,775
------------------
MEXICO - 0.5%
9,300 Grupo Televisa S.A. GDR(1) 453,956
(media)
8,300 Telefonos de Mexico, S.A. Cl L ADR 768,269
------------------
(telephone)
1,222,225
------------------
NETHERLANDS - 3.8%
19,100 Getronics N.V. 1,169,318
(information services)
10,500 Gucci Group N.V. New York Shares 874,125
(apparel & textiles)
18,362 ING Groep N.V. 1,033,465
(financial services)
13,000 Phillips Electronics N.V.
New York Shares 1,553,500
(electrical equipment)
18,600 Randstad Holdings N.V. 933,459
(industrial services)
18,200 United Pan-Europe
Communications NV(1) 1,788,252
(telephone)
31,600 VNU N.V. 1,253,097
(publishing)
13,349 Wolters Kluwer NV 402,901
------------------
(publishing)
9,008,117
------------------
PORTUGAL - 0.3%
17,219 PT MULTIMEDIA(1) 678,828
------------------
(internet)
SINGAPORE - 0.9%
26,749 DBS Group Holdings Ltd. 346,894
(banks)
35,000 Singapore Press Holdings Ltd. 655,860
(media)
434,000 Singapore Technologies
Engineering Ltd. 648,031
(industrial services)
45,408 United Overseas Bank Ltd. 405,187
------------------
(banks)
2,055,972
------------------
SOUTH KOREA - 0.4%
5,000 Samsung Electronics 1,035,152
------------------
(electrical equipment)
34 1-800-345-2021 See Notes to Financial Statements
Global Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
SPAIN - 2.0%
14,477 Sogecable, S.A.(1) $ 457,955
(media)
40,000 Telefonica Publicidad e
Informacion, S.A.(1) 1,213,331
(information services)
67,133 Telefonica S.A.(1) 1,399,070
(telephone)
48,497 Terra Networks, S.A.(1) 1,671,940
------------------
(internet)
4,742,296
------------------
SWEDEN - 3.1%
16,000 Ericsson (L.M.) Telephone Co. ADR 771,500
(electrical equipment)
44,500 Hennes & Mauritz AB Cl B 1,412,399
(specialty stores)
59,955 Modern Times Group MTG AB Cl B(1) 1,994,553
(media)
51,000 Optosof AB Cl B(1) 839,329
(information services)
49,200 Securitas AB Cl B 818,381
(industrial services)
64,900 Skandia Forsakrings AB 1,552,540
------------------
(financial services)
7,388,702
------------------
SWITZERLAND - 2.1%
18,723 ABB Ltd. 1,851,227
(specialty stores)
5,400 Credit Suisse Group 1,010,123
(financial services)
648 Holderbank Financiere
Glarus AG Cl B 812,037
(construction & real property)
409 Nestle S.A. 736,015
(food & beverage)
378 Novartis AG 589,199
------------------
(drugs)
4,998,601
------------------
TAIWAN (REPUBLIC OF CHINA) - 0.4%
45,000 Hon Hai Precision Industry
Co., Ltd. GDR (Acquired 9/30/99,
Cost $625,050)(1)(2) 841,500
------------------
(computer hardware &
business machines)
UNITED KINGDOM - 9.1%
112,600 Amvescap Plc 1,164,713
(financial services)
12,842 ARM Holdings plc(1) 631,762
(semiconductor)
15,000 AstraZeneca Group plc 670,471
(drugs)
23,600 Barclays PLC 682,388
(banks)
9,200 BP Amoco Plc ADR 560,625
(oil refining)
26,284 British Aerospace PLC 150,634
(defense/aerospace)
Shares Value
--------------------------------------------------------------------------------
76,015 British Telecommunications plc $ 1,528,246
(telephone)
70,500 Capita Group Plc 1,277,716
(industrial services)
359,200 Centrica plc 1,067,309
(gas & water utilities)
14,100 CMG plc 745,344
(information services)
45,484 COLT Telecom Group plc(1) 1,719,879
(telephone)
68,500 Compass Group PLC 831,658
(industrial services)
59,900 Lloyds TSB Group plc 767,914
(banks)
50,400 Logica plc 1,219,787
(information services)
61,300 Marconi plc 784,883
(electrical equipment)
27,600 Orange plc(1) 835,524
(wireless telecommunications)
35,200 Pearson plc 842,355
(media)
52,100 Prudential Corporation PLC 856,850
(property & casualty insurance)
220,166 Saatchi & Saatchi plc 1,076,248
(media)
103,800 Shire Pharmaceuticals Group PLC(1) 1,108,510
(drugs)
124,363 TeleWest Communications plc(1) 585,580
(telephone)
157,135 Vodafone AirTouch 741,146
(wireless telecommunications)
108,800 WPP Group plc 1,599,903
------------------
(media)
21,449,445
------------------
UNITED STATES - 31.4%
7,000 Allergan, Inc. 688,625
(drugs)
10,000 ALLTEL Corp. 865,000
(wireless telecommunications)
21,000 Amdocs Ltd.(1) 738,938
(computer software)
40,000 America Online Inc.(1) 2,907,500
(internet)
10,000 American Express Co. 1,513,125
(financial services)
11,875 American International Group, Inc. 1,226,094
(property & casualty insurance)
21,000 Amgen Inc.(1) 956,156
(drugs)
10,500 Anheuser-Busch Companies, Inc. 785,531
(alcohol)
17,000 AT&T Corp. 949,875
(telephone)
8,000 Biogen, Inc.(1) 584,250
(drugs)
14,000 Cablevision Systems Corp. Cl A(1) 959,875
(media)
See Notes to Financial Statements www.americancentury.com 35
Global Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Shares Value
--------------------------------------------------------------------------------
50,000 Charter Communications, Inc.(1) $ 1,157,812
(media)
9,000 Chase Manhattan Corp. 695,250
(banks)
26,000 Cisco Systems Inc.(1) 2,318,062
(computer hardware &
business machines)
28,000 Citigroup Inc. 1,508,500
(banks)
14,000 Colgate-Palmolive Co. 768,250
(home products)
20,400 Comcast Corp. Cl A 921,825
(media)
9,000 Corning Inc. 843,188
(electrical equipment)
16,000 Covad Communications Group, Inc.(1) 830,500
(telephone)
11,000 Electronic Arts Inc.(1) 1,153,625
(computer software)
10,000 EMC Corp. (Mass.)(1) 835,625
(computer hardware &
business machines)
39,000 Enron Corp. 1,484,438
(oil refining)
5,800 Foundry Networks, Inc.(1) 1,365,719
(computer hardware &
business machines)
19,000 Gemstar International Group Ltd.(1) 2,143,438
(information services)
16,300 General Electric Co. (U.S.) 2,119,000
(multi-industry)
16,000 General Instrument Corp.(1) 1,048,000
(electrical equipment)
10,000 GTE Corp. 730,000
(telephone)
24,500 Infinity Broadcasting Corp. Cl A(1) 892,719
(media)
14,000 Intel Corp. 1,072,750
(semiconductor)
18,000 International Business Machines Corp. 1,855,125
(computer hardware &
business machines)
11,588 JDS Uniphase Corp.(1) 2,650,393
(electrical equipment)
19,000 Johnson & Johnson 1,971,250
(medical products & supplies)
3,800 Juniper Networks, Inc.(1) 1,052,362
(computer hardware &
business machines)
9,000 Lucent Technologies Inc. 657,562
(electrical equipment)
24,000 MCI WorldCom, Inc.(1) 1,984,500
(telephone)
15,000 Merck & Co., Inc. 1,177,500
(drugs)
8,000 Micromuse Inc.(1) 915,250
(computer software)
40,000 Microsoft Corp.(1) 3,641,250
(computer software)
Shares Value
-------------------------------------------------------------------------------
5,000 Morgan Stanley Dean Witter & Co. $ 603,125
(securities & asset management)
7,500 Motorola, Inc. 856,875
(electrical equipment)
8,900 NTL Inc.(1) 811,569
(telephone)
47,000 Pfizer, Inc. 1,700,812
(drugs)
12,000 Procter & Gamble Co. (The) 1,296,000
(home products)
10,000 QUALCOMM Inc.(1) 3,622,812
(wireless communications)
40,000 Qwest Communications
International Inc.(1) 1,366,250
(telephone)
19,740 SBC Communications Inc. 1,025,246
(telephone)
17,000 Siebel Systems, Inc.(1) 1,192,125
(computer software)
11,300 Solectron Corp.(1) 930,838
(electrical equipment)
25,600 Spanish Broadcasting System,
Inc. Cl A(1) 812,000
(media)
14,000 Sun Microsystems, Inc.(1) 1,851,062
(computer hardware &
business machines)
8,100 Tellabs, Inc.(1) 525,488
(electrical equipment)
28,000 Tiffany & Co. 2,170,000
(specialty stores)
32,000 Time Warner Inc. 1,974,000
(media)
14,100 Tyco International Ltd. 564,881
(industrial parts)
12,000 Univision Communications Inc. Cl A(1) 1,050,000
(media)
33,000 Wal-Mart Stores, Inc. 1,901,625
------------------
(department stores)
74,223,570
------------------
TOTAL COMMON STOCKS 221,110,571
------------------
(Cost $161,264,444)
PREFERRED STOCKS - 1.9%
BRAZIL - 0.3%
3,960,000 Petroleo Brasileiro S.A. 800,031
------------------
(energy reserves & production)
GERMANY - 1.6%
9,000 Marschollek, Lautenschlaeger und
Partner AG 2,612,088
(financial services)
400 Porsche AG 1,074,262
------------------
(motor vehicles & parts)
3,686,350
------------------
TOTAL PREFERRED STOCKS 4,486,381
------------------
(Cost $3,510,242)
36 1-800-345-2021 See Notes to Financial Statements
Global Growth--Schedule of Investments
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
Principal Amount Value
--------------------------------------------------------------------------------
CORPORATE BONDS(3)
UNITED KINGDOM
GBP 8,301 British Aerospace PLC, 7.45%
11/29/03 $ 13,029
------------------
(defense/aerospace)
(Cost $0)
TEMPORARY CASH INVESTMENTS - 4.5%
Repurchase Agreement, BA Security Services,
Inc. (U.S. Treasury obligations), in a joint trading
account at 5.55%, dated 11/30/99, due
12/1/99 (Delivery value $10,601,634) 10,600,000
------------------
(Cost $10,600,000)
TOTAL INVESTMENT SECURITIES -- 100.0% $236,209,981
==================
(Cost $175,374,686)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain
-------------------------------------------------------------------------------
2,963,367 EURO 12/30/99 $2,993,635 $5,796
=====================================
(Value on Settlement Date $2,999,431)
Forward foreign currency exchange contracts are designed to protect the fund's
foreign investments against declines in foreign currencies (also known as
hedging). The contracts are called "forward" because they allow the
fund to exchange a foreign currency for U.S. dollars on a specific date in the
future--and at a prearranged exchange rate.
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
GBP = British Pound
GDR = Global Depositary Receipt
(1) Non-income producing.
(2) Security was purchased under Rule 144A of the Securities Act of 1933 or is a
private placement and, unless registered under the Act or exempted from
registration, may only be sold to qualified institutional investors. The
aggregate value of restricted securities at October 31, 1999, was $841,500
which represented 0.4% of net assets.
(3) Category is less than 0.05% of total investment securities.
See Notes to Financial Statements www.americancentury.com 37
Statements of Assets and Liabilities
--------------------------------------------------------------------------------
This statement breaks down the fund's ASSETS (such as securities, cash, and
other receivables) and LIABILITIES (money owed for securities purchased,
management fees, and other liabilities) as of the last day of the reporting
period. Subtracting the liabilities from the assets results in the fund's NET
ASSETS. For each class of shares, the net assets divided by shares outstanding
is the share price, or NET ASSET VALUE PER SHARE. This statement also breaks
down the fund's net assets into capital (shareholder investments) and
performance (investment income and gains/losses).
NOVEMBER 30, 1999
INTERNATIONAL INTERNATIONAL EMERGING GLOBAL
GROWTH DISCOVERY MARKETS GROWTH
ASSETS
Investment securities, at value
(identified cost of
$2,527,045,522, $924,781,153,
$72,300,048, and $175,374,686,
respectively) (Note 3) .............. $3,912,053,881 $1,580,269,995 $97,926,067 $236,209,981
Foreign currency holdings, at
value (identified cost
of $0, $22,938,427, $2,270,790,
and $0, respectively) ............... - 22,959,515 2,270,935 -
Cash .................................. 405,390 - 35,236 505,865
Receivable for forward foreign
currency exchange contracts ......... 118,471 54,045 - 5,796
Receivable for investments sold ....... 15,898,323 20,034,178 896,820 2,508,813
Receivable for capital shares sold .... 24,002,051 - - -
Dividends and interest receivable ..... 5,603,269 1,466,020 41,496 124,145
---------------- --------------- ------------- --------------
3,958,081,385 1,624,783,753 101,170,554 239,354,600
---------------- --------------- ------------- --------------
LIABILITIES
Disbursements in excess of
demand deposit cash ................. - 1,670,639 - -
Payable for investments purchased ..... 44,656,685 30,509,000 2,012,699 5,193,480
Payable for capital shares redeemed ... 14,450,962 - - -
Accrued management fees (Note 2) ...... 3,697,744 1,701,458 148,788 225,624
Distribution fees payable (Note 2) .... 11,715 10 26 20
Service fees payable (Note 2) ......... 11,715 10 26 20
Accrued directors' fees and expenses .. 1,720 656 42 96
---------------- --------------- ------------- --------------
62,830,541 33,881,773 2,161,581 5,419,240
---------------- --------------- ------------- --------------
Net Assets ............................ $3,895,250,844 $1,590,901,980 $99,008,97 $233,935,360
================ =============== ============= ==============
NET ASSETS CONSIST OF
Capital (par value and
paid-in surplus) .................... $2,311,705,709 $ 848,020,994 $75,157,747 $161,507,636
Accumulated undistributed
net investment income (loss) ........ 1,682,440 1,223 - (2,867)
Accumulated undistributed
net realized gain (loss)
on investment and foreign
currency transactions ............... 196,806,221 90,540,886 (1,333,259) 11,570,454
Net unrealized appreciation
on investments and
translation of assets and
liabilities in foreign
currencies (Note 3) ................. 1,385,056,474 652,338,877 25,184,485 60,860,137
---------------- --------------- ------------- --------------
$3,895,250,844 $1,590,901,980 $99,008,973 $233,935,360
================ =============== ============= ==============
Investor Class, $0.01 Par Value
Net assets ............................ $3,701,902,791 $1,408,623,517 $82,359,253 $233,822,914
Shares outstanding .................... 284,335,795 92,651,386 14,653,998 28,085,416
Net asset value per share ............. $13.02 $15.20 $5.62 $8.33
Advisor Class, $0.01 Par Value
Net assets ............................ $61,316,590 $56,791 $142,544 $112,446
Shares outstanding .................... 4,718,909 3,750 25,400 13,524
Net asset value per share ............. $12.99 $15.14 $5.61 $8.31
Institutional Class, $0.01 Par Value
Net assets ............................ $132,031,463 $182,221,672 $16,507,176 N/A
Shares outstanding .................... 10,118,701 11,954,312 2,933,695 N/A
Net asset value per share ............. $13.05 $15.24 $5.63 N/A
38 1-800-345-2021 See Notes to Financial Statements
Statements of Operations
--------------------------------------------------------------------------------
This statement shows how the fund's net assets changed during the reporting
period as a result of the fund's operations. In other words, it shows how much
money the fund made or lost as a result of dividend and interest income, fees
and expenses, and investment gains or losses.
YEAR ENDED NOVEMBER 30, 1999
INTERNATIONAL INTERNATIONAL EMERGING GLOBAL
GROWTH DISCOVERY MARKETS GROWTH
INVESTMENT LOSS
Income:
Dividends (net of foreign taxes
withheld of $4,437,993,
$989,386, $54,262, and
$93,491, respectively) ............. $ 31,994,584 $ 7,058,273 $ 854,583 $ 1,000,454
Interest ............................. 4,087,473 2,310,544 64,602 395,360
----------------- --------------- -------------- -------------
36,082,057 9,368,817 919,185 1,395,814
----------------- --------------- -------------- -------------
Expenses (Note 2):
Management fees ...................... 37,688,188 15,969,351 1,069,576 1,645,420
Distribution fees- Advisor Class ..... 89,772 55 120 115
Service fees - Advisor Class ......... 89,772 55 120 115
Directors' fees and expenses ......... 24,793 8,441 447 1,027
----------------- --------------- -------------- -------------
37,892,525 15,977,902 1,070,263 1,646,677
----------------- --------------- -------------- -------------
Net investment loss .................. (1,810,468) (6,609,085) (151,078) (250,863)
----------------- --------------- -------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY (NOTE 3)
Net realized gain (loss) on:
Investments (net of foreign
taxes withheld of $0, $730,456,
$130,263, and $0, respectively) .... 266,613,049 112,196,249 7,130,081 12,634,537
Foreign currency transactions ........ (21,492,839) (5,163,030) (1,687,151) (816,087)
----------------- --------------- -------------- -------------
245,120,210 107,033,219 5,442,930 11,818,450
---------------- --------------- ------------- --------------
Change in net unrealized
appreciation on:
Investments (net of foreign
taxes accrued of $0, $3,218,747,
$440,094, and $0, respectively) .... 944,518,147 501,764,378 23,813,381 61,882,872
Translation of assets and
liabilities in foreign currencies .. (17,183,714) (21,660,632) (1,202,836) (1,022,735)
----------------- --------------- -------------- -------------
927,334,433 480,103,746 22,610,545 60,860,137
----------------- --------------- -------------- -------------
Net realized and unrealized gain on
investments and foreign currency ... 1,172,454,643 587,136,965 28,053,475 72,678,587
----------------- --------------- -------------- -------------
Net Increase in Net Assets
Resulting from Operations ............ $1,170,644,175 $580,527,880 $27,902,397 $72,427,724
================= =============== ============== =============
See Notes to Financial Statements www.americancentury.com 39
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
This statement shows how the fund's net assets changed over the past two
reporting periods. It details how much a fund grew or shrank as a result of
operations (as detailed on the previous page for the most recent period), income
and capital gain distributions, and shareholder investments and redemptions.
YEARS ENDED NOVEMBER 30, 1999 AND NOVEMBER 30, 1998
INTERNATIONAL GROWTH INTERNATIONAL DISCOVERY
Increase in Net Assets 1999 1998 1999 1998
OPERATIONS
Net investment income (loss) ......$ (1,810,468) $ 7,275,076 $ (6,609,085) $ (2,736,864)
Net realized gain (loss) on
investments and foreign
currency transactions ........... 245,120,210 9,916,493 107,033,219 (3,456,660)
Change in net unrealized
appreciation (depreciation)
on investments and translation
of assets and liabilities in
foreign currencies .............. 927,334,433 289,105,638 480,103,746 77,131,758
------------------ --------------- ------------------ ---------------
Net increase (decrease) in
net assets resulting
from operations ................. 1,170,644,175 306,297,207 580,527,880 70,938,234
------------------ --------------- ------------------ ---------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class .................. (4,441,422) (5,227,590) - (1,491,376)
Advisor Class ................... (11,642) (5,388) - -
Institutional Class ............. (57,931) (57,980) - -
From net realized gains on
investment transactions:
Investor Class .................. (38,836,031) (237,083,658) (2,870,473) (33,708,327)
Advisor Class ................... (345,866) (1,325,086) (40) -
Institutional Class ............. (225,320) (2,488,279) (229,210) -
------------------ --------------- ------------------ ---------------
Decrease in net assets
from distributions .............. (43,918,212) (246,187,981) (3,099,723) (35,199,703)
------------------ --------------- ------------------ ---------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Net increase in net assets from
capital share transactions ...... 285,165,978 666,675,328 170,993,276 180,415,416
------------------ --------------- ------------------ ---------------
Net increase in net assets ........ 1,411,891,941 726,784,554 748,421,433 216,153,947
NET ASSETS
Beginning of period ............... 2,483,358,903 1,756,574,349 842,480,547 626,326,600
------------------ --------------- ------------------ ---------------
End of period ..................... $3,895,250,844 $2,483,358,903 $1,590,901,980 $842,480,547
================== =============== ================== ===============
Undistributed net investment
income (loss) ................... $1,682,440 $4,639,770 $1,223 $(142,872)
================== =============== ================== ===============
40 1-800-345-2021 See Notes to Financial Statements
Statements of Changes in Net Assets
--------------------------------------------------------------------------------
(Continued)
YEARS ENDED NOVEMBER 30, 1999 AND NOVEMBER 30, 1998
Increase in Net Assets
EMERGING MARKETS GLOBAL GROWTH
1999 1998 1999
OPERATIONS
Net investment income (loss) ....... $ (151,078) $ (6,575) $ (250,863)
Net realized gain (loss)
on investments and foreign
currency transactions ............ 5,442,930 (6,498,850) 11,818,450
Change in net unrealized
appreciation (depreciation)
on investments and translation
of assets and liabilities
in foreign currencies ............ 22,610,545 3,572,630 60,860,137
-------------- ---------------- ----------------
Net increase (decrease) in
net assets resulting
from operations .................. 27,902,397 (2,932,795) 72,427,724
-------------- ---------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class ................... - - -
Advisor Class .................... - - -
Institutional Class .............. - - -
From net realized gains on
investment transactions:
Investor Class ................... - - -
Advisor Class .................... - - -
Institutional Class .............. - - -
-------------- ---------------- ----------------
Decrease in net assets
from distribution ................ - - -
-------------- ---------------- ----------------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Net increase in net assets from
capital share transactions ....... 49,982,453 12,227,403 161,507,636
-------------- ---------------- ----------------
Net increase in net assets ......... 77,884,850 9,294,608 233,935,360
NET ASSETS
Beginning of period ................ 21,124,123 11,829,515 -
-------------- ---------------- ----------------
End of period ...................... $99,008,973 $21,124,123 $233,935,360
============== ================ ================
Undistributed net investment loss .. - $(41,813) $(2,867)
============== ================ ================
See Notes to Financial Statements www.americancentury.com 41
Notes to Financial Statements
--------------------------------------------------------------------------------
NOVEMBER 30, 1999
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century World Mutual Funds, Inc. (the corporation)
is registered under the Investment Company Act of 1940 (the 1940 Act) as an
open-end management company. International Growth Fund (International Growth),
International Discovery Fund (International Discovery), Emerging Markets Fund
(Emerging Markets) and Global Growth Fund (Global Growth) (the funds) are the
funds currently issued by the corporation. The funds are diversified under the
1940 Act. The funds' investment objective is to seek capital growth by investing
primarily in equity securities. International Growth seeks to achieve its
investment objective by investing in securities of issuers in developed markets.
International Discovery seeks to achieve its investment objective by investing
in issuers having comparatively smaller market capitalizations. Emerging Markets
seeks to achieve its investment objective by investing in issuers in emerging
market countries. Global Growth seeks to achieve its investment objective by
investing in U.S. and foreign equity securities of issuers in developed
countries. The following significant accounting policies are in accordance with
generally accepted accounting principles; these policies may require the use of
estimates by fund management.
MULTIPLE CLASS -- Each fund is authorized to issue three classes of shares:
the Investor Class, the Advisor Class and the Institutional Class. The three
classes of shares differ principally in their respective shareholder servicing
and distribution expenses and arrangements. All shares of each fund represent an
equal pro rata interest in the net assets of the class to which such shares
belong, and have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except for class specific expenses and exclusive
rights to vote on matters affecting only individual classes. Sale of the
Institutional Class and Advisor Class for Emerging Markets commenced on January
28, 1999 and May 12, 1999, respectively. Global Growth's inception date and
commencement of the Investor Class was December 1, 1998. Sale of the Advisor
Class for Global Growth commenced on February 5, 1999. Sale of the Institutional
Class for Global Growth had not commenced as of November 30, 1999.
SECURITY VALUATIONS -- Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or at the mean
of the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. When valuations are
not readily available, securities are valued at fair value as determined in
accordance with procedures adopted by the Board of Directors.
SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified cost
basis, which is also used for federal income tax purposes.
Certain countries impose taxes on realized gains on the sale of their
securities. The funds record the foreign tax expense, if any, on an accrual
basis. The realized and unrealized tax reduces the net realized gain (loss) on
investments and net unrealized appreciation (depreciation) on investments,
respectively.
INVESTMENT INCOME -- Dividend income less foreign taxes withheld (if any) is
recorded as of the ex-dividend date. Interest income is recorded on the accrual
basis and includes accretion of discounts and amortization of premiums.
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the rates
of exchange prevailing on the respective dates of such transactions. Realized
and unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component of
realized gain (loss) on foreign currency transactions and unrealized
appreciation (depreciation) on translation of assets and liabilities in foreign
currencies, respectively.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the fund's exposure to
foreign currency exchange rate fluctuations. The net U.S. dollar value of
foreign currency underlying all contractual commitments held by the funds and
the resulting unrealized appreciation or depreciation are determined daily using
prevailing exchange rates. The funds bear the risk of an unfavorable change in
the foreign currency exchange rate underlying the forward contract.
Additionally, losses may arise if the counterparties do not perform under the
contract terms.
REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements with
institutions that the funds' investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The funds require that the collateral, represented by securities,
purchased in a repurchase transaction be transferred to the custodian in a
manner sufficient to enable the funds to obtain those securities in the event of
a default under the repurchase agreement. ACIM monitors, on a daily basis, the
securities transferred to ensure the value, including accrued interest, of the
securities under each repurchase agreement is greater than amounts owed to the
funds under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund along with other registered
investment companies having management agreements with ACIM, may transfer
uninvested cash balances into a joint trading account. These balances are
invested in one or more repurchase agreements that are collateralized by U.S.
Treasury or Agency obligations.
INCOME TAX STATUS -- It is the funds' policy to distribute all net
investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under the provisions of the Internal
Revenue Code. Accordingly, no provision has been made for federal or state
income taxes.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded
on the ex-dividend date. Distributions from net investment income and net
realized gains are declared and paid annually.
42 1-800-345-2021
Notes to Financial Statements
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
--------------------------------------------------------------------------------
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences reflect the differing character
of certain income items and net realized gains and losses for financial
statement and tax purposes and may result in reclassification among certain
capital accounts.
On December 17, 1999, International Growth and Discovery declared and paid a
distribution to shareholders of record on that date. The distributions from net
investment income in International Growth were $0.0053 and $0.0328 for the
Investor and Institutional Classes, respectively. The distribution from net
realized gains on investments was $0.6901 for the Investor and Institutional
Classes of International Growth. The distribution from net realized gains on
investments was $0.6626 for the Advisor Class of International Growth. The
distribution from net realized gains on investments was $0.8052 for the Investor
and Institutional Classes of Discovery. The distribution from net realized gains
on investments was $0.7643 for the Advisor Class of Discovery.
At November 30, 1999, Emerging Markets had accumulated net realized capital
loss carryovers for federal income tax purposes of $864,075 (expiring in 2005
through 2006) which may be used to offset future taxable gains.
ADDITIONAL INFORMATION -- Funds Distributor, Inc. (FDI) is the corporation's
distributor. Certain officers of FDI are also officers of the corporation.
--------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES
The corporation has entered into a Management Agreement with ACIM, under
which ACIM provides each fund with investment advisory and management services
in exchange for a single, unified management fee per class. The Agreement
provides that all expenses of the funds, except brokerage commissions, taxes,
interest, fees and expenses of those directors who are not considered
"interested persons" as defined in the 1940 Act (including counsel
fees) and extraordinary expenses, will be paid by ACIM. The fee is computed
daily and paid monthly based on each class's average daily closing net assets
during the previous month.
The annual management fee for each class of International Growth is as
follows:
INVESTOR ADVISOR INSTITUTIONAL
CLASS CLASS CLASS
FUND AVERAGE NET ASSETS
First $1 billion .............. 1.50% 1.25% 1.30%
Of the next $1 billion ........ 1.20% 0.95% 1.00%
Over $2 billion ............... 1.10% 0.85% 0.90%
The annual management fee for each class of International Discovery is as
follows:
INVESTOR ADVISOR INSTITUTIONAL
CLASS CLASS CLASS
FUND AVERAGE NET ASSETS
First $500 million ............ 1.75% 1.50% 1.55%
Of the next $500 million ...... 1.40% 1.15% 1.20%
Over $1 billion ............... 1.20% 0.95% 1.00%
The annual management fee for each class of Emerging Markets is as follows:
INVESTOR ADVISOR INSTITUTIONAL
CLASS CLASS CLASS
FUND AVERAGE NET ASSETS
First $500 million ............ 2.00% 1.75% 1.80%
Of the next $500 million ...... 1.50% 1.25% 1.30%
Over $1 billion ............... 1.25% 1.00% 1.05%
www.americancentury.com 43
Notes to Financial Statements
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
--------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
The annual management fee for each class of Global Growth is as follows:
INVESTOR ADVISOR INSTITUTIONAL
CLASS CLASS CLASS
FUND AVERAGE NET ASSETS
First $1 billion .............. 1.30% 1.05% 1.10%
Of the next $1 billion ........ 1.15% 0.90% 0.95%
Over $2 billion ............... 1.05% 0.80% 0.85%
The Board of Directors has adopted the Advisor Class Master Distribution and
Shareholder Services Plan (the plan), pursuant to Rule 12b-1 of the 1940 Act.
The plan provides that the funds will pay ACIM an annual distribution fee equal
to 0.25% and service fee equal to 0.25%. The fees are computed daily and paid
monthly based on the Advisor Class's average daily closing net assets during the
previous month. The distribution fee provides compensation for distribution
expenses incurred by financial intermediaries in connection with distributing
shares of the Advisor Class including, but not limited to, payments to brokers,
dealers, and financial institutions that have entered into sales agreements with
respect to shares of the funds. The service fee provides compensation for
shareholder and administrative services rendered by ACIM, its affiliates or
independent third party providers. Fees incurred under the plan during the
period ended November 30, 1999, were $179,544, $110, $240, and $230 for
International Growth, International Discovery, Emerging Markets and Global
Growth, respectively.
Certain officers and directors of the corporation are also officers and/or
directors, and, as a group, controlling stockholders of American Century
Companies, Inc., the parent of the corporation's investment manager, ACIM, and
the corporation's transfer agent, American Century Services Corporation.
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 1999, were as follows:
INTERNATIONAL INTERNATIONAL EMERGING GLOBAL
GROWTH DISCOVERY MARKETS GROWTH
Purchases ............$3,635,905,978 $1,272,535,098 $138,003,681 $322,876,256
Proceeds from sales ..$3,405,014,428 $1,102,558,882 $88,602,248 $170,039,802
On November 30, 1999, the composition of unrealized appreciation and
depreciation of investment securities based on the aggregate cost of investments
for federal income tax purposes was as follows:
INTERNATIONAL INTERNATIONAL EMERGING GLOBAL
GROWTH DISCOVERY MARKETS GROWTH
Appreciation .........$1,385,872,085 $666,189,527 $26,305,826 $61,872,746
Depreciation ......... (21,278,245) (15,860,058) (1,148,991) (1,441,733)
--------------- ------------- ------------ -------------
Net ..................$1,364,593,840 $650,329,469 $25,156,835 $60,431,013
=============== ============= ============ =============
Federal Tax Cost .....$2,547,460,041 $929,940,526 $72,769,232 $175,778,968
=============== ============= ============ =============
44 1-800-345-2021
Notes to Financial Statements
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
--------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the funds were as follows:
INTERNATIONAL GROWTH INTERNATIONAL DISCOVERY
SHARES AMOUNT SHARES AMOUNT
INVESTOR CLASS
Shares Authorized ........................... 400,000,000 220,000,000
=============== ==============
Year ended November 30, 1999
Sold ........................................ 320,764,742 $3,280,242,016 37,751,725 $438,698,645
Issued in reinvestment of distributions ..... 4,146,364 38,366,368 292,628 2,684,210
Redeemed .................................... (305,139,555) (3,152,772,929) (29,960,277) (326,355,890)
--------------- ---------------- -------------- --------------
Net increase ................................ 19,771,551 $ 165,835,455 8,084,076 $115,026,965
--------------- ---------------- -------------- --------------
Year ended November 30, 1998
Sold ........................................ 338,695,442 $3,150,048,946 39,468,455 $378,281,301
Issued in reinvestment of distributions ..... 29,659,031 237,081,794 4,246,933 33,877,525
Redeemed .................................... (291,295,313) (2,728,685,938) (32,494,579) (295,297,992)
--------------- ---------------- -------------- --------------
Net increase ................................ 77,059,160 $ 658,444,802 11,220,809 $116,860,834
=============== ================ ============== ==============
ADVISOR CLASS
Shares Authorized ........................... 50,000,000 10,000,000
=============== ==============
Year ended November 30, 1999
Sold ........................................ 5,155,871 $53,457,122 8,912 $104,046
Issued in reinvestment of distributions ..... 38,171 353,152 4 40
Redeemed .................................... (2,817,059) (29,357,675) (6,328) (72,345)
--------------- ---------------- -------------- --------------
Net increase ................................ 2,376,983 $24,452,599 2,588 $ 31,741
=============== ================ ============== ==============
Year ended November 30, 1998(1)
Sold ........................................ 1,970,051 $18,561,418 1,162 $11,734
Issued in reinvestment of distributions ..... 166,517 1,330,469 - -
Redeemed .................................... (785,223) (7,325,105) - -
--------------- ---------------- -------------- --------------
Net increase ................................ 1,351,345 $12,566,782 1,162 $11,734
=============== ================ ============== ==============
INSTITUTIONAL CLASS
Shares Authorized ........................... 50,000,000 25,000,000
=============== ==============
Year ended November 30, 1999
Sold ........................................ 12,801,865 $138,336,765 9,013,271 $98,171,153
Issued in reinvestment of distributions ..... 28,963 267,978 24,968 229,210
Redeemed .................................... (4,174,309) (43,726,819) (3,673,179) (42,465,793)
--------------- ---------------- -------------- --------------
Net increase ................................ 8,656,519 $ 94,877,924 5,365,060 $55,934,570
=============== ================ ============== ==============
Year ended November 30, 1998(2)
Sold ........................................ 4,437,498 $42,547,908 8,496,060 $81,509,088
Issued in reinvestment of distributions ..... 318,681 2,546,259 - -
Redeemed .................................... (5,337,650) (49,430,423) (1,906,808) (17,966,240)
--------------- ---------------- -------------- --------------
Net increase (decrease) ..................... (581,471) $ (4,336,256) 6,589,252 $63,542,848
=============== ================ ============== ==============
(1) April 28, 1998 (commencement of sale) through November 30, 1998 for
International Discovery.
(2) January 2, 1998 (commencement of sale) through November 30, 1998 for
International Discovery.
www.americancentury.com 45
Notes to Financial Statements
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
--------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
EMERGING MARKETS GLOBAL GROWTH
SHARES AMOUNT SHARES AMOUNT
INVESTOR CLASS
Shares Authorized .......................... 50,000,000 220,000,000
=============== ==============
Year ended November 30, 1999
Sold ....................................... 21,920,444 $99,527,279 38,263,860 $226,491,941
Redeemed ................................... (13,316,046) (59,675,593) (10,178,444) (65,070,655)
--------------- ---------------- -------------- --------------
Net increase ............................... 8,604,398 $39,851,686 28,085,416 $161,421,286
=============== ================ ============== ==============
Year ended November 30, 1998
Sold ....................................... 11,437,641 $43,805,177 - -
Redeemed ................................... (8,239,183) (31,577,774) - -
--------------- ---------------- -------------- --------------
Net increase ............................... 3,198,458 $12,227,403 - -
=============== ================ ============== ==============
ADVISOR CLASS
Shares Authorized .......................... 12,500,000 25,000,000
=============== ==============
Year ended November 30, 1999(1)
Sold ....................................... 69,598 $328,016 14,744 $93,484
Redeemed ................................... (44,198) (203,661) (1,220) (7,134)
--------------- ---------------- -------------- --------------
Net increase ............................... 25,400 $124,355 13,524 $86,350
=============== ================ ============== ==============
INSTITUTIONAL CLASS
Shares Authorized .......................... 12,500,000 25,000,000
=============== ==============
Year ended November 30, 1999(2)
Sold ....................................... 2,933,695 $10,006,412
=============== ================
(1) May 12, 1999 (commencement of sale) through November 30, 1999 for Emerging
Markets and February 5, 1999 (commencement of sale) through November 30,
1999 for Global Growth.
(2) January 28, 1999 (commencement of sale) through November 30, 1999 for
Emerging Markets.
46 1-800-345-2021
Notes to Financial Statements
--------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1999
--------------------------------------------------------------------------------
5. BANK LOANS
Effective December 18, 1998, the funds, along with certain other funds
managed by ACIM, entered into an unsecured $570,000,000 bank line of credit
agreement with Chase Manhattan Bank. Borrowings under the agreement bear
interest at the Federal Funds rate plus 0.40%. Effective December 21, 1999,
borrowings under the agreement bear interest at the Federal Funds rate plus
0.50%. The funds may borrow money for temporary or emergency purposes to fund
shareholder redemptions. The funds did not borrow from the line during the
period December 18, 1998 through November 30, 1999.
www.americancentury.com 47
International Growth--Financial Highlights
--------------------------------------------------------------------------------
This table itemizes investment results and distributions on a per-share basis to
illustrate share price changes for each of the last five fiscal years (or less,
if the share class is not five years old). It also includes several key
statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net
income as a percentage of average net assets), EXPENSE RATIO (operating expenses
as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the
fund's trading activity).
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30
Investor Class
1999 1998 1997 1996 1995
PER-SHARE DATA
Net Asset Value, Beginning of Period .... $9.25 $9.22 $8.73 $7.51 $7.47
----------- ----------- ------------ ----------- ------------
Income From Investment Operations
Net Investment Income (Loss) .......... (0.01)(1) 0.03(1) -(2) (0.01)(1) 0.01
Net Realized and Unrealized Gain on
Investment Transactions ............... 3.95 1.31 1.41 1.24 0.40
----------- ----------- ------------ ----------- ------------
Total From Investment Operations ...... 3.94 1.34 1.41 1.23 0.41
----------- ----------- ------------ ----------- ------------
Distributions
From Net Investment Income ............ (0.02) (0.03) - (0.01) -
From Net Realized Gains on
Investment Transactions ............... (0.15) (1.28) (0.92) - (0.37)
----------- ----------- ------------ ----------- ------------
Total Distributions ................... (0.17) (1.31) (0.92) (0.01) (0.37)
----------- ----------- ------------ ----------- ------------
Net Asset Value, End of Period .......... $13.02 $9.25 $9.22 $8.73 $7.51
=========== =========== ============ =========== ============
Total Return(3) ....................... 43.22% 16.74% 18.12% 16.35% 5.93%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................. 1.27% 1.33% 1.38%(4) 1.65%(4) 1.77%
Ratio of Net Investment Income
(Loss) to Average Net Assets .......... (0.06)% 0.33% 0.04% (0.07)% 0.25%
Portfolio Turnover Rate ................. 117% 190% 163% 158% 169%
Net Assets, End of Period
(in thousands) .......................$3,701,903 $2,448,162 $1,728,617 $1,342,608 $1,210,442
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any.
(4) American Century Investment Manangement, Inc. voluntarily waived a portion
of its management fee effective August 1, 1996 through July 30, 1997. In
absence of the management fee waiver, the ratio of operating expenses to
average net assets would have been 1.56% and 1.76% for the years ended
November 30, 1997 and November 30, 1996, respectively.
48 1-800-345-2021 See Notes to Financial Statements
International Growth--Financial Highlights
--------------------------------------------------------------------------------
OR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Advisor Class
1999 1998 1997 1996(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ............ $9.24 $9.20 $8.72 $8.41
---------- ---------- ---------- -----------
Income From Investment Operations
Net Investment Income (Loss) .................. (0.04)(2) -(2)(3) (0.03) (0.01)(2)
Net Realized and Unrealized
Gain on Investment Transactions ............... 3.94 1.33 1.43 0.32
---------- ---------- ---------- -----------
Total From Investment Operations .............. 3.90 1.33 1.40 0.31
---------- ---------- ---------- -----------
Distributions
From Net Investment Income .................... -(3) (0.01) - -
From Net Realized Gains
on Investment Transactions .................... (0.15) (1.28) (0.92) -
---------- ---------- ---------- -----------
Total Distributions ........................... (0.15) (1.29) (0.92) -
---------- ---------- ---------- -----------
Net Asset Value, End of Period .................. $12.99 $9.24 $9.20 $8.72
========== ========== ========== ============
Total Return(4) ............................... 42.86% 16.58% 17.97% 3.69%
========== ========== ========== ============
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......................... 1.52% 1.58% 1.63% 1.67%(5)
Ratio of Net Investment
Income (Loss) to Average Net Assets ........... (0.31)% 0.08% (0.21)% (0.76)%(5)
Portfolio Turnover Rate ......................... 117% 190% 163% 158%
Net Assets, End of Period
(in thousands) ................................ $61,317 $21,635 $9,111 $3,803
(1) October 2, 1996 (commencement of sale) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
See Notes to Financial Statements www.americancentury.com 49
International Growth--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Institutional Class
1999 1998 1997(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ......... $9.28 $9.22 $9.26
--------- ----------- -----------
Income From Investment Operations
Net Investment Income (Loss) ............... -(2)(3) 0.05(3) -(2)
Net Realized and Unrealized
Gain (Loss) on Investment Transactions ..... 3.96 1.32 (0.04)
--------- ----------- -----------
Total From Investment Operations ........... 3.96 1.37 (0.04)
--------- ----------- -----------
Distributions
From Net Investment Income ................. (0.04) (0.03) -
From Net Realized Gains on
Investment Transactions .................... (0.15) (1.28) -
--------- ----------- -----------
Total Distributions ........................ (0.19) (1.31) -
--------- ----------- -----------
Net Asset Value, End of Period ............... $13.05 $9.28 $9.22
========= =========== ===========
Total Return(4) ............................ 43.40% 17.14% (0.43)%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ...................... 1.07% 1.13% 1.18%(5)
Ratio of Net Investment Income
(Loss) to Average Net Assets ............... 0.14% 0.53% (0.53)%(5)
Portfolio Turnover Rate ...................... 117% 190% 163%
Net Assets, End of Period
(in thousands) ............................. $132,031 $13,562 $18,846
(1) November 20, 1997 (commencement of sale) through November 30, 1997.
(2) Per-share amount was less than $0.005.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
50 1-800-345-2021 See Notes to Financial Statements
International Discovery--Financial Highlights
--------------------------------------------------------------------------------
This table itemizes investment results and distributions on a per-share basis to
illustrate share price changes for each of the last five fiscal years (or less,
if the share class is not five years old). It also includes several key
statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net
income as a percentage of average net assets), EXPENSE RATIO (operating expenses
as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the
fund's trading activity).
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30
Investor
1999 1998 1997 1996 1995
PER-SHARE DATA
Net Asset Value, Beginning of Period .... $9.24 $8.54 $7.60 $5.70 $5.39
---------- --------- --------- --------- ---------
Income From Investment Operations
Net Investment Income (Loss) .......... (0.07)(1) (0.03)(1) (0.03) (0.02)(1) 0.03
Net Realized and Unrealized Gain on
Investment Transactions ............... 6.06 1.22 1.31 1.95 0.28
---------- --------- --------- --------- ---------
Total From Investment Operations ...... 5.99 1.19 1.28 1.93 0.31
---------- --------- --------- --------- ---------
Distributions
From Net Investment Income ............ - (0.02) (0.02) (0.01) -
In Excess of Net Investment Income .... - - - (0.02) -
From Net Realized Gains on
Investment Transactions ............... (0.03) (0.47) (0.32) - -
---------- --------- --------- --------- ---------
Total Distributions ................... (0.03) (0.49) (0.34) (0.03) -
---------- --------- --------- --------- ---------
Net Asset Value, End of Period .......... $15.20 $9.24 $8.54 $7.60 $5.70
========== ========= ========= ========= =========
Total Return(2) ....................... 65.12% 14.79% 17.76% 34.06% 5.75%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets .............................. 1.55% 1.64% 1.70%(3) 1.88%(3) 2.00%
Ratio of Net Investment
Income (Loss) to Average
Net Assets .............................. (0.65)% (0.36)% (0.37)% (0.31)% 0.27%
Portfolio Turnover Rate ................. 110% 178% 146% 130% 168%
Net Assets, End of Period
(in thousands) .......................$1,408,624 $781,551 $626,327 $377,128 $114,579
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.
(3) American Century Investment Manangement, Inc. voluntarily waived a portion
of its management fee effective August 1, 1996 through July 30, 1997. In
absence of the management fee waiver, the ratio of operating expenses to
average net assets would have been 1.87% and 1.99% for the years ended
November 30, 1997 and November 30, 1996, respectively.
See Notes to Financial Statements www.americancentury.com 51
International Discovery--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Advisor Class
1999 1998(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period .................. $9.22 $10.10
------------ ----------
Income From Investment Operations
Net Investment Loss(2) .............................. (0.07) (0.02)
Net Realized and Unrealized
Gain (Loss) on Investment Transactions .............. 6.02 (0.86)
------------ ----------
Total From Investment Operations .................... 5.95 (0.88)
------------ ----------
Distributions
From Net Realized Gains on
Investment Transactions ............................. (0.03) -
------------ ----------
Total Distributions ................................. (0.03) -
------------ ----------
Net Asset Value, End of Period ........................ $15.14 $9.22
============ ==========
Total Return(3) ..................................... 64.82% (8.71)%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............................... 1.80% 1.89%(4)
Ratio of Net Investment Loss
to Average Net Assets ............................... (0.90)% (0.60)%(4)
Portfolio Turnover Rate ............................... 110% 178%
Net Assets, End of Period ............................. $56,791 $10,708
(1) April 28, 1998 (commencement of sale) through November 30, 1998.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
52 1-800-345-2021 See Notes to Financial Statements
International Discovery--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Institutional Class
1999 1998(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period .............. $9.25 $8.18
----------- -----------
Income From Investment Operations
Net Investment Loss(2) .......................... (0.04) -
Net Realized and Unrealized
Gain on Investment Transactions ................. 6.06 1.07
----------- -----------
Total From Investment Operations ................ 6.02 1.07
----------- -----------
Distributions
From Net Realized Gains
on Investment Transactions ...................... (0.03) -
----------- -----------
Total Distributions ............................. (0.03) -
----------- -----------
Net Asset Value, End of Period .................... $15.24 $9.25
=========== ===========
Total Return(3) ................................. 65.37% 13.08%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........................... 1.35% 1.44%(4)
Ratio of Net Investment Loss
to Average Net Assets ........................... (0.45)% -(4)
Portfolio Turnover Rate ........................... 110% 178%
Net Assets, End of Period
(in thousands) .................................. $182,222 $60,918
(1) January 2, 1998 (commencement of sale) through November 30, 1998.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
See Notes to Financial Statements www.americancentury.com 53
Emerging Markets--Financial Highlights
--------------------------------------------------------------------------------
This table itemizes investment results and distributions on a per-share basis to
illustrate share price changes for each of the last five fiscal years (or less,
if the share class is not five years old). It also includes several key
statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net
income as a percentage of average net assets), EXPENSE RATIO (operating expenses
as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the
fund's trading activity).
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Investor Class
1999 1998 1997(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ...... $3.49 $4.15 $5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Loss(2) .................. (0.01) -(3) (0.01)
Net Realized and Unrealized Gain
(Loss) on Investment Transactions ....... 2.14 (0.66) (0.84)
----------- ----------- -----------
Total From Investment Operations ........ 2.13 (0.66) (0.85)
----------- ----------- -----------
Net Asset Value, End of Period ............ $5.62 $3.49 $4.15
=========== =========== ===========
Total Return(4) ......................... 61.03% (15.90)% (17.00)%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................... 2.00% 2.00% 2.00%(5)
Ratio of Net Investment Loss
to Average Net Assets ................... (0.33)% (0.03)% (0.74)%(5)
Portfolio Turnover Rate ................... 168% 270% 36%
Net Assets, End of Period
(in thousands) .......................... $82,359 $21,124 $11,830
(1) September 30, 1997 (inception) through November 30, 1997.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(5) Annualized.
54 1-800-345-2021 See Notes to Financial Statements
Emerging Markets--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED
Advisor Class
1999(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ............................ $4.44
-------------
Income From Investment Operations
Net Realized and Unrealized Gain on
Investment Transactions ....................................... 1.17
-------------
Total From Investment Operations .............................. 1.17
-------------
Net Asset Value, End of Period .................................. $5.61
=============
Total Return(2) ............................................... 26.35%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets ............... 2.25%(3)
Ratio of Net Investment Income to Average Net Assets ............ 0.02%(3)
Portfolio Turnover Rate ......................................... 168%
Net Assets, End of Period ....................................... $142,544
(1) May 12, 1999 (commencement of sale) through November 30, 1999.
(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(3) Annualized.
See Notes to Financial Statements www.americancentury.com 55
Emerging Markets--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED
Institutional Class
1999(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ................ $3.39
---------------
Income From Investment Operations
Net Realized and Unrealized
Gain on Investment Transactions ................... 2.24
---------------
Total From Investment Operations .................. 2.24
---------------
Net Asset Value, End of Period ...................... $5.63
===============
Total Return(2) ................................... 66.08%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets ... 1.80%(3)
Ratio of Net Investment Loss to Average Net Assets .. (0.05)%(3)
Portfolio Turnover Rate ............................. 168%
Net Assets, End of Period (in thousands) ............ $16,507
(1) January 28, 1999 (commencement of sale) through November 30, 1999.
(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(3) Annualized.
56 1-800-345-2021 See Notes to Financial Statements
Global Growth--Financial Highlights
--------------------------------------------------------------------------------
This table itemizes investment results and distributions on a per-share basis to
illustrate share price changes for each of the last five fiscal years (or less,
if the share class is not five years old). It also includes several key
statistics for each reporting period, including TOTAL RETURN, INCOME RATIO (net
income as a percentage of average net assets), EXPENSE RATIO (operating expenses
as a percentage of average net assets), and PORTFOLIO TURNOVER (a gauge of the
fund's trading activity).
FOR A SHARE OUTSTANDING THROUGHOUT THE YEAR ENDED NOVEMBER 30
Investor Class
1999(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ............................ $5.00
-------------
Income From Investment Operations
Net Investment Loss(2) ........................................ (0.01)
Net Realized and Unrealized
Gain on Investment Transactions ............................... 3.34
-------------
Total From Investment Operations .............................. 3.33
-------------
Net Asset Value, End of Period .................................. $8.33
=============
Total Return(3) ............................................... 66.60%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets ............... 1.30%
Ratio of Net Investment Loss to Average Net Assets .............. (0.20)%
Portfolio Turnover Rate ......................................... 133%
Net Assets, End of Period (in thousands) ........................ $233,823
(1) December 1, 1998 (inception) through November 30, 1999.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any.
See Notes to Financial Statements www.americancentury.com 57
Global Growth--Financial Highlights
--------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED
Advisor Class
1999(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ........................... $5.58
---------------
Income From Investment Operations
Net Investment Loss(2) ....................................... (0.03)
Net Realized and Unrealized Gain
on Investment Transactions ................................... 2.76
---------------
Total From Investment Operations ............................. 2.73
---------------
Net Asset Value, End of Period ................................. $8.31
===============
Total Return(3) .............................................. 48.92%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets .............. 1.55%(4)
Ratio of Net Investment Loss to Average Net Assets ............. (0.40)%(4)
Portfolio Turnover Rate ........................................ 133%
Net Assets, End of Period ...................................... $112,446
(1) February 5, 1999 (commencement of sale) through November 30, 1999.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
58 1-800-345-2021 See Notes to Financial Statements
Independent Auditors' Report
--------------------------------------------------------------------------------
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of International Growth Fund,
International Discovery Fund, Emerging Markets Fund and Global Growth Fund,
(collectively the "Funds"), comprising American Century World Mutual
Funds, Inc., as of November 30, 1999, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of the
two years (one year for Global Growth Fund) in the period then ended, and the
financial highlights the periods presented. These financial statements and the
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at November
30, 1999 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above and financial
highlights present fairly, in all material respects, the financial positions of
International Growth Fund, International Discovery Fund, Emerging Markets Fund
and Global Growth Fund as of November 30, 1999, the results of their operations
for the year then ended, the changes in their net assets for each of the two
years (one year for Global Growth Fund) in the period then ended, and the
financial highlights for the periods presented in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
January 12, 2000
www.americancentury.com 59
Share Class and Retirement Account Information
--------------------------------------------------------------------------------
SHARE CLASSES
Three classes of shares are authorized for sale by the funds: Investor
Class, Advisor Class and Institutional Class.
INVESTOR CLASS shareholders do not pay any commissions or other fees for
purchase of fund shares directly from American Century. Investors who buy
Investor Class shares through a broker-dealer may be required to pay the
broker-dealer a transaction fee.
ADVISOR CLASS shares are sold through banks, broker-dealers, insurance
companies and financial advisors. Advisor Class shares are subject to a 0.50%
Rule 12b-1 service and distribution fee. Half of that fee is available to pay
for recordkeeping and administrative services, and half is available to pay for
distribution services provided by the financial intermediary through which the
Advisor Class shares are purchased. The total expense ratio of the Advisor Class
shares is 0.25% higher than the total expense ratio of the Investor Class
shares.
INSTITUTIONAL CLASS shares are available to endowments, foundations, defined
benefit pension plans or financial intermediaries serving these investors. This
class recognizes the relatively lower cost of serving institutional customers
and others who invest at least $5 million in an American Century fund or at
least $10 million in multiple funds. In recognition of the larger investments
and account balances and comparatively lower transaction costs, the total
expense ratio of the Institutional Class shares is 0.20% less than the total
expense ratio of the Investor Class shares.
All classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)
account] are subject to federal income tax withholding at the rate of 10% of the
total amount withdrawn, unless you elect not to have withholding apply. If you
don't want us to withhold on this amount, you may send us a written notice not
to have the federal income tax withheld. Your written notice is valid from the
date of receipt at American Century. Even if you plan to roll over the amount
you withdraw to another tax-deferred account, the withholding rate still applies
to the withdrawn amount unless we have received a written notice not to withhold
federal income tax prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Exchange/Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid from the date of receipt at American
Century. You may revoke your election at any time by sending a written notice to
us.
Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments are
not sufficient.
60 1-800-345-2021
Background Information
--------------------------------------------------------------------------------
INVESTMENT PHILOSOPHY AND POLICIES
American Century offers 14 growth funds including domestic equity,
specialty, international, and global. The philosophy behind these growth funds
focuses on three important principles. First, the funds seek to own successful
companies, which we define as those with growing earnings and revenues. Second,
we attempt to keep the funds fully invested, regardless of short-term market
activity. Experience has shown that market gains can occur in unpredictable
spurts and that missing those opportunities can significantly limit the
potential for gain. Third, the funds are managed by teams, rather than by one
"star." We believe this allows us to make better, more consistent
management decisions.
In addition to these principles, each fund has its own investment Policies:
INTERNATIONAL GROWTH invests primarily in the equity securities of foreign
companies. These companies will be located primarily in developed countries.
INTERNATIONAL DISCOVERY invests primarily in the equity securities of
smaller foreign companies. To enable the fund to maintain its emphasis on
smaller growth companies, the fund will close to new investors on January 28,
2000. We will continue to accept investments into existing accounts after that
date. The fund may experience greater share price fluctuation and short-term
risk than International Growth.
EMERGING MARKETS invests primarily in the equity securities of companies in
emerging market countries. The companies may be located or principally traded in
emerging market countries and also may derive a significant portion of their
business from emerging market countries. This fund may experience greater share
price fluctuation and short-term risk than either International Growth or
International Discovery.
GLOBAL GROWTH invests primarily in equity securities of both U.S. and
foreign companies. These companies will be primarily located in developed
countries.
International investing involves special risks, including political
instability and economic risk. Investing in emerging markets may accentuate
these risks. Historically, share prices of small companies have been more
volatile than those of large companies.
HOW CURRENCY RETURNS AFFECT FUND PERFORMANCE
For U.S. investors, the total return from international stocks includes the
effects of currency fluctuations--the movement of international currency values
in relation to the value of the U.S. dollar. Currency exchange rates come into
play when international stock income, gains and losses are converted into U.S.
dollars.
Changing currency values may have a significant impact on the total returns
of international stock funds. The value of the foreign investments held by
international stock funds may be reduced or increased by changes in currency
exchange rates. As a result, the value of your investment could change based
solely upon changes in the exchange rates between foreign currencies and the
U.S. dollar. 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. (The weakened foreign currency buys fewer dollars.) Conversely, the
dollar value of a foreign security tends to increase when the value of the
dollar falls against the
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PORTFOLIO MANAGERS
International Growth
HENRIK STRABO
MARK KOPINSKI
International Discovery
HENRIK STRABO
MARK KOPINSKI
BRIAN BRADY
Emerging Markets
MARK KOPINSKI
MIKE DONNELLY, CFA
Global Growth
HENRIK STRABO
BRADLEY AMOILS
www.americancentury.com 61
Background Information
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(Continued)
foreign currency. (The stronger foreign currency buys more dollars.) 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 regulations,
currency devaluations and political developments.
COMPARATIVE INDICES
The following indices are used in the report to serve as fund performance
comparisons. They are not investment products available for purchase.
MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) has developed several indices
that measure the performance of foreign stock markets. The best known is the
EUROPE, AUSTRALASIA, FAR EAST INDEX (EAFE(reg.tm)), which is a widely followed
group of stocks from 20 countries. Within this index are two narrower indices,
MSCI EUROPE and MSCI FAR EAST, which measure stock performance in 14 European
countries and four Asian countries, respectively.
The MSCI EMERGING MARKETS FREE INDEX (EMF(reg.tm)) represents the
performance of stocks in 26 emerging market countries in Europe, Latin America
and the Pacific Basin. Within this index is a narrower index, MSCI EMERGING
LATIN AMERICA, which measures the performance of stocks in seven Latin American
countries.
The MSCI WORLD FREE INDEX represents the performance of stocks in 22
developed market countries (including the United States) available for purchase
by global investors.
62 1-800-345-2021
Glossary
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RETURNS
TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.
AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year total returns, please refer to the
"Financial Highlights" on pages 48-58.
INVESTMENT TERMS
* EXPENSE RATIO-- the operating expenses of the fund, expressed as a percentage
of average net assets. Shareholders pay an annual fee to the investment manager
for investment advisory and management services. The expenses and fees are
deducted from fund income, not from each shareholder account. (See Note 2 in the
Notes to Financial Statements.)
* MEDIAN MARKET CAPITALIZATION-- Market capitalization (market cap) is the total
value of a company's stock and is calculated by multiplying the number of
outstanding common shares by the current share price. The company whose market
cap is in the middle of the portfolio is the median market cap. Half the
companies in the portfolio have values greater than the median, and half have
values that are less. If there is an even number of companies, then the median
is the average of the two companies in the middle.
* NUMBER OF COMPANIES-- the number of different companies held by a fund on a
given date.
* PORTFOLIO TURNOVER-- the percentage of a fund's investment portfolio that is
replaced during a given time period, usually a year. Actively managed portfolios
tend to have higher turnover than passively managed portfolios such as index
funds.
* PRICE/BOOK RATIO-- a stock value measurement calculated by dividing a
company's stock price by its book value per share, with the result expressed as
a multiple instead of as a percentage. (Book value per share is calculated by
subtracting a company's liabilities from its assets, then dividing that value by
the number of outstanding shares.)
* PRICE/EARNINGS (P/E) RATIO-- a stock value measurement calculated by dividing
a company's stock price by its earnings per share, with the result expressed as
a multiple instead of as a percentage. (Earnings per share is calculated by
dividing the after-tax earnings of a corporation by its outstanding shares.)
TYPES OF STOCKS
* BLUE CHIP STOCKS-- stocks of the most established companies in American
industry. They are generally large, fairly stable companies that have
demonstrated consistent earnings and usually have long-term growth potential.
Examples include General Electric and Coca-Cola.
* CYCLICAL STOCKS-- generally considered to be stocks whose price and earnings
fluctuations tend to follow the ups and downs of the business cycle. Examples
include the stocks of automobile manufacturers, steel producers, and textile
operators.
* GROWTH STOCKS-- stocks of companies that have experienced above-average
earnings growth and are expected to continue such growth. These stocks often
sell at high P/E ratios. Examples can include the stocks of high-tech, health
care, and consumer staple companies.
* LARGE-CAPITALIZATION ("LARGE-CAP") STOCKS-- generally considered to
be stocks of companies with a market capitalization (the total value of a
company's outstanding stock) of more than $5 billion. These tend to be the
stocks that make up the Dow Jones Industrial Average and the S&P 500.
* MEDIUM-CAPITALIZATION ("MID-CAP") STOCKS-- generally considered to
be stocks of companies with a market capitalization (the total value of a
company's outstanding stock) of between $1 billion and $5 billion. These tend to
be the stocks that make up the S&P 400.
* SMALL-CAPITALIZATION ("SMALL-CAP") STOCKS-- generally considered to
be stocks of companies with a market capitalization (the total value of a
company's outstanding stock) of less than $1 billion. These tend to be the
stocks that make up the Russell 2000 Index.
* VALUE STOCKS-- generally considered to be stocks that are purchased because
they are relatively inexpensive. These stocks are typically characterized by low
P/E ratios.
www.americancentury.com 63
Glossary
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(Continued)
FUND CLASSIFICATIONS
INVESTMENT OBJECTIVE
The investment objective may be based on the fund's objective as stated in
its prospectus or fund profile, or the fund's categorization by independent
rating organizations based on its management style.
* CAPITAL PRESERVATION -- offers taxable and tax-free money market funds for
relative stability of principal and liquidity.
* INCOME -- offers funds that can provide current income and competitive yields,
as well as a strong and stable foundation and generally lower volatility levels
than stock funds.
* GROWTH & INCOME -- offers funds that emphasize both growth and income
provided by either dividend-paying equities or a combination of equity and
fixed-income securities.
* GROWTH -- offers funds with a focus on capital appreciation and long-term
growth, generally providing high return potential with corresponding high price
fluctuation risk.
RISK
The classification of funds by risk category is based on quantitative
historical measures as well as qualitative prospective measures. It is not
intended to be a precise indicator of future risk or return levels. The degree
of risk within each category can vary significantly, and some fund returns have
historically been higher than more aggressive funds or lower than more
conservative funds. Please be aware that a fund's category may change over time.
Therefore, it is important that you read a fund's prospectus or fund profile
carefully before investing to ensure its objectives, policies, and risk
potential are consistent with your needs.
* CONSERVATIVE -- these funds generally provide lower return potential with
either low or minimal price fluctuation risk.
* MODERATE -- these funds generally provide moderate return potential with
moderate price fluctuation risk.
* AGGRESSIVE -- these funds generally provide high return potential with
corresponding high price fluctuation risk.
64 1-800-345-2021
[inside back cover]
===============================================================================
INVESTMENT OBJECTIVE - CAPITAL PRESERVATION
===============================================================================
RISK LEVEL - CONSERVATIVE
TAXABLE MONEY MARKETS TAX-FREE MONEY MARKETS
Premium Capital Reserve FL Municipal Money Market
Prime Money Market CA Municipal Money Market
Premium Government Reserve CA Tax-Free Money Market
Government Agency Tax-Free Money Market
Money Market
Capital Preservation
===============================================================================
INVESTMENT OBJECTIVE - INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
TAXABLE BONDS TAX-FREE BONDS
Target 2025* CA High-Yield Municipal
Target 2020* High-Yield Municipal
Target 2015*
Target 2010*
High-Yield
International Bond
RISK LEVEL - MODERATE
TAXABLE BONDS TAX-FREE BONDS
Long-Term Treasury CA Long-Term Tax-Free
Target 2005* Long-Term Tax-Free
Bond CA Insured Tax-Free
Premium Bond
RISK LEVEL - CONSERVATIVE
TAXABLE BONDS TAX-FREE BONDS
Intermediate-Term Bond CA Intermediate-Term Tax-Free
Intermediate-Term Treasury AZ Intermediate-Term Municipal
GNMA FL Intermediate-Term Municipal
Inflation-Adjusted Treasury Intermediate-Term Tax-Free
Limited-Term Bond CA Limited-Term Tax-Free
Target 2000* Limited-Term Tax-Free
Short-Term Government
Short-Term Treasury
===============================================================================
INVESTMENT OBJECTIVE - GROWTH AND INCOME
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY
Small Cap Quantitative
Small Cap Value
RISK LEVEL - MODERATE
ASSET ALLOCATION/BALANCED DOMESTIC EQUITY SPECIALTY
Strategic Allocation: Equity Growth Utilities
Aggressive Equity Index Real Estate
Balanced Tax-Managed Value
Strategic Allocation: Income & Growth
Moderate Value
Strategic Allocation: Large Cap Value
Conservative Equity Income
===============================================================================
INVESTMENT OBJECTIVE - GROWTH
===============================================================================
RISK LEVEL - AGGRESSIVE
DOMESTIC EQUITY SPECIALTY INTERNATIONAL
Veedot(SM) Global Gold Emerging Markets
New Opportunities International Discovery
Giftrust(reg.tm) International Growth
Vista
Heritage Global Growth
Growth
Ultra(reg.tm)
Select
RISK LEVEL - MODERATE
SPECIALTY
Global Natural Resources
The investment objective may be based on the fund's objective as stated in its
prospectus or fund profile, or the fund's categorization by independent rating
organizations based on its management style.
The classification of funds by risk category is based on quantitative historical
measures as well as qualitative prospective measures. It is not intended to be a
precise indicator of future risk or return levels. The degree of risk within
each category can vary significantly, and some fund returns have historically
been higher than more aggressive funds or lower than more conservative funds.
Please be aware that a fund's category may change over time. Therefore, it is
important that you read a fund's prospectus or fund profile carefully before
investing to ensure its objectives, policies and risk potential are consistent
with your needs. For a definition of fund categories, see the Glossary.
*While listed within the Income investment objective, the Target funds do not
pay current dividend income. Income dividends are distributed once a year in
December. The Target funds are listed in all three risk categories due to the
dramatic price volatility investors may experience during certain market
conditions. If held to their target dates, however, they can offer a
conservative, dependable way to invest for a specific time horizon.
Please call 1-800-345-2021 for a prospectus or profile on any American Century
fund. These documents contain important information including charges and
expenses, and you should read them carefully before you invest or send money.
[back cover]
[graphic of runners]
Who we are
American Century offers investors more than 70 mutual funds that span the
investment spectrum. We currently manage $100 billion for roughly 2 million
individuals, institutions and corporations, with a range of services designed to
make investing easy and convenient.
For four decades, American Century has been a leader in performance, service and
innovation. From pioneering the use of computer technology in investing to
allowing investors to conduct transactions and receive financial advice over the
Internet, we have remained committed to building long-term relationships and to
helping investors achieve their dreams.
In a very real sense, investors put their future in our hands. With so much at
stake, our work continues to be guided by one central belief, shared by every
person at American Century: WE SUCCEED ONLY IF OUR INVESTORS SUCCEED.
[left margin]
[american century logo(reg.sm)]
American
Century
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
WWW.AMERICANCENTURY.COM
INVESTOR RELATIONS
1-800-345-2021 OR 816-531-5575
AUTOMATED INFORMATION LINE
1-800-345-8765
FAX: 816-340-7962
TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 OR 816-444-3485
BUSINESS, NOT-FOR-PROFIT, EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533
BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL ADVISORS, INSURANCE COMPANIES
1-800-345-6488
AMERICAN CENTURY MUTUAL FUNDS, INC.
INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
KANSAS CITY, MISSOURI
THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
--------------------------------------------------------------------------------
American Century Investments BULK RATE
P.O. Box 419200 U.S. POSTAGE PAID
Kansas City, MO 64141-6200 AMERICAN CENTURY
www.americancentury.com COMPANIES
0001 Funds Distributor, Inc. is the distributor for American Century funds
SH-ANN-18893
