AMERICAN CENTURY INTERNATIONAL BOND FUNDS, 485BPOS, 1999-04-30

AMERICAN CENTURY INTERNATIONAL BOND FUNDS
485BPOS, 1999-04-30

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 14 [X]

and/or

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

Amendment No. 15 [X]

(Check appropriate box or boxes.)

AMERICAN CENTURY INTERNATIONAL BOND FUNDS
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)

4500 Main Street, Kansas City, MO 64141-6200
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)

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

William M. Lyons, 4500 Main Street, Kansas City, MO 64141-6200
_________________________________________________________________
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: May 1, 1999

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

[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

- --------------------------------------------------------------------------------
<PAGE>
[front cover]

AMERICAN CENTURY

Prospectus

International Bond Fund

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

[left margin]

MAY 1, 1999
INVESTOR CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

Dear Investor,

Reading a prospectus doesn't have to be a chore. We've done the hard work so
you can focus on what's important--learning about the fund. Take a look inside
and you'll see this prospectus is different from others. It takes a clear-cut
approach to fund information.

Here's what you'll find:

* The fund's primary investments and risks

* A description of who may or may not want to invest in the fund

* Fund performance, including returns for each year, best and worst
quarters, and average annual returns compared to the fund's benchmarks

* An overview of services available and ways to manage your accounts

* Helpful tips and definitions of key investment terms

Whether you're a current investor or investing in mutual funds for the first
time, this prospectus will give you a clear understanding of the fund. If you
have questions, our Investor Relations Representatives are available weekdays, 7
a.m. to 7 p.m., and Saturdays, 9 a.m. to 2 p.m., Central time. Our toll-free
number is 1-800-345-2021. We look forward to helping you achieve your financial
goals.

Sincerely,
/s/Mark Killen
Mark Killen
Senior Vice President
American Century Investment Services, Inc.

[left margin]

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

American Century
Investments

P.O. Box 419200
Kansas City, MO
64141-6200

TABLE OF CONTENTS

An Overview of the Fund ................................................... 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 4
Information about the Fund ................................................ 5
Basics of Fixed-Income Investing .......................................... 7
Management ................................................................ 9
Investing with American Century ........................................... 12
Share Price and Distributions ............................................. 16
Taxes ..................................................................... 17
Multiple Class Information ................................................ 18
Financial Highlights ...................................................... 19

[left margin]

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

[graphic of hand with pointing index finger] This symbol highlights special
information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks high total return by investing in high-quality,
nondollar-denominated government and corporate debt securities outside the
United States.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The fund invests most of its assets in high-quality DEBT SECURITIES issued by
foreign corporations and governments. The advisor expects the fund's
dollar-weighted average maturity to range from two to 10 years.

The fund's primary investment risks include

* interest rate risk

* currency risk

* political and economic risk

* market and trading risk

Additional important information about the fund's investment strategies and
risks begins on page 5.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you

* want to diversify your investments beyond United States-dollar denominated
securities and interest rate exposure

* want to protect your income against a decline in the purchasing power of the
U.S. dollar relative to foreign currencies

* are comfortable with the fund's other investment risks

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* looking exclusively for current income

* unable to tolerate the risk of investing in foreign securities

* unable to tolerate rapid fluctuations in the value of your investment

* looking for the added security of FDIC insurance

[left margin]

DEBT SECURITIES means bonds, notes and debentures. Debt securities also are
sometimes called fixed-income securities.

[graphic of hand with pointing index finger] An investment in the fund is not a
bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation (FDIC) or any other government agency.

2 American Century Investments 1-800-345-2021

FUND PERFORMANCE HISTORY

INTERNATIONAL BOND FUND

Annual Total Returns

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

[bar chart]
1998 1997 1996 1995 1994 1993
-----------------------------------------------------
International Bond 17.87% -5.88% 6.38% 24.40% 1.52% 11.79%

The highest and lowest quarterly returns for the period reflected in the bar
chart are:

Highest Lowest
- --------------------------------------------------------------------------------
International Bond 13.84% (1Q 1995) -6.79% (1Q 1997)

Average Annual Returns

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

For the calendar year Life of
ended December 31, 1998 1 year 5 years Fund(1)
- -------------------------------------------------------------------------------
International Bond 17.87% 8.37% 8.65%
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J.P. Morgan Global Traded
Government Bond Index(2) 18.49% 9.61% 9.31%
- -------------------------------------------------------------------------------

(1) The inception date for the fund is January 7, 1992.

(2) Excluding the U.S. and with Japan weighted at 15%. Benchmark began January
31, 1992.

[left margin]

[graphic of hand with pointing index finger] The performance information on this
page is designed to help you understand how fund returns can vary. Keep in mind
that past performance does not predict how the fund will perform in the future.

[graphic of hand with pointing index finger] For current performance
information, including yields, please call us at 1-800-345-2021 or visit
American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 3

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century

* to reinvest dividends in additional shares

* to exchange into the Investor Class shares of other American Century funds

The following table describes the fees and expenses that you will pay if you buy
and hold shares of the fund.

ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

Distribution Total Annual
Management and Service Other Fund Operating
Fee(1) (12b-1) Fees Expenses(2) Expenses
- --------------------------------------------------------------------------------
International Bond 0.84% None 0.00% 0.84%

(1) Based on expenses incurred during the fund's most recent fiscal year. The
fund has a stepped fee schedule. As a result, the fund's management fee rate
generally decrease as fund assets increase. Please consult the Statement of
Additional Information for more details about the fund's management fees.

(2) Other expenses, which include the fees and expenses of the fund's
independent trustees, their legal counsel and interest, were less than 0.005%
for the most recent fiscal year.

EXAMPLE

The example in the table below is intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund

* redeem all of your shares at the end of the periods shown below

* earn a 5% return each year

* incur the same operating expenses as shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
International Bond $86 $268 $465 $1,034

[left margin]

[graphic of hand with pointing index finger] Use this example to compare the
costs of investing in other funds. Of course, your actual costs may be higher or
lower.

4 American Century Investments 1-800-345-2021

INFORMATION ABOUT THE FUND

INTERNATIONAL BOND FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks high total return by investing in high-quality,
nondollar-denominated government and corporate debt securities outside the
United States.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund buys HIGH-QUALITY, nondollar-denominated foreign government and foreign
corporate DEBT SECURITIES.

The subadvisor selects the fund's investments by using a combination of
fundamental research and bond and currency valuation models.

* Economic/Political Fundamentals. The subadvisor evaluates each country's
economic climate and political discipline for controlling deficits and
inflation.

* Expected Return. Using economic forecasts, the subadvisor projects the
expected return for each country.

* Relative Value. By contrasting expected risks and returns for investments in
each country, the subadvisor selects those countries expected to produce the
best return at reasonable risk.

Normally, the fund will only purchase bonds denominated in foreign currencies.
The fund will not hedge back to the dollar.

The weighted average maturity of the fund is expected to be between two and 10
years.

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

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

When interest rates change, the fund's share value will be affected. Generally,
when interest rates rise, the fund's share value will decline. The opposite is
true when interest rates decline. The interest rate risk for International Bond
is higher than for funds that have shorter weighted average maturities, such as
short-term and limited-term funds.

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

International Bond invests primarily in foreign securities, which involves
greater risks than investing in U.S. securities. These risks are summarized
below.

* Currency Risk. In addition to changes in the value of the fund's investments,
changes in the value of foreign currencies against the U.S. dollar also could
result in gains or losses to the fund. The value of a share of International
Bond is determined in U.S. dollars. The fund's investments, however,
generally are held in the foreign currency of the country where investments
are made. As a result, the fund could recognize a gain or loss based solely
upon a change in the exchange rate between the foreign currency and the U.S.
dollar.

* Political and Economic Risk. Many countries where the fund invests are not as
politically or economically developed as the United States. As a result, the
economies and political and social structures of these countries could be
unstable. This could cause the value of the fund's investments to decrease.
The fund also could be unable to enforce its ownership rights or pursue legal
remedies in countries where it invests.

[left margin]

A HIGH-QUALITY DEBT SECURITY is one that has been determined to be among the top
half of investment grade. This can be established in a number of ways. For
example, independent rating agencies may rate the security in one of their two
highest rating categories. The fund's advisor also can analyze an unrated
security to determine if its credit quality is high enough for investment.

www.americancentury.com American Century Investments 5

* Market and Trading Risk. The trading markets for many foreign securities are
not as active as U.S. markets and may have less governmental regulation and
oversight. Foreign markets also may have procedures that make it difficult
for the fund to buy and sell securities. These factors could result in a loss
to the fund.

* Availability of Information. Foreign companies generally are not subject to
the regulatory controls or uniform accounting, auditing and financial
reporting standards imposed on U.S. issuers. As a result, there may be less
publicly available information about foreign issuers than is available
regarding U.S. issuers.

In summary, International Bond is intended for investors who find foreign
securities an appropriate investment and who are willing to accept the increased
risk associated with the fund's investment strategy. An investment in the fund
should not be considered a complete investment program and is not appropriate
for investors who are unable to tolerate rapid fluctuations in the value of
their investment.

6 American Century Investments 1-800-345-2021

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

When a fund buys a debt security, which is also called a fixed-income security,
it is essentially lending money to the issuer of the security. Notes, bonds,
commercial paper and Treasury bills are examples of debt securities. After the
debt security is first sold by the issuer, it may be bought and sold by other
investors. The price of the security may rise or fall based on many factors,
including changes in interest rates, inflation and liquidity.

The fund managers decide which debt securities to buy and sell by

* determining which securities help a fund meet its maturity requirements

* identifying securities that satisfy a fund's credit quality requirements

* evaluating the current economic conditions and assessing the risk of
inflation

* evaluating special features of the securities that may make them more or
less attractive

WEIGHTED AVERAGE MATURITY

Like most loans, debt securities eventually must be repaid (or refinanced) at
some date. This date is called the maturity date. The number of days left to a
debt security's maturity date is called the remaining maturity. The longer a
debt security's remaining maturity, the more sensitive it is to changes in
interest rates.

Because a bond fund will own many debt securities, the fund managers calculate
the average of the remaining maturities of all of the debt securities the fund
owns to evaluate the interest rate sensitivity of the entire portfolio. This
average is weighted according to the size of the fund's individual holdings and
is called WEIGHTED AVERAGE MATURITY. The following chart shows how a fund
manager would calculate the weighted average maturity for a fund that owned only
two debt securities.

Amount of Percent of Remaining Weighted
Security Owned Portfolio Maturity Maturity
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Debt Security A $100,000 25% 1,000 days 250 days
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Debt Security B $300,000 75% 10,000 days 7,500 days
- --------------------------------------------------------------------------------
Weighted Average
Maturity 7,750 days

TYPES OF RISK

The basic types of risk that the fund faces are described below.

Interest Rate Risk

Generally, interest rates and the prices of debt securities move in opposite
directions. So when interest rates fall, the prices of most debt securities
rise; when interest rates rise, prices fall. Because the fund invests primarily
in debt securities, changes in interest rates will affect the fund's
performance.

The degree to which interest rate changes affect the fund's performance varies
and is related to the weighted average maturity of the fund. For example, when
interest rates rise, you can expect the share value of a long-term bond fund to
fall more than that of a short-term bond fund. When rates fall, the opposite is
true. This sensitivity to interest rate changes is called interest rate risk.

[left margin]
[graphic of hand with pointing index finger] The longer a fund's weighted
average maturity, the more sensitive it is to changes in interest rates.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate
the remaining maturity of a fund's investment portfolio.

www.americancentury.com American Century Investments 7

When interest rates change, longer maturity bonds experience a greater change in
price. The following table shows the effect of a 1% increase in interest rates
on the price of 7% coupon bonds of differing maturities:

Remaining Price After
Maturity Current Price 1% Increase Change in Price
- --------------------------------------------------------------------------------
1 year $100.00 $99.06 -0.94%
- --------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
- --------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
- --------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%

Credit Risk

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the rating
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and be able to make interest and principal
payments on time. Generally, a lower credit rating indicates a greater risk of
non-payment. A lower rating also may indicate that the issuer has a more senior
series of debt securities, which means that if the issuer has difficulties
making its payments, the more senior series of debt is first in line for
payment.

It's not as simple as buying the highest-rated debt securities. Higher credit
ratings usually mean lower interest rates, so investors often purchase
securities that aren't the highest-rated to increase return. If a fund purchases
lower-rated securities, it assumes additional credit risk.

The following chart shows the authorized credit quality ranges for the fund
offered by this Prospectus.

- ---------------------------------- ---------------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- ---------------------------------- ---------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- --------------------------------------------------------------------------------
XXXXXXXXXXXXXXX International Bond
- --------------------------------------------------------------------------------

Securities rated in one of the highest four categories by a nationally
recognized securities rating organization (e.g., Moody's or Standard & Poor's)
are considered "investment grade." For a complete description of the ratings
system, see "Explanation of Fixed-Income Securities Ratings" in the Statement of
Additional Information. The fund's credit quality restrictions apply at the time
of purchase; the fund will not necessarily sell securities if they are
downgraded by a rating agency.

Liquidity Risk

Debt securities can become difficult to sell for a variety of reasons, such as
lack of an active trading market. When a fund's investments become difficult to
sell, it is said to have a problem with liquidity. The chance that a fund will
have liquidity issues is called liquidity risk.

Inflation Risk

The safest investments usually have the lowest potential income and performance.
There is a risk, then, that returns from the investment may fail to
significantly outpace inflation. Even if the value of your investment has not
gone down, your money will not be worth as much as if there had been no
inflation. Your after-inflation return may be quite small. This risk is called
inflation risk.

The fund engages in a variety of investment techniques as it pursues its
investment objectives. Each technique has its own characteristics, and may pose
some level of risk to the fund. If you would like to learn more about these
techniques, you should review the Statement of Additional Information before
making an investment.

[left margin]

[graphic of hand with pointing index finger] Credit quality may be lower when
the issuer has

* a high debt level

* a short operating history

* a senior level of debt

* a difficult, competitive environment

[graphic of hand with pointing index finger] The Statement of Additional
Information provides a detailed description of these securities ratings.

8 American Century Investments 1-800-345-2021

MANAGEMENT

WHO MANAGES THE FUND?

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

THE BOARD OF TRUSTEES

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

THE INVESTMENT ADVISOR

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

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

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee based on a percentage of the average
net assets of the Investor Class shares of the fund. The rate of the management
fee for a fund is determined monthly on a class-by-class basis using a two-step
formula that takes into account the fund's strategy (money market, bond or
equity) and the total amount of mutual fund assets the advisor manages.

The Statement of Additional Information contains detailed information about the
calculation of the management fee. Out of that fee, the advisor paid all
expenses of managing and operating the fund except brokerage expenses, taxes,
interest, fees and expenses of the independent trustees (including legal counsel
fees) and extraordinary expenses. A portion of the management fee may be paid by
the fund's advisor to unaffiliated third parties who provide recordkeeping and
administrative services that would otherwise be performed by an affiliate of the
advisor.

Management Fees Paid by the Fund to the Advisor
as a Percentage of Average Net Assets for the
Most Recent Fiscal Year Ended December 31, 1998
- --------------------------------------------------------------------------------
International Bond 0.84%

www.americancentury.com American Century Investments 9

THE FUND MANAGEMENT TEAM

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

The advisor and the Board of Trustees have hired and supervise J.P. Morgan
Investment Management Inc. (JPMIM), a subadvisor, to make investment decisions
for the fund.

The portfolio managers on the investment team are identified below:

DAVID SCHROEDER

Mr. Schroeder, Vice President and Senior Portfolio Manager, has been a member of
the team that manages International Bond since June 1997. He joined American
Century in 1990 as a portfolio manager. He has a bachelor of arts from Pomona
College.

DAVID GIBBON

Mr. Gibbon, Vice President and Fixed-Income Portfolio Manager, has been a member
of the team that manages International Bond since December 1998. He joined
JPMIM, New York in 1992 and has worked in London since 1997. He has a bachelor's
degree in physics from Princeton University. He is a Chartered Financial
Analyst.

DOMINIC PEGLER

Mr. Pegler, Vice President, JPMIM, and Fixed-Income Portfolio Manager, has been
a member of the team that manages International Bond since June 1997. He joined
JPMIM London in 1996 after seven years at the Bank of England, serving as an
economist and in the Reserves Management Department, managing the UK's foreign
exchange reserves. He has a bachelor's degree and an MBA in economics from the
London School of Economics.

[left margin]

[graphic of hand with pointing index finger] CODE OF ETHICS

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

10 American Century Investments 1-800-345-2021

FUNDAMENTAL INVESTMENT POLICIES

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

YEAR 2000 ISSUES

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

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

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

www.americancentury.com American Century Investments 11

INVESTING WITH AMERICAN CENTURY

SERVICES AUTOMATICALLY AVAILABLE TO YOU

You automatically will have access to the services listed below when you open
your account. If you do not want these services, see "Conducting Business in
Writing" below.

CONDUCTING BUSINESS IN WRITING

If you prefer to conduct business in writing only, you can indicate this on the
account application. If you choose this option, you must provide written
instructions to invest, exchange and redeem. All account owners must sign
transaction instructions (with signatures guaranteed for redemptions in excess
of $100,000). If you want to add services later, you can complete an Investor
Service Options form.

WAYS TO MANAGE YOUR ACCOUNT
- --------------------------------------------------------------------------------

BY TELEPHONE

Investor Relations
1-800-345-2021

Business, Not-For-Profit and Employer-Sponsored Retirement Plans
1-800-345-3533

Automated Information Line
1-800-345-8765

OPEN AN ACCOUNT

If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES

Call us or use our Automated Information Line if you have authorized us to
accept telephone instructions.

MAKE ADDITIONAL INVESTMENTS

Call us or use our Automated Information Line if you have authorized us to
invest from your bank account.

SELL SHARES

Call an Investor Relations Representative.

[graphic of telephone]

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

BY MAIL OR FAX

P.O. Box 419200
Kansas City, MO 64141-6200

Fax
816-340-7962

OPEN AN ACCOUNT

Send a signed and completed application and check or money order payable to
American Century Investments.

EXCHANGE SHARES

Send us written instructions to exchange your shares from one American Century
account to another.

MAKE ADDITIONAL INVESTMENTS

Send us your check or money order for at least $50 with an investment slip or
$250 without an investment slip. If you don't have an investment slip, include
your name, address and account number on your check or money order.

SELL SHARES

Send us written instructions or a redemption form to sell shares. Call an
Investor Relations Representative to request a form.

[graphic of envelope]

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

ONLINE

www.americancentury.com

OPEN AN ACCOUNT

If you are a current investor, you can open an account by exchanging shares from
another American Century account.

EXCHANGE SHARES

Exchange shares from another American Century account.

MAKE ADDITIONAL INVESTMENTS

Make an additional investment into an established American Century account if
you have authorized us to invest from your bank account.

SELL SHARES

Not available.

[graphic of computer]

12 American Century Investments 1-800-345-2021

A NOTE ABOUT MAILINGS TO SHAREHOLDERS

To reduce expenses and show respect for our environment, we will deliver most
financial reports, prospectuses and account statements to households in a single
envelope, even if the accounts are registered under different names. If you
would like additional copies of financial reports and prospectuses or separate
mailing of account statements, please call us.

YOUR GUIDE TO SERVICES AND POLICIES

When you open an account, you will receive a services guide, which explains the
services available to you and the policies of the fund and the transfer agent.

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

BY WIRE

[graphic of hand with pointing index finger] Please remember that if you request
redemptions by wire, $10 will be deducted from the amount redeemed. Your bank
also may charge a fee.

OPEN AN ACCOUNT

Call us to set up your account or mail a completed application to the address
provided in the "By Mail" section and give your bank the following information.

* Our bank information:
Commerce Bank N.A.
Routing No. 101000019
Account No. 2804918
* The fund name
* Your American Century account number+
* Your name
* The contribution year (for IRAs only)

+ For additional investments only

MAKE ADDITIONAL INVESTMENTS

Follow the wire instructions provided in the "Open an account" section.

SELL SHARES

You can receive redemption proceeds by wire or electronic transfer.

EXCHANGE SHARES

Not applicable.

[graphic of wire machine]

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

AUTOMATICALLY

OPEN AN ACCOUNT

Not available.

EXCHANGE SHARES

Send us written instructions to set up an automatic exchange of your shares from
one American Century account to another.

MAKE ADDITIONAL INVESTMENTS

With the automatic investment privilege, you can purchase shares on a regular
basis. You must invest at least $600 per year per account.

SELL SHARES

If you have at least $10,000 in your account, you may sell shares automatically
by establishing Check-A-Month or Automatic Redemption plans.

[graphic of circle with arrows]

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

IN PERSON

If you prefer to handle your transactions in person, visit one of our Investor
Centers listed below. A representative can help you open an account, make
additional investments and sell or exchange shares.

4500 Main St. 4917 Town Center Drive
Kansas City, Missouri Leawood, Kansas
8 a.m. to 5:30 p.m., Monday - Friday 8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday

1665 Charleston Road
Mountain View, California 9445 East County Line Road, Suite A
8 a.m. to 5 p.m., Monday - Friday Englewood, Colorado
8 a.m. to 6 p.m., Monday - Friday
8 a.m. to noon, Saturday

[graphic of person]

www.americancentury.com American Century Investments 13

MINIMUM INITIAL INVESTMENT AMOUNTS

To open an account, the minimum investments are:
- --------------------------------------------------------------------------------
Individual or Joint $2,500
- --------------------------------------------------------------------------------
Traditional IRA $1,000
- --------------------------------------------------------------------------------
Roth IRA $1,000
- --------------------------------------------------------------------------------
Educational IRA $500
- --------------------------------------------------------------------------------
UGMA/UTMA $2,500
- --------------------------------------------------------------------------------
403(b) No minimum
- --------------------------------------------------------------------------------
Qualified Retirement Plans $2,500*

* The minimum investment requirements may be different for some types of
retirement accounts.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

If your redemption activity causes your account balance to fall below the
minimum initial investment amount, we will notify you and give you 90 days to
meet the minimum. If you do not meet the deadline, American Century will redeem
the shares in the account and send the proceeds to your address of record.

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds - up to seven days - or to honor
certain redemptions with securities, rather than cash, as described in the next
section.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the assets of the fund if that percentage is less than $250,000), we
reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of cash. If we make payment
in securities, we will value the securities, selected by the fund, in the same
manner as we do in computing the fund's net asset value. We may provide these
securities in lieu of cash without prior notice.

If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining shareholders.

14 American Century Investments 1-800-345-2021

INVESTING THROUGH FINANCIAL INTERMEDIARIES

If you do business with us through a FINANCIAL INTERMEDIARY or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include

* minimum investment requirements

* exchange policies

* fund choices

* cutoff time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the fund's annual report, semiannual
report and Statement of Additional Information are available from your
intermediary or plan sponsor.

Certain financial intermediaries perform for their clients recordkeeping and
administrative services that would otherwise be performed by American Century's
transfer agent. In some circumstances, American Century will pay the service
provider a fee for performing those services.

Although transactions in fund shares may be made directly with American Century
at no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the fund.

American Century has contracts with certain financial intermediaries requiring
them to track the time investment orders are received and to comply with
procedures relating to the transmission of orders. The fund has authorized those
intermediaries to accept orders on its behalf up to the time at which the net
asset value is determined. If those orders are transmitted to American Century
and paid for in accordance with the contract, they will be priced at the net
asset value next determined after your request is received in the form required
by the intermediary on a fund's behalf.

[left margin]

FINANCIAL INTERMEDIARIES include banks, broker-dealers, insurance companies and
investment advisors.

www.americancentury.com American Century Investments 15

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

American Century determines the NET ASSET VALUE (NAV) of the fund as of the
close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern
time) on each day the Exchange is open. On days when the Exchange is not open
(including certain U.S. holidays), we do not calculate the NAV. The NAV of a
fund share is the current value of the fund's assets, minus any liabilities,
divided by the number of fund shares outstanding.

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

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

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means that the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received, as well as CAPITAL GAINS realized on the
sale of investment securities. The fund pays distributions from net income
quarterly, although it may elect to not pay a distribution in a given quarter.
The fund may decide not to pay a distribution if, for example, net currency
losses exceed net investment income. The fund generally pays distributions of
capital gains, if any, once a year in December. The fund may make more frequent
distributions, if necessary, to comply with Internal Revenue Code provisions.

You will participate in fund distributions when they are declared, starting on
the day after your purchase is effective. For example, if you purchase shares on
a day that a distribution is declared, you will not receive that distribution.
If you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any distributions received
with your redemption proceeds.

Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For shareholders investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash. Please consult
your services guide for further information regarding distributions and your
distribution options.

[left margin]

The NET ASSET VALUE of a fund is the price of the fund's shares.

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

Distributions discussed in this Prospectus means income and realized securities
gain distributions. The fund does not expect to make return of capital
distributions.

16 American Century Investments 1-800-345-2021

TAXES

The tax consequences of owning shares of the fund will vary depending on whether
you own them through a taxable or tax-deferred account. Tax consequences result
from distributions by the fund of dividend and interest income it has received
and capital gains it has generated through its investment activities. Tax
consequences also result from sales of fund shares by investors after the net
asset value has increased or decreased.

Tax-Deferred Accounts

If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation, but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through an employer-sponsored
retirement or savings plan, or through an IRA, please consult your plan
administrator, your summary plan description or a professional tax advisor.

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Fund distributions may consist of income earned by the fund from sources such as
dividends and interest, or capital gains generated from the sale of fund
investments. Distributions of income are taxed as ordinary income. Distributions
of capital gains are classified either as short term or long term and are taxed
as follows:

Tax Rate for Tax Rate for
Type of Distribution 15% Bracket 28% Bracket or Above
- --------------------------------------------------------------------------------
Short-term
capital gains Ordinary income rate Ordinary income rate
- --------------------------------------------------------------------------------
Long-term
capital gains 10% 20%

The tax status of any distribution of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund or whether you reinvest your distributions in
additional shares or take them in cash. American Century will send you the tax
status of fund distributions for each calendar year in an annual tax statement
from the fund.

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

Your redemptions -- including exchanges to other American Century funds -- are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss.

[left margin]

[graphic of hand with pointing index finger] BUYING A DIVIDEND

Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.

The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. We distribute those gains to you, after subtracting any losses, even
if you did not own the shares when the gains occurred.

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

www.americancentury.com American Century Investments 17

MULTIPLE CLASS INFORMATION

American Century offers two classes of the fund: Investor Class and Advisor
Class. The shares offered by this Prospectus are Investor Class shares and have
no up-front or deferred charges, commissions, or 12b-1 fees.

American Century offers the other class of shares primarily to institutional
investors through institutional distribution channels, such as
employer-sponsored retirement plans, or through banks, broker-dealers and
insurance companies. The other class has different fees, expenses and/or minimum
investment requirements than the Investor Class. The difference in the fee
structures between the classes is the result of their separate arrangements for
shareholder and distribution services and not the result of any difference in
amounts charged by the advisor for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class.
Different fees and expenses will affect performance. For additional information
concerning the other class of shares not offered by this Prospectus, call us at
1-800-345-3533 for Advisor Class shares. You can also contact a sales
representative or financial intermediary who offers that class of shares.

Except as described below, both classes of shares of the fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class, (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; and (d) each class
may have different exchange privileges.

18 American Century Investments 1-800-345-2021

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

The table on the next page itemizes what contributed to the changes in share
price during the period. It also shows the changes in share price for this
period in comparison to changes over the last five fiscal years or less, if the
share class is not five years old.

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

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

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

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

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

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

www.americancentury.com American Century Investments 19

<TABLE>
<CAPTION>
INTERNATIONAL BOND FUND

Investor Class

For a Share Outstanding Throughout the Years Ended December 31

PER-SHARE DATA
1998 1997 1996 1995 1994

Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Year ............ $ 10.92 $ 11.79 $ 11.95 $ 10.36 $ 10.82
----------- ----------- ----------- ----------- -----------
Income From
Investment Operations

Net Investment Income ...... 0.47 0.65 0.69 0.61 0.78

Net Realized and
Unrealized Gain
(Loss) on
Investment Transactions .... 1.47 (1.34) 0.03 1.88 (0.63)
----------- ----------- ----------- ----------- -----------
Total From
Investment Operations ....... 1.94 (0.69) 0.72 2.49 0.15

Distributions

From Net
Investment Income .......... (0.17) (0.04) (0.71) (0.90) (0.60)

In Excess of Net
Investment Income .......... -- -- (0.02) -- --

From Net Realized
Gains on Investment
Transactions ............... (0.25) (0.14) (0.15) -- (0.01)
----------- ----------- ----------- ----------- -----------
Total Distributions ........ (0.42) (0.18) (0.88) (0.90) (0.61)
----------- ----------- ----------- ----------- -----------
Net Asset Value,
End of Year .................. $ 12.44 $ 10.92 $ 11.79 $ 11.95 $ 10.36
=========== =========== =========== =========== ===========
Total Return(1) ............ 17.87% (5.88)% 6.38% 24.40% 1.52%

RATIOS/SUPPLEMENTAL DATA
1998 1997 1996 1995 1994

Ratio of Operating
Expenses to Average
Net Assets ................... 0.84% 0.84% 0.83% 0.82% 0.86%

Ratio of Net
Investment Income
to Average
Net Assets ................... 4.11% 4.82% 5.48% 6.14% 6.09%

Portfolio Turnover
Rate ......................... 322% 163% 242% 167% 166%

Net Assets,
End of Year
(in thousands) ............... $ 157,412 $ 165,731 $ 252,456 $ 252,247 $ 194,301
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

20 American Century Investments 1-800-345-2021

NOTES

www.americancentury.com American Century Investments 21

[back cover]

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)

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

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

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the documents.)

Investment Company Act File No. 811-6441

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

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

9905
SH-PRS-15760
<PAGE>
[front cover]

AMERICAN CENTURY

Prospectus

International Bond Fund

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

[left margin]

MAY 1, 1999
ADVISOR CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

Distributed by Funds Distributor, Inc.

Dear Investor,

Here's what you'll find:

* The fund's primary investments and risks

* A description of who may or may not want to invest in the fund

* Fund performance, including returns for each year, best and worst
quarters, and average annual returns compared to the fund's
benchmarks

* An overview of services available and ways to manage your accounts

* Helpful tips and definitions of key investment terms

Whether you're a current investor or investing in mutual funds for the first
time, this prospectus will give you a clear understanding of the fund. If you
have questions, our Service Representatives are available weekdays, 8 a.m. to 5
p.m., Central time. Our toll-free number is 1-800-345-3533. We look forward to
helping you achieve your financial goals.

Sincerely,
/s/Mark Killen
Mark Killen
Senior Vice President
American Century Investment Services, Inc.

[left margin]

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

American Century
Investments

P.O. Box 419385
Kansas City, MO
64141-6385

TABLE OF CONTENTS

An Overview of the Fund ................................................... 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 4
Information about the Fund ................................................ 5
Basics of Fixed-Income Investing .......................................... 7
Management ................................................................ 9
Investing with American Century ........................................... 12
Share Price and Distributions ............................................. 14
Taxes ..................................................................... 15
Multiple Class Information ................................................ 16
Financial Highlights ...................................................... 17
Performance Information of Other Class .................................... 19

[left margin]

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

[graphic of hand with pointing index finger] This symbol highlights special
information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT GOAL?

The fund seeks high total return by investing in high-quality,
nondollar-denominated government and corporate debt securities outside the
United States.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The fund's primary investment risks include

* interest rate risk

* currency risk

* political and economic risk

* market and trading risk

Additional important information about the fund's investment strategies and
risks begins on page 5.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you

* want to diversify your investments beyond United States-dollar denominated
securities and interest rate exposure

* want to protect your income against a decline in the purchasing power of the
U.S. dollar relative to foreign currencies

* are comfortable with the fund's other investment risks

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* looking exclusively for current income

* unable to tolerate the risk of investing in foreign securities

* unable to tolerate rapid fluctuations in the value of your investment

* looking for the added security of FDIC insurance

[left margin]

DEBT SECURITIES means bonds, notes and debentures. Debt securities also are
sometimes called fixed-income securities.

2 American Century Investments 1-800-345-3533

FUND PERFORMANCE HISTORY

INTERNATIONAL BOND FUND

When the Advisor Class of a fund has investment results for a full calendar
year, this section will feature charts that show

* Annual Total Returns

* Highest and Lowest Quarterly Returns

* Average Annual Returns, including a comparison of these returns to a
benchmark index for the Advisor Class of the fund

In addition, investors can examine the performance of the fund's Investor Class
of shares. The Investor Class has a total expense ratio that is 0.25% lower than
the Advisor Class. If the Advisor Class existed during the periods presented,
its performance would have been lower because of the additional expense.

All past performance information is designed to help show you how fund returns
can vary. Keep in mind that past performance does not predict how the fund will
perform in the future.

[left margin]

[graphic of hand with pointing index finger] For current performance
information, including yields, please call us at 1-800-345-3533 or visit
American Century's Web site at www.americancentury.com.

www.americancentury.com American Century Investments 3

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century

* to reinvest dividends in additional shares

* to exchange into the Advisor Class shares of other American Century funds

The following table describes the fees and expenses that you will pay if you buy
and hold shares of the fund.

ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

Distribution Total Annual
Management and Service Other Fund Operating
Fee (12b-1) Fees(1) Expenses(2) Expenses
- --------------------------------------------------------------------------------
International Bond 0.59% 0.50% 0.00% 1.09%(3)

(1) The 12b-1 fee is designed to permit investors to purchase Advisor Class
shares through broker-dealers, banks, insurance companies and other financial
intermediaries. A portion of the fee is used to compensate them for ongoing
recordkeeping and administrative services that would otherwise be performed by
an affiliate of the advisor, and a portion is used to compensate them for
distribution and other shareholder services. See "Service and Distribution
Fees," page 16.

(2) Other expenses, which include the fees and expenses of the fund's
independent trustees, their legal counsel, interest and extraordinary expenses,
were less than 0.005% for the most recent fiscal year.

(3) The Advisor Class of the fund commenced operations on October 27, 1998. The
management fee number has been restated to reflect a full fiscal year of
operations.

EXAMPLE

The example in the table below is intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund

* redeem all of your shares at the end of the periods shown below

* earn a 5% return each year

* incur the same operating expenses as shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
- --------------------------------------------------------------------------------
International Bond $111 $345 $599 $1,322

[left margin]

[graphic of hand with pointing index finger] Use this example to compare the
costs of investing in other funds. Of course, your actual costs may be higher or
lower.

4 American Century Investments 1-800-345-3533

INFORMATION ABOUT THE FUND

INTERNATIONAL BOND FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks high total return by investing in high-quality,
nondollar-denominated government and corporate debt securities outside the
United States.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund buys HIGH-QUALITY, nondollar-denominated foreign government and foreign
corporate DEBT SECURITIES.

The subadvisor selects the fund's investments by using a combination of
fundamental research and bond and currency valuation models.

* Economic/Political Fundamentals. The subadvisor evaluates each country's
economic climate and political discipline for controlling deficits and
inflation.

* Expected Return. Using economic forecasts, the subadvisor projects the
expected return for each country.

* Relative Value. By contrasting expected risks and returns for investments in
each country, the subadvisor selects those countries expected to produce the
best return at reasonable risk.

Normally, the fund will only purchase bonds denominated in foreign currencies.
The fund will not hedge back to the dollar.

The weighted average maturity of the fund is expected to be between two and 10
years.

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

WHAT ARE THE PRIMARY RISKS OF INVESTING IN THE FUND?

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

International Bond invests primarily in foreign securities, which involves
greater risks than investing in U.S. securities. These risks are summarized
below.

[left margin]

A HIGH QUALITY DEBT SECURITY is one that has been determined to be among the top
half of investment grade. This can be established in a number of ways. For
example, independent rating agencies may rate the security in one of their two
highest rating categories. The fund's advisor also can analyze an unrated
security to determine if its credit quality is high enough for investment.

www.americancentury.com American Century Investments 5

6 American Century Investments 1-800-345-3533

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

The fund managers decide which debt securities to buy and sell by

* determining which securities help a fund meet its maturity requirements

* identifying securities that satisfy a fund's credit quality requirements

* evaluating the current economic conditions and assessing the risk of
inflation

* evaluating special features of the securities that may make them more or less
attractive

WEIGHTED AVERAGE MATURITY

Because a bond fund will own many debt securities, the fund managers calculate
the average of the remaining maturities of all the debt securities the fund owns
to evaluate the interest rate sensitivity of the entire portfolio. This average
is weighted according to the size of the fund's individual holdings and is
called WEIGHTED AVERAGE MATURITY. The following chart shows how a fund manager
would calculate the weighted average maturity for a fund that owned only two
debt securities.

TYPES OF RISK

The basic types of risk that the fund faces are described below.

Interest Rate Risk

[left margin]

[graphic of hand with pointing index finger] The longer a fund's weighted
average maturity, the more sensitive it is to changes in interest rates.

WEIGHTED AVERAGE MATURITY is a tool that the fund managers use to approximate
the remaining maturity of a fund's investment portfolio.

www.americancentury.com American Century Investments 7

Remaining Current Price After Change
Maturity Price 1% Increase in Price
- --------------------------------------------------------------------------------
1 year $100.00 $99.06 -0.94%
- --------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
- --------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
- --------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%

Credit Risk

The following chart shows the authorized credit quality ranges for the fund
offered by this Prospectus.

- ----------------------------------- --------------------------------------------
INVESTMENT GRADE NON-INVESTMENT GRADE
- ----------------------------------- --------------------------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
- --------------------------------------------------------------------------------
XXXXXXXXXXXXXXX International Bond
- --------------------------------------------------------------------------------

Liquidity Risk

Inflation Risk

The fund engages in a variety of investment techniques as it pursues its
investment objective. Each technique has its own characteristics, and may pose
some level of risk to the fund. If you would like to learn more about these
techniques, you should review the Statement of Additional Information before
making an investment.

[left margin]

[graphic of hand with pointing index finger] Credit quality may be lower when
the issuer has

* a high debt level

* a short operating history

* a senior level of debt

* a difficult, competitive environment

[graphic of hand with pointing index finger] The Statement of Additional
Information provides a detailed description of these securities ratings.

8 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUND?

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

THE BOARD OF TRUSTEES

THE INVESTMENT ADVISOR

For the services it provided to the fund during the most recent fiscal year, the
advisor received a unified management fee based on a percentage of the average
net assets of the Advisor Class shares of the fund. The rate of the management
fee for a fund is determined monthly on a class-by-class basis using a two-step
formula that takes into account the fund's strategy (money market, bond or
equity) and the total amount of mutual fund assets the advisor manages.

Management Fees Paid by the Fund to the Advisor as a Percentage of Average
Net Assets for the Most Recent Fiscal Year Ended December 31, 1998
- --------------------------------------------------------------------------------
International Bond 0.59%

www.americancentury.com American Century Investments 9

THE FUND MANAGEMENT TEAM

The advisor and the Board of Trustees have hired and supervise J.P. Morgan
Investment Management Inc. (JPMIM), a subadvisor, to make investment decisions
for the fund.

The portfolio managers on the investment team are identified below:

DAVID SCHROEDER

DAVID GIBBON

Mr. Gibbon, Vice President, JPMIM, and Fixed-Income Portfolio Manager, has been
a member of the team that manages International Bond since December 1998. He
joined JPMIM, New York in 1992 and has worked in London since 1997. He has a
bachelor's degree in physics from Princeton University. He is a Chartered
Financial Analyst.

DOMINIC PEGLER

[left margin]

[graphic of hand with pointing index finger] CODE OF ETHICS

10 American Century Investments 1-800-345-3533

FUNDAMENTAL INVESTMENT POLICIES

YEAR 2000 ISSUES

www.americancentury.com American Century Investments 11

INVESTING WITH AMERICAN CENTURY

ELIGIBILITY FOR ADVISOR CLASS SHARES

The Advisor Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through banks, broker-dealers, insurance companies and other financial
intermediaries that provide various administrative and distribution services.

INVESTING THROUGH FINANCIAL INTERMEDIARIES

* minimum investment requirements

* exchange policies

* fund choices

* cutoff time for investments

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor we believe has a history
of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control. We also reserve the right
to delay delivery of your redemption proceeds -- up to seven days -- or to honor
certain redemptions with securities, rather than cash, as described in the next
section.

[left margin]

[graphic of hand with pointing index finger] FINANCIAL INTERMEDIARIES include
banks, broker-dealers, insurance companies and investment advisors.

12 American Century Investments 1-800-345-3533

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

www.americancentury.com American Century Investments 13

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

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

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

It is the responsibility of your plan recordkeeper or financial intermediary to
transmit your purchase, exchange and redemption requests to the fund's transfer
agent prior to the applicable cutoff time for receiving orders and to make
payment for any purchase transactions in accordance with the fund's procedures
or any contractual arrangements with the fund or the fund's distributor in order
for you to receive that day's price.

DISTRIBUTIONS

You will participate in fund distributions, when they are declared, starting on
the day after your purchase is effective. For example, if you purchase shares on
a day that a distribution is declared, you will not receive that distribution.
If you redeem shares, you will receive any distribution declared on the day you
redeem. If you redeem all shares, we will include any distributions received
with your redemption proceeds.

[left margin]

The NET ASSET VALUE of a fund is the price of the fund's shares.

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

Distributions discussed in this Prospectus means income and realized securities
gain distributions. The fund does not expect to make return of capital
distributions.

14 American Century Investments 1-800-345-3533

TAXES

The tax consequences of owning shares of the fund will vary depending on whether
you own them through a taxable or tax-deferred account. Tax consequences result
from distributions by the fund of dividend and interest income it has received
or capital gains it has generated through its investment activities. Tax
consequences also result from sales of fund shares by investors after the net
asset value has increased or decreased.

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, distributions by the fund and
sales by you of fund shares may cause you to be taxed.

Taxability of Distributions

Tax Rate for Tax Rate for
Type of Distribution 15% Bracket 28% Bracket or
Above
- --------------------------------------------------------------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
- --------------------------------------------------------------------------------
Long-term capital gains 10% 20%

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, always consult your tax professional about federal,
state and local tax consequences.

Taxes on Transactions

[left margin]

[graphic of hand with pointing index finger] BUYING A DIVIDEND

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

www.americancentury.com American Century Investments 15

MULTIPLE CLASS INFORMATION

American Century offers two classes of the fund: Investor Class and Advisor
Class. The shares offered by this Prospectus are Advisor Class shares and are
offered primarily to institutional investors through institutional distribution
channels, such as employer- sponsored retirement plans, or through banks,
broker-dealers and insurance companies.

American Century offers another class of shares that has no up-front or deferred
charges, commissions or 12b-1 fees. The other class has different fees, expenses
and/or minimum investment requirements than the Advisor Class. The difference in
the fee structures between the classes is the result of their separate
arrangements for shareholder and distribution services and not the result of any
difference in amounts charged by the advisor for core investment advisory
services. Accordingly, the core investment advisory expenses do not vary by
class. Different fees and expenses will affect performance. For additional
information concerning the other class of shares not offered by this Prospectus,
call us at 1-800-345-2021 for Investor Class shares. You can also contact a
sales representative or financial intermediary who offers that class of shares.

Except as described below, both classes of shares of the fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting such class; and (d) each class
may have different exchange privileges.

SERVICE AND DISTRIBUTION FEES

Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay out of fund assets certain expenses associated with the distribution of
their shares. The fund's Advisor Class shares have a 12b-1 Plan. Under the Plan,
the fund pays an annual fee of 0.50% of fund assets, half for certain
shareholder and administrative services and half for distribution services. The
advisor, as paying agent for the fund, pays all or a portion of such fees to the
banks, broker-dealers and insurance companies that make such shares available.
Because these fees are paid out of the fund's assets on an on-going basis, over
time these fees will increase the cost of your investment and may cost you more
than paying other types of sales charges. For additional information about the
Plan and its terms, see "Multiple Class Structure--Master Distribution and
Shareholder Services Plan" in the Statement of Additional Information.

16 American Century Investments 1-800-345-3533

FINANCIAL HIGHLIGHTS

UNDERSTANDING THE FINANCIAL HIGHLIGHTS

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

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

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

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

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

The Financial Highlights have been audited by PricewaterhouseCoopers LLP,
independent accountants. Their report is included in the fund's annual report
for the fiscal year ended December 31, 1998, which is incorporated by reference
into the Statement of Additional Information, and is available upon request.

www.americancentury.com American Century Investments 17

INTERNATIONAL BOND FUND

Advisor Class

For a Share Outstanding Throughout the Period Ended December 31

PER-SHARE DATA
1998(1)

Net Asset Value, Beginning of Period ................... $ 12.50
----------
Income From Investment Operations
Net Investment Income ................................ 0.08

Net Realized and Unrealized Gain
on Investment Transactions ........................... 0.19
----------
Total From Investment Operations ..................... 0.27
----------
Distributions
From Net Investment Income ........................... (0.17)

From Net Realized Gains
on Investment Transactions ........................... (0.16)
----------
Total Distributions .................................. (0.33)
----------
Net Asset Value,
End of Period .......................................... $ 12.44
==========
Total Return(2) ...................................... 2.12%

RATIOS/SUPPLEMENTAL DATA
1998

Ratio of Operating Expenses
to Average Net Assets .................................. 1.08%(3)

Ratio of Net Investment
Income to Average Net Assets ........................... 3.71%(3)

Portfolio Turnover Rate ................................ 322%

Net Assets, End of Period .............................. $ 33,762

(1) October 27, 1998 (commencement of sale) through December 31, 1998.

(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.

18 American Century Investments 1-800-345-3533

PERFORMANCE INFORMATION OF OTHER CLASS

The following financial information is provided to show the performance of the
fund's original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.25% lower than the Advisor Class. If the Advisor Class
had existed during the periods presented, its performance would have been lower
because of the additional expense.

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

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period

* investment income and capital gains or losses

* distributions of income and capital gains paid to shareholders

* share price at the end of the period

The table also includes some key statistics for the period as appropriate

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

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

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

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

www.americancentury.com American Century Investments 19

<TABLE>
<CAPTION>
INTERNATIONAL BOND FUND

Investor Class

For a Share Outstanding Throughout the Years Ended December 31

PER-SHARE DATA
1998 1997 1996 1995 1994

Net Investment Income ...... 0.47 0.65 0.69 0.61 0.78

Distributions

From Net
Investment Income .......... (0.17) (0.04) (0.71) (0.90) (0.60)

In Excess of Net
Investment Income .......... -- -- (0.02) -- --

RATIOS/SUPPLEMENTAL DATA
1998 1997 1996 1995 1994

Ratio of Operating
Expenses to Average
Net Assets ................... 0.84% 0.84% 0.83% 0.82% 0.86%

Ratio of Net
Investment Income
to Average
Net Assets ................... 4.11% 4.82% 5.48% 6.14% 6.09%

Portfolio Turnover
Rate ......................... 322% 163% 242% 167% 166%

Net Assets,
End of Year
(in thousands) ............... $ 157,412 $ 165,731 $ 252,456 $ 252,247 $ 194,301
</TABLE>

(1) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

20 American Century Investments 1-800-345-3533

NOTES

www.americancentury.com American Century Investments 21

[back cover]

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

STATEMENT OF ADDITIONAL INFORMATION (SAI)

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

* In person SEC Public Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying the
documents.)

Investment Company Act File No. 811-6441

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419385
Kansas City, Missouri 64141-6385

1-800-345-3533 or 816-531-5575

9905
SH-PRS-15761
<PAGE>
[front cover]

MAY 1, 1999

AMERICAN CENTURY

Statement of Additional Information

International Bond Fund

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

[left margin]

This Statement of Additional Information adds to the discussion in the fund's
Prospectus, dated May 1, 1999, but is not a prospectus. The Statement of
Additional Information should be read in conjunction with the fund's current
Prospectus. If you would like a copy of the Prospectus, please contact us at one
of the addresses or phone numbers listed on the back cover or visit American
Century's Web site at www.americancentury.com.

This Statement of Additional Information incorporates by reference certain
information that appears in the fund's annual and semiannual reports, which are
delivered to all shareholders. You may obtain a free copy of the fund's annual
or semiannual report by calling 1-800-345-2021.

Distributed by Funds Distributor, Inc.

STATEMENT OF ADDITIONAL INFORMATION
May 1, 1999

TABLE OF CONTENTS

The Fund's History ........................................................ 2

Fund Investment Guidelines ................................................ 2
Portfolio Composition ................................................. 2
Currency Management ................................................... 2

Detailed Information about the Fund ....................................... 3
Investment Strategies and Risks ....................................... 3
Investment Policies ................................................... 9
Temporary Defensive Measures .......................................... 12
Portfolio Turnover .................................................... 12
Transactions with Subadvisor Affiliates ............................... 12

Management ................................................................ 13
The Board of Trustees ................................................. 13
Officers .............................................................. 17

The Fund's Principal Shareholders ......................................... 18

Service Providers ......................................................... 18
Investment Advisor .................................................... 18
Transfer Agent and Administrator ...................................... 20
Distributor ........................................................... 20

Other Service Providers ................................................... 21
Custodian Banks ....................................................... 21
Independent Accountants ............................................... 21

Brokerage Allocation ...................................................... 21

Information about Fund Shares ............................................. 21
Multiple Class Structure .............................................. 22
Buying and Selling Fund Shares ........................................ 24
Valuation of the Fund's Securities .................................... 24

Taxes ..................................................................... 24
Federal Income Taxes .................................................. 24

How Fund Performance
Information is Calculated .............................................. 26
Multiple Class Performance Advertising ................................. 27

Financial Statements ...................................................... 27

Explanation of Fixed-Income
Securities Ratings ...................................................... 27
Bond Ratings .......................................................... 28
Commercial Paper Ratings .............................................. 29
Note Ratings .......................................................... 29

Statement of Additional Information 1

THE FUNDS' HISTORY

American Century International Bond Funds (the "Trust") is a registered
open-end management investment company that was organized as a Massachusetts
business trust on August 28, 1991. The Trust was known as "Benham International
Funds" until January 1997.

The fund is a separate series of the Trust. The Trust may issue other
series; the fund would operate for many purposes as if it were an independent
company from any such future series.

Fund-Class (Ticker Symbol) Inception Date
- --------------------------------------------------------------------------------
International Bond Fund--
Investor Class (BEGBX) 1/7/1992

International Bond Fund--
Advisor Class (N/A) 10/27/1998
- --------------------------------------------------------------------------------

FUND INVESTMENT GUIDELINES

This section explains the extent to which the fund's advisor, American
Century Investment Management, Inc., can use various investment vehicles and
strategies in managing a fund's assets. Descriptions of the investment
techniques and risks associated with each appear in the section, "Investment
Strategies and Risks," which begins on page 3. In the case of the fund's
principal investment strategies, these descriptions elaborate upon discussion
contained in the Prospectus.

The fund is a nondiversified open-end investment company as defined in the
Investment Company Act of 1940 (the Investment Company Act). This means that the
fund may take larger positions in individual issuer's securities; for example,
the fund may invest more than 5% of its assets in the securities of a single
issuer. This can increase the amount of risk in the portfolio, because it may
become concentrated in fewer issuers than diversified funds.

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

PORTFOLIO COMPOSITION

The fund manager intends to keep the fund fully invested in foreign debt
securities. Under normal market conditions, the fund will invest at least 65% of
its total assets in bonds issued or guaranteed by foreign governments or their
agencies and by foreign authorities, provinces and municipalities. The fund may
invest up to 35% of its total assets in high-quality (i.e., rated "AA" or
higher) foreign corporate debt securities.

The fund's investments may include but shall not be limited to: (1) Debt
obligations issued or guaranteed by (a) a foreign sovereign government or one of
its agencies, authorities, instrumentalities or political subdivisions including
a foreign state, province or municipality, and (b) supranational organizations
such as the World Bank, Asian Development Bank, European Investment Bank, and
European Economic Community; (2) Debt obligations of (a) foreign banks and bank
holding companies, and (b) domestic banks and corporations issued in foreign
currencies; and (3) Foreign corporate debt securities and commercial paper. All
of these investments must satisfy the credit quality standards (i.e., "AA" or
higher) established by the trustees of the fund.

The fund's credit quality requirements effectively limit the countries in
which the fund may invest. As of the date of this Prospectus, the fund expects
to invest in the securities of issuers located in and governments of the
following countries: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Ireland, Japan, Liechtenstein, Luxembourg, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Taiwan and
United Kingdom. To limit the possibility that the fund will become unduly
concentrated in Japan, the fund currently limits its investment in issuers
located in Japan to no more than 15% of total assets.

For an explanation of the securities ratings referred to in the Prospectus
and this Statement of Additional Information, see "Additional Performance
Comparisons" on page 27.

CURRENCY MANAGEMENT

The rate of exchange between U.S. dollars and foreign currencies fluctuates,
which results in gains and losses to the fund. Even if the fund's foreign
security

2 American Century Investments

holdings perform well, an increase in the value of the dollar relative to the
currencies in which portfolio securities are denominated can offset net
investment income.

Because the fund is designed for U.S. investors seeking currency and
interest rate diversification, the subadvisor limits its use of hedging
strategies intended to minimize the effect of currency fluctuations. Although
hedging strategies (if they are successful) reduce exchange rate risk, they also
reduce the potential for share price appreciation when foreign currencies
increase in value relative to the U.S. dollar.

When the subadvisor considers the U.S. dollar to be attractive relative to
foreign currencies, as much as 25% of the fund's total assets may be hedged into
dollars. For temporary defensive purposes and under extraordinary circumstances
(such as significant political events), more than 25% of the fund's total assets
may be hedged in this manner.

In managing the fund's currency exposure, the subadvisor will buy and sell
foreign currencies regularly, either in the spot (i.e., cash) market or the
forward market. Forward foreign currency exchange contracts ("forward
contracts") are individually negotiated and privately traded between currency
traders (usually large commercial banks) and their customers. In most cases, no
deposit requirements exist, and these contracts are traded at a net price
without commission. Forward contracts involve an obligation to purchase or sell
a specific currency at an agreed-upon price on a future date. Most contracts
expire in less than one year. The fund also may use futures and options for
currency management purposes. For more information on futures and options,
please see "Futures and Options" on page 6.

DETAILED INFORMATION ABOUT THE FUND

INVESTMENT STRATEGIES AND RISKS

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

U.S. GOVERNMENT SECURITIES

U.S. government securities include bills, notes and bonds issued by the U.S.
Treasury and securities issued or guaranteed by agencies or instrumentalities of
the U.S. government.

Some U.S. government securities are supported by the direct full faith and
credit pledge of the U.S. government; others are supported by the right of the
issuer to borrow from the U.S. Treasury; others, such as securities issued by
the Federal National Mortgage Association (FNMA), are supported by the
discretionary authority of the U.S. government to purchase the agencies'
obligations; and others are supported only by the credit of the issuing or
guaranteeing instrumentality. There is no assurance that the U.S. government
will provide financial support to an instrumentality it sponsors when it is not
obligated by law to do so.

REPURCHASE AGREEMENTS

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

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

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

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

Statement of Additional Information 3

The fund will not invest more than 15% of its assets in repurchase
agreements maturing in more than seven days.

SECURITIES LENDING

The fund may lend its portfolio securities to earn additional income. If a
borrower defaulted on a securities loan, the fund could experience delays in
recovering the securities it loaned; if the value of the loaned securities
increased over the value of the collateral, the fund could suffer a loss.

To minimize the risk of default on securities loans, the manager adheres to
guidelines prescribed by the Board of Trustees governing lending of securities.
These guidelines strictly govern (1) the type and amount of collateral that must
be received by the fund; (2) the circumstances under which additions to that
collateral must be made by borrowers; (3) the return received by the fund on the
loaned securities; (4) the limitations on the percentage of fund assets on loan;
and (5) the credit standards applied in evaluating potential borrowers of
portfolio securities. In addition, the guidelines require that the fund have the
option to terminate any loan of a portfolio security at any time and set
requirements for recovery of securities from borrowers.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS

The fund expects to exchange dollars for the fund's underlying currencies,
and vice versa, in the normal course of managing the fund's underlying
investments. J.P. Morgan Investment Management Inc. (JPMIM), the fund's
subadvisor, does not expect that the fund will hold currency that is not earning
income on a regular basis, although the fund may do so temporarily when suitable
investments are not available. The fund may exchange currencies on a "spot"
basis (i.e., for prompt delivery and settlement), or by entering into forward
currency exchange contracts (also called forward contracts) or other contracts
to purchase and sell currencies for settlement at a future date. The fund will
incur costs in converting assets from one currency to another. Foreign exchange
dealers may charge a fee for conversion; in addition, they also realize a profit
based on the difference (i.e., the spread) between the prices at which they buy
and sell various currencies in the spot and forward markets. Thus, a dealer may
offer to sell a foreign currency to the fund at one rate, and repurchase it at a
lesser rate should the fund desire to resell the currency to the dealer.

Forward contracts are agreements to exchange a specific amount of one
currency for a specified amount of another at a future date. The date may be any
agreed fixed number of days in the future. The amount of currency to be
exchanged, the price at which the exchange will take place, and the date of the
exchange are negotiated when the fund enters into the contract and are fixed for
the term of the contract. Forward contracts are traded in an interbank market
conducted directly between currency traders (usually large commercial banks) and
their customers. A forward contract generally has no deposit requirement and is
consummated without payment of any commission. However, the fund may enter into
forward contracts with deposit requirements or commissions.

At the maturity of a forward contract, the fund may complete the contract by
paying for and receiving the underlying currency, or may seek to roll forward
its contractual obligation by entering into an "offsetting" transaction with the
same currency trader and paying or receiving the difference between the
contractual exchange rate and the current exchange rate. The fund also may be
able to enter into an offsetting contract prior to the maturity of the
underlying contract. This practice is sometimes referred to as "cross hedging"
and may be employed if, for example, JPMIM believes that one foreign currency
(in which a portion of the fund's foreign currency holdings are denominated)
will change in value relative to the U.S. dollar differently than another
foreign currency. There is no assurance that offsetting transactions, or new
forward contracts, will always be available to the fund.

Investors should realize that the use of forward contracts does not
eliminate fluctuations in the underlying prices of the securities. Such
contracts simply establish a rate of exchange that the fund can achieve at some
future point in time. Additionally, although such contracts tend to minimize the
risk of loss due to fluctuations in the value of the hedged currency when used
as a hedge against foreign currency declines, at the same time they tend to
limit any potential gain that might result from the change in the value of such
currency.

4 American Century Investments

Because investments in, and redemptions from, the fund will be in U.S.
dollars, JPMIM expects that the fund's normal investment activity will involve a
significant amount of currency exchange. For example, the fund may exchange
dollars for its underlying foreign currencies for dollars in order to meet
shareholder redemption requests or to pay expenses. These transactions may be
executed in the spot or forward markets.

In addition, the fund may combine forward transactions in its underlying
currency with investments in U.S. dollar-denominated instruments, in an attempt
to construct an investment position whose overall performance will be similar to
that of a security denominated in its underlying currency. If the amount of
dollars to be exchanged is properly matched with the anticipated value of the
dollar-denominated securities, the fund should be able to "lock in" the foreign
currency value of the securities, and the fund's overall investment return from
the combined position should be similar to the return from purchasing a foreign
currency-denominated instrument. This is sometimes referred to as a "synthetic"
investment position or a "position hedge."

The execution of a synthetic investment position may not be successful. It
is impossible to forecast with absolute precision what the dollar value of a
particular security will be at any given time. If the value of a
dollar-denominated security is not exactly matched with the fund's obligation
under the forward contract on the contract's maturity date, the fund may be
exposed to some risk of loss from fluctuation of the dollar. Although JPMIM will
attempt to hold such mismatchings to a minimum, there can be no assurance that
JPMIM will be successful in doing so.

WHEN-ISSUED AND FORWARD COMMITMENT AGREEMENTS

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

When purchasing securities on a when-issued or forward commitment basis, a
fund assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. While the fund will make commitments to purchase or sell
securities with the intention of actually receiving or delivering them, it may
sell the securities before the settlement date if doing so is deemed advisable
as a matter of investment strategy.

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

As an operating policy, no fund will commit more than 50% of its total
assets to when-issued or forward commitment agreements. If fluctuations in the
value of securities held cause more than 50% of a fund's total assets to be
committed under when-issued or forward commitment agreements, the advisor need
not sell such agreements, but it will be restricted from entering into further
agreements on behalf of the fund until the percentage of assets committed to
such agreements is below 50% of total assets.

SHORT-TERM SECURITIES

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

Examples of those securities include

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

* Commercial Paper

* Certificates of Deposit and Euro Dollar Certificates of Deposit

* Bankers' Acceptances

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

* Repurchase agreements

Statement of Additional Information 5

OTHER INVESTMENT COMPANIES

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

FUTURES AND OPTIONS

The fund may enter into futures contracts, options or options on futures
contracts. Some futures and options strategies, such as selling futures, buying
puts and writing calls, hedge a fund's investments against price fluctuations.
Other strategies, such as buying futures, writing puts and buying calls, tend to
increase market exposure. The fund does not use futures and options transactions
for speculative purposes.

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

Futures contracts provide for the sale by one party and purchase by another
party of a specific security at a specified future time and price. Futures
contracts are traded on national futures exchanges. Futures exchanges and
trading are regulated under the Commodity Exchange Act by the Commodity Futures
Trading Commission (CFTC), a U.S. government agency.

Although futures contracts, by their terms, call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date. A futures position may be closed by taking an
opposite position in an identical contract (i.e., buying a contract that has
previously been sold or selling a contract that has previously been bought).

To initiate and maintain open positions in a futures contract, a fund would
be required to make a good faith margin deposit in cash or government securities
with a futures broker or custodian. A margin deposit is intended to assure
completion of the contract (delivery or acceptance of the underlying security)
if it is not terminated prior to the specified delivery date. Minimum initial
margin requirements are established by the futures exchanges and may be revised.
In addition, brokers may establish margin deposit requirements that are higher
than the exchange minimums.

Once a futures contract position is opened, the value of the contract is
marked to market daily. If the futures contract price changes to the extent that
the margin on deposit does not satisfy margin requirements, the contract holder
is required to pay additional variation margin. Conversely, changes in the
contract value may reduce the required margin, resulting in a repayment of
excess margin to the contract holder. Variation margin payments are made to or
from the futures broker for as long as the contract remains open and do not
constitute margin transactions for purposes of the fund's investment
restrictions.

PURCHASING PUT AND CALL OPTIONS

By purchasing a put option, the fund obtains the right (but not the
obligation) to sell the option's underlying instrument at a fixed strike price.
In return for this right, the fund pays the current market price for the option
(known as the option premium). Options have various types of underlying
instruments, including specific securities, indices of securities prices, and
futures contracts. The fund may terminate its position in a put option it has
purchased by allowing it to expire or by exercising the option. If the option is
allowed to expire, the fund will lose the entire premium it paid. If the fund
exercises the option, it completes the sale of the underlying instrument at the
strike price. The fund also may terminate a put option position by closing it
out in the secondary market at its current price if a liquid secondary market
exists.

6 American Century Investments

The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium paid, plus related
transaction costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's strike
price. A call buyer typically attempts to participate in potential price
increases of the underlying instrument with risk limited to the cost of the
option if security prices fall. At the same time, the buyer can expect to suffer
a loss if security prices do not rise sufficiently to offset the cost of the
option.

WRITING PUT AND CALL OPTIONS

If the fund writes a put option, it takes the opposite side of the
transaction from the option's purchaser. In return for receipt of the premium,
the fund assumes the obligation to pay the strike price for the option's
underlying instrument if the other party chooses to exercise the option. When
writing an option on a futures contract, the fund will be required to make
margin payments to a broker or custodian as described above for futures
contracts. The fund may seek to terminate its position in a put option it writes
before exercise by closing out the option in the secondary market at its current
price. However, if the secondary market is not liquid for a put option the fund
has written, the fund must continue to be prepared to pay the strike price while
the option is outstanding, regardless of price changes, and must continue to set
aside assets to cover its position.

If security prices rise, a put writer would generally expect to profit,
although the gain would be limited to the amount of the premium received. If
security prices remain the same over time, the writer also would likely profit
by being able to close out the option at a lower price. If security prices fall,
the put writer would expect to suffer a loss. This loss should be less than the
loss from purchasing the underlying instrument directly, however, because the
premium received for writing the option should mitigate the effects of the
decline.

Writing a call option obligates the fund to sell or deliver the option's
underlying instrument in return for the strike price upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price even if its current value is greater,
a call writer gives up some ability to participate in security price increases.

COMBINED POSITIONS

The fund may purchase and write options in combination with one another, or
in combination with futures or forward contracts, to adjust the risk and return
characteristics of the overall position. For example, the fund may purchase a
put option and write a call option on the same underlying instrument to
construct a combined position whose risk and return characteristics are similar
to selling a futures contract. Another possible combined position would involve
writing a call option at one strike price and buying a call option at a lower
price to reduce the risk of the written call option in the event of a
substantial price increase. Because combined options positions involve multiple
trades, they result in higher transaction costs and may be more difficult to
open and close out.

OVER-THE-COUNTER OPTIONS

Unlike exchange-traded options, which are standardized with respect to the
underlying instrument, expiration date, contract size, and strike price, the
terms of over-the-counter (OTC) options (options not traded on exchanges)
generally are established through negotiation with the other party to the option
contract. While this type of arrangement allows the fund greater flexibility to
tailor an option to its needs, OTC options generally involve greater credit risk
than exchange-traded options, which are guaranteed by the clearing organizations
of the exchanges where they are traded. The risk of illiquidity also is greater
with OTC options because these options generally can be closed out only by
negotiation with the other party to the option.

Statement of Additional Information 7

RISKS RELATED TO FUTURES AND OPTIONS TRANSACTIONS

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

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

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

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

OPTIONS ON FUTURES

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

CORRELATION OF PRICE CHANGES

Because there are a limited number of types of exchange-traded futures and
options contracts, it is likely that the standardized contracts available will
not match the fund's current or anticipated investments exactly. The fund may
invest in futures and options contracts based on securities with different
issuers, maturities, or other characteristics from the securities in which it
typically invests (for example, by hedging intermediate-term securities with a
futures contract based on an index of long-term bond prices); this involves a
risk that the futures position will not track the performance of the fund's
other investments.

Options and futures prices can diverge from the prices of their underlying
instruments even if the underlying instruments correlate well with the fund's
investments. Options and futures prices are affected by factors such as current
and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation also
may result from differing levels of demand in the options and futures markets
and securities markets,

8 American Century Investments

from structural differences in how options and futures and securities are
traded, or from the imposition of daily price fluctuation limits or trading
halts. The fund may purchase or sell options and futures contracts with a
greater or lesser value than the securities it wishes to hedge or intends to
purchase in an effort to compensate for differences in volatility between the
contract and the securities, although this may not be successful in all cases.
If price changes in the fund's options or futures positions are poorly
correlated with its other investments, the positions may fail to produce
anticipated gains or result in losses that are not offset by gains in other
investments.

FUTURES AND OPTIONS CONTRACTS RELATING TO FOREIGN CURRENCIES

The fund may purchase and sell currency futures and purchase and write
currency options to increase or decrease its exposure to different foreign
currencies. A fund also may purchase and write currency options in connection
with currency futures or forward contracts.

Currency futures contracts are similar to forward currency exchange
contracts, except that they are traded on exchanges and have standard contract
sizes and delivery dates. Most currency futures contracts call for payment or
delivery in U.S. dollars.

The uses and risks of currency futures are similar to those of futures
relating to securities or indices, as described above. Currency futures values
can be expected to correlate with exchange rates, but may not reflect other
factors that affect the value of the fund's investments. A currency hedge, for
example, should protect a German-mark-denominated security from a decline in the
German mark, but it will not protect the fund against a price decline resulting
from a deterioration in the issuer's creditworthiness.

LIQUIDITY OF FUTURES CONTRACTS AND OPTIONS

There is no assurance that a liquid secondary market will exist for any
particular futures contract or option at any particular time. Options may have
relatively low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges may
establish daily price fluctuation limits for futures contracts and options and
may halt trading if a contract's price moves upward or downward more than the
limit on a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund to
enter into new positions or close out existing positions. If the secondary
market for a contract was not liquid, because of price fluctuation limits or
otherwise, prompt liquidation of unfavorable positions could be difficult or
impossible, and the fund could be required to continue holding a position until
delivery or expiration regardless of changes in its value. Under these
circumstances, the fund's access to assets held to cover its future positions
also could be impaired.

Futures and options trading on foreign exchanges may not be regulated as
effectively as similar transactions in the U.S. and may not involve clearing
mechanisms or guarantees similar to those available in the U.S. The value of a
futures contract or option traded on a foreign exchange may be adversely
affected by the imposition of different exercise and settlement terms, trading
procedures, margin requirements and lesser trading volume.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS

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

Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for purposes other than
hedging, provided that assets committed to initial margin and option premiums do
not exceed 5% of the fund's total assets. To the extent required by law, each
fund will segregate cash or securities on its records in an amount sufficient to
cover its obligations under the futures contracts and options.

INVESTMENT POLICIES

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

Statement of Additional Information 9

FUNDAMENTAL INVESTMENT POLICIES

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

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

Subject Policy
- --------------------------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as
permitted under the Investment Company Act.
- --------------------------------------------------------------------------------
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in
an amount not exceeding 33 1/3% of the fund's total
assets (including the amount borrowed) less liabilities
(other than borrowings).
- --------------------------------------------------------------------------------
Lending A fund may not lend any security or make any other loan
if, as a result, more than 33 1/3% of the fund's total
assets would be lent to other parties, except, (i) through
the purchase of debt securities in accordance with its
investment objective, policies and limitations or
(ii) by engaging in repurchase agreements with respect to
portfolio securities.
- --------------------------------------------------------------------------------
Real Estate A fund may not purchase or sell real estate unless
acquired as a result of ownership of securities or other
instruments. This policy shall not prevent a fund from
investing in securities or other instruments backed by real
estate or securities of companies that deal in real estate or
are engaged in the real estate business.
- --------------------------------------------------------------------------------
Concentration A fund may not concentrate its investments in securities of
issuers in a particular industry (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities).
- --------------------------------------------------------------------------------
Underwriting A fund may not act as an underwriter of securities issued
by others, except to the extent that the fund may be
considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities.
- --------------------------------------------------------------------------------
Commodities A fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments provided that this limitation shall not prohibit
the fund from purchasing or selling options and futures
contracts or from investing in securities or other
instruments backed by physical commodities.
- --------------------------------------------------------------------------------
Control A fund may not invest for purposes of exercising control over
management.

10 American Century Investments

NONFUNDAMENTAL INVESTMENT POLICIES

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

Subject Policy
- --------------------------------------------------------------------------------
Diversification The fund, to meet federal tax requirements for
qualification as a "regulated investment company," limits
its investment so that at the close of each quarter of
its taxable year: (i) with regard to at least 50% of
total assets, no more than 5% of total assets are invested
in the securities of a single issuer, and (ii) no more
than 25% of total assets are invested in the securities
of a single issuer. Limitations (i) and (ii) do not apply
to "Government securities" as defined for federal tax
purposes. The fund does not, with respect to 75% of its
total assets, currently intend to purchase the securities
of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or
instrumentalities) if, as a result thereof, the fund would
own more than 10% of the outstanding voting securities of
such issuer.
- --------------------------------------------------------------------------------
Liquidity The fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of
its net assets would be invested in repurchase agreements
not entitling the holder to payment of principal and
interest within seven days and in securities that are
illiquid by virtue of legal or contractual restrictions on
resale or the absence of a readily available market.
- --------------------------------------------------------------------------------
Short Sales The fund may not sell securities short, unless it owns
or has the right to obtain securities equivalent in-kind and
amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed
to constitute selling securities short.
- --------------------------------------------------------------------------------
Margin The fund may not purchase securities on margin, except that
the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided
that margin payments in connection with futures contracts
and options on futures contracts shall not constitute
purchasing securities on margin.
- --------------------------------------------------------------------------------

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

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

Statement of Additional Information 11

TEMPORARY DEFENSIVE MEASURES

For temporary defensive purposes, the fund may invest in securities that may
not fit its investment objective or its stated market. During a temporary
defensive period, the fund may direct its assets to the following investment
vehicles:

* interest-bearing bank accounts or Certificates of Deposit

* U.S. government securities and repurchase agreements collateralized by
U.S. government securities

* money market funds

PORTFOLIO TURNOVER

The portfolio turnover rates of the fund are shown in the Financial
Highlights table in the Prospectuses.

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

The fund managers intend to purchase a given security whenever they believe
it may contribute to the stated objective of the fund. In order to achieve each
fund's investment objective, the managers may sell a given security, no matter
how long or how short a period it has been held in the portfolio, and no matter
whether the sale is at a gain or at a loss, if the managers believe that the
security is not fulfilling its purpose, either because, among other things, it
did not live up to the managers' expectations, or because it may be replaced
with another security holding greater promise, or because it has reached its
optimum potential, or because of a change in the circumstances of a particular
company or industry or in general economic conditions, or because of some
combination of such reasons. Under normal conditions, the fund's annual
portfolio turnover rates may exceed 150%.

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

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

TRANSACTIONS WITH SUBADVISOR AFFILIATES

As described in further detail under the section titled "MANAGEMENT," J.P.
Morgan Investment Management, Inc. (JPMIM) is subadvisor to the fund pursuant to
an agreement with American Century Investment Management, Inc.

JPMIM, Morgan Guaranty Trust Company of New York ("Morgan Guaranty"), J.P.
Morgan Securities Inc., and J.P. Morgan Securities Limited are wholly owned
subsidiaries of J.P. Morgan & Co. Incorporated, hereafter referred to
collectively as "Morgan affiliates."

J. P. Morgan Securities Inc. is a broker-dealer registered with the SEC and
is a member of the National Association of Securities Dealers. It is active as a
dealer in U.S. government securities and an underwriter of and dealer in U.S.
government agency securities and money market instruments.

J.P. Morgan Securities Limited underwrites, distributes, and trades
international securities, including Eurobonds, commercial paper, and foreign
government bonds. J.P. Morgan & Co. Incorporated issues commercial paper and
long-term debt securities. Morgan Guaranty and some of its affiliates issue
certificates of deposit and create bankers' acceptances.

To the extent that the fund invests a portion of its assets in such
obligations, it will not invest in securities issued or created by Morgan
affiliates.

Certain activities of Morgan affiliates may affect the fund's portfolio or
the markets for securities in which the fund invests. In particular, activities
of Morgan affiliates may affect the prices of securities held by the

12 American Century Investments

fund and the supply of issues available for purchase by the fund. Where a Morgan
affiliate holds a large portion of a given issue, the price at which that issue
is traded may influence the price of similar securities the fund holds or is
considering purchasing.

The fund will not purchase securities directly from Morgan affiliates, and
the size of Morgan affiliates' holdings may limit the selection of available
securities in a particular maturity, yield, or price range. The fund will not
execute any transactions with Morgan affiliates and will use only unaffiliated
broker-dealers. In addition, the fund will not purchase any securities of U.S.
government agencies during the existence of an underwriting or selling group of
which a Morgan affiliate is a member, except to the extent permitted by law.

The fund's ability to engage in transactions with Morgan affiliates is
restricted by the SEC and the Federal Reserve Board. In JPMIM's opinion, these
limitations should not significantly impair the fund's ability to pursue its
investment objectives. However, there may be circumstances in which the fund is
disadvantaged by these limitations compared to other funds with similar
investment objectives that are not subject to these limitations.

In acting for its fiduciary accounts, including the fund, JPMIM will not
discuss its investment decisions or positions with the personnel of any Morgan
affiliate. JPMIM has informed the fund that, in making investment decisions, it
will not obtain or use material, non-public information in the possession of any
division or department of JPMIM or other Morgan affiliates.

The commercial banking divisions of Morgan Guaranty and its affiliates may
have deposit, loan, and other commercial banking relationships with issuers of
securities the fund purchases, including loans that may be repaid in whole or in
part with the proceeds of securities purchased by the fund. Except as may be
permitted by applicable law, the fund will not purchase securities in any
primary public offering when the prospectus discloses that the proceeds will be
used to repay a loan from Morgan Guaranty. JPMIM will not cause the fund to make
investments for the direct purpose of benefitting other commercial interests of
Morgan affiliates at the fund's expense.

MANAGEMENT

THE BOARD OF TRUSTEES

The Board of Trustees oversees the management of the fund and meets at least
quarterly to review reports about fund operations. Although the Board of
Trustees does not manage the fund, it has hired the advisor to do so. Two-thirds
of the trustees are independent of the fund's advisor; that is, they are not
employed by and have no financial interest in the advisor.

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

Statement of Additional Information 13

Position(s)
Name (Age) Held Principal Occupation(s)
Address With Fund During Past Five Years
- --------------------------------------------------------------------------------
Albert A. Eisenstat (68) Trustee General Partner, Discovery Venturers
1665 Charleston Road (venture capital firm, 1996 to
Mountain View, CA 94043 present)
Independent Director, Commercial
Metals Co. (1982 to present)
Independent Director, Sungard
Data Systems (1991 to present)
Independent Director, Business
Objects S/A (software & programming,
1994 to present)
- --------------------------------------------------------------------------------
Ronald J. Gilson (52) Trustee Charles J. Meyers Professor of
1665 Charleston Road Law and Business, Stanford Law
Mountain View, CA 94043 School (since 1979)
Marc and Eva Stern Professor of
Law and Business, Columbia
University School of Law (since 1992)
Counsel, Marron, Reid & Sheehy
(a San Francisco law firm, since 1984)
- --------------------------------------------------------------------------------
William M. Lyons* (43) Trustee President, Chief Operating Officer
4500 Main Street and Assistant Secretary, ACC
Kansas City, MO 64111 Executive Vice President, Chief
Operating Officer and Secretary
ACSC and ACIS
- --------------------------------------------------------------------------------
Myron S. Scholes (57) Trustee Limited Partner, Long-Term Capital
1665 Charleston Road Management (since February 1999)
Mountain View, CA 94043 Principal, Long-Term Capital
Management (investment advisor,
1993-January 1999) Frank E. Buck
Professor of Finance, Stanford Graduate
School of Business (since 1981)
Director, Dimensional Fund Advisors
(investment advisor, since 1982)
Director, Smith Breeden Family of Funds
(since 1992)
- --------------------------------------------------------------------------------
Kenneth E. Scott (70) Trustee Ralph M. Parsons Professor of Law
1665 Charleston Road and Business, Stanford Law School
Mountain View, CA 94043 (since 1972)
Director, RCM Capital Funds, Inc.
(since 1994)
- -------------------------------------------------------------------------------
Isaac Stein (52) Trustee Director, Raychem Corporation
1665 Charleston Road (electrical equipment, since
1993)
Mountain View, CA 94043 President, Waverley Associates, Inc.
(private investment firm, since 1983)
Director, ALZA Corporation
(pharmaceuticals, since 1987)
Trustee, Stanford University
(since 1994)
Chairman, Stanford Health Services
(since 1994)
- --------------------------------------------------------------------------------
James E. Stowers III* (40) Trustee, Chief Executive Officer and
4500 Main Street Chairman Director, ACC
Kansas City, MO 64111 of the Board President, Chief Executive Officer
and Director, ACSC and ACIS
- --------------------------------------------------------------------------------
Jeanne D. Wohlers (53) Trustee Director and Partner, Windy Hill
1665 Charleston Road Productions, LP (edutainment software,
Mountain View, CA 94043 1994-present)
Director, Quintus Corporation,
(automation solutions, 1995-present)
Vice President and Chief Financial
Officer, Sybase, Inc. (software
company, 1988 to 1992)
- --------------------------------------------------------------------------------

14 American Century Investments

COMMITTEES

The Board has four committees to oversee specific functions of the Trust's
operations. Only independent trustees serve on these committees. Information
about these committees appears in the table below:

Committee Members Function of Committee
- --------------------------------------------------------------------------------

Audit Albert A. Eisenstat The Audit Committee selects and oversees
Kenneth E. Scott the activities of the Trust's independent
Jeanne D. Wohlers auditor. The Committee receives reports
from the advisor's Internal Audit
Department, which is accountable solely to
the Committee. The Committee also receives
reporting about compliance matters
affecting the Trust.
- --------------------------------------------------------------------------------
Nominating Albert A. Eisenstat The Nominating Committee primarily
Ronald J. Gilson considers and recommends individuals
Myron S. Scholes for nomination as trustees. The names
Kenneth E. Scott of potential trustee candidates are
Isaac Stein drawn from a number of sources,
Jeanne D. Wohlers including recommendations from Board
members, management and shareholders. This
committee also reviews and makes
recommendations to the Board with respect
to the composition of Board committees and
other Board-related matters, including its
organization, size, composition,
responsibilities, functions and
compensation.
- --------------------------------------------------------------------------------
Portfolio Ronald J. Gilson The Portfolio Committee reviews quarterly
Myron S. Scholes the investment activities and strategies
Isaac Stein used to manage fund assets. The Committee
regularly receives reports from portfolio
managers, credit analysts and other
investment personnel concerning the funds'
investments.
- --------------------------------------------------------------------------------
Quality of Ronald J. Gilson The Quality of Service Committee reviews
Service Myron S. Scholes the level and quality of transfer agent
Isaac Stein and administrative services provided to
the funds and their shareholders. It
receives and reviews reports comparing
those services to fund competitors and
seeks to improve such services where
feasible and appropriate.
- --------------------------------------------------------------------------------

Statement of Additional Information 15

COMPENSATION OF TRUSTEES

The trustees also serve as trustees for seven American Century investment
companies other than the Trust. Each trustee who is not an interested person as
defined in the Investment Company Act receives compensation for service as a
member of the Board of all seven such companies based on a schedule that is
based on the number of meetings attended and the assets of the fund for which
the meetings are held. These fees and expenses are divided among the seven
investment companies based, in part, upon their relative net assets. Under the
terms of the management agreement with the advisor, the funds are responsible
for paying such fees and expenses.

The following table shows the aggregate compensation paid by the Trust for
the periods indicated by the seven investment companies served by this Board to
each trustee who is not an interested person as defined in the Investment
Company Act.

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

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

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

The plan is an unfunded plan and, accordingly, the Trust has no obligation
to segregate assets to secure or fund the deferred fees. The rights of trustees
to receive their deferred fee account balances are the same as the rights of a
general unsecured creditor of the Trust. The plan may be terminated at any time
by the administrative committee of the plan. If terminated, all deferred fee
account balances will be paid in a lump sum.

No deferred fees were paid to any trustee under the plan during the fiscal
year ended December 31, 1998.

Aggregate Trustee Compensation for Fiscal Year Ended December 31, 1998
- --------------------------------------------------------------------------------
Total Compensation
Total Compensation from the
Compensation from American Century
Name of Trustee the Fund(1) Family of Funds(2)
- --------------------------------------------------------------------------------
Albert A. Eisenstat $4,079 $65,750
Ronald J. Gilson $4,106 $73,000
Myron S. Scholes $4,045 $61,750
Kenneth E. Scott $4,096 $73,000
Isaac Stein $4,065 $67,500
Jeanne D. Wohlers $4,096 $73,000
- --------------------------------------------------------------------------------

(1) Includes compensation paid to the trustees during the fiscal year ended
December 31, 1998, and also includes amounts deferred at the election of the
trustees under the American Century Mutual Fund Deferred Compensation Plan for
Non-Interested Directors and Trustees. The total amount of deferred compensation
included in the preceding table is as follows: Mr. Eisenstat, $4,079; Mr.
Gilson, $2,053; Mr. Scholes, $4,045; Mr. Scott, $2,048 and Ms. Wohlers, $2,048.

(2) Includes compensation paid by the seven investment company members of the
American Century family of funds served by this Board.

16 American Century Investments

OFFICERS

Background information for the officers of the Trust is provided in the
following table. All persons named as officers of the Trust also serve in
similar capacities for the 12 other investment companies advised by ACIM. Not
all officers of the Trust are listed; only those officers with policy-making
functions for the Trust are listed. No officer is compensated for his or her
service as an officer of the Trust. The individuals listed in the table are
interested persons of the fund (as defined in the Investment Company Act) by
virtue of, among other considerations, their affiliation with either the fund;
ACC, ACC's subsidiaries (including ACIM and ACSC), or the fund's distributor
(FDI), as specified in the table.

Position(s)
Name (Age) Held With Principal Occupation(s)
Address Fund During Past Five Years
- --------------------------------------------------------------------------------
George A. Rio (44) President Executive Vice President and Director
60 State Street of Client Services, FDI (March 1998
Boston, MA 02109 to present)
Senior Vice President and Senior Key
Account Manager, Putnam Mutual Funds (June
1995 to March 1998) Director Business
Development, First Data Corporation (May
1994 to June 1995) Senior Vice President
and Manager of Client Services and
Director of Internal Audit, The Boston
Company, Inc. (September 1983 to May 1994)
- --------------------------------------------------------------------------------
Mary A. Nelson (34) Vice Vice President and Manager of Treasury
60 State Street President Services and Administration, FDI
Boston, MA 02109 (1994 to present)
Assistant Vice President and Client
Manager, The Boston Company, Inc.
(1989 to 1994)
- --------------------------------------------------------------------------------
Maryanne Roepke, Vice Senior Vice President, Treasurer and
CPA (43) President Principal Accounting Officer, ACSC
4500 Main Street and Treasurer
Kansas City, MO 64111
- --------------------------------------------------------------------------------
David C. Tucker (40) Vice Senior Vice President and General
4500 Main Street President Counsel, ACSC and ACIM (June 1998
Kansas City, MO 64111 to present)
General Counsel, ACC (June 1998
to present)
Consultant to mutual fund industry
May 1997-April 1998)
Vice President and General Counsel,
Janus Companies (1990 to 1997)
- --------------------------------------------------------------------------------
Christopher J. Vice Vice President and Associate General
Kelley (34) President Counsel, FDI (since July 1996)
60 State Street Assistant Counsel, Forum Financial Group
Boston, MA 02109 (April 1994 to July 1996)
Compliance Officer, Putnam Investments
(1992 to April 1994)
- --------------------------------------------------------------------------------
Douglas A. Paul (52) Secretary Vice President and Associate General
1665 Charleston Road and Vice Counsel, ACSC
Mountain View, CA 94043 President
- --------------------------------------------------------------------------------
C. Jean Wade (35) Controller Controller-Fund Accounting, ACSC
4500 Main Street
Kansas City, MO 64111
- --------------------------------------------------------------------------------
Jon Zindel (32) Tax Officer Director of Taxation, ACSC (1996
4500 Main Street to present)
Kansas City, MO 64111 Tax Manager, Price Waterhouse, LLP
(1989-1996)
- --------------------------------------------------------------------------------

Statement of Additional Information 17

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of April 1, 1999 the following companies were the record owners of more
than 5% of a fund's outstanding shares. The fund is unaware of any other
shareholders, beneficial or of record, who own more than 5% of the fund's
outstanding shares. As of April 1, 1999 the officers and trustees of the fund,
as a group, own less than 1% of the fund's outstanding shares.

Percentage
of Shares
Fund Shareholder Outstanding
- -------------------------------------------------------------------------------
International Bond Charles Schwab & Co. 29.0%
101 Montgomery Street
San Francisco, CA 94101

SERVICE PROVIDERS

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

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

INVESTMENT ADVISOR

The fund has an investment management agreement with the advisor, dated
August 1, 1997. This agreement was approved by the shareholders of the fund on
July 30, 1997.

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

For the services provided to the fund, the advisor receives a monthly fee
based on a percentage of the average net assets of the fund. The annual rate at
which this fee is assessed is determined monthly in a two-step process: First, a
fee rate schedule is applied to the assets of all of the funds of its investment
category managed by the advisor (the "Investment Category Fee"). For example,
when calculating the fee for a money market fund, all of the assets of the money
market funds managed by the advisor are aggregated. The three investment
categories are money market funds, bond funds and equity funds. Second, a
separate fee rate schedule is applied to the assets of all of the funds managed
by the advisor (the "Complex Fee"). The Investment Category Fee and the Complex
Fee are then added to determine the unified management fee payable by the fund
to the advisor.

The schedules by which the Investment Category Fees are determined are as
follows:

INVESTMENT CATEGORY FEE SCHEDULE FOR

* International Bond

Category Assets Fee Rate
- -------------------------------------------------------------------------------
First $1 billion 0.6100%
Next $1 billion 0.5580%
Next $3 billion 0.5280%
Next $5 billion 0.5080%
Next $15 billion 0.4950%
Next $25 billion 0.4930%
Thereafter 0.4925%
- -------------------------------------------------------------------------------

The Complex Fee is determined according to the schedule on the table below.

COMPLEX FEE SCHEDULE

Complex Assets Fee Rate
- -------------------------------------------------------------------------------
First $2.5 billion 0.3100%
Next $7.5 billion 0.3000%
Next $15 billion 0.2985%
Next $25 billion 0.2970%
Next $50 billion 0.2960%
Next $100 billion 0.2950%
Next $100 billion 0.2940%
Next $200 billion 0.2930%
Next $250 billion 0.2920%
Next $500 billion 0.2910%
Thereafter 0.2900%
- -------------------------------------------------------------------------------

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

18 American Century Investments

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

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

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

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

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

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

Prior to August 1, 1997, Benham Management Corporation served as the
investment advisor to the fund. Benham Management Corporation was merged into
the advisor in late 1997.

Unified management fees incurred by the fund by class for the fiscal periods
ended December 31, 1998, 1997 and 1996, are indicated in the following table.
Fee amounts are net of amounts reimbursed or recouped under the fund's previous
investment advisory agreement with Benham Management Corporation.

UNIFIED MANAGEMENT FEES*

Fund 1998 1997 1996
- ----------------------------------------------------------------------------
International Bond
Investor $1,263,294 $1,219,730 $1,060,306
Advisor 61 0 0
- ----------------------------------------------------------------------------

* Net of reimbursements

The investment management agreement provides that the manager may delegate
certain responsibilities under the agreement to a subadvisor. Currently, JPMIM
serves as subadvisor to the fund under a subadvisory agreement between the
manager and JPMIM dated August 1, 1997, that was approved by shareholders on
July 30, 1997. This supersedes subadvisory agreements dated June 1, 1995,
December 31, 1991, and June 1, 1994. The subadvisory agreement continues for an
initial period of two years and thereafter so long as continuance is
specifically approved by vote of a majority of the fund's outstanding voting
securities or by vote of a majority of the fund's trustees, including a majority
of those trustees who are neither parties to the agreement

Statement of Additional Information 19

nor interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval. The subadvisory agreement is subject to
termination without penalty on 60 days' written notice by the manager, the Board
of Trustees, or a majority of the fund's outstanding shares or 12 months'
written notice by JPMIM and will terminate automatically in the event of (i) its
assignment or (ii) termination of the investment advisory agreement between the
fund and the manager.

The subadvisory agreement provides that JPMIM will make investment decisions
for the fund in accordance with the fund's investment objective, policies, and
restrictions, and whatever additional written guidelines it may receive from the
manager from time to time. For these services, the manager pays JPMIM a monthly
fee at an annual rate of .20% of the fund's average daily net assets up to $200
million; and .15% of average daily net assets over $200 million. Under the 1991
subadvisory agreement, the manager paid JPMIM a monthly fee at an annual rate of
.25% of average daily net assets up to $200 million, and .05% of average daily
net assets in excess of $200 million, with a minimum annual fee of $250,000.

For the fiscal years ended December 31, 1998, 1997 and 1996, the manager
paid JPMIM subadvisory fees as listed in the following table:

JPMIM SUBADVISORY FEES

1998 $340,185
1997 $315,813
1996 $470,287

OTHER ADVISORY RELATIONSHIPS

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

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

TRANSFER AGENT AND ADMINISTRATOR

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

Prior to August 1, 1997, the fund paid ACSC directly for its services as
transfer agent and administrative services agent.

Administrative service and transfer agent fees paid by the fund for the
fiscal years ended December 31, 1997 and 1996, are indicated in the table below.
Fee amounts are net of expense limitations.

ADMINISTRATIVE FEES
Fiscal Fiscal
Fund 1997 1996
- ----------------------------------------------------------------------------
International Bond $120,327 $263,533
- ----------------------------------------------------------------------------

TRANSFER AGENT FEES
Fiscal Fiscal
Fund 1997 1996
- ----------------------------------------------------------------------------
International Bond $134,632 $239,896
- ----------------------------------------------------------------------------

DISTRIBUTOR

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

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

20 American Century Investments

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

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

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP is the independent accountant of the fund for the
fiscal years ended December 31, 1997 and 1998. The address of
PricewaterhouseCoopers LLP is 1055 Broadway, 10th Floor, Kansas City, Missouri
64105. As the independent accountant of the fund, PricewaterhouseCoopers
provides services including (1) audit of the annual financial statements for the
fund, (2) assistance and consultation in connection with SEC filings and (3)
review of the annual federal income tax return filed for the fund.

KPMG Peat Marwick LLP, 1000 Walnut, Suite 1600, Kansas City, Missouri 64106,
served as independent auditors for the fund and examined the financial
statements of the fund for all fiscal years ending prior to January 1, 1997.

BROKERAGE ALLOCATION

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

INFORMATION ABOUT FUND SHARES

The Declaration of Trust permits the Board of Trustees to issue an unlimited
number of full and fractional shares of beneficial interest without par value,
which may be issued in series (or funds). Shares issued are fully paid and
nonassessable and have no preemptive, conversion or similar rights.

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

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

Shareholders of a Massachusetts business trust could, under certain
circumstances, be held personally liable for its obligations. However, the
Declaration of Trust contains an express disclaimer of shareholder liability for
acts or obligations of the Trust. The Declaration of Trust also provides for
indemnification and reimbursement of expenses of any shareholder held personally
liable for obligations of the Trust. The Declaration of Trust provides that the
Trust will, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. The Declaration of Trust further provides that the Trust may maintain
appropriate insurance (for example, fidelity, bonding and errors and omissions
insurance)

Statement of Additional Information 21

for the protection of the Trust, its shareholders, trustees, officers, employees
and agents to cover possible tort and other liabilities. Thus, the risk of a
shareholder incurring financial loss as a result of shareholder liability is
limited to circumstances in which both inadequate insurance exists and the Trust
is unable to meet its obligations.

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

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

MULTIPLE CLASS STRUCTURE

The Trust's Board of Trustees has adopted a multiple class plan (the
Multiclass Plan) pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such
plan, the fund may issue up to three classes of shares: an Investor Class, an
Institutional Class and an Advisor Class. Not all American Century funds offer
all three classes.

The Investor Class is made available to investors directly without any load
or commission, for a single unified management fee. The Institutional and
Advisor Classes are made available to institutional shareholders or through
financial intermediaries that do not require the same level of shareholder and
administrative services from the advisor as Investor Class shareholders. As a
result, the advisor is able to charge these classes a lower total management
fee. In addition to the management fee, however, Advisor Class shares are
subject to a Master Distribution and Shareholder Services Plan (described on
this page). The plan has been adopted by the Board of Trustees and initial
shareholder in accordance with Rule 12b-1 adopted by the SEC under the
Investment Company Act.

RULE 12B-1

Rule 12b-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by the investment
company's Board of Trustees and approved by its shareholders. Pursuant to such
rule, the Board of Trustees and initial shareholder of the Advisor Class have
approved and entered into a Master Distribution and Shareholder Services Plan
(the "Plan"). The Plan is described below.

In adopting the Plan, the Board of Trustees [including a majority of
trustees who are not interested persons of the fund (as defined in the
Investment Company Act), hereafter referred to as the "independent trustees"]
determined that there was a reasonable likelihood that the Plan would benefit
the fund and the shareholders of the affected class. Pursuant to Rule 12b-1,
information with respect to revenues and expenses under the Plan is presented to
the Board of Trustees quarterly for its consideration in connection with its
deliberations as to the continuance of the Plan. Continuance of the Plan must be
approved by the Board of Trustees (including a majority of the independent
trustees) annually. The Plan may be amended by a vote of the Board of Trustees
(including a majority of the independent trustees), except that the Plan may not
be amended to materially increase the amount to be spent for distribution
without majority approval of the shareholders of the affected class. The Plan
terminates automatically in the event of an assignment and may be terminated
upon a vote of a majority of the independent trustees or by vote of a majority
of the outstanding voting securities of the affected class.

All fees paid under the Plan will be made in accordance with Section 26 of
the Rules of Fair Practice of the National Association of Securities Dealers.

22 American Century Investments

MASTER DISTRIBUTION AND SHAREHOLDER SERVICES PLAN

As described in the Prospectus, the fund's Advisor Class of shares also is
made available to participants in employer-sponsored retirement or savings plans
and to persons purchasing through financial intermediaries, such as banks,
broker-dealers and insurance companies. The fund's distributor enters into
contracts with various banks, broker-dealers, insurance companies and other
financial intermediaries, with respect to the sale of the fund's shares and/or
the use of the fund's shares in various investment products or in connection
with various financial services.

Certain recordkeeping and administrative services that are provided by the
fund's transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for shareholders in
the Advisor Class. In addition to such services, the financial intermediaries
provide various distribution services.

To enable the fund's shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the fund's
advisor has reduced its management fee by 0.25% per annum with respect to the
Advisor Class shares and the fund's Board of Trustees has adopted a Master
Distribution and Shareholder Services Plan (the Distribution Plan). Pursuant to
such Plan, the Advisor Class shares pay a fee of 0.50% annually of the aggregate
average daily assets of the fund's Advisor Class shares, 0.25% of which is paid
for Shareholder Services (as described below) and 0.25% of which is paid for
distribution services.

Payments may be made for a variety of shareholder services, including, but
are not limited to, (a) receiving, aggregating and processing purchase, exchange
and redemption requests from beneficial owners (including contract owners of
insurance products that utilize the fund as an underlying investment media) of
shares and placing purchase, exchange and redemption orders with the
Distributor; (b) providing shareholders with a service that invests the assets
of their accounts in shares pursuant to specific or pre-authorized instructions;
(c) processing dividend payments from a fund on behalf of shareholders and
assisting shareholders in changing dividend options, account designations and
addresses; (d) providing and maintaining elective services such as check writing
and wire transfer services; (e) acting as shareholder of record and nominee for
beneficial owners; (f) maintaining account records for shareholders and/or other
beneficial owners; (g) issuing confirmations of transactions; (h) providing
subaccounting with respect to shares beneficially owned by customers of third
parties or providing the information to a fund as necessary for such
subaccounting; (i) preparing and forwarding shareholder communications from the
fund (such as proxies, shareholder reports, annual and semiannual financial
statements and dividend, distribution and tax notices) to shareholders and/or
other beneficial owners; and (j) providing other similar administrative and
sub-transfer agency services. Shareholder Services do not include those
activities and expenses that are primarily intended to result in the sale of
additional shares of the fund.

Distribution services include any activity undertaken or expense incurred
that is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to, (a) the payment of sales
commissions, on going commissions and other payments to brokers, dealers,
financial institutions or others who sell Advisor Class shares pursuant to
Selling Agreements; (b) compensation to registered representatives or other
employees of distributor who engage in or support distribution of the fund's
Advisor Class shares; (c) compensation to, and expenses (including overhead and
telephone expenses) of distributor; (d) the printing of prospectuses, statements
of additional information and reports for other than existing shareholders; (e)
the preparation, printing and distribution of sales literature and advertising
materials provided to the fund's shareholders and prospective shareholders; (f)
receiving and answering correspondence from prospective shareholders, including
distributing prospectuses, statements of additional information, and shareholder
reports; (g) the providing of facilities to answer questions from prospective
investors about fund shares; (h) complying with federal and state securities
laws pertaining to the sale of fund shares; (i) assisting investors in
completing application forms and selecting dividend and other account options;
(j) the providing of other reasonable assistance in connection with the
distribution of fund shares; (k) the organizing and conducting of sales seminars
and payments

Statement of Additional Information 23

in the form of transactional and compensation or promotional incentives; (l)
profit on the foregoing; (m) the payment of "service fees" for the provision of
personal, continuing services to investors, as contemplated by the Rules of Fair
Practice of the NASD and (n) such other distribution and services activities as
the advisor determines may be paid for by the fund pursuant to the terms of this
Agreement and in accordance with Rule 12b-1 of the Investment Company Act.

BUYING AND SELLING FUND SHARES

Information about buying, selling and exchanging fund shares is contained in
the American Century Investor Services Guide. The guide is available to
investors without charge and may be obtained by calling us.

VALUATION OF THE FUND'S SECURITIES

The fund's net asset value per share (NAV) is calculated as of the close of
business of the New York Stock Exchange (the Exchange), usually at 4 p.m.
Eastern time each day the Exchange is open for business. The Exchange typically
observes the following holidays: New Year's Day, Martin Luther King Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Although the fund expects the same holidays
to be observed in the future, the Exchange may modify its holiday schedule at
any time.

The subadvisor typically completes its trading on behalf of the fund in
various markets before the Exchange closes for the day. Foreign currency
exchange rates also are determined prior to the close of the Exchange. However,
if extraordinary events occur that are expected to affect the value of a
portfolio security after the close of the primary exchange on which it is
traded, the security will be valued at fair market value as determined in good
faith under the direction of the Board of Trustees. The fund's share price is
calculated by adding the value of all portfolio securities and other assets,
deducting liabilities and dividing the result by the number of shares
outstanding. Expenses and interest earned on portfolio securities are accrued
daily.

TAXES

FEDERAL INCOME TAX

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

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. The dividends from net income may qualify for the 70% dividends
received deduction for corporations to the extent that the fund held shares
receiving the dividend for more than 45 days. Distributions from gains on assets
held greater than 12 months are taxable as long-term gains regardless of the
length of time you have held the shares. However, you should note that any loss
realized upon the sale or redemption of shares held for six months or less will
be treated as a long-term capital loss to the extent of any distributions of
long-term capital gain to you with respect to such shares.

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

If more than 50% of the value of a fund's total assets at the end of each
quarter of its fiscal year consists of securities of foreign corporations, the
fund may qualify for and make an election with the Internal Revenue Service with
respect to such fiscal year so that fund shareholders may be able to claim a
foreign tax credit in lieu of a deduction for foreign income taxes paid by the
fund. If such an election is

24 American Century Investments

made, the foreign taxes paid by the fund will be treated as income received by
you. In order for the shareholder to utilize the foreign tax credit, the mutual
fund shares must have been held for 16 days or more during the 30-day period,
beginning 15 days prior to the ex-dividend date for the mutual fund shares. The
mutual fund must meet a similar holding period requirement with respect to
foreign securities to which a dividend is attributable. Any portion of the
foreign tax credit that is ineligible as a result of the fund not meeting the
holding period requirement will be separately disclosed and may be eligible as
an itemized deduction.

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

If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, either American Century or your financial intermediary is
required by federal law to withhold and remit to the IRS 31% of reportable
payments (which may include dividends, capital gains distributions and
redemptions). Those regulations require you to certify that the Social Security
number or tax identification number you provide is correct and that you are not
subject to 31% withholding for previous under-reporting to the IRS. You will be
asked to make the appropriate certification on your application. Payments
reported by us that omit your Social Security number or tax identification
number will subject us to a penalty of $50, which will be charged against your
account if you fail to provide the certification by the time the report is
filed, and is not refundable.

Redemption of shares of a fund (including redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders will generally recognize gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. If a loss is
realized on the redemption of fund shares, the reinvestment in additional fund
shares within 30 days before or after the redemption may be subject to the "wash
sale" rules of the Code, resulting in a postponement of the recognition of such
loss for federal income tax purposes.

The fund's transactions in foreign currencies, forward contracts, options
and futures contracts (including options and futures contracts on foreign
currencies) will be subject to special provisions of the Code that, among other
things, may affect the character of gains and losses realized by the fund (i.e.,
may affect whether gains or losses are ordinary or capital), accelerate
recognition of income to the fund, defer fund losses, and affect the
determination of whether capital gains and losses are characterized as long-term
or short-term capital gains or losses. These rules could therefore affect the
character, amount and timing of distributions to shareholders. These provisions
also may require the fund to mark to market certain types of the positions in
its portfolio (i.e., treat them as if they were sold), which may cause the fund
to recognize income without receiving cash with which to make distributions in
amounts necessary to satisfy the 90% and 98% distribution requirements for
relief from income and excise taxes, respectively. The fund will monitor its
transactions and may make such tax elections as fund management deems
appropriate with respect to foreign currency, options, futures contracts or
forward contracts. The fund's status as a regulated investment company may limit
its transactions involving foreign currency, futures, options and forward
contracts.

Under the Code, gains or losses attributable to fluctuations in exchange
rates that occur between the time the fund accrues income or other receivables
or accrues expenses or other liabilities denominated in a foreign currency and
the time the fund actually collects such receivables or pays such liabilities
generally

Statement of Additional Information 25

are treated as ordinary income or loss. Similarly, in disposing of debt
securities denominated in foreign currencies, certain forward currency
contracts, or other instruments, gains or losses attributable to fluctuations in
the value of a foreign currency between the date the security, contract, or
other instrument is acquired and the date it is disposed of are also usually
treated as ordinary income or loss. Under Section 988 of the Code, these gains
or losses may increase or decrease the amount of the fund's investment company
taxable income distributed to shareholders as ordinary income.

Earnings derived by the fund from sources outside the U.S. may be subject to
non-U.S. withholding and possibly other taxes. Such taxes may be reduced or
eliminated under the terms of a U.S. income tax treaty, and the fund intends to
undertake any procedural steps required to claim the benefits of such a treaty.
With respect to any non-U.S. taxes actually paid by the fund, if more than 50%
in value of the fund's total assets at the close of any taxable year consists of
securities of foreign corporations, the fund may elect to treat any non-U.S.
income and similar taxes it pays as though the taxes were paid by its
shareholders.

TAXATION OF NON-U.S. SHAREHOLDERS

U.S. taxation of a shareholder who is a non-resident alien or a non-U.S.
corporation, partnership, trust, or estate depends on whether the payments
received from a fund are "effectively connected" with a U.S. trade or business
carried on by such a shareholder. Ordinarily, income from the fund will not be
treated as "effectively connected."

If the payments received from the fund are effectively connected with a U.S.
trade or business of the shareholder, then all distributions of net investment
income and net capital gains of the fund and gains realized upon the redemption,
exchange, or other taxable disposition of shares will be subject to U.S. federal
income tax at the graduated rates applicable to U.S. citizens, residents, or
domestic entities, although the tax may be eliminated under the terms of an
applicable U.S. income tax treaty. Non-U.S. corporate shareholders also may be
subject to a branch profits tax with respect to payments from the fund.

If the shareholder is not engaged in a U.S. trade or business, or the
payments received from the fund are not effectively connected with the conduct
of such a trade or business, the shareholder will generally be subject to U.S.
tax withholding at the rate of 30% (or a lower rate under an applicable U.S.
income tax treaty) on distributions of net investment income and net realized
short-term capital received. Non-U.S. shareholders not engaged in a U.S. trade
or business, or having no effectively connected income, may also be subject to
U.S. tax at the rate of 30% (or a lower treaty rate) on additional distributions
resulting from the fund's election to treat any non-U.S. taxes it pays as though
the taxes were paid by its shareholders.

Distributions of net realized long-term capital gains to non-U.S.
shareholders and any capital gains realized by them upon the redemption or other
taxable disposition of shares generally will not be subject to U.S. tax. In the
case of individuals and other non-exempt, non-U.S. shareholders who fail to
furnish the fund with required certifications regarding their foreign status on
IRS Form W-8 or an appropriate substitute, the fund may be required to impose
backup withholding of U.S. tax at the rate of 31% on distributions of net
realized capital gains and proceeds of redemptions and exchanges.

The information above is only a summary of some of the tax considerations
affecting the fund and their shareholders. No attempt has been made to discuss
individual tax consequences. A prospective investor should consult with his or
her tax advisors or state or local or foreign tax authorities to determine
whether the fund is a suitable investment.

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The fund may quote performance in various ways. Historical performance
information will be used in advertising and sales literature.

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

26 American Century Investments

The following table sets forth yield quotations for the two classes of the
fund for the 30-day period ended December 31, 1998 (the last day of the fiscal
year pursuant to computation methods prescribed by the SEC).

Investor Advisor
Fund Class Class
- --------------------------------------------------------------------------------
International Bond 3.04% N/A
- --------------------------------------------------------------------------------

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

The following table shows the cumulative total return and the average annual
total return of the Investor Class of the fund since its inception (as noted)
through December 31, 1998.

Fund 1 Year From Inception
- --------------------------------------------------------------------------------
International Bond 17.87% 78.41%
- --------------------------------------------------------------------------------

(1) Commenced operations on January 7, 1992.

ADDITIONAL PERFORMANCE COMPARISONS

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

MULTIPLE CLASS PERFORMANCE ADVERTISING

Pursuant to the Multiple Class Plan, the Trust may issue additional classes
of its existing fund or introduce new funds with multiple classes available for
purchase. To the extent a new class is added to an existing fund, the manager
may, in compliance with SEC and NASD rules, regulations and guidelines, market
the new class of shares using the historical performance information of the
original class of shares. When quoting performance information for the new class
of shares for periods prior to the first full quarter after inception, the
original class' performance will be restated to reflect the expenses of the new
class and for periods after the first full quarter after inception, actual
performance of the new class will be used.

FINANCIAL STATEMENTS

The financial statements of the fund are included in the Annual Report to
shareholders for the fiscal year ended December 31, 1998. The Annual Report is
incorporated herein by reference. You may receive copies of the Reports without
charge upon request to American Century at the address and telephone number
shown on the back cover of this Statement of Additional Information.

EXPLANATION OF FIXED-INCOME SECURITIES RATINGS

As described in the Prospectus, the fund invests in fixed-income securities.
Those investments, however, are subject to certain credit quality restrictions,
as noted in the Prospectus and in this Statement of Additional Information. The
following is a summary of the rating categories referenced in the prospectus
disclosure.

Statement of Additional Information 27

BOND RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
AAA Aaa These are the highest ratings assigned by S&P and Moody's to
a debt obligation and indicates an extremely strong capacity to
pay interest and repay principal.
- --------------------------------------------------------------------------------
AA Aa Debt rated in this category is considered to have a very
strong capacity to pay interest and repay principal and differs
from AAA/Aaa issues only in a small degree.
- --------------------------------------------------------------------------------
A A Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than debt in higher-rated categories.
- --------------------------------------------------------------------------------
BBB Baa Debt rated BBB/Baa is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely to
lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher-rated categories.
- --------------------------------------------------------------------------------
BB Ba Debt rated BB/Ba has less near-term vulnerability to default
than other speculative issues. However, it faces major ongoing
uncertainties or exposure to adverse business, financial or
economic conditions that could lead to inadequate capacity to
meet timely interest and principal payments. The BB rating
category also is used for debt subordinated to senior debt that
is assigned an actual or implied BBB- rating.
- --------------------------------------------------------------------------------
B B Debt rated B has a greater vulnerability to default but
currently has the capacity to meet interest payments and
principal repayments. Adverse business, financial or economic
conditions will likely impair capacity or willingness to pay
interest and repay principal. The B rating category also is used
for debt subordinated to senior debt that is assigned an actual
or implied BB/Ba or BB-/Ba3 rating.
- --------------------------------------------------------------------------------
CCC Caa Debt rated CCC/Caa has a currently identifiable vulnerability
to default and is dependent upon favorable business, financial
and economic conditions to meet timely payment of interest
and repayment of principal. In the event of adverse business,
financial or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The CCC/Caa
rating category also is used for debt subordinated to senior
debt that is assigned an actual or implied B or B-/B3 rating.
- --------------------------------------------------------------------------------
CC Ca The rating CC/Ca typically is applied to debt subordinated
to senior debt that is assigned an actual or implied
CCC/Caa rating.
- --------------------------------------------------------------------------------
C C The rating C typically is applied to debt subordinated to
senior debt, which is assigned an actual or implied CCC-/Caa3
debt rating. The C rating may be used to cover a situation
where a bankruptcy petition has been filed, but debt service
payments are continued.
- --------------------------------------------------------------------------------
CI - The rating CI is reserved for income bonds on which no
interest is being paid.
- --------------------------------------------------------------------------------
D D Debt rated D is in payment default. The D rating category
is used when interest payments or principal payments are not
made on the date due even if the applicable grace period
has not expired, unless S&P believes that such payments will
be made during such grace period. The D rating also will be
used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
- --------------------------------------------------------------------------------

28 American Century Investments

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

COMMERCIAL PAPER RATINGS

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

NOTE RATINGS

S&P Moody's Description
- --------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying
strong protection from established cash flows of funds
for their servicing or from established and broad-based
access to the market for refinancing,
or both.
- --------------------------------------------------------------------------------
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins of protection
ample, although not so large as in the preceding
group.
- --------------------------------------------------------------------------------
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security
elements accounted for, but lacking the undeniable
strength of the preceding grades. Market access for
refinancing, in particular, is likely to be less
well established.
- --------------------------------------------------------------------------------
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying
specific risk but having protection and not distinctly
or predominantly speculative.
- --------------------------------------------------------------------------------

Statement of Additional Information 29

MORE INFORMATION ABOUT THE FUND IS CONTAINED THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

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

You can receive a free copy of the annual and semiannual reports, and ask any
questions about the funds, by contacting us at one of the addresses or telephone
numbers listed below.

If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary

you can receive the annual and semiannual reports directly from them.

You also can get information about the funds from the Security and Exchange
Commission (SEC).

* In person SEC Public
Reference Room
Washington, D.C.
Call 1-800-SEC-0330 for location and hours.

* On the Internet www.sec.gov

* By mail SEC Public Reference Section
Washington, D.C. 20549-6009
(The SEC will charge a fee for copying
the documents.)

Investment Company Act File No. 811-3706

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

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

INVESTOR SERVICES
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

WWW.AMERICANCENTURY.COM

FAX
816-340-7962

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

BUSINESS; NOT-FOR-PROFIT AND EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-3533

SH-SAI-15762 9905
<PAGE>
AMERICAN CENTURY INTERNATIONAL BOND FUNDS

1933 Act Post-Effective Amendment No. 14
1940 Act Amendment No. 15
- --------------------------------------------------------------------------------

PART C OTHER INFORMATION

Item 23 EXHIBITS.

(a) Amended and Restated Declaration of Trust, dated March 1, 1999 is
included herein as Exhibit EX-99.a.

(b) Amended and Restated Bylaws dated March 9, 1998 are incorporated by
reference to Exhibit 2(b) of Post-Effective Amendment No. 23 to the
Registration Statement of American Century Municipal Trust, filed on
March 26, 1998 (Accession # 0000746458-98-000007).

(c) Registrant hereby incorporates by reference, as though set forth
fully herein, Article III, Article VIII, Article X, Article XI and
Article XII of Registrant's Declaration of Trust, appearing as
Exhibit (1) to Post-Effective Amendment No. 7 and Exhibit (1) to
Post-Effective Amendment No. 9 to the Registration Statements on
Form N-1A of the Registrant; and Article II, Article VII and Article
VIII of Registrant's Amended and Restated Bylaws, appearing as
Exhibit (b) to Post-Effective Amendment No. 23 to the Registration
Statement on Form N-1A of American Century Municipal Trust.

(d) (1) Investor Class Investment Management Agreement between American
Century International Bond Funds and American Century Investment
Management, Inc., dated August 1, 1997 (filed electronically as
Exhibit 5 of Post-Effective Amendment No. 33 to the Registration
Statement of American Century Government Income Trust on July 31,
1997, File No. 2-99222).

(2) Advisor Class Investment Management Agreement between American
Century International Bond Funds, American Century Government Income
Trust, American Century Target Maturities Trust, American Century
Quantitative Equity Funds and American Century Investment
Management, Inc., dated August 1, 1997 (filed electronically as
Exhibit 5 of Post-Effective Amendment No. 27 to the Registration
Statement of American Century Target Maturities Trust on August 28,
1997, File No. 2-94608).

(e) (1) Distribution Agreement between American Century International
Bond Funds and Funds Distributor, Inc., dated January 15, 1998
(filed electronically as Exhibit 6 to Post-Effective Amendment No.
28 to the Registration Statement of American Century Target
Maturities Trust on January 30, 1998, File No. 2-94608).

(2) Amendment No. 1 to the Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc., dated
June 1, 1998 (filed electronically as Exhibit 6b to Post-Effective
Amendment No. 11 to the Registration Statement of American Century
Capital Portfolios, Inc. on June 26, 1998, File No. 33-64872).

(3) Amendment No. 2 to Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc., dated
December 1, 1998 (filed electronically as Exhibit (e)(3) to
Post-Effective Amendment No. 12 to the Registration Statement of
American Century World Mutual Funds, Inc., on November 13, 1998,
File No. 33-39242).

(4) Amendment No. 3 to Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc., dated
January 29, 1999 (filed electronically as Exhibit (e)(4) to
Post-Effective Amendment No. 28 to the Registration Statement of
American Century California Tax-Free and Municipal Funds, on
December 28, 1998, File No. 2-82734).

(f) Not Applicable.

(g) (1) Custodian Agreement between American Century International Bond
Funds and State Street Bank and Trust Company dated August 10, 1993
is incorporated herein by reference to Exhibit 8(a) of
Post-Effective Amendment No. 7 filed on April 22, 1996 (Accession #
0000880268-96-000010).

(2) Amendment No. 1 dated December 1, 1994 to the Custodian
Agreement between American Century International Bond Funds and
State Street Bank and Trust Company dated August 10, 1993 is
incorporated herein by reference to Exhibit 8(b) of Post-Effective
Amendment No. 7 filed on April 22, 1996 (Accession #
0000880268-96-000010).

(3) Amendment No. 2 dated March 4, 1996 to the Custodian Agreement
between American Century International Bond Funds and State Street
Bank and Trust Company dated August 10, 1993 is incorporated herein
by reference to Exhibit 8(c) of Post-Effective Amendment No. 7 filed
on April 22, 1996 (Accession # 0000880268-96-000010).

(h) (1) Transfer Agency Agreement between American Century International
Bond Funds and American Century Services Corporation dated as of
August 1, 1997, is incorporated herein by reference to Exhibit 9 of
Post-Effective Amendment No. 33 to the Registration Statement of the
American Century Government Income Trust filed on July 31, 1997
(Accession # 773674-97-000014).

(2) Amendment to Transfer Agency Agreement between American Century
International Bond Funds and American Century Services Corporation,
dated June 29, 1998 (filed electronically as Exhibit 9b to
Post-Effective Amendment No. 23 to the Registration Statement of
American Century Quantitative Equity Funds on June 29, 1998, File
No. 33-19589).

(i) Opinion and consent of counsel dated April 30, 1999 is filed herein
as Exhibit EX-99.i.

(j) (1) Consent of PricewaterhouseCoopers, LLP, independent auditors, is
filed herein as Exhibit EX-99.j1.

(2) Consent of KPMG Peat Marwick, LLP, independent auditors (filed
electronically as Exhibit 11(b) to Post-Effective Amendment No. 11
to the Registration Statement of the Registrant, filed on May 1,
1998, File No. 33-43321 and incorporated herein by reference.)

(3) Power of Attorney dated December 18, 1998 is included herein as
Exhibit EX-99.j3.

(k) Not applicable.

(l) Not applicable.

(m) (1)Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century International Bond
Fund, American Century Target Maturities Trust and American Century
Quantitative Equity Funds (Advisor Class) dated August 1, 1997
(filed electronically as Exhibit 15 to Post-Effective Amendment No.
27 to the Registration Statement of American Century Target
Maturities Trust filed on August 28, 1997, File No. 2-94608).

(2) Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century International Bond Funds (Advisor Class)
dated June 29, 1998 (filed electronically as Exhibit 15b to
Post-Effective Amendment No. 23 of American Century Quantitative
Equity Funds filed on June 29, 1998, File No. 33-19589).

(n) Financial Data Schedule of American Century International Bond Funds
is included herein.

(o) (1) Multiple Class Plan of American Century California Tax-Free and
Municipal Funds, American Century Government Income Trust, American
Century International Bond Funds, American Century Investment Trust,
American Century Municipal Trust, American Century Target Maturities
Trust and American Century Quantitative Equity Funds dated August 1,
1997 (filed electronically as Exhibit 18 of Post-Effective Amendment
No. 27 to the Registration Statement of American Century Target
Maturities Trust on August 28, 1997, File No. 2-94608).

(2) Amendment to Multiple Class Plan of American Century
International Bond Funds dated June 29, 1998 (filed electronically
as Exhibit (o)(2) to Post-Effective Amendment No. 23 to the
Registration Statement of American Century Quantitative Equity Funds
on June 29, 1998, File No. 33-19589).

Item 24. Persons Controlled by or Under Common Control with Registrant.

Not Applicable.

Item 25. Indemnification.

As stated in Article VII, Section 3 of the Declaration of Trust,
incorporated herein by reference to Exhibit 1 to the Registration Statement,
"The Trustees shall be entitled and empowered to the fullest extent
permitted by law to purchase insurance for and to provide by resolution or
in the Bylaws for indemnification out of Trust assets for liability and for
all expenses reasonably incurred or paid or expected to be paid by a Trustee
or officer in connection with any claim, action, suit, or proceeding in
which he or she becomes involved by virtue of his or her capacity or former
capacity with the Trust. The provisions, including any exceptions and
limitations concerning indemnification, may be set forth in detail in the
Bylaws or in a resolution adopted by the Board of Trustees."

Registrant hereby incorporates by reference, as though set forth fully
herein, Article VI of the Registrant's Bylaws, amended on May 17, 1995
(filed electronically as Exhibit 2(b) of Post-Effective Amendment No. 6 to
the Registration Statement on February 29, 1996, File No. 33-43321).

Item 26. Business and other Connections of Investment Advisor.

American Century Investment Management, Inc., the investment manager to each
of the Registrant's Funds, is engaged in the business of managing
investments for deferred compensation plans and other institutional
investors.

Item 27. Principal Underwriters.

(a) Funds Distributor, Inc. (the "Distributor") acts as principal
underwriter for the following investment companies.

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century World Mutual Funds, Inc.
The Brinson Funds
Dresdner RCM Capital Funds, Inc.
Dresdner RCM Equity Funds, Inc.
Harris Insight Funds Trust
HT Insight Funds, Inc. d/b/a Harris Insight Funds
J.P. Morgan Institutional Funds
J.P. Morgan Funds
JPM Series Trust
JPM Series Trust II
LaSalle Partners Funds, Inc.
Kobrick Investment Trust
Merrimac Series
Monetta Fund, Inc.
Monetta Trust
The Montgomery Funds I
The Montgomery Funds II
The Munder Framlington Funds Trust
The Munder Funds Trust
The Munder Funds, Inc.
National Investors Cash Management Fund, Inc.
Orbitex Group of Funds
SG Cowen Funds, Inc.
SG Cowen Income + Growth Fund, Inc.
SG Cowen Standby Reserve Fund, Inc.
SG Cowen Standby Tax-Exempt Reserve Fund, Inc.
SG Cowen Series Funds, Inc.
St. Clair Funds, Inc.
The Skyline Funds
Waterhouse Investors Family of Funds, Inc.
WEBS Index Fund, Inc.

The Distributor is registered with the Securities and Exchange Commission as
a broker-dealer and is a member of the National Association of Securities
Dealers. The Distributor is located at 60 State Street, Suite 1300, Boston,
Massachusetts 02109. The Distributor is an indirect wholly-owned subsidiary of
Boston Institutional Group, Inc., a holding company all of whose outstanding
shares are owned by key employees.

(b) The following is a list of the executive officers, directors and
partners of the Distributor:

<TABLE>
Name and Principal Positions and Offices with Positions and Offices with
Business Address* Underwriter Registrant

<S> <C> <C>
Marie E. Connolly Director, President and Chief none
Executive Officer

George A. Rio Executive Vice President President, Principal Executive
and Principal Financial Officer

Donald R. Roberson Executive Vice President none

William S. Nichols Executive Vice President none

Margaret W. Chambers Senior Vice President, none
General Counsel, Chief
Compliance Officer,
Secretary and Clerk
Joseph F. Tower, III Director, Senior Vice President, none
Treasurer and Chief Financial
Officer

Paula R. David Senior Vice President none

Gary S. MacDonald Senior Vice President none

Judith K. Benson Senior Vice President none

William J. Nutt Chairman and Director none
- --------------------
* All addresses are 60 State Street, Suite 1300, Boston, Massachusetts 02109
</TABLE>

Item 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act, and the rules promulgated thereunder, are in the
possession of Registrant, American Century Services Corporation and American
Century Investment Management, Inc., all located at 4500 Main Street, Kansas
City, Missouri 64111.

Item 29. Management Services.

Not Applicable.

Item 30. Undertakings.

Registrant undertakes to furnish each person to whom a Prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all the requirements
for effectiveness of this Post-Effective Amendment No. 14 to its Registration
Statement pursuant to Rule 485(b) promulgated under the Securities Act of 1933,
as amended, and has duly caused this Post-Effective Amendment No. 14 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Kansas City, and State of Missouri, on the 30th day of April, 1999.

AMERICAN CENTURY INTERNATIONAL BOND FUNDS

By: /*/ George A. Rio
George A. Rio
President and Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective
Amendment No. 14 has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date

*George A. Rio President, Principal April 30, 1999
- --------------------------------- Executive and Principal
George A. Rio Financial Officer

*Maryanne Roepke Vice President, Treasurer April 30, 1999
- --------------------------------- and Principal Accounting
Maryanne Roepke Officer

*Albert A. Eisenstat Director April 30, 1999
- ---------------------------------
Albert A. Eisenstat

*Ronald J. Gilson Director April 30, 1999
- ---------------------------------
Ronald J. Gilson

*William M. Lyons Director April 30, 1999
- ---------------------------------
William M. Lyons

*Myron S. Scholes Director April 30, 1999
- ---------------------------------
Myron S. Scholes

*Kenneth E. Scott Director April 30, 1999
- ---------------------------------
Kenneth E. Scott

*Isaac Stein Director April 30, 1999
- ---------------------------------
Isaac Stein

*James E. Stowers III Director April 30, 1999
- ---------------------------------
James E. Stowers III

*Jeanne D. Wohlers Director April 30, 1999
- ---------------------------------
Jeanne D. Wohlers

*By /s/Charles C.S. Park
Charles C.S. Park
Attorney-in-Fact

EXHIBIT DESCRIPTION

EX-99.a Amended and Restated Declaration of Trust, dated March 1, 1999 is
included herein.

EX-99.b Amended and Restated Bylaws dated March 9, 1998 are incorporated
by reference to Exhibit 2(b) of Post-Effective Amendment No. 23
to the Registration Statement of American Century Municipal
Trust, filed on March 26, 1998 (Accession #0000746458-98-000007).

EX-99.d1 Investor Class Investment Management Agreement between American
Century International Bond Funds and American Century Investment
Management, Inc., dated August 1, 1997 (filed as a part of
Post-Effective Amendment No. 33 to the Registration Statement on
Form N-1A of American Century Government Income Trust, File No.
2-99222, filed July 31, 1997 and incorporated herein by
reference).

EX-99.d2 Advisor Class Investment Management Agreement between American
Century International Bond Funds, American Century Government
Income Trust, American Century Target Maturities Trust, and
American Century Quantitative Equity Funds, dated August 1, 1997
(filed as a part of Post-Effective Amendment No. 27 to the
Registration Statement on Form N-1A of American Century Target
Maturities Trust, File No. 2-94608, filed on August 28, 1997 and
incorporated herein by reference).

EX-99.e1 Distribution Agreement between American Century International
Bond Funds and Funds Distributor, Inc., dated January 15, 1998
(filed as a part of Post-Effective Amendment No. 28 to the
Registration Statement on Form N-1A of American Century Target
Maturities Trust, File No. 2-94608, filed on January 30, 1998 and
incorporated herein by reference).

EX-99.e2 Amendment No. 1 to the Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc.,
dated June 1, 1998 (filed as a part of Post-Effective Amendment
No. 11 to the Registration Statement on Form N-1A of American
Century Capital Portfolios, Inc., File No. 33-64872, filed on
June 26, 1998 and incorporated herein by reference).

EX-99.e3 Amendment No. 2 to Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc.,
dated as of December 1, 1998 (filed as a part of Post-Effective
Amendment No. 12 to the Registration Statement on Form N-1A of
American Century World Mutual Funds, Inc., File No. 33-39242,
filed on November 13, 1998, and incorporated herein by
reference).

EX-99.e4 Amendment No. 3 to Distribution Agreement between American
Century International Bond Funds and Funds Distributor, Inc.,
dated as of January 29, 1999 (filed as a part of Post-Effective
Amendment No. 28 to the Registration Statement on Form N-1A of
American Century California Tax-Free and Municipal Funds, File
No. 2-82734, filed on December 28, 1998, and incorporated herein
by reference).

EX-99.g1 Custodian Agreement between American Century International Bond
Funds and State Street Bank and Trust Company dated August 10,
1993 is incorporated herein by reference to Exhibit 8(a) of
Post-Effective Amendment No. 7 filed on April 22, 1996 (Accession
# 0000880268-96-000010).

EX-99.g2 Amendment No. 1 dated December 1, 1994 to the Custodian Agreement
between American Century International Bond Funds and State
Street Bank and Trust Company dated August 10, 1993 is
incorporated herein by reference to Exhibit 8(b) of
Post-Effective Amendment No. 7 filed on April 22, 1996 (Accession
# 0000880268-96-000010).

EX-99.g3 Amendment No. 2 dated March 4, 1996 to the Custodian Agreement
between American Century International Bond Funds and State
Street Bank and Trust Company dated August 10, 1993 is
incorporated herein by reference to Exhibit 8(c) of
Post-Effective Amendment No. 7 filed on April 22, 1996 (Accession
# 0000880268-96-000010).

EX-99.h1 Transfer Agency Agreement between American Century International
Bond Funds and American Century Services Corporation dated as of
August 1, 1997, is incorporated herein by reference to Exhibit 9
of Post-Effective Amendment No. 33 to the Registration Statement
of the American Century Government Income Trust filed on July 31,
1997 (Accession # 773674-97-000014).

EX-99.h2 Amendment to Transfer Agency Agreement between American Century
International Bond Funds and American Century Services
Corporation dated June 29, 1998 (filed as a part of
Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A of American Century Quantitative Equity Funds, File No.
33-19589, filed on June 29, 1998, and incorporated herein by
reference).

EX-99.i Opinion and consent of counsel, is included herein.

EX-99.j1 Consent of PricewaterhouseCoopers, LLP, independent auditors, is
included herein.

EX-99.j2 Consent of KPMG Peat Marwick, LLP, independent auditors (filed as
Exhibit 11(b) to Post-Effective Amendment No. 11 to the
Registration Statement of the Registrant, filed on May 1, 1998,
File No. 33-43321).

EX-99.j3 Power of Attorney dated December 18, 1998 is included herein.

EX-99.m1 Master Distribution and Shareholder Services Plan of American
Century Government Income Trust, American Century International
Bond Fund, American Century Target Maturities Trust and American
Century Quantitative Equity Funds (Advisor Class) dated August 1,
1997 (filed electronically as Exhibit 15 to Post-Effective
Amendment No. 27 to the Registration Statement of American
Century Target Maturities Trust filed on August 28, 1997, File
No. 2-94608).

EX-99.m2 Amendment No. 1 to Master Distribution and Shareholder Services
Plan of American Century International Bond Funds (Advisor Class)
dated June 29, 1998 (filed as a part of Post-Effective Amendment
No. 23 to the Registration Statement on Form N-1A of American
Century Quantitative Equity Funds, File No. 33-19589, filed on
June 29, 1998 and incorporated herein by reference).

EX-99.o1 Multiple Class Plan of American Century California Tax-Free and
Municipal Funds, American Century Government Income Trust,
American Century International Bond Funds, American Century
Investment Trust, American Century Municipal Trust, American
Century Target Maturities Trust and American Century Quantitative
Equity Funds dated August 1, 1997 (filed as a part of
Post-Effective Amendment No. 27 of the Registration Statement on
Form N-1A of American Century Target Maturities Trust, File No.
2-94608, filed on August 28, 1997 and incorporated herein by
reference).

EX-99.o2 Amendment to Multiple Class Plan of American Century
International Bond Funds dated June 29, 1998 (filed as a part of
Post-Effective Amendment No. 23 to the Registration Statement on
Form N-1A of American Century Quantitative Equity Funds, File No.
33-19589, filed on June 29, 1998 and incorporated herein by
reference).

EX-27.1 Financial Data Schedule.

AMERICAN CENTURY INTERNATIONAL BOND FUNDS

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
AS AMENDED THROUGH MARCH 9, 1998

TABLE OF CONTENTS

<TABLE>
ARTICLE I NAME AND DEFINITIONS....................................................................................1
<S> <C> <C>
Section 1. Name.............................................................................................1
Section 2. Definitions......................................................................................1

ARTICLE II PURPOSE OF TRUST.......................................................................................2

ARTICLE III SHARES................................................................................................2
Section 1. Division of Beneficial Interest..................................................................2
Section 2. Ownership of Shares..............................................................................2
Section 3. Investments in the Trust.........................................................................3
Section 4. Status of Shares and Limitation of Personal Liability............................................3
Section 5. Power of Trustees to Change Provisions Relating to Shares........................................3
Section 6. Establishment and Designation of Series..........................................................4
Section 7. Indemnification of Shareholders..................................................................6

ARTICLE IV THE TRUSTEES...........................................................................................6
Section 1. Number, Election and Tenure......................................................................6
Section 2. Effect of Death, Resignation, etc. of a Trustee..................................................7
Section 3. Powers...........................................................................................7
Section 4. Payment of Expenses by the Trust.................................................................9
Section 5. Payment of Expenses by Shareholders..............................................................9
Section 6. Ownership of Assets of the Trust................................................................10
Section 7. Service Contracts...............................................................................10

ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS...............................................................11
Section 1. Voting Powers...................................................................................11
Section 2. Voting Power and Meetings.......................................................................11
Section 3. Quorum and Required Vote........................................................................12
Section 4. Action by Written Consent.......................................................................12
Section 5. Record Dates....................................................................................12
Section 6. Additional Provisions...........................................................................13

ARTICLE VI NET ASSET VALUE, DISTRIBUTIONS, AND REDEMPTIONS.......................................................13
Section 1. Determination of Net Asset Value, Net Income, and Distributions.................................13
Section 2. Redemptions and Repurchases.....................................................................13
Section 3. Redemptions at the Option of the Trust..........................................................13

ARTICLE VII COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES.................................................14
Section 1. Compensation....................................................................................14
Section 2. Limitation of Liability.........................................................................14
Section 3. Indemnification.................................................................................14

ARTICLE VIII MISCELLANEOUS.......................................................................................14
Section 1. Trustees, Shareholders, etc. Not Personally Liable; Notice......................................14
Section 2. Trustee's Good Faith Action, Expert Advice, No Bond or Surety...................................15
Section 3. Liability of Third Persons Dealing with Trustees................................................15
Section 4. Termination of Trust or Series..................................................................15
Section 5. Merger and Consolidation........................................................................16
Section 6. Filing of Copies, References, Headings..........................................................16
Section 7. Applicable Law..................................................................................16
Section 8. Amendments......................................................................................16
Section 9. Trust Only......................................................................................16
Section 10. Use of the Name "Benham" and "American Century"................................................17
</TABLE>

AMERICAN CENTURY INTERNATIONAL BOND FUNDS

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
(as amended through March 9, 1998)

AGREEMENT AND DECLARATION OF TRUST made at Palo Alto, California on the
28th day of August, 1991 and amended by the Trustees hereunder.

WHEREAS the Trustees desire and have agreed to manage all property
coming into their hands as trustees of a Massachusetts business trust in
accordance with the provisions hereinafter set forth.

NOW, THEREFORE, the Trustees hereby direct that this Agreement and
Declaration of Trust be filed with the Secretary of The Commonwealth of
Massachusetts and do hereby declare that they will hold all cash, securities and
other assets, which they may form time to time acquire in any manner as Trustees
hereunder, IN TRUST, and manage and dispose of the same upon the following terms
and conditions for the pro rata benefit of the holders of Shares in this Trust.

ARTICLE I
NAME AND DEFINITIONS

SECTION 1. NAME
This Trust shall be known as the "American Century International Bond Funds" and
the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.

SECTION 2. DEFINITIONS
Whenever used herein, unless otherwise required by the context or specifically
provided:

(a) The "Trust" refers to the Massachusetts business trust established by
this Agreement and Declaration of Trust, as amended from time to time;

(b) "Trustees" refers to the Trustees of the Trust named in Article IV
hereof or elected or appointed in accordance with such Article;

(c) "Shares" means the equal proportionate units of interest into which the
beneficial interest in the Trust property belonging to any Series of
the Trust (as the context may require) shall be divided from time to
time;

(d) "Shareholder" means a record owner of Shares;

(e) The "1940 Act" refers to the Investment Company Act of 1940 Act" refers
to the Investment Company Act of 1940 and the Rules and Regulations
thereunder, all as amended from time to time;

(f) The term "Commission" shall mean the United States Securities and
Exchange Commission;

(g) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust, as amended or restated from time to time;

(h) "Bylaws" shall mean the Bylaws of the Trust as amended from time to
time;

(i) "Series Company" refers to the form of registered open-end investment
company described in Section 18(f)(2) of the 1940 Act or in any
successor statutory provision; and

(j) "Series" refers to each Series of Shares established and designated
under or in accordance with the provisions of Article III. Present and
future separate "Series" in the Trust may be referred to as
"Portfolios" and these terms may be used alternatively in future
publications and communications sent to investors.

(k) "Class" shall have the meaning prescribed in the Multiple Class Plan
dated August 1, 1997 as amended from time to time (the "Multiple Class
Plan").

ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to provide investors a managed investment company
registered under the 1940 Act and investing one or more portfolios primarily in
securities and debt instruments.

ARTICLE III
SHARES

SECTION 1. DIVISION OF BENEFICIAL INTEREST
The beneficial interest in the Trust shall at all times be divided into an
unlimited number of Shares, without par value. Subject to the provisions of
Section 6 of this Article III, each Share shall have voting rights as provided
in Article V hereof, and holders of the Shares of any Series shall be entitled
to receive dividends, when and as declared with respect thereto in the manner
provided in Article VI, Section 1 hereof. No Shares shall have any priority or
preference over any other Share of the same Series with respect to dividends or
distributions upon termination of the Trust or of such Series made pursuant to
Article VIII, Section 4 hereof. All dividends and distributions shall be made
ratably among all Shareholders of a particular Series from the assets belonging
to such Series according to the number of Shares of such Series held of record
by each Shareholder on the record date for any dividend or on the date of
termination, as the case my be. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust or any Series. The Trustees may from time to time divide or combine the
Shares of any particular Series into a greater or lesser number of Shares of
that Series without thereby changing the proportionate beneficial interest of
the Shares of that Series in the assets belonging to that Series or in any way
affecting the rights of Shares of any other Series.

SECTION 2. OWNERSHIP OF SHARES
The ownership of Shares shall be recorded on the books of the Trust or a
transfer or similar agent for the Trust, which books shall be maintained
separately for the Shares of each Series. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time. The Trustees may make such rules as they consider
appropriate for the transfer of Shares of each Series and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders of each
Series and as to the number of Shares of each Series held from time to time by
each.

SECTION 3. INVESTMENTS IN THE TRUST
The Trustees may accept investments in the Trust from such persons, at such
times, and on such terms and for such consideration as they from time to time
authorize.

SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Shares shall be deemed to be personal property giving only the rights provided
in this instrument. Every Shareholder by virtue of having become a Shareholder
shall be held to have expressly assented and agreed to the terms hereof and to
have become a party hereto. The death of a Shareholder during the existence of
the Trust shall not operate to terminate the Trust, nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but entitles
such representative only to the right of said deceased Shareholder under this
Trust. Ownership of Shares shall not entitle the Shareholder to any title in or
to the whole or any part of the Trust property or right to call for a partition
or division of the same or for an accounting , nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholders, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.

SECTION 5. POWER OF TRUSTEES TO CHANGE PROVISIONS RELATING TO SHARES
Notwithstanding any other provision of this Declaration of Trust and without
limiting the power of the Trustees to amend the Declaration of Trust as provided
elsewhere herein, the Trustees shall have the power to amend this Declaration of
Trust, at any time and from time to time, in such manner as the Trustees may
determine in their sole discretion, without the need for Shareholder action, so
as to add to, delete, replace or otherwise modify any provisions relating to the
Shares contained in this Declaration of Trust, provided that before adopting any
such amendment without Shareholder approval the Trustees shall determine that it
is consistent with the fair and equitable treatment of all Shareholders or that
Shareholder approval is not otherwise required by the 1940 Act or other
applicable law.

Without limiting the generality of the foregoing, the Trustees may, for the
above-stated purposes, amend the Declaration of Trust to:

(a) create one or more Series of Shares (in addition to any Series already
existing or otherwise) with such rights and preferences and such
eligibility requirements for investment therein as the Trustees shall
determine and reclassify any or all outstanding Shares as shares of
particular Series in accordance with such eligibility requirements;

(b) amend any of the provisions set forth in paragraphs (a) through (i) of
Section 6 of this Article III;

(c) combine one or more Series of Shares into a single Series on such terms
and conditions as the Trustees shall determine;

(d) change or eliminate any eligibility requirements for investment in
Shares of any Series, including without limitation, to provide for the
issue of Shares of any Series in connection with any merger or
consolidation of the Trust with another trust or company or any
acquisition by the Trust of part or all of the assets of another trust
or investment company;

(e) change the designation of any Series of Shares;

(f) change the method of allocating dividends among the various Series of
Shares;

(g) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more Series
of Shares; and

(h) specifically allocate assets to any or all Series of Shares or create
one or more additional Series of Shares which are preferred over all
other Series of Shares in respect of assets specifically allocated
thereto or any dividends paid by the Trust with respect to any net
income, however determined, earned from the investment and reinvestment
of any assets so allocated or otherwise and provide for any special
voting or other rights with respect to such Series.

SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES
The establishment and designation of any Series of Shares shall be effective
upon resolution by a majority of the then Trustees, setting forth such
establishment and designation and the relative rights and preferences of such
Series, or as otherwise provided in such resolution. Such establishment and
designation shall be set forth in an amendment to this Declaration of Trust by
execution of a new Schedule A to this Declaration of Trust.

Shares of each Series established pursuant to this Section 6, unless otherwise
provided in the resolution establishing such Series or as modified by the
Multiple Class Plan, shall have the following rights and preferences:

(a) ASSETS BELONGING TO SERIES. All consideration received by the Trust for
the issue or sale of Shares of a particular Series, together with all
assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof from whatever source
derived, including, without limitation, any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that Series for all purposes,
subject only to the rights of creditors, shall be so recorded upon the
books of account of the Trust, and are herein referred to as "assets
belonging to" that Series. In the event that there are any assets,
income, earnings, profits and proceeds thereof, funds or payments which
are not readily identifiable as belonging to any particular Series
(collectively "General Assets"), the Trustees shall allocate such
General Assets to, between or among any one or more of the Series in
such manner and on such basis as they, in their sole discretion, deem
fair and equitable, and any General Assets to, between or among any one
or more of the Series in such manner and on such basis as they, in
their sole discretion, deem fair and equitable, and any General Asset
so allocated to a particular Series shall belong to that Series. Each
such allocation by the Trustees shall be conclusive and binding upon
the Shareholders of all Series for all purposes.

(b) LIABILITIES BELONGING TO SERIES. The assets belonging to each
particular Series shall be charged with the liabilities of the Trust in
respect to that Series and all expenses, costs, charges and reserves
attributable to that Series, and any general liabilities of the Trust
which are not readily identifiable as belonging to any particular
Series shall be allocated and charged by the Trustees to and among any
one or more of the Series in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. The
liabilities, expenses, costs, charges, and reserves so charged to a
Series are herein referred to as "liabilities belonging to" that
Series. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustee shall be conclusive and binding upon the
holders of all Series for all purposes. Under no circumstances shall
the assets allocated or belonging to any particular Series be charged
with liabilities attributable to any other Series. All persons who have
extended credit which has been allocated to particular Series, or who
have a claim or contract which has been allocated to any particular
Series, shall look only to the assets of that particular Series for
payment of such credit, claim, or contract.

(c) INCOME, DISTRIBUTIONS, AND REDEMPTIONS. The Trustees shall have full
discretion, to the extent not inconsistent with the 1940 Act, to
determine which items shall be treated as income and which items as
capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders. Notwithstanding any other provision
of this Declaration, including, without limitation, Article VI, no
dividend or distribution (including, without limitation, Article VI,
any distribution paid upon termination of the Trust or of any Series)
with respect to, nor any redemption or repurchase of, the Shares of any
Series shall be effected by the Trust other than from the assets
belonging to such Series, nor, except as specifically provided in
Section 7 of this Article III, shall any Shareholder of any particular
Series otherwise have any right or claim against the assets belonging
to any other Series except to the extent that such Shareholder has such
a right or claim hereunder as a Shareholder of such other Series.

(d) VOTING. All Shares of the Trust entitled to vote on a matter shall vote
separately by Series. That is, the Shareholders of each Series shall
have the right to approve or disapprove matters affecting the Trust and
each respective Series as if the Series were separate companies. There
are, however, two exceptions to voting by separate Series. First, if
the 1940 Act requires all Shares of the Trust to be voted in the
aggregate without differentiation between the separate Series, then all
Series shall vote together. Second, if any matter affects only the
interests of some but not all Series, then only such affected Series
shall be entitled to vote on the matter.

(e) EQUALITY. All the Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that Series
(subject to the liabilities belonging to that Series), and each Share
of any particular Series shall be equal to each other Share of that
Series.

(f) FRACTIONS. Any fractional Share of a Series shall carry proportionately
all the rights and obligations of a whole share of that Series,
including rights with respect to voting, receipt of dividends and
distributions, redemption of Shares and termination of the Trust.

(g) EXCHANGE PRIVILEGE. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to
exchange said Shares for Shares of one or more other Series of Shares
in accordance with such requirements and procedures as may be
established by the Trustees.

(h) COMBINATION OF SERIES. The Trustees shall have the authority, without
the approval of the Shareholders of any Series unless otherwise
required by applicable law, to combine the assets and liabilities
belonging to any two or more Series into assets and liabilities
belonging to a single Series.

(i) ELIMINATION OF SERIES. At any time that there are no Shares outstanding
of any particular Series previously established and designated, the
Trustees may amend this Declaration of Trust to abolish that Series and
to rescind the establishment and designation thereof, such amendment to
be effected in the manner provided pursuant to Section 5 of this
Article III.

SECTION 7. INDEMNIFICATION OF SHAREHOLDERS
In case any Shareholder or former Shareholder shall be held to be personally
liable solely by reason of his or her being or having been a Shareholder and not
because of his or her acts or omissions or for some other reasons, the
Shareholder or former Shareholder (or his or her heirs, executors,
administrators, or other legal representatives or in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled out
of the assets of the Trust to be held harmless from and indemnified against all
loss and expense arising from such liability.

ARTICLE IV
THE TRUSTEES

SECTION 1. NUMBER, ELECTION AND TENURE
The number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by a majority of the Trustees, provided, however,
that the number of Trustees shall in no event be less than three nor more than
15. The Trustees may by vote of a majority of the remaining Trustees fill
vacancies in the Trustees or remove Trustees with or without cause by vote of a
majority of the Trustees who are "non-interested" persons (as defined in the
1940 Act) if the Trustee to be removed is a "non-interested" Trustee, or by vote
of the Trustees who are "interested persons" if the Trustee to be removed is an
"interested" Trustee. Each Trustee shall serve during the continued lifetime of
the Trust until he dies, resigns or is removed, or, if sooner, until the next
meeting of Shareholders called for the purpose of electing Trustees and until
the election and qualification of his successor, except, that Trustees who are
not "interested persons" or employees of American Century Companies, Inc. or its
affiliates shall retire at the end of the calendar year in which they shall have
reached the age of seventy-five (75) years. Any Trustee may resign at any time
by written instrument signed by him and delivered to any officer of the Trust or
to a meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee resigning
and no Trustee removed shall have any right to any compensation for any period
following his resignation or removal, or any right to damages on account of such
removal. The Shareholders may fix the number of Trustees and elect Trustees at
any meeting of Shareholders called by the Trustees for that purpose.

SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
The death, declination, resignation, retirement, removal, or incapacity of the
Trustees, or any of them, shall not operate to annual the Trust or to revoke any
existing agency created pursuant to the terms of this Declaration of Trust.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in Article IV, Section 1 the Trustees in office, regardless
of their number, shall have all the powers granted to the Trustees and shall
discharge all the duties imposed upon the Trustees by this Declaration of Trust.
A written instrument certifying the existence of such vacancy signed by a
majority of the Trustees shall be conclusive evidence of such vacancy. In the
event of the death, declination, resignation, retirement, removal, or incapacity
of all the then Trustees within a short period of time and without the
opportunity for at least one disinterested Trustee being able to appoint
additional Trustees to fill vacancies, the Trust's investment advisor or
investment advisors jointly, if there is more than one, are empowered to appoint
new Trustees.

SECTION 3. POWERS
Subject to the provisions of this Declaration of Trust, the business of the
Trust shall be managed by the Trustees, and they shall have all powers necessary
or convenient to carry out that responsibility including the power to engage in
securities transactions of all kinds on behalf of the Trust. Without limiting
the foregoing, the Trustees may adopt Bylaws not inconsistent with this
Declaration of Trust providing for the regulation and management of the affairs
of the Trust any may amend and repeal them to the extent that such Bylaws do not
reserve that right to the Shareholders; they may fill vacancies in or reduce the
number of Trustees, and may elect and remove such officers and appoint and
terminate such agents as they consider appropriate; they may appoint from their
own number and establish and terminate one or more committees consisting of two
or more Trustees which may exercise the powers and authority of the Trustees to
the extent that the Trustees determine; they may employ one or more custodians
of the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities or with a Federal Reserve Bank,
retain a transfer agent or a shareholder servicing agent, or both, provide for
the distribution of Shares by the Trust, through one or more principal
underwriters or otherwise, set record dates for the determination of
Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian, transfer or Shareholder servicing agent, or principal
underwriter. Any determination as to what is in the interests of the Trust made
by the Trustees in good faith shall be conclusive. In construing the provisions
of this Declaration of Trust, the presumption shall be in favor of a grant of
power to the Trustees.

Without limiting the foregoing, the Trustees shall have power and authority:

(a) to invest and reinvest cash, to hold cast uninvested, and to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, transfer, exchange, distribute, lend or otherwise
deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities of every nature and
kind, including without limitation, all types of bonds, debentures,
stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers acceptances, and other
securities of any kind, issued, created, guaranteed, or sponsored by
any and all persons, including, without limitation, states,
territories, and possessions of the United States and the District of
Columbia and any political subdivision, agency, or instrumentality of
the U.S. Government, any foreign government or any political
subdivision of the U.S. Government or any foreign government, or any
international instrumentality, or by any bank or savings institution,
or by any corporation or organization organized under the laws of the
United States or of any state, territory, or possession thereof, or by
any corporation or organization organized under any foreign law, or in
"when issued" contracts for any such securities, to change the
investments of the assets of the Trust; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with respect
thereto, with power to designate one or more persons, firms,
associations, or corporations to exercise any of said rights, powers,
and privileges in respect of any of said instruments;

(b) to sell, exchange, lend, pledge, mortgage, hypothecate, lease, or write
options with respect to or otherwise deal in any property rights
relating to any or all of the assets of the Trust;

(c) to vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the
Trustees shall deem proper;

(d) to exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;

(e) to hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own
name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise;

(f) to consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security
which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer;
and to pay calls or subscriptions with respect to any security held in
the Trust;

(g) to join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power
and authority with relation to any security (whether or not so
deposited or transferred) as the Trustees shall deem proper, and to
agree to pay, and to pay, such portion of the expenses and compensation
of such committee, depositary or trustee as the Trustees shall deem
proper;

(h) to compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not
limited to claims for taxes;

(i) to enter into joint ventures, general or limited partnerships and any
other combinations or associations;

(j) to borrow funds or other property;

(k) to endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;

(l) to purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring
the assets of the Trust or payment of distributions and principal on
its portfolio investments, and insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment
advisors, principal underwriters, or independent contractors of the
Trust, individually against all claims and liabilities of every nature
arising by reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or
omitted by any such person as Trustee, officer, employee, agent,
investment advisor, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power to
indemnify such person against liability; and

(m) to pay pensions as deemed appropriate by the Trustees and to adopt,
establish and carry out pension, profit-sharing, share bonus, share
purchase, savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life
insurance and annuity contracts as a means of providing such retirement
and other benefits, for any or all of the Trustees, officers, employees
and agents of the Trust.

The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust. The Trustees shall not in any way be
bound or limited by any present or future law or custom in regard to investment
by fiduciaries. The Trustees shall not be required to obtain any court order to
deal with any assets of the Trust or take any other action hereunder.

SECTION 4. PAYMENT OF EXPENSES BY THE TRUST
The Trustees are authorized to pay or cause to be paid out of the principal or
income of the Trust, or partly out of the principal and partly out of income, as
they deem fair, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the Trust, or in connection with the management
thereof, including, but not limited to, the Trustees' compensation and such
expenses and charges for the services of the Trust's officers, employees,
investment advisor or manager, principal underwriter, auditors, counsel,
custodian, transfer agent, shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Trustees may
deem necessary or proper to incur.

SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS
The Trustees shall have the power, as frequently as they may determine, to cause
each Shareholder, or each Shareholder of any particular Series, to pay directly,
in advance or arrears, for charges of the Trust's custodian or transfer,
Shareholder servicing or similar agent, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.

SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST
Title to all of the assets of the Trust shall at all times be considered as
vested in the Trustees.

SECTION 7. SERVICE CONTRACTS
(a) Subject to such requirements and restrictions as may be set forth in
the Bylaws, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory and/or management
services for the Trust or for any Series with American Century
Investment Management, Inc. or any other corporation, trust,
association or other organization (the "Advisor"); and any such
contract may contain such other terms as the Trustees may determine,
including without limitation, authority for the Advisor to determine
from time to time without prior consultation with the Trustees what
investments shall be purchased, held, sold or exchanged and what
portion, if any, of the assets of the Trust shall be held uninvested
and to make changes in the Trust's investments.

(b) The Trustees may also, at any time and from time to time, contract with
any corporation, trust, association, or other organization, appointing
it exclusive or nonexclusive distributor or principal underwriter for
the Shares of any, some, or all of the Series. Every such contract
shall comply with such requirements and restrictions as may be set
forth in the Bylaws; and any such contract may contain such other terms
as the Trustees may determine.

(c) The Trustees are also empowered, at any time and from time to time, to
contract with any corporations, trust, associations, or other
organizations, appointing it or them the transfer agent(s) and/or
shareholders servicing agent(s) for the Trust or one or more of the
Series. Specifically, the Trustees are empowered to contract or join
with other investment companies managed by the Trust's investment
advisor to have transfer agency and/or shareholder servicing activities
performed jointly by such investment companies and their employees with
an appropriate allocation between the investment companies of the costs
and expenses of providing such services. Every such contract shall
comply with such requirements and restrictions as may be set forth in
the Bylaws or stipulated by resolution of the Trustees.

(d) The fact that:

(i) any of the Shareholders, Trustees, or officers of the Trust is
a shareholder, director, officer, partner, trustee, employee,
manager, advisor, principal underwriter, distributor or
affiliate or agent of or for any corporation, trust,
association, or other organization, or for any parent or
affiliate of any organization with which an advisory or
management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or
other agency contract may have been or may hereafter be made,
or that any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Trust, or
that

(ii) any corporation, trust, association or other organization with
which an advisory or management contract or principal
underwriter's or distributor's contract, or transfer,
Shareholder servicing or other agency contract may have been
or may hereafter be made also has an advisory or management
contract, or principal underwriter's or distributor's
contract, or transfer, shareholder servicing or other agency
contract with one or more other corporations, trusts,
associations, or other organizations, or has other business or
interests, shall not affect the validity of any such contract
or disqualify any Shareholder, Trustee or officer of the Trust
from voting upon or executing the same or create any liability
or accountability to the Trust or its Shareholders.

ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS

SECTION 1. VOTING POWERS
Subject to the provisions of Article III, Section 6(d), the Shareholders shall
have power to vote only (i) for the election of Trustees as provided in Article
IV, Section 1, (ii) to the same extent as the stockholders of a California
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or the Shareholders, (iii) with respect to the
termination of the Trust or any Series to the extent and as provided in Article
VIII, Section 4, and (iv) with respect to such additional matters relating to
the Trust as may be required by this Declaration of Trust, the Bylaws or any
registration of the Trust with the Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. A Shareholder of
each Series shall be entitled to one vote for each dollar of net asset value per
Share of such Series, on any matter on which such Shareholder is entitled to
vote and each fractional dollar amount shall be entitled to a proportionate
fractional vote. All references in this Declaration of Trust or the Bylaws to a
vote of, or the holders of, a percentage of Shares shall mean a vote of or the
holders of that percentage of total votes representing dollars of net asset
value of a Series or of the Trust, as the case may be. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to exercise of
the proxy the Trust receives a specific written notice to the contrary from any
one of them. A proxy purporting to be executed by or on behalf of a Shareholder
shall be deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. At any time when no
Shares of a Series are outstanding, the Trustees may exercise all rights of
Shareholders of that Series with respect to matters affecting that Series, take
any action required by law, this Declaration of Trust or the Bylaws to be taken
by the Shareholders.

SECTION 2. VOTING POWER AND MEETINGS
Meetings of the Shareholders may be called by the Trustees for the purpose of
electing Trustees as provided in Article IV, Section 1 and for such other
purposes as may be prescribed by law, by this Declaration of Trust or by the
Bylaws. Meetings of the Shareholders may also be called by the Trustees from
time to time for the purpose of taking action upon any other matter deemed by
the Trustees to be necessary or desirable. A meeting of Shareholders may be held
at any place designated by the Trustees. Written notice of any meeting of
Shareholders shall be given or caused to be given by the Trustees by mailing
such notice at least seven days before such meeting, postage prepaid, stating
the time and place of the meeting, to each Shareholder at the Shareholder's
address as it appears on the records of the Trust. Whenever notice of a meeting
is required to be given to a Shareholder under this Declaration of Trust or the
Bylaws, a written waiver thereof, executed before or after the meeting by such
Shareholder or his attorney thereunto authorized and filed with the records of
the meeting, shall be deemed equivalent to such notice.

SECTION 3. QUORUM AND REQUIRED VOTE
Except when a larger quorum is required by applicable law, by the Bylaws or by
this Declaration of Trust, forty percent (40%) of the Shares entitled to vote
shall constitute a quorum at a Shareholders' meeting. When any one or more
Series is to vote as a single class separate from any other Shares which are to
vote on the same matters as a separate class or classes, forty percent (40%) of
the Shares of each such Series entitled to vote shall constitute a quorum at a
Shareholders' meeting of that Series. Any meeting of Shareholders may be
adjourned from time to time by a majority of the votes properly cast upon the
question, whether or not a quorum is present, and the meeting may be held as
adjourned within a reasonable time after the date set for the original meeting
without further notice. Subject to the provisions of Article III, Section 6(d),
when a quorum is present at any meeting, a majority of the Shares voted shall
decide any questions and a plurality shall elect a Trustee, except when a larger
vote is required by any provision of this Declaration of Trust or the Bylaws or
by applicable law.

SECTION 4. ACTION BY WRITTEN CONSENT
Any action taken by Shareholders may be taken without a meeting if Shareholders
holding a majority of the Shares entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or by the Bylaws) and holding a majority (or such larger
proportion as aforesaid) of the Shares of any Series entitled to vote separately
on the matter consent to the action in writing and such written consents are
filed with the records of the meetings of Shareholders. Such consent shall be
treated for all purposes as a vote taken at a meeting of Shareholders.

SECTION 5. RECORD DATES
For the purpose of determining the Shareholders of any Series who are entitled
to vote or act at any meeting or any adjournment thereof, the Trustees may from
time to time fix a time, which shall be not more than 75 days before the date of
any meeting of Shareholders, as the record date for determining the Shareholders
of such Series having the right to notice of and to vote at such meeting and any
adjournment thereof, and in such case only Shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. For the purpose of determining the
Shareholders of any Series who are entitled to receive payment of any dividend
or of any other distribution, the Trustees may from time to time fix a date,
which shall be before the date for the payment of such dividend or such other
payment, as the record date for determining the Shareholders of such Series
having the right to receive such dividend or distribution. Without fixing a
record date the Trustees may for voting and/or distribution purposes close the
register or transfer books for one or more Series for all or any part of the
period between a record date and a meeting of Shareholders or the payment of a
distribution. Nothing in this section shall be construed as precluding the
Trustees from setting different record dates for different Series.

SECTION 6. ADDITIONAL PROVISIONS
The Bylaws may include further provisions for Shareholders' votes and meetings
and related matters.

ARTICLE VI
NET ASSET VALUE, DISTRIBUTIONS, AND REDEMPTIONS

SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND DISTRIBUTIONS
Subject to Article III, Section 6 hereof, the Trustees, in their absolute
discretion, may prescribe and shall set forth in the Bylaws or in a duly adopted
resolution of the Shares of any Series or net income attributable to the Shares
of any Series, or the declaration and payment of dividends and distributions on
the Shares of any Series, as they may deem necessary or desirable.

SECTION 2. REDEMPTIONS AND REPURCHASES
The Trust shall purchase such Shares as are offered by any Shareholder for
redemption, upon the presentation of a proper instrument of transfer together
with a request directed to the Trust or a person designated by the Trust that
the Trust purchase such Shares or in accordance with such other procedures for
redemption as the Trustees may from time to time authorize; and the Trust will
pay therefor the net asset value thereof, as determined in accordance with the
Bylaws and applicable law, next determined under the 1940 Act. Payment for said
Shares shall be made by the Trust to the Shareholder within seven days after the
date on which the request is made in proper form. The obligation set forth in
this Section 2 is subject to the provision that in the event that any time the
New York Stock Exchange is closed for other than weekends or holidays, or if
permitted by the rules of the Commission, during periods when trading on the
Exchange is restricted or during any emergency which makes it impracticable for
the Trust to dispose of the investments of the applicable Series or to determine
fairly the value of the net assets belonging to such Series or during any other
period permitted by order of the Commission for the protection of investors,
such obligation may be suspended or postponed by the Trustees.

SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST
The Trust shall have the right at its option and at any time to redeem Shares of
any Shareholder at the net asset value thereof as described in Section 1 of this
Article VI: (i) if at such time such Shareholder owns Shares of any Series
having an aggregate net asset value of less than an amount, not to exceed
$1,000, determined from time to time by the Trustees; or (ii) to the extent that
such Shareholder owns Shares equal to or in excess of a percentage determined
from time to time by the Trustees of the outstanding Shares of the Trust or of
any Series.

ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES

SECTION 1. COMPENSATION
The non-interested Trustees as such shall be entitled to reasonable compensation
from the Trust, and they may fix the amount of such compensation. Nothing herein
shall in any way prevent the employment of any Trustee for advisory, management,
legal, accounting, investment banking or other services and payment for the same
by the Trust.

SECTION 2. LIMITATION OF LIABILITY
The Trustees shall not be responsible or liable in any event for any neglect or
wrongdoing of any officer, agent, employee, manager or Principal Underwriter of
the Trust, nor shall any Trustee be responsible for the act or omission of any
other Trustee, but nothing herein contained shall protect any Trustee against
any liability to which he would otherwise be subject by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

Every note, bond, contract, instrument, certificate or undertaking and every
other act or thing whatsoever issued, executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been issued, executed or done only in or with
respect to their or his capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.

SECTION 3. INDEMNIFICATION
The Trustees shall be entitled and empowered to the fullest extent permitted by
law to purchase insurance for and to provide by resolution or in the Bylaws for
indemnification out of Trust assets for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim, action, suit or proceeding in which he becomes
involved by virtue of his capacity or former capacity with the Trust. The
provisions, including any exceptions and limitations concerning indemnification,
may be set forth in detail in the Bylaws or in a resolution of the Trustees.

ARTICLE VIII
MISCELLANEOUS

SECTION 1. TRUSTEES, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
All persons extending credit to, contracting with or having any claim against
the Trust or any Series shall look only to the assets of the Trust, or, to the
extent that the liability of the Trust may have been expressly limited by
contract to the assets of a particular Series, only to the assets belonging to
the relevant Series, for payment under such credit, contract or claim; and
neither the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect any Trustee against
any liability to which such Trustee would otherwise be subject by reason or
wilful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee.

Every note, bond, contract, instrument, certificate or undertaking made or
issued on behalf of the Trust by the Trustees, by an officer or officers or
otherwise may include a notice that this Declaration of Trust is on file with
the Secretary of the Commonwealth of Massachusetts and may recite that the note,
bond, contract, instrument, certificate, or undertaking was executed or made by
or on behalf of the Trust or by them as Trustee or Trustees or as officer or
officers or otherwise and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually but
are binding only upon the assets and property of the Trust or upon the assets
belonging to the Series for the benefit of which the Trustees have caused the
note, bond, contract instrument, certificate or undertaking to be made or
issued, and may contain such further recital as he or they may deem appropriate,
but the omission of any such recital shall not operate to bind any Trustee or
Trustees or officer or officers or Shareholders or any other person
individually.

SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
The exercise by the Trustees of their powers and discretions hereunder shall be
binding upon everyone interested. A Trustee shall be liable for his own wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and for nothing else, and
shall not be liable for errors of judgment or mistakes of fact or law. The
Trustees may take advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and shall be under no liability for
any act or omission in accordance with such advice or for failing to follow such
advice. The Trustees shall not be required to give any bond as such, nor any
surety if a bond is required.

SECTION 3. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES
No person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees or
to see to the application of any payments made or property transferred to the
Trust or upon its order.

SECTION 4. TERMINATION OF TRUST OR SERIES
Unless terminated as provided herein, the Trust shall continue without
limitation of time. The Trust may be terminated at any time by vote of at least
two-thirds (66-2/3%) of the Shares of each Series entitled to vote, voting
separately by Series, or by the Trustees by written notice to the Shareholders.
Any Series may be terminated at any time by vote of at least two-thirds
(66-2/3%) of the Shares of that Series or by the Trustees by written notice to
the Shareholders of that Series.

Upon termination of the Trust (or any Series, as the case may be), after paying
or otherwise providing for all charges, taxes, expenses and liabilities
belonging, severally, to each Series (or the applicable Series, as the case may
be), whether due or accrued or anticipated as may be determined by the Trustees,
the Trust shall, in accordance with such procedures as the Trustees consider
appropriate, reduce the remaining assets belonging, severally, to each Series
(or the applicable Series, as the case may be), to distributable form in cash or
shares or other securities, or any combination thereof, and distribute the
proceeds belonging to each Series or the applicable Series, as the case may be),
to the Shareholders of that Series, as a Series, ratably according to the number
of Shares of that Series held by the several Shareholders on the date of
termination.

SECTION 5. MERGER AND CONSOLIDATION
The Trustees may cause the Trust or one or more of its Series to be merged into
or consolidated with another Trust or company or the Shares exchanged under or
pursuant to any state or Federal statute, if any, or otherwise to the extent
permitted by law. Such merger or consolidation or share exchange must be
authorized by vote of a majority of the outstanding Shares of the Trust as a
whole or any affected Series, as may be applicable; provided that in all
respects not governed by statute or applicable law, the Trustees shall have
power to prescribe the procedure necessary or appropriate to accomplish a sale
of assets, merger or consolidation.

SECTION 6. FILING OF COPIES, REFERENCES, HEADINGS
The original or a copy of this instrument and of each amendment hereto shall be
kept at the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each amendment hereto shall be filed by the Trust
with the Secretary of the Commonwealth of Massachusetts and with any other
governmental office where such filing may from time to time be required. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may relay on a copy certified by an officer of the Trust to be a copy
of this instrument, or of any such amendments. In this instrument and in any
such amendment, references to this instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer to this instrument
as amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original.

SECTION 7. APPLICABLE LAW
This Agreement and Declaration of Trust is created under and is to be governed
by and construed and administered according to the laws of the Commonwealth of
Massachusetts. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.

SECTION 8. AMENDMENTS
This Declaration of Trust may be amended at any time by an instrument in writing
signed by a majority of the then Trustees.

SECTION 9. TRUST ONLY
It is the intention of the Trustees to create only the relationship of Trustee
and beneficiary between the Trustees and each Shareholder from time to time. It
is not the intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a trust. Nothing in this Agreement and Declaration
of Trust shall be construed to make the Shareholders, either by themselves or
with the Trustees, partners or members of a joint stock association.

SECTION 10. USE OF THE NAME "BENHAM" AND "AMERICAN CENTURY"
American Century Services Corporation ("ACSC") has consented to the use by the
Trust of the identifying words or names "Benham" and "American Century" in the
names of the Trust and/or its various Series. Such consent is conditioned upon
the employment of ACSC, its successors or any affiliate thereof, as the
Advisor/Investment Manager of the Trust. As between the Trust and itself, ACSC
controls the use of the name of the Trust insofar as such name contains "Benham"
and/or "American Century". The name or identifying words "Benham" and/or
"American Century" may be used from time to time in other connections and for
other purposes by ACSC or its affiliated entities. ACSC may require the Trust to
cease using "Benham" or "American Century" in the name of the Trust if the Trust
ceases to employ, for any reason, ACSC, an affiliate, or any successor as
Advisor/Investment Manager of the Trust.

IN WITNESS WHEREOF, a majority of the Trustees as aforesaid do hereto
set their hands this 9th day of March, 1998, as an amendment and restatement of
that Agreement and Declaration of Trust originally executed on the 28th day of
August, 1991.

TRUSTEES OF THE AMERICAN CENTURY INTERNATIONAL BOND FUNDS

/s/Albert A. Eisenstat 3/9/98 /s/ Kenneth E. Scott 3/9/98
______________________ ____________________
Albert A. Eisenstat Date Kenneth E. Scott Date

/s/ Ronald J. Gilson 3/9/98 /s/ Isaac Stein 3/9/98
____________________ _______________
Ronald J. Gilson Date Isaac Stein Date

/s/ William M. Lyons 3/9/98 /s/ James E. Stowers III 3/9/98
____________________ ________________________
William M. Lyons Date James E. Stowers III Date

/s/ Myron S. Scholes 3/9/98 /s/ Jeanne D. Wohlers 3/9/98
____________________ _____________________
Myron S. Scholes Date Jeanne D. Wohlers Date
<PAGE>
AMERICAN CENTURY INTERNATIONAL BOND FUNDS

AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST
(restated as of March 9, 1998)

SCHEDULE A

Pursuant to Article III, Section 6, the Trustees hereby establish and designate
the following Series as Series of the Trust (and the Classes thereof) with the
relative rights and preferences as described in Section 6:

- ----------------------------------------------- ------------ -------------------
Date of
Series Class Establishment
- ----------------------------------------------- ------------ -------------------
- ----------------------------------------------- ------------ -------------------
International Bond Fund Investor 8/28/1991
Advisor 8/1/1997
- ----------------------------------------------- ------------ -------------------

This Schedule A shall supersede any previously adopted Schedule A to the
Declaration of Trust.

TRUSTEES OF THE AMERICAN CENTURY INTERNATIONAL BOND FUNDS

/s/Albert A. Eisenstat 3/1/99 /s/ Kenneth E. Scott 3/1/99
______________________ Date ____________________ Date
Albert A. Eisenstat Kenneth E. Scott

3/1/99 3/1/99
/s/ Ronald J. Gilson Date /s/ Isaac Stein Date
____________________ _______________
Ronald J. Gilson Isaac Stein

3/1/99 3/1/99
Date Date
/s/ William M. Lyons /s/ James E. Stowers III
____________________ ________________________
William M. Lyons James E. Stowers III
3/1/99 3/1/99
Date Date

/s/ Myron S. Scholes /s/ Jeanne D. Wohlers
____________________ _____________________
Myron S. Scholes Jeanne D. Wohlers

*By/s/ Charles C.S. Park Date: March 1, 1999
Charles C.S. Park, Esq.
Pursuant to Power of Attorney dated December 18, 1998

CHARLES C.S. PARK
ATTORNEY AT LAW

1665 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043

(650)967-9683
FACSIMILE (650)964-9591

April 30, 1999

American Century International Bond Funds
American Century Tower
4500 Main Street
Kansas City, Missouri 64111

Ladies and Gentlemen:

As counsel to American Century International Bond Funds, I am generally
familiar with its affairs. Based upon this familiarity, and upon the examination
of such documents as I deemed relevant, it is my opinion that the shares of the
Corporation described in Post-Effective Amendment No. 14 to its Registration
Statement on Form N-1A, to be filed with the Securities and Exchange Commission
on April 30, 1999, will, when issued, be validly issued, fully paid and
nonassessable.

For the record, it should be stated that I am an employee of American
Century Services Corporation, an affiliated corporation of American Century
Investment Management, Inc., the investment advisor of the Corporation.

I hereby consent to the use of this opinion as an exhibit to
Post-Effective Amendment No. 14, referenced above.

Very truly yours,

/s/Charles C.S. Park
Charles C.S. Park

Consent of Independent Accountants

We consent to the incorporation by reference in Post-Effective Amendment No. 14
to the Registration Statement of the American Century-Benham International Bond
Fund (comprising the American Century International Bond Funds), on Form N-1A of
our report dated February 1, 1999 on our audits of the financial statements and
financial highlights of the American Century-Benham International Bond Fund,
which report is included in the Annual Report to Shareholders for the year ended
December 31, 1998, which is incorporated by reference in Post-Effective
Amendment No. 14 to the Registration Statement. We also consent to the reference
in the Statement of Additional Information to our Firm under the caption
"Independent Accountants."

/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Kansas City, Missouri
April 28, 1999

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, American Century
International Bond Funds, hereinafter called the "Trust", and certain trustees
and officers of the Trust, do hereby constitute and appoint George A. Rio, David
C. Tucker, Douglas A. Paul, Charles A. Etherington, and Charles C.S. Park, and
each of them individually, their true and lawful attorneys and agents to take
any and all action and execute any and all instruments which said attorneys and
agents may deem necessary or advisable to enable the Trust to comply with the
Securities Act of 1933 and/or the Investment Company Act of 1940, as amended,
and any rules, regulations, orders, or other requirements of the United States
Securities and Exchange Commission thereunder, in connection with the
registration under the Securities Act of 1933 and/or the Investment Company Act
of 1940, as amended, including specifically, but without limitation of the
foregoing, power and authority to sign the name of the Trust in its behalf and
to affix its seal, and to sign the names of each of such trustees and officers
in their capacities as indicated, to any amendment or supplement to the
Registration Statement filed with the Securities and Exchange Commission under
the Securities Act of 1933 and/or the Investment Company Act of 1940, as
amended, and to any instruments or documents filed or to be filed as a part of
or in connection with such Registration Statement; and each of the undersigned
hereby ratifies and confirms all that said attorneys and agents shall do or
cause to be done by virtue hereof.

IN WITNESS WHEREOF, the Trust has caused this Power to be executed by
its duly authorized officers on this the 18th day of December, 1998.

AMERICAN CENTURY INTERNATIONAL BOND FUNDS

By: /s/ George A. Rio
GEORGE A. RIO, President

SIGNATURE AND TITLE

/s/ George A. Rio /s/ Ronald J. Gilson
GEORGE A. RIO RONALD J. GILSON
President, Principal Executive and Trustee
Principal Financial Officer

/s/ Maryanne Roepke /s/ Myron S. Scholes
MARYANNE ROEPKE MYRON S. SCHOLES
Vice President and Treasurer Trustee

/s/ James E. Stowers, III /s/ Kenneth E. Scott
JAMES E. STOWERS, III KENNETH E. SCOTT
Trustee Trustee

/s/ William M. Lyons /s/ Isaac Stein
WILLIAM M. LYONS ISAAC STEIN
Trustee Trustee

/s/ Albert A. Eisenstat /s/ Jeanne D. Wohlers
ALBERT A. EISENSTAT JEANNE D. WOHLERS
Trustee Trustee

Attest:

By:/s/ Douglas A. Paul
Douglas A. Paul, Secretary

<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ANNUAL
REPORT OF AMERICAN CENTURY INTERNATIONAL BOND FUNDS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH REPORT. INFORMATION PRESENTED IS A TOTAL OF ALL
CLASSES, EXCEPT WHERE SUCH PRESENTATION IS NOT POSSIBLE(SUCH AS PER SHARE DATA).
IN THOSE CASES, ONLY THE INVESTOR CLASS IS PRESENTED.
</LEGEND>
<CIK> 0000880268
<NAME> AMERICAN CENTURY INTERNATIONAL BOND FUND
<SERIES>
<NUMBER> 1
<NAME> AMERICAN CENTURY-BENHAM INTERNATIONAL BOND FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 147,175,868 <F1>
<INVESTMENTS-AT-VALUE> 153,987,136
<RECEIVABLES> 4,841,380
<ASSETS-OTHER> 518,879
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 159,347,395
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,902,108
<TOTAL-LIABILITIES> 1,902,108
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 143,043,601
<SHARES-COMMON-STOCK> 12,655,275
<SHARES-COMMON-PRIOR> 15,176,256
<ACCUMULATED-NII-CURRENT> 2,571,437
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,381,914
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,448,335
<NET-ASSETS> 157,445,287
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 7,479,813
<OTHER-INCOME> 0
<EXPENSES-NET> 1,274,788
<NET-INVESTMENT-INCOME> 6,205,025
<REALIZED-GAINS-CURRENT> 6,392,408
<APPREC-INCREASE-CURRENT> 11,657,485
<NET-CHANGE-FROM-OPS> 24,254,918
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,152,123
<DISTRIBUTIONS-OF-GAINS> 3,258,745
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 97,205,374
<NUMBER-OF-SHARES-REDEEMED> 129,328,345
<SHARES-REINVESTED> 4,993,052
<NET-CHANGE-IN-ASSETS> (8,285,869)
<ACCUMULATED-NII-PRIOR> (1,481,465)
<ACCUMULATED-GAINS-PRIOR> 1,248,251
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,263,355
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,274,788
<AVERAGE-NET-ASSETS> 150,904,518
<PER-SHARE-NAV-BEGIN> 10.92 <F2>
<PER-SHARE-NII> 0.47 <F2>
<PER-SHARE-GAIN-APPREC> 1.47 <F2>
<PER-SHARE-DIVIDEND> 0.17 <F2>
<PER-SHARE-DISTRIBUTIONS> 0.25 <F2>
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.44 <F2>
<EXPENSE-RATIO> 0.84 <F2>
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
<FN>
<F1>SCHEDULE REFLECTS THE TOTAL FOR ALL CLASSES, EXCEPT WHERE INDICATED.
<F2>INVESTOR CLASS INFORMATION ONLY.
</FN>

</TABLE>