AMERICAN CENTURY CAPITAL PORTFOLIOS INC, 497, 1998-08-03

AMERICAN CENTURY CAPITAL PORTFOLIOS INC
497, 1998-08-03

Previous: GENEMEDICINE INC, 8-K/A, 1998-08-03

Next: FIRST FINANCIAL BANCORP INC, DEF 14A, 1998-08-03

PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Value
Small Cap Value
Equity Income

INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios. To
help you find the funds that may meet your investment needs, American Century
funds have been divided into three groups based on investment style and
objectives. These groups, which appear below, are designed to help simplify your
fund decisions.

AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century
Group Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Value
Small Cap Value
Equity Income

PROSPECTUS
JULY 30, 1998

Value * Small Cap Value * Equity Income
INVESTOR CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. Three of the funds from our
American Century Group that invest primarily in equity securities are described
in this Prospectus. Their investment objectives are listed on page 2 of this
Prospectus. The other funds are described in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

This Prospectus gives you information about the funds that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated July 30, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419200 Kansas City,
Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri:
816-444-3485 www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY VALUE FUND

The investment objective of Value is long-term capital growth. Income is a
secondary objective. The fund seeks to achieve its investment objectives by
investing in securities that management believes to be undervalued at the time
of purchase.

AMERICAN CENTURY SMALL CAP VALUE FUND

The investment objective of Small Cap Value is long-term capital growth.
Income is a secondary objective. The fund seeks to achieve its investment
objective by investing primarily in equity securities of companies with smaller
market capitalizations that management believes to be undervalued at the time of
purchase.

AMERICAN CENTURY EQUITY INCOME FUND

The investment objective of Equity Income is the production of current
income. Capital appreciation is a secondary objective. The fund attempts to
achieve its objectives by investing primarily in income-producing equity
securities. In the pursuit of its objectives, the fund seeks a yield that
exceeds the yield of securities comprising the Standard & Poor's 500 Composite
Stock Price Index.

There is no assurance that the funds will achieve
their respective investment objectives.

NO PERSON IS AUTHORIZED BY THE FUNDS TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN OTHER PRINTED
OR WRITTEN MATERIAL ISSUED BY OR ON BEHALF OF THE FUNDS, AND YOU SHOULD NOT RELY
ON ANY OTHER INFORMATION OR REPRESENTATION.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds ........................................ 2
Transaction and Operating Expense Table ................................... 4
Financial Highlights ...................................................... 5
INFORMATION REGARDING THE FUNDS
Investment Policies of the Funds .......................................... 7
Value .................................................................. 7
Small Cap Value ........................................................ 7
Equity Income .......................................................... 8
Policies Applicable to All Funds ....................................... 8
Other Investment Practices, Their Characteristics
and Risks .............................................................. 9
Foreign Securities ..................................................... 9
Equity Securities ...................................................... 9
Forward Currency Exchange Contracts .................................... 10
Investments in Smaller Companies ....................................... 10
Portfolio Turnover ..................................................... 11
Repurchase Agreements .................................................. 11
Futures Contracts ...................................................... 11
Derivative Securities .................................................. 12
When-Issued Securities ................................................. 12
Investments in Companies with Limited
Operating Histories ............................................ 13
Short Sales ......................................................... 13
Rule 144A Securities ................................................ 13
Performance Advertising .................................................. 14

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments .............................................. 15
Investing in American Century ............................................. 15
How to Open an Account .................................................... 15
By Mail ........................................................ 15
By Wire ........................................................ 15
By Exchange .................................................... 16
In Person ...................................................... 16
Subsequent Investments .............................................. 16
By Mail ........................................................ 16
By Telephone ................................................... 16
By Online Access ............................................... 16
By Wire ........................................................ 16
In Person ...................................................... 16
Automatic Investment Plan ........................................... 16
How to Exchange from One Account to Another .............................. 17
By Mail ........................................................ 17
By Telephone ................................................... 17
By Online Access ............................................... 17
How to Redeem Shares ..................................................... 17
By Mail ........................................................ 17
By Telephone ................................................... 17
By Check-A-Month ............................................... 17
Other Automatic Redemptions .................................... 17
Redemption Proceeds ................................................. 17
By Check ....................................................... 18
By Wire and ACH ................................................ 18
Special Requirements for Large Redemptions .......................... 18
Redemption of Shares in Low-Balance
Accounts ....................................................... 18
Signature Guarantee ...................................................... 18
Special Shareholder Services ............................................. 19
Automated Information Line ..................................... 19
Online Account Access .......................................... 19
Open Order Service ............................................. 19
Tax-Qualified Retirement Plans ................................. 19
Important Policies Regarding Your Investments ............................ 19
Reports to Shareholders .................................................. 20
Employer-Sponsored Retirement Plans and
Institutional Accounts ................................................. 21

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 22
When Share Price Is Determined ......................................... 22
How Share Price Is Determined .......................................... 22
Where to Find Information About Share Price ............................ 23
Distributions ............................................................. 23
Taxes ..................................................................... 23
Tax-Deferred Accounts .................................................. 24
Taxable Accounts ....................................................... 24
Management ................................................................ 25
Investment Management .................................................. 25
Code of Ethics ......................................................... 26
Transfer and Administrative Services ................................... 26
Year 2000 Issues .................................................... 26
Distribution of Fund Shares .............................................. 27
Further Information About American Century ............................... 27

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE

Value and Small Cap
Equity Income Value
SHAREHOLDER TRANSACTION EXPENSES:
<S> <C> <C> <C>
Maximum Sales Load
Imposed on Purchases ......................................... none none
Maximum Sales Load Imposed
on Reinvested Dividends ...................................... none none
Deferred Sales Load ............................................ none none
Redemption Fee(1) .............................................. none none
Exchange Fee ................................................... none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees(2) ............................................. 1.00% 1.25%
12b-1 Fees ..................................................... none none
Other Expenses(3) .............................................. 0.00% 0.00%
Total Fund Operating Expenses .................................. 1.00% 1.25%

EXAMPLE:
You would pay the following expenses on a 1 year $ 10 $13
$1,000 investment, assuming a 5% annual return 3 years 32 39
and redemption at the end of each time period: 5 years 55 68
10 years 122 150
</TABLE>

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

(2) A portion of the management fee may be paid by the funds' manager to
unaffiliated third parties who provide recordkeeping and administrative
services that would otherwise be performed by an affiliate of the manager.
See "Management -- Transfer and Administrative Services," page 26.

(3) Other expenses, which includes the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as defined
in the Investment Company Act, were less than 0.01 of 1% of average net
assets for the most recent fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the funds offered by
this Prospectus. The example set forth above assumes reinvestment of all
dividends and distributions and uses a 5% annual rate of return as required by
SEC regulations.

NEITHER THE 5% RATE OF RETURN NOR THE EXPENSES SHOWN ABOVE SHOULD BE
CONSIDERED INDICATIONS OF PAST OR FUTURE RETURNS AND EXPENSES. ACTUAL RETURNS
AND EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions or 12b-1 fees. The funds offer
other classes of shares, primarily to institutional investors, that have
different fee structures than the Investor Class. The difference in the fee
structures among 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 manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class. A
difference in fees will result in different performance for the other classes.
For additional information about the various classes, see "Further Information
About American Century," page 27.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
VALUE

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The Financial Highlights for the periods
ended on or before March 31, 1997, have been audited by other independent
auditors. The annual report contains additional performance information and will
be made available upon request and without charge. The information presented is
for a share outstanding throughout the years ended March 31, except as noted.

1998 1997 1996 1995 1994(1)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C> <C>
Beginning of Period ........... $ 6.58 $ 6.32 $ 5.46 $ 4.98 $ 5.01
--------------- --------------- --------------- --------------- ---------------
Income From Investment
Operations
Net Investment Income(2) ... 0.10 0.12 0.13 0.12 0.08
Net Realized and
Unrealized Gain (Loss)
on Investment Transactions 2.35 0.87 1.34 0.75 (0.04)
--------------- --------------- --------------- --------------- ---------------
Total From Investment
Operations ............... 2.45 0.99 1.47 0.87 0.04
--------------- --------------- --------------- --------------- ---------------
Distributions
From Net Investment ........ (0.10) (0.12) (0.12) (0.12) (0.07)
In Excess of Net
Investment Income ........ -- --(3) (0.01) -- --
From Net Realized Gains
on Investment Transactions (1.20) (0.61) (0.48) (0.27) --
--------------- --------------- --------------- --------------- ---------------
Total Distributions ........ (1.30) (0.73) (0.61) (0.39) (0.07)
--------------- --------------- --------------- --------------- ---------------
Net Asset Value, End of Period $ 7.73 $ 6.58 $ 6.32 $ 5.46 $ 4.98
=============== =============== =============== =============== ===============
Total Return(4) ............ 39.94% 15.92% 28.06% 18.56% 0.83%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ....... 1.00% 1.00% 0.97% 1.00% 1.00%(5)
Ratio of Net Investment
Income to Average Net Assets 1.38% 1.86% 2.17% 2.65% 3.37%(5)
Portfolio Turnover Rate ....... 130% 111% 145% 94% 79%
Average Commission Paid per
Share of Equity
Security Traded ............. $ 0.0462 $ 0.0459 $ 0.0409 --(6) --(6)
Net Assets, End of Period
(in thousands) .............. $ 2,713,562 $ 1,743,582 $ 881,885 $ 348,281 $ 87,798
</TABLE>

(1) September 1, 1993 (inception) through March 31, 1994.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
EQUITY INCOME

1998 1997 1996 1995(1)
PER-SHARE
Net Asset Value,
<S> <C> <C> <C> <C>
Beginning of Period ............... $ 6.31 $ 6.10 $ 5.42 $ 5.00
------------- ------------- ------------- -------------
Income From Investment
Operations
Net Investment Income(2) ........ 0.25 0.22 0.20 0.09
Net Realized and
Unrealized Gain on
Investment Transactions ....... 1.99 0.75 1.13 0.44
------------- ------------- ------------- -------------
Total From Investment
Operations ........................ 2.24 0.97 1.33 0.53
------------- ------------- ------------- -------------
Distributions
From Net Investment Income ...... (0.24) (0.21) (0.19) (0.09)
In Excess of Net
Investment Income ............. -- --(3) (0.01) --
From Net Realized Gains
on Investment Transactions .... (1.16) (0.55) (0.45) (0.02)
------------- ------------- ------------- -------------
Total Distributions ............. (1.40) (0.76) (0.65) (0.11)
------------- ------------- ------------- -------------
Net Asset Value, End of Period .... $ 7.15 $ 6.31 $ 6.10 $ 5.42
============= ============= ============= =============
Total Return(4) ................. 37.78% 16.24% 25.67% 10.69%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........... 1.00% 1.00% 0.98% 1.00%(5)
Ratio of Net Investment
Income to Average Net Assets .... 3.52% 3.46% 3.51% 4.04%(5)
Portfolio Turnover Rate ........... 158% 159% 170% 45%
Average Commission Paid per
Share of Equity Security Trade .. $ 0.0453 $ 0.0440 $ 0.0378 --(6)
Net Assets, End of Period
(in thousands) .................. $ 355,962 $ 199,388 $ 116,692 $ 52,213
</TABLE>

(1) August 1, 1994 (inception) through March 31, 1995.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

The funds have adopted certain investment restrictions that are set forth in
the Statement of Additional Information. Those restrictions, as well as the
investment objectives of the funds identified on page 2 of this Prospectus, and
any other investment policies designated as "fundamental" in this Prospectus or
in the Statement of Additional Information, cannot be changed without
shareholder approval. The funds have implemented additional investment policies
and practices to guide their activities in the pursuit of their respective
investment objectives. These policies and practices, which are described
throughout this Prospectus, are not designated as fundamental policies and may
be changed without shareholder approval.

VALUE

The investment objective of Value is long-term capital growth. Income is a
secondary objective. The fund seeks to achieve its objectives by investing
primarily in equity securities of well-established companies with
intermediate-to-large market capitalizations that are believed by management to
be undervalued at the time of purchase.

Securities may be undervalued because they are temporarily out of favor in
the market due to market decline, poor economic conditions, or actual or
anticipated unfavorable developments affecting the issuer of the security or its
industry, or because the market has overlooked them. Under normal market
conditions, the fund expects to invest at least 80% of the value of its total
assets in equity securities. The fund's investments typically will be
characterized by lower price-to-earnings, price-to-cash flow and/or
price-to-book value ratios relative to the equity market in general. Its
investments also may have above-average current dividend yields.

It is management's intention that the fund will consist primarily of
domestic equity securities. However, the fund also may invest in other types of
domestic or foreign securities consistent with the accomplishment of the fund's
objective. The other securities the fund may invest in are convertible
securities (see "Other Investment Practices, Their Characteristics and
Risks--Equity Securities," page 9), preferred stocks, bonds, notes and debt
securities of companies and debt obligations of governments and their agencies.
Investments in these securities will be made when the manager believes that the
total return potential on these securities equals or exceeds the potential
return on common stocks.

SMALL CAP VALUE

The investment objective of Small Cap Value is long-term capital growth.
Income is a secondary objective. The fund seeks to achieve its objectives by
investing primarily in equity securities of companies with smaller market
capitalizations that are believed by management to be undervalued at the time of
purchase.

The fund will invest its assets primarily in equity securities of companies
with smaller market capitalizations. A company shall be considered to have a
smaller market capitalization if, at the time of investment, it has a market
capitalization that is not greater than the market capitalization of the largest
company contained in the S&P/Barra Small-Cap 600 Value Index. The S&P/Barra
Small-Cap 600 Value Index is a stock index that tracks the performance of equity
securities of smaller capitalization companies

PROSPECTUS INFORMATION REGARDING THE FUNDS 7

contained in the S&P Small-Cap 600 Index which have lower price-to-book value
ratios and, thus, may be more attractive to investors using the value style of
investing. As of December 31, 1997, the largest company contained in the
S&P/Barra Small-Cap 600 Value Index had a market capitalization of approximately
$2.3 billion, while the median company contained in the index had a market
capitalization of approximately $387 million.

EQUITY INCOME

The investment objective of Equity Income is the production of current
income. Capital appreciation is a secondary objective of the fund. The fund
seeks to achieve its objectives by screening companies primarily for favorable
dividend-paying history (yield) and prospects for continuing and/or increasing
dividend-paying ability and secondarily for capital appreciation potential. The
fund seeks a yield that exceeds the yield of securities comprising the S&P 500.
Total return for the fund will consist primarily of dividend income and
secondarily of capital appreciation (or depreciation).

Under normal circumstances, the fund will invest at least 65% of its total
assets in equity securities and at least 85% of its total assets will be
invested in income-paying securities. The fund's portfolio will consist
primarily of domestic securities.

POLICIES APPLICABLE TO ALL FUNDS

Each fund's holdings will be spread among industry groups that meet its
investment criteria to help reduce certain risks inherent in common stock
investments. These investments will primarily be securities listed on major
exchanges or traded in the over-the-counter markets.

Income is a primary or secondary objective of each fund. As a result, a
portion of the portfolio of each fund may consist of fixed income securities.

The value of fixed income securities fluctuates based on changes in interest
rates and in the credit quality of the issuer. Debt securities that comprise
part of a fund's fixed income portfolio will be limited primarily to "investment
grade" obligations. However, each fund may invest up to 5% of its assets in
"high yield" securities. "Investment grade" means that at the time of purchase,
such obligations are rated within the four highest categories by a nationally
recognized statistical rating organization (for example, at least Baa by Moody's
Investors Service, Inc. or BBB by Standard & Poor's Corporation), or, if not
rated, are of equivalent investment quality as determined by the investment
manager. According to Moody's, bonds rated Baa are medium-grade and possess some
speculative characteristics. A BBB rating by S&P indicates S&P's belief that a
security exhibits a satisfactory degree of safety and capacity for repayment,
but is more vulnerable to adverse economic conditions and changing
circumstances.

"High yield" securities, sometimes referred to as "junk bonds," are higher
risk, non-convertible debt obligations that are rated below investment grade
securities, or are unrated, but with similar credit quality.

There are no credit or maturity restrictions on the fixed income securities
in which the high yield portion of a fund's portfolio may be invested. Debt
securities rated lower than Baa by Moody's or BBB by S&P or their equivalent are
considered by many to be predominantly speculative. Changes in economic
conditions or other circumstances are more likely to lead to a weakened capacity
to make principal and interest payments on such securities than is the case with
higher quality debt securities. Regardless of rating levels, all debt securities
considered for purchase by the fund are analyzed by the investment manager to
determine, to the extent reasonably possible, that the planned investment is
sound, given the investment objective of the fund (see "An Explanation of Fixed
Income Securities Ratings" in the Statement of Additional Information).

8 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

The funds will not necessarily dispose of high yield securities if the
aggregate value of such securities exceeds 5% of a fund's assets, if such level
is exceeded as a result of market appreciation of the value of such securities
or market depreciation of the value of the other assets of the fund. Rather, the
manager will cease purchasing any additional high yield securities until the
value of such securities is less than 5% of the fund's assets and will monitor
such investments to determine whether continuing to hold such investments is
likely to assist the fund in meeting its investment objectives.

In addition, the value of a fund's investments in fixed income securities
will change as prevailing interest rates change. In general, the prices of such
securities vary inversely with interest rates. As prevailing interest rates
fall, the prices of bonds and other securities that trade on a yield basis rise.
When prevailing interest rates rise, bond prices fall. These changes in value
may, depending upon the particular amount and type of fixed income securities
holdings of a fund, impact the net asset value of that fund's shares.

Notwithstanding the fact that the funds will invest primarily in equity
securities, under exceptional market or economic conditions, the funds may
temporarily invest all or a substantial portion of their assets in cash or
investment grade short-term securities (denominated in U.S. dollars or foreign
currencies).

To the extent that a fund assumes a defensive position, it will not be
investing for capital growth.

OTHER INVESTMENT PRACTICES, THEIR
CHARACTERISTICS AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

FOREIGN SECURITIES

Each fund may invest up to 25% of its assets in the securities of foreign
issuers, including debt securities of foreign governments and their agencies,
when these securities meet its standards of selection. The manager defines
"foreign issuer" as an issuer of securities that is domiciled outside the United
States, derives at least 50% of its total revenue from production or sales
outside of the United States, and/or whose principal trading market is outside
the United States. The principal business activities of such issuers will be
located in developed countries.

The funds may make such investments either directly in foreign securities or
indirectly by purchasing depositary receipts for foreign securities. Depositary
receipts or depositary shares or similar instruments (collectively "depositary
receipts") are securities that are listed on exchanges or quoted in the domestic
over-the-counter markets in one country but represent shares of issuers
domiciled in another country. Direct investments in foreign securities may be
made either on foreign securities exchanges or in the over-the-counter markets.

Subject to their individual investment objectives and policies, the funds
may invest in common stocks, convertible securities, preferred stocks, bonds,
notes and other debt securities of foreign issuers, and debt securities of
foreign governments and their agencies. The funds will limit their purchase of
debt securities to investment-grade obligations.

Investments in foreign securities may present certain risks, including those
resulting from fluctuations in currency exchange rates, future political and
economic developments, clearance and settlement risk, reduced availability of
public information concerning issuers, and the lack of uniform accounting,
auditing, financial reporting standards and practices and requirements
comparable to those applicable to domestic issuers.

EQUITY SECURITIES

In addition to investing in common stocks, the funds may invest in other
equity securities and equity equivalents. Other equity securities and equity
equivalents include securities that permit a fund to receive an equity interest
in an issuer, the opportunity to acquire an equity interest in an issuer, or the
opportunity to receive a return on its investment that permits the fund to
benefit from the growth over time in the equity of an issuer. Examples of equity
securities and equity equivalents include preferred stock, convertible preferred
stock and convertible debt securities.

PROSPECTUS INFORMATION REGARDING THE FUNDS 9

investments in convertible debt securities and other high yield, non-convertible
debt securities rated below investment grade will comprise less than 35% of the
fund's net assets. Debt securities rated below the four highest categories are
not considered "investment grade" obligations. These securities have speculative
characteristics and present more credit risk than investment grade obligations.
For a description of the S&P and Moody's ratings categories, see "An Explanation
of Fixed Income Securities Ratings" in the Statement of Additional Information.
Equity equivalents also may include securities whose value or return is derived
from the value or return of a different security. Depositary receipts, which are
described in the following section, are an example of the type of derivative
security in which a fund might invest.

FORWARD CURRENCY EXCHANGE CONTRACTS

Some of the foreign securities held by the funds may be denominated in
foreign currencies. Other securities, such as depositary receipts, may be
denominated in U.S. dollars, but have a value that is dependent on the
performance of a foreign security, as valued in the currency of its home
country. As a result, the value of a fund's portfolio may be affected by changes
in the exchange rates between foreign currencies and the U.S. dollar, as well as
by changes in the market values of the securities themselves. The performance of
foreign currencies relative to the U.S. dollar may be a factor in the overall
performance of a fund.

To protect against adverse movements in exchange rates between currencies,
the funds may, for hedging purposes only, enter into forward currency exchange
contracts. A forward currency exchange contract obligates the fund to purchase
or sell a specific currency at a future date at a specific price.

A fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.

By entering into a forward currency exchange contract with respect to the
specific purchase or sale of a security denominated in a foreign currency, a
fund can "lock in" an exchange rate between the trade and settlement dates for
that purchase or sale. This practice is sometimes referred to as "transaction
hedging." Each fund may enter into transaction hedging contracts with respect to
all or a substantial portion of its foreign securities trades.

When the manager believes that a particular currency may decline in value
compared to the U.S. dollar, a fund may enter into forward currency exchange
contracts to sell the value of some or all of the fund's portfolio securities
either denominated in, or whose value is tied to, that currency. This practice
is sometimes referred to as "portfolio hedging." A fund may not enter into a
portfolio hedging transaction where it would be obligated to deliver an amount
of foreign currency in excess of the aggregate value of its portfolio securities
or other assets denominated in, or whose value is tied to, that currency.

Each fund will make use of portfolio hedging to the extent deemed
appropriate by the manager. However, it is anticipated that a fund will enter
into portfolio hedges much less frequently than transaction hedges.

If a fund enters into a forward currency exchange contract, the fund, when
required, will instruct its custodian bank to segregate cash or liquid
high-grade securities in a separate account in an amount sufficient to cover its
obligation under the contract. Those assets will be valued at market daily, and
if the value of the segregated securities declines, additional cash or
securities will be added so that the value of the account is not less than the
amount of the fund's commitment. At any given time, no more than 10% of a fund's
assets will be committed to a segregated account in connection with portfolio
hedging transactions.

Predicting the relative future values of currencies is very difficult, and
there is no assurance that any attempt to protect a fund against adverse
currency movements through the use of forward currency exchange contracts will
be successful. In addition, the use of forward currency exchange contracts tends
to limit the potential gains that might result from a positive change in the
relationship between the foreign currency and the U.S. dollar.

INVESTMENTS IN SMALLER COMPANIES

10 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

greater risks than larger issuers. Such companies may have limited product
lines, markets or financial resources, and their securities may trade less
frequently and in more limited volume than the securities of larger companies.
In addition, the securities of such companies may be more likely to be delisted
from trading on their primary exchange. As a result, the securities of smaller
companies may experience significantly more price volatility and less liquidity
than securities of larger companies, and this volatility and limited liquidity
may be reflected in the net asset value of the fund.

PORTFOLIO TURNOVER

The total portfolio turnover rates of Value and Equity Income are shown in
the Financial Highlights tables of this Prospectus.

Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objectives. The manager believes that the rate of portfolio turnover is
irrelevant when it determines a change is in order to achieve those objectives
and, accordingly, the annual portfolio turnover rate cannot be anticipated.

The portfolio turnover of a fund may be higher than other mutual funds with
similar investment objectives. Higher turnover would generate correspondingly
greater brokerage commissions that the funds pay directly. Higher portfolio
turnover also may increase the likelihood of realized capital gains, if any,
distributed by the fund. See "Taxes," page 23.

REPURCHASE AGREEMENTS

Each 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 that fund.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase 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.

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

FUTURES CONTRACTS

Each fund may enter into domestic stock futures contracts. A futures
contract is an agreement to take or make delivery of an amount of cash based on
the difference between the value of the index at the beginning and at the end of
the contract period.

Rather than actually purchasing the specific financial assets, or the
securities of a market index, the manager may purchase a futures contract, which
reflects the value of such underlying securities. For example, S&P 500 futures
reflect the value of the underlying companies that comprise the S&P 500
Composite Stock Price Index. If the aggregate market value of the underlying
index securities increases or decreases during the contract period, the value of
the S&P 500 futures can be expected to reflect such increase or decrease. As a
result, the manager is able to expose to the equity markets cash that is
maintained by the funds to meet anticipated redemptions or held for future
investment opportunities. Because futures generally settle within a day from the
date they are closed out (compared with three days for the types of equity
securities primarily invested in by the funds) the manager believes that this
use of futures allows the funds to effectively be fully invested in equity
securities while maintaining the liquidity needed by the funds.

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

When a fund enters into a futures contract, it must make deposit of cash or
high-quality debt securities, known as "initial margin," as partial security for
its performance under the contract. As the value of the underlying financial
assets fluctuates, the parties to the contract are required to make additional
margin payments, known as "variation margin," to cover any additional obligation
it may have under the contract. Assets set aside by a fund as initial or
variation margin may not be disposed of so long as the fund maintains the
contract.

The funds may not purchase leveraged futures. A fund will deposit in a
segregated account with its custodian bank cash or high-quality debt securities
in an amount equal to the fluctuating market value of the index futures
contracts it has purchased, less any margin deposited on its position. The funds
will invest only in exchange-traded futures. In addition, the value of futures
contracts purchased by a fund may not exceed 5% of the fund's total assets.

DERIVATIVE SECURITIES

To the extent permitted by its investment objectives and policies, a fund
may invest in securities that are commonly referred to as "derivative"
securities. Generally, a derivative is a financial arrangement the value of
which is based on, or "derived" from, a traditional security, asset, or market
index. Certain derivative securities are more accurately described as
"index/structured" securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators (reference indices).

Some "derivatives" such as mortgage-related and other asset-backed
securities are in many respects like any other investment, although they may be
more volatile or less liquid than more traditional debt securities.

There are many different types of derivatives and many different ways to use
them. Futures and options are commonly used for traditional hedging purposes to
attempt to protect a fund from exposure to changing interest rates, securities
prices, or currency exchange rates and for cash management purposes as a
low-cost method of gaining exposure to a particular securities market without
investing directly in those securities.

No fund may invest in a derivative security unless the reference index or
the instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the S&P 500 Index would
be a permissible investment because each of the funds may invest in the
securities of companies comprising the S&P 500 Index (assuming they otherwise
meet the other requirements for the fund), while a security whose underlying
value is linked to the price of oil would not be a permissible investment
because the funds may not invest in oil and gas leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There is a range of risks associated with derivative investments, including
but not limited to:

* the risk that the underlying security, interest rate, market index or
other financial asset will not move in the direction the portfolio
manager anticipates;

* the possibility that there will be no liquid secondary market, or the
possibility that price fluctuation limits will be imposed by the
relevant exchange, either of which may make it difficult or impossible
to close out a position when desired;

* the risk that adverse price movements in an instrument will result in a
loss substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

The Board of Directors has approved the manager's policy regarding
investments in derivative securities. That policy specifies factors that must be
considered in connection with a purchase of derivative securities. The policy
also establishes a committee that must review certain proposed purchases before
the purchases can be made. The manager will report on fund activity in
derivative securities to the Board of Directors as necessary. In addition, the
Board will review the manager's policy for investments in derivative securities
annually.

WHEN-ISSUED SECURITIES

Each of the funds may sometimes purchase new issues of securities on a
when-issued basis or forward

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

commitment basis when, in the opinion of the manager, such purchases will
further the investment objectives of the fund. The price of when-issued
securities is established at the time the commitment to purchase is made.
Delivery of and payment for these securities typically occur 15 to 45 days after
the commitment to purchase. Market rates of interest on debt securities at the
time of delivery may be higher or lower than those contracted for on the
when-issued security. Accordingly, the value of such security may decline prior
to delivery, which could result in a loss to the fund. A separate account for
each fund consisting of cash or appropriate liquid assets in an amount at least
equal to the when-issued commitments will be established and maintained with the
custodian. No income will accrue to the fund prior to delivery.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

The funds may invest in the securities of issuers with limited operating
histories. The manager considers an issuer to have a limited operating history
if that issuer has a record of less than three years of continuous operation.

Investments in securities of issuers with limited operating histories may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating history and financial
information upon which the manager may base its investment decision on behalf of
the funds. In addition, financial and other information regarding such issuers,
when available, may be incomplete or inaccurate.

A fund will not invest more than 5% of its total assets in the securities of
issuers with less than a three-year operating history. The manager will consider
periods of capital formation, incubation, consolidation, and research and
development in determining whether a particular issuer has a record of three
years of continuous operation.

SHORT SALES

A fund may engage in short sales if, at the time of the short sale, the fund
owns or has the right to acquire securities equivalent in kind and amount to the
securities being sold short. Such transactions allow the fund to hedge against
price fluctuations by locking in a sale price for securities it does not wish to
sell immediately.

A fund may make a short sale when it wants to sell the security it owns at a
current attractive price, but also wishes to defer recognition of gain or loss
for federal income tax purposes and for purposes of satisfying certain tests
applicable to regulated investment companies under the Internal Revenue Code and
Regulations.

RULE 144A SECURITIES

The funds may, from time to time, purchase Rule 144A securities when they
present attractive investment opportunities that otherwise meet the funds'
criteria for selection. Rule 144A securities are securities that are privately
placed with and traded among qualified institutional investors rather than the
general public. Although Rule 144A securities are considered "restricted
securities," they are not necessarily illiquid.

With respect to securities eligible for resale under Rule 144A, the staff of
the SEC has taken the position that the liquidity of such securities in the
portfolio of a fund offering redeemable securities is a question of fact for the
Board of Directors to determine, such determination to be based upon a
consideration of the readily available trading markets and the review of any
contractual restrictions. The staff also acknowledges that, while the Board
retains ultimate responsibility, it may delegate this function to the manager.
Accordingly, the Board has established guidelines and procedures for determining
the liquidity of Rule 144A securities and has delegated the day-to-day function
of determining the liquidity of Rule 144A securities to the manager. The Board
retains the responsibility to monitor the implementation of the guidelines and
procedures it has adopted.

Since the secondary market for such securities is limited to certain
qualified institutional investors, the liquidity of such securities may be
limited accordingly and a fund may, from time to time, hold a Rule 144A security
that is illiquid. In such an event, the fund's manager will consider appropriate
remedies to minimize the effect on such fund's liquidity. No fund may invest
more than 15% of its assets in illiquid securities (securities that may not be
sold within seven days at approximately the price used in determining the net
asset value of fund shares).

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

PERFORMANCE ADVERTISING

From time to time, the funds may advertise performance data. Fund
performance may be shown by presenting one or more performance measurements,
including cumulative total return or average annual total return and yield.
Performance data may be quoted separately for the Investor Class and for the
other classes.

Cumulative total return data is computed by considering all elements of
return, including reinvestment of dividends and capital gains distributions,
over a stated period of time. Average annual total return is determined by
computing the annual compound return over a stated period of time that would
have produced the fund's cumulative total return over the same period if the
fund's performance had remained constant throughout.

A quotation of yield reflects a fund's income over a stated period of time
expressed as a percentage of the fund's share price.

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.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules for all stock and bond funds. Because yield
accounting methods differ from the methods used for other accounting purposes, a
fund's yield may not equal the income paid on its shares or the income reported
in the fund's financial statements.

The funds also may include in advertisements data comparing performance with
the performance of non-related investment media, published editorial comments
and performance rankings compiled by independent organizations such as Lipper
Analytical Services or Donoghue's Money Fund Report and publications that
monitor the performance of mutual funds. Performance information may be quoted
numerically or may be presented in a table, graph or other illustration. In
addition, fund performance may be compared to well-known indices of market
performance including the Standard and Poor's 500 Index, the Dow Jones
Industrial Average, the S&P/Barra Value Index (with regard to Value), the S&
P/Barra Small-Cap 600 Value Index (with regard to Small Cap Value) and the
Lipper Equity Income Fund Index (with regard to Equity Income). Fund performance
also may be compared, on a relative basis, to other funds in our fund family.
This relative comparison, which may be based upon historical fund performance or
historical or expected volatility or other fund characteristics, may be
presented numerically, graphically or in text. Fund performance also may be
combined or blended with other funds in our fund family, and that combined or
blended performance may be compared to the same indices to which individual
funds may be compared.

All performance information advertised by the funds is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The funds offered by this Prospectus are a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-2021 for a brochure or prospectuses for the other funds in the
American Century Investments family.

To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will eliminate duplicate copies of most
financial reports and prospectuses to most households and deliver account
statements to most households in a single envelope, even if they have more than
one account. If you would like additional copies of financial reports and
prospectuses or separate mailing of account statements, please call us.

INVESTING IN AMERICAN CENTURY

The following sections explain how to invest in American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Employer-Sponsored Retirement Plans and Institutional Accounts," page 21.

HOW TO OPEN AN ACCOUNT

To open an account, you must complete and sign an application, furnishing
your taxpayer identification number. (You must also certify whether you are
subject to withholding for failing to report income to the IRS.) Investments
received without a certified taxpayer identification number will be returned.

The minimum investment is $2,500 [$1,000 for IRA and Uniform Gifts/Transfers
to Minors Acts (UGMA/UTMA) accounts]. These minimums will be waived if you
establish an automatic investment plan to your account that is the equivalent of
at least $50 per month. See "Automatic Investment Plan," page 16.

The minimum investment requirements may be different for some types of
retirement accounts. Call one of our Investor Services Representatives for
information on our retirement plans, which are available for individual
investors or for those investing through their employers.

Please note: If you register your account as belonging to multiple owners
(e.g., as joint tenants), you must provide us with specific authorization on
your application in order for us to accept written or telephone instructions
from a single owner. Otherwise, all owners will have to agree to any
transactions that involve the account (whether the transaction request is in
writing or over the telephone).

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 15

are investing. If more than one, leave blank and see Bank to Bank
Information below.

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):
* Taxpayer identification or Social Security number.
* If more than one account, account numbers and amount to be invested in
each account.
* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See page
17 for more information on exchanges.

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street
Kansas City, Missouri 64111

4917 Town Center Drive
Leawood, Kansas 66211

1665 Charleston Road
Mountain View, California 94043

2000 S. Colorado Blvd.
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

Subsequent investments may be made by an automatic bank, payroll or
government direct deposit (see "Automatic Investment Plan," this page) or by any
of the methods below. The minimum investment requirement for subsequent
investments is $250 for checks submitted without the investment slip portion of
a previous statement or confirmation and $50 for all other types of subsequent
investments.

BY MAIL

When making subsequent investments, enclose your check with the investment
slip portion of a previous statement or confirmation. If the investment slip is
not available, indicate your name, address and account number on your check or a
separate piece of paper. (Please be aware that the investment minimum for
subsequent investments is higher without an investment slip.)

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Investor Services Representative
or use our Automated Information Line.

BY ONLINE ACCESS

Upon completion of your application and once your account is open, you may
make investments online.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 18 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

By completing the application and electing to make investments
automatically, we will draw on your bank account regularly. Such investments
must be at least the equivalent of $50 per month. You also may choose an
automatic payroll or government direct deposit. If you are establishing a new
account, check the appropriate box under "Automatic Investments" on your
application to receive more information. If you would like to add a direct
deposit to an existing account, please call an Investor Services Representative.

16 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same day it is received, if it is
received before the fund's net asset values are calculated, which is one hour
prior to the close of the New York Stock Exchange for funds issued by American
Century Target Maturities Trust and at the close of the Exchange for all of our
other funds. See "When Share Price Is Determined," page 22.

For any single exchange, the shares of each fund being acquired must have a
value of at least $100. However, we will allow investors to set up an Automatic
Exchange Plan between any two funds in the amount of at least $50 per month. See
our Investor Services Guide for further information about exchanges.

If, in any 90-day period, the total of your exchanges and your redemptions
from any one account exceeds the lesser of $250,000 or 1% of the fund's assets,
further exchanges will be subject to special requirements to comply with our
policy on large redemptions. See "Special Requirements for Large Redemptions,"
page 18.

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line--see page 19) upon
completion and receipt of your application or by calling us at 1-800-345-2021 to
get the appropriate form.

BY ONLINE ACCESS

You can make exchanges online. This service is established upon completion
and receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.

BY MAIL

Your written instructions to redeem shares may be made either by a
redemption form, which we will send you upon request, or by a letter to us.
Certain redemptions may require a signature guarantee. Please see "Signature
Guarantee," page 18.

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

If you have at least a $10,000 balance in your account, you may redeem
shares by Check-A-Month. A Check-A-Month plan automatically redeems enough
shares each month to provide you with a check in an amount you choose (minimum
$50). To set up a Check-A-Month plan, please call and request our Check-A-Month
brochure.

OTHER AUTOMATIC REDEMPTIONS

If you have at least a $10,000 balance in your account, you may elect to
make redemptions automatically by authorizing us to send funds to you or to your
account at a bank or other financial institution. To set up automatic
redemptions, call an Investor Services Representative.

REDEMPTION PROCEEDS

Please note that shortly after a purchase of shares is made by check or
electronic draft (also known as an ACH draft) from your bank, we may wait up to
15 days or longer to send redemption proceeds (to allow your purchase funds to
clear). No interest is paid on the redemption proceeds after the redemption is
processed but before your redemption proceeds are sent.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

Ordinarily, all redemption checks will be made payable to the registered
owner of the shares and will be mailed only to the address of record. For more
information, please refer to our Investor Services Guide.

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Wired funds are subject to a $10 fee to cover bank wire charges, which is
deducted from redemption proceeds. Once the funds are transmitted, the time of
receipt and the funds' availability are not under our control.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

We have elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates each fund to make certain redemptions in cash. This
requirement to pay redemptions in cash applies to situations where one
shareholder redeems, during any 90-day period, up to the lesser of $250,000 or
1% of the assets of the fund. Although redemptions in excess of this limitation
will also normally be paid in cash, we reserve the right under unusual
circumstances to honor these redemptions by making payment in whole or in part
in readily marketable securities (a "redemption-in-kind").

If payment is made in securities, the securities, selected by the fund, will
be valued in the same manner as they are in computing the fund's net asset value
and will be provided without prior notice.

If you expect to make a large redemption and would like to avoid any
possibility of being paid in securities, you may do so by providing 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.
Receipt of your instruction 15 days prior to the transaction provides the fund
with sufficient time to raise the cash in an orderly manner to pay the
redemption and thereby minimizes the effect of the redemption on the fund and
its remaining shareholders.

Despite the fund's right to redeem fund shares through a redemption-in-kind,
we do not expect to exercise this option unless a fund has an unusually low
level of cash to meet redemptions and/or is experiencing unusually strong
demands for its cash. Such a demand might be caused, for example, by extreme
market conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you to bring the value of the
shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. See "How to Open An
Account," page 15. If action is not taken within 90 days of the letter's date,
the shares held in the account will be redeemed and the proceeds from the
redemption will be sent by check to your address of record. We reserve the right
to increase the investment minimums.

SIGNATURE GUARANTEE

To protect your accounts from fraud, some transactions will require a
signature guarantee. You can obtain a signature guarantee from a bank or trust
company, credit union, broker-dealer, securities exchange or association,
clearing agency or savings association, as defined by federal law.

For a more in-depth explanation of our signature guarantee policy, or if you
live outside the United States and would like to know how to obtain a signature
guarantee, please consult our Investor Services Guide.

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

SPECIAL SHAREHOLDER SERVICES

We offer several services to make your account easier to manage. These are
listed on the account application. You will find more information about each of
these services in our Investor Services Guide.

Our special shareholder services include:

AUTOMATED INFORMATION LINE

We offer an Automated Information Line, 24 hours a day, seven days a week,
at 1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You may also use the Automated
Information Line to make investments into your accounts (if we have your bank
information on file) and obtain your share balance, value and most recent
transactions. You also may exchange shares from one fund to another via the
Automated Information Line. Redemption instructions cannot be given via the
Automated Information Line.

ONLINE ACCOUNT ACCESS

You may contact us 24 hours a day, seven days a week, at
www.americancentury.com to access daily share prices, receive updates on major
market indices and view historical performance of the fund. You can use your
personal access code and Social Security number to view your account balance and
account activity, make subsequent investments from your bank account or exchange
shares from one fund to another.

OPEN ORDER SERVICE

Through our open order service, you may designate a price at which to buy
shares of a variable-priced fund by exchange from one of our money market funds,
or a price at which to sell shares of a variable-priced fund by exchange to one
of our money market funds. The designated purchase price must be equal to or
lower, or the designated sale price equal to or higher, than the variable-priced
fund's net asset value at the time the order is placed. If the designated price
is met within 90 calendar days, we will execute your exchange order
automatically at that price (or better). Open orders not executed within 90 days
will be canceled.

If the fund you have selected deducts a distribution from its share price,
your order price will be adjusted accordingly so the distribution does not
inadvertently trigger an open order transaction on your behalf. If you close or
re-register the account from which the shares are to be redeemed, your open
order will be canceled.

Because of their time-sensitive nature, open order transactions are accepted
only by telephone or in person. These transactions are subject to exchange
limitations described in each fund's prospectus, except that orders and
cancellations received before 2 p.m. Central time are effective the same day,
and orders or cancellations received after 2 p.m. Central time are effective the
next business day.

TAX-QUALIFIED RETIREMENT PLANS

Each fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

* 403(b) plans for employees of public school
systems and non-profit organizations; or

* Profit sharing plans and pension plans for corporations and other
employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

Every account is subject to policies that could affect your investment.
Please refer to the Investor Services Guide for further information about the
policies discussed below, as well as further detail about the services we offer.

(1) We reserve the right for any reason to suspend the offering of shares
for a period of time, or to reject any specific purchase order
(including purchases by exchange). Additionally, purchases may be
refused if, in the opinion of the manager, they are of a size that
would disrupt the management of the fund.

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 19

redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all
shareholders or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(4) Transactions requesting a specific price and date, other than open
orders, will be refused. Once you have mailed or otherwise transmitted
your transaction instructions to us, they may not be modified or
canceled.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require
evidence satisfactory to us of the authority of the individual making
the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for
losses due to unauthorized or fraudulent instructions. The company, its
transfer agent and manager will not be responsible for any loss due to
instructions they reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the
registration. If the owner's name appears in the registration as Mary
Elizabeth Jones, she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an
increase in the number of shareholder telephone calls. If you
experience difficulty in reaching us during such periods, you may send
your transaction instructions by mail, express mail or courier service,
or you may visit one of our Investor Centers. You also may use our
Automated Information Line if you have requested and received an access
code and are not attempting to redeem shares.

(9) If you fail to provide us with the correct certified taxpayer
identification number, we may reduce any redemption proceeds by $50 to
cover the penalty the IRS will impose on us for failure to report your
correct taxpayer identification number on information reports.

(10) We will perform special inquiries on shareholder accounts. A research
fee of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

At the end of each calendar quarter, we will send you a consolidated
statement that summarizes all of your American Century holdings, as well as an
individual statement for each fund you own that reflects all year-to-date
activity in your account. You may request a statement of your account activity
at any time.

With the exception of most automatic transactions, each time you invest,
redeem, transfer or exchange shares, we will send you a confirmation of the
transaction. See the Investor Services Guide for more detail.

Carefully review all the information relating to transactions on your
statements and confirmations to ensure that your instructions were acted on
properly. Please notify us immediately in writing if there is an error. If you
fail to provide notification of an error with reasonable promptness, i.e.,
within 30 days of non-automatic transactions or within 30 days of the date of
your consolidated quarterly statement, in the case of automatic transactions, we
will deem you to have ratified the transaction.

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

Each year, we will send you an annual and a semiannual report relating to
your fund, each of which is incorporated herein by reference. The annual report
includes audited financial statements and a list of portfolio securities as of
the fiscal year end. The semiannual report includes unaudited financial
statements for the first six months of the fiscal year, as well as a list of
portfolio securities at the end of the period. You also will receive an updated
prospectus at least once each year. Please read these materials carefully, as
they will help you understand your fund.

20 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

EMPLOYER-SPONSORED RETIREMENT PLANS
AND INSTITUTIONAL ACCOUNTS

Information contained in our Investor Services Guide pertains to
shareholders who invest directly with American Century rather than through an
employer-sponsored retirement plan or through a financial intermediary.

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan, your ability to purchase shares of the
funds, exchange them for shares of other American Century funds, and redeem them
will depend on the terms of your plan.

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance company or other financial intermediary, your ability
to purchase, exchange and redeem shares will depend on your agreement with, and
the policies of, such financial intermediary.

You may reach one of our Institutional Service Representatives by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds that you
are unable to obtain through your plan administrator or financial intermediary.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 21

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares is also referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. The net asset values for Target Maturities funds are
determined one hour prior to the close of the Exchange.

Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of the close of the Exchange on the next day the Exchange is open.

Investments are considered received only when payment is received by us.
Wired funds are considered received on the day they are deposited in our bank
account if they are deposited before the time as of which the net asset value of
the fund is determined.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value of the fund is
determined, will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.

If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, it is the responsibility of your plan
recordkeeper or financial intermediary to transmit your purchase, exchange and
redemption requests to the funds' transfer agent prior to the applicable cut-off
time for receiving orders and to make payment for any purchase transactions in
accordance with the funds' procedures or any contractual arrangements with the
funds or the funds' distributor in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the funds have authorized such
intermediaries and their designees to accept purchase and redemption orders on
the funds' behalf up to the applicable cut-off time. The funds will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the funds' net asset values next determined
after acceptance on the funds' behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The portfolio securities of each fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale is reported, or if
local convention or regulation so provides, the mean of the latest bid and asked
prices is used. Depending on local convention or regulation, securities traded
over-the-counter are priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

available, securities and other assets are valued at fair value as determined in
accordance with procedures adopted by the Board of Directors.

Debt securities not traded on a principal securities exchange are valued
through valuations obtained from a commercial pricing service or at the most
recent mean of the bid and asked prices provided by investment dealers in
accordance with procedures established by the Board of Directors.

The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which it
is traded or as of the close of business on the New York Stock Exchange, if that
is earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day that the New York Stock Exchange is open. If an event
were to occur after the value of a security was established but before the net
asset value per share was determined that was likely to materially change the
net asset value, then that security would be valued at fair value as determined
in accordance with procedures adopted by the Board of Directors.

Trading of these securities in foreign markets may not take place on every
New York Stock Exchange business day. In addition, trading may take place in
various foreign markets on Saturdays or on other days when the New York Stock
Exchange is not open and on which a fund's net asset value is not calculated.
Therefore, such calculation does not take place contemporaneously with the
determination of the prices of many of the portfolio securities used in such
calculation and the value of a fund's portfolio may be affected on days when
shares of the fund may not be purchased or redeemed.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class of the funds are published in
leading newspapers daily. The net asset value may be obtained by calling us or
by accessing our Web site (www.americancentury.com).

DISTRIBUTIONS

Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, generally are declared
and paid annually, usually in December, but the funds may make distributions on
a more frequent basis to comply with the distribution requirements of the
Internal Revenue Code, in all events in a manner consistent with the provisions
of the Investment Company Act.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 59(1)/2 years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

A distribution on shares of a fund does not increase the value of your
shares or your total return. At any given time the value of your shares includes
the undistributed net gains, if any, realized by the fund on the sale of
portfolio securities, and undistributed dividends and interest received, less
fund expenses.

Because such gains and dividends are included in the price of your shares,
when they are distributed the price of your shares is reduced by the amount of
the distribution. If you buy your shares through a taxable account just before
the distribution, you will pay the full price for your shares, and then receive
a portion of the purchase price back as a taxable distribution. See "Taxes,"
this page.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 23

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions paid by the fund generally will not be subject to current
taxation, but will accumulate in your account under the plan on a tax-deferred
basis.

Employer-sponsored retirement and savings plans are governed by complex tax
rules. If you elect to participate in your employer's plan, consult your plan
administrator, your plan's summary plan description, or a professional tax
advisor regarding the tax consequences of participation in the plan,
contributions to, and withdrawals or distributions from the plan.

TAXABLE ACCOUNTS

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 longer than 12 months but no more than 18 months (28% rate gain) and/or
assets held longer than 18 months (20% rate gain) 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
distribution of long-term capital gain (28% or 20% rate gain) to you with
respect to such shares.

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

Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you
purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain).

In January of the year following the distribution, if you own shares in a
taxable account, you will receive a Form 1099-DIV notifying you of the status of
your distributions for federal income tax purposes.

Distributions also may be subject to state and local taxes, even if all or a
substantial part of such distributions are derived from interest on U.S.
government obligations which, if you received them directly, would be exempt
from state income tax. However, most but not all states allow this tax exemption
to pass through to fund shareholders when a fund pays distributions to its
shareholders. You should consult your tax advisor about the tax status of such
distributions in your own state.

If you have not complied with certain provisions of the Internal Revenue
Code and Regulations, we are 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. This charge is not refundable.

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

capital gain or loss and generally will be considered long-term, subject to tax
at a maximum rate of 28% if shareholders have held such shares for a period of
more than 12 months but no more than 18 months and long-term, subject to tax at
a maximum rate of 20% if shareholders have held such shares for a period of more
than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Internal Revenue Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

In addition to the federal income tax consequences described above relating
to an investment in a fund, there may be other federal, state or local tax
considerations that depend upon the circumstances of each particular investor.
Prospective shareholders are therefore urged to consult their tax advisors with
respect to the effect of this investment on their own specific situations.

MANAGEMENT

INVESTMENT MANAGEMENT

Under the laws of the State of Maryland, the Board of Directors is
responsible for managing the business and affairs of the funds. Acting pursuant
to an investment management agreement entered into with the funds, American
Century Investment Management, Inc. serves as the manager of the funds. Its
principal place of business is American Century Tower, 4500 Main Street, Kansas
City, Missouri 64111. The manager has been providing investment advisory
services to investment companies and institutional clients since it was founded
in 1958.

The manager supervises and manages the investment portfolio of a fund and
directs the purchase and sale of its investment securities. It utilizes a team
of portfolio managers, assistant portfolio managers and analysts acting together
to manage the assets of a fund. The team meets regularly to review portfolio
holdings and to discuss purchase and sale activity. The team adjusts holdings in
a fund's portfolio as it deems appropriate in pursuit of the fund's investment
objectives. Individual portfolio manager members of the team also may adjust
portfolio holdings of a fund as necessary between team meetings.

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

PHILLIP N. DAVIDSON, Vice President and Portfolio Manager, joined American
Century in September 1993 as a Portfolio Manager. Prior to joining American
Century, Mr. Davidson served as an investment manager for Boatmen's Trust
Company in St. Louis, Missouri.

R. TODD VINGERS, Portfolio Manager, joined American Century in August 1994
as an Investment Analyst, a position he held until February 1998. At that time
he was promoted to Portfolio Manager. Prior to joining American Century, Mr.
Vingers attended the University of Chicago Graduate School of Business from
October 1992 to June 1994, where he obtained his MBA degree.

The activities of the manager are subject only to directions of the funds'
Board of Directors. The manager pays all the expenses of the funds except
brokerage, taxes, interest, fees and expenses of the non-interested person
directors (including counsel fees) and extraordinary expenses.

For the services provided to the Investor Class of the funds, the manager
receives an annual fee of 1% of the average net assets of Value and Equity
Income and 1.25% of the average net assets of Small Cap Value.

On the first business day of each month, each fund pays a management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying the applicable fee for each fund by
the aggregate average daily closing value of each fund's net assets during the
previous month, and further multiplying that product 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).

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

CODE OF ETHICS

The funds and the manager have adopted a Code of Ethics that restricts
personal investing practices by employees of the manager and its affiliates.
Among other provisions, the Code of Ethics requires that employees with access
to information about the purchase or sale of securities in the funds' portfolios
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111 acts as transfer agent and dividend-paying
agent for the funds. It provides facilities, equipment and personnel to the
funds, and is paid for such services by the manager.

Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the funds as a funding medium, by broker-dealers and financial
advisors for their customers investing in shares of American Century or by
sponsors of multi mutual fund no- or low-transaction fee programs. The manager
or an affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.

Although there is no sales charge levied by the funds, transactions in
shares of the funds may be executed by brokers or investment advisors who charge
a transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the funds or the
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.

From time to time, special services may be offered to shareholders who
maintain higher share balances in our family of funds. These services may
include the waiver of minimum investment requirements, expedited confirmation of
shareholder transactions, newsletters and a team of personal representatives.
Any expenses associated with these special services will be paid by the manager.

The manager and transfer agent are both wholly owned by American Century
Companies, Inc. James E. Stowers Jr., Chairman of the funds' Board of Directors,
controls American Century Companies by virtue of his ownership of a majority of
its common stock.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the Co-Administrator for the funds. FDI is
responsible for (i) providing certain officers of the funds and (ii) reviewing
and filing marketing and sales literature on behalf of the funds. The fees and
expenses of FDI are paid by the manager out of its unified fee.

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. The
funds and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the funds'
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

each (substantially completed with respect to critical systems in early 1998);
and the renovation and testing of affected systems (targeted for completion with
respect to critical systems by the end of 1998). The manager will pay for the
remediation effort with revenues from its management fee, so that the funds will
not directly bear any of the cost.

In light of these remediation efforts, the funds do not anticipate a
material adverse impact on their business or operations. However, there can be
no assurance that the remediation plan will be sufficient and timely or that
interaction with other noncomplying computer systems will not have a material
adverse effect on the funds' business, operations or financial condition.

In addition, the issuers of the securities in which the funds invests may
have Year 2000 computer problems. Although the media and various regulatory
agencies have focused a great deal of attention on the need for issuers to
assess and remediate these problems, their failure to do so could hurt the
funds' performance.

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the funds offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
funds are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc., (the "Corporation"), the issuer
of the funds, was organized as a Maryland corporation on June 14, 1993.

The corporation is a diversified, open-end management investment company
whose shares were first offered for sale September 1, 1993. Its business and
affairs are managed by its officers under the direction of its Board of
Directors.

The principal office of the funds is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-2021 (international
calls: 816-531-5575).

American Century Capital Portfolios, Inc. currently issues four series of
$0.01 par value shares. Each series is commonly referred to as a fund. The
assets belonging to each series of shares are held separately by the custodian.

American Century offers four classes of Value and Equity Income: an Investor
Class, an Institutional Class, a Service Class, and an Advisor Class. American
Century offers three classes of the Real Estate and Small Cap Value funds: an
Investor Class, an Institutional Class and an Advisor Class. The shares offered
by this Prospectus are Investor Class shares and have no up-front charges,
commissions or 12b-1 fees.

The other classes of shares are offered primarily to institutional investors
or through institutional distribution channels, such as employer-sponsored
retirement plans or through banks, broker-dealers, insurance companies or other
financial intermediaries. The other classes have different fees, expenses,
and/or minimum investment requirements than the Investor Class. The difference
in the fee structures among 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 manager for core investment advisory
services. Accordingly, the core investment advisory expenses do not vary by
class. Different fees and expenses will affect performance. For additional
information concerning the other classes of shares not offered by this

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Except as described below, all classes of shares of a fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences among the various classes are (a) each class
may be subject to different expenses specific to that class, (b) each class has
a different identifying designation or name, (c) each class has exclusive voting
rights with respect to matters solely affecting such class, (d) each class may
have different exchange privileges, and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.

Each share, irrespective of series or class, is entitled to one vote for
each dollar of net asset value applicable to such share on all questions, except
for those matters that must be voted on separately by the series or class of
shares affected. Matters affecting only one series or class are voted upon only
by that series or class.

Shares have non-cumulative voting rights, which means that the holders of
more than 50% of the votes cast in an election of directors can elect all of the
directors if they choose to do so, and in such event the holders of the
remaining votes will not be able to elect any person or persons to the Board of
Directors.

Unless required by the Investment Company Act, it will not be necessary for
the funds to hold annual meetings of shareholders. As a result, shareholders may
not vote each year on the election of directors or the appointment of auditors.
However, pursuant to the funds' by-laws, the holders of shares representing at
least 10% of the votes entitled to be cast may request the funds to hold a
special meeting of shareholders. We will assist in the communication with other
shareholders.

WE RESERVE THE RIGHT TO CHANGE ANY OF OUR POLICIES, PRACTICES AND PROCEDURES
DESCRIBED IN THIS PROSPECTUS, INCLUDING THE STATEMENT OF ADDITIONAL INFORMATION,
WITHOUT SHAREHOLDER APPROVAL EXCEPT IN THOSE INSTANCES WHERE SHAREHOLDER
APPROVAL IS EXPRESSLY REQUIRED.

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 29

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

PERSON-TO-PERSON ASSISTANCE:
1-800-345-2021 OR 816-531-5575

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-11946 Recycled
<PAGE>
PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Real Estate Fund

INVESTOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

AMERICAN CENTURY INVESTMENTS
- -------------------------------------------------------------------------------
Benham Group American Century Twentieth Century
Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
Real Estate Fund

PROSPECTUS

JULY 30, 1998

Real Estate Fund

INVESTOR CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. The American Century Real Estate
Fund is described in this Prospectus. Its investment objective is listed on page
2 of this Prospectus. The other funds are described in separate prospectuses.

Through its Investor Class of shares, American Century offers investors a
full line of no-load funds, investments that have no sales charges or
commissions.

This Prospectus gives you information about the fund that you should know
before investing. Please read this Prospectus carefully and retain it for future
reference. Additional information is included in the Statement of Additional
Information dated July 30, 1998, and filed with the Securities and Exchange
Commission. It is incorporated into this Prospectus by reference. To obtain a
copy without charge, call or write:

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419200
Kansas City, Missouri 64141-6200 * 1-800-345-2021
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-634-4113 * In Missouri: 816-444-3485
www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVE OF THE FUND

AMERICAN CENTURY REAL ESTATE FUND

The investment objective of American Century Real Estate Fund is long-term
capital appreciation. Current income is a secondary objective. The fund seeks to
achieve its objective by investing primarily in securities issued by real estate
investment trusts and in the securities of companies that are principally
engaged in the real estate industry.

There is no assurance that the fund will achieve its investment objective.

2 INVESTMENT OBJECTIVE AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objective of the Fund .......................................... 2
Transaction and Operating Expense Table ................................... 4
Financial Highlights ...................................................... 5

INFORMATION REGARDING THE FUND
Investment Policies of the Fund ........................................... 6
Investment Objective ................................................... 6
Investment Strategy .................................................... 6
Investments in Real Estate ............................................. 6
Investment Philosophy .................................................. 7
Other Investment Practices, Their Characteristics
and Risks .............................................................. 8
U.S. Fixed Income Securities ........................................... 8
Diversification ........................................................ 8
When-Issued Securities ................................................. 8
Rule 144A Securities ................................................... 9
Borrowing .............................................................. 9
Portfolio Turnover ..................................................... 9
Repurchase Agreements .................................................. 9
Futures and Options .................................................... 10
Investments in Companies With Limited
Operating Histories ................................................. 10
Performance Advertising ................................................... 10

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments .............................................. 12
Investing in American Century ............................................. 12
How to Open an Account .................................................... 12
By Mail ........................................................ 12
By Wire ........................................................ 12
By Exchange .................................................... 13
In Person ...................................................... 13
Subsequent Investments .............................................. 13
By Mail ........................................................ 13
By Telephone ................................................... 13
By Online Access ............................................... 13
By Wire ........................................................ 13
In Person ...................................................... 13
Automatic Investment Plan ........................................... 13
How to Exchange From One Account to Another .............................. 13
By Mail ........................................................ 14
By Telephone ................................................... 14
By Online Access ............................................... 14
How to Redeem Shares ..................................................... 14
By Mail ........................................................ 14
By Telephone ................................................... 14
By Check-A-Month ............................................... 14
Other Automatic Redemptions .................................... 14
Redemption Proceeds ................................................. 14
By Check ....................................................... 14
By Wire and ACH ................................................ 14
Special Requirements for Large Redemptions .......................... 15
Redemption of Shares in Low-Balance Accounts ........................ 15
Signature Guarantee ...................................................... 15
Special Shareholder Services ............................................. 15
Automated Information Line ..................................... 15
Online Account Access .......................................... 16
Open Order Service ............................................. 16
Tax-Qualified Retirement Plans ................................. 16
Important Policies Regarding Your Investments ............................ 16
Reports to Shareholders .................................................. 17
Employer-Sponsored Retirement Plans and
Institutional Accounts ................................................. 17

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 19
When Share Price Is Determined ......................................... 19
How Share Price Is Determined .......................................... 19
Where to Find Information About Share Price ............................ 20
Distributions ............................................................. 20
Taxes ..................................................................... 20
Tax-Deferred Accounts .................................................. 20
Taxable Accounts ....................................................... 20
Management ................................................................ 22
Investment Management .................................................. 22
Performance History of the Subadvisor .................................. 23
Performance Highlights ................................................. 24
Code of Ethics ......................................................... 25
Transfer and Administrative Services ................................... 25
Year 2000 Issues ....................................................... 25
Distribution of Fund Shares ............................................... 26
Further Information About American Century ................................ 26

PROSPECTUS TABLE OF CONTENTS 3

TRANSACTION AND OPERATING EXPENSE TABLE

SHAREHOLDER TRANSACTION EXPENSES:

Maximum Sales Load Imposed on Purchases ............................ none
Maximum Sales Load Imposed on Reinvested Dividends ................. none
Deferred Sales Load ................................................ none
Redemption Fee(1) .................................................. none
Exchange Fee ....................................................... none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):

Management Fees(2) ................................................. 1.20%
12b-1 Fees ......................................................... none
Other Expenses(3) .................................................. 0.00%
Total Fund Operating Expenses ...................................... 1.20%

EXAMPLE:
You would pay the following expenses on a 1 year $12
$1,000 investment, assuming a 5% annual return and 3 years 38
redemption at the end of each time period: 5 years 66

10 years 145

(1) Redemption proceeds sent by wire are subject to a $10 processing fee.

(2) A portion of the management fee may be paid by the fund's manager to
unaffiliated third parties who provide recordkeeping and administrative
services that would otherwise be performed by an affiliate of the manager.
See "Management - Transfer and Administrative Services," page 25.

(3) Other expenses, which include the fees and expenses (including legal counsel
fees) of those directors who are not "interested persons" as defined in the
Investment Company Act, are expected to be less than 0.01 of 1% of average
net assets for the next fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by Securities
and Exchange Commission regulations.

The shares offered by this Prospectus are Investor Class shares and have no
up-front or deferred sales charges, commissions, or 12b-1 fees. The fund offers
two other classes of shares, primarily to institutional investors, that have
different fee structures than the Investor Class. The difference in the fee
structures among 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 manager for core investment advisory services.
Accordingly, the core investment advisory expenses do not vary by class. A
difference in fees will result in different performance for the other classes.
For additional information about the various classes, see "Further Information
About American Century," page 26.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

REAL ESTATE FUND

The Financial Highlights for each of the periods presented has been audited by
Deloitte & Touche LLP, independent auditors, whose report thereon appears in the
fund's annual report, which is incorporated by reference into the Statement of
Additional Information. The annual report contains additional performance
information and will be made available upon request and without charge. The
information presented is for a share outstanding throughout the years ended
October 31, except as noted.

1998(1) 1997 1996 1995(2)

PER-SHARE DATA

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ................ $ 16.06 $ 12.29 $ 9.82 $ 10.00
------------- ------------- ------------- -------------
Income From Investment Operations

Net Investment Income ............................ 0.25(3) 0.67(3) 0.55 0.07

Net Realized and Unrealized Gain
(Loss)
on Investment Transactions .................... 0.26 4.13 2.27 (0.25)
------------- ------------- ------------- -------------
Total From Investment Operations ................. 0.51 4.80 2.82 (0.18)
------------- ------------- ------------- -------------
Distributions

From Net Investment Income ....................... (0.18) (0.48) (0.35) --

From Net Realized Gains on Investment Transactions (0.27) (0.55) -- --
------------- ------------- ------------- -------------
Total Distributions .............................. (0.45) (1.03) (0.35) --
------------- ------------- ------------- -------------
Net Asset Value, End of Period ...................... $ 16.12 $ 16.06 $ 12.29 $ 9.82
============= ============= ============= =============
Total Return(4) .................................. 3.26% 40.69% 29.28% (1.80)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ... 1.15%(5) 1.17% 1.00% 1.50%(5)

Ratio of Operating Expenses to Average Net
Assets
(before expense waivers and reimbursements)(6) ... 1.20%(5) 1.82% 6.83% 14.83%(5)

Ratio of Net Investment Income to Average Net Assets 3.75%(5) 4.48% 5.84% 6.66%(5)

Ratio of Net Investment Income to Average Net
Assets
(before expense waivers and reimbursements)(6) ... 3.70%(5) 3.84% 0.01% (6.67)%(5)

Portfolio Turnover Rate ............................. 28% 69% 86% --

Average Commission Paid per Share of
Equity Security Traded ........................... $ 0.0534 $ 0.0528 $ 0.0545 --

Net Assets, End of Period (in thousands) ............ $ 135,922 $ 76,932 $ 7,209 $ 2,983
</TABLE>

(1) Five month period ended March 31, 1998. The fund's fiscal year end was
changed from October 31 to March 31 resulting in a five month annual
reporting period.

(2) September 21, 1995 (inception) through October 31, 1995.

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

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

(5) Annualized.

(6) During the periods ended October 31, 1996 and October 31, 1995 and for a
portion of the period ended October 31, 1997, the manager voluntarily agreed
to waive its management fee and reimburse certain expenses incurred by the
fund and prior to the unified management fee structure, effective June 13,
1997, the custodian offset part of its fees for balance credits given to the
fund. During the period ended March 31, 1998, a portion of the subadvisory
fee, which is paid for subadvisory services, was waived.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

INFORMATION REGARDING THE FUND

INVESTMENT POLICIES OF THE FUND

The fund has adopted certain investment restrictions that are set forth in
the Statement of Additional Information. Those restrictions, as well as the
investment objective of the fund identified on page 2 of this Prospectus, and
any other investment policies designated as "fundamental" in this Prospectus or
in the Statement of Additional Information, cannot be changed without
shareholder approval. The fund has implemented additional investment policies
and practices to guide its activities in the pursuit of its investment
objective. These policies and practices, which are described throughout this
Prospectus, are not designated as fundamental policies and may be changed
without shareholder approval.

INVESTMENT OBJECTIVE

The fund's primary investment objective is long-term capital appreciation.
Current income is a secondary objective. The fund seeks to achieve its objective
by investing primarily in securities issued by real estate investment trusts and
in the securities of companies that are principally engaged in the real estate
industry. There can be no assurance that the fund will achieve its investment
objective.

INVESTMENT STRATEGY

Under normal conditions, the fund will invest no less than 80% of its total
assets in equity securities of companies that are real estate investment trusts
(REITs) or are principally engaged in the real estate industry. Equity
securities include common stock, preferred stock and securities convertible into
common stock. A company will be considered to be "principally engaged in the
real estate industry" if, in the opinion of the manager, at the time its
securities are purchased by the fund, at least 50% of its revenues or at least
50% of the market value of its assets is attributable to the ownership,
construction, management or sale of residential, commercial or industrial real
estate. Companies principally engaged in the real estate industry may include,
among others, equity REITs and real estate master limited partnerships, mortgage
REITs, and real estate brokers and developers. See "Investments in Real Estate,"
this page.

The fund also may invest up to 20% of its total assets in other securities.
Other securities may include debt securities and equity securities of companies
not principally engaged in the real estate industry. (See "U.S. Fixed Income
Securities," page 8.)

REITs pool investor funds for investment primarily in income producing real
estate or real estate related loans or interests. A REIT is not taxed on income
distributed to shareholders if it complies with various requirements relating to
its organization, ownership, assets and income and with the requirement that it
distribute to its shareholders at least 95% of its taxable income (other than
net capital gains) for each taxable year. REITs generally can be classified as
equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest the majority
of their assets directly in real property and derive their income primarily from
rents. Equity REITs also can realize capital gains by selling property that has
appreciated in value. Mortgage REITs invest the majority of their assets in real
estate mortgages and derive their income primarily from interest payments.
Hybrid REITs combine the characteristics of both equity REITs and mortgage
REITs.

INVESTMENTS IN REAL ESTATE

The fund may be subject to certain risks similar to those associated with
the direct ownership of real estate because of its policy of concentration in
the securities of REITs and companies that are principally engaged in the real
estate industry. The risks of direct ownership of real estate include: risks
related to general, regional and local economic conditions and fluctuations in
interest rates; overbuilding and increased competition; increases in property
taxes and operating expenses; changes in zoning laws; heavy cash flow
dependency; possible lack of availability of mortgage funds; losses due to
natural disasters; regulatory limitations on rents; variations in market rental
rates; and changes in neighborhood values. In addition, the fund may incur
losses due to environmental problems. If

6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

there is historic contamination at a site, the current owner is one of the
parties that may be responsible for clean-up costs.

Equity REITs may be affected by changes in the value of the underlying
property owned by the trusts, while mortgage REITs may be affected by default or
payment problems relating to underlying mortgages, the quality of credit
extended and self-liquidation provisions by which mortgages held may be paid in
full and distributions of capital returns may be made at any time. Equity and
mortgage REITs are dependent upon the skill of their individual management
personnel and generally are not diversified. In addition, equity and mortgage
REITs could be adversely affected by failure to qualify for tax-free
pass-through of income under the Internal Revenue Code, or to maintain their
exemptions from registration under the Investment Company Act. By investing in
REITs indirectly through the fund, a shareholder will bear not only a
proportionate share of the expenses of the fund, but also indirectly, similar
expenses of the REITs, including compensation of management.

To the extent the fund is invested in debt securities (including
asset-backed securities) or mortgage REITs, it will be subject to credit risk
and interest rate risk. Credit risk relates to the ability of the issuer to meet
interest and principal payments when due. Interest rate risk refers to the
fluctuations in the net asset value of any portfolio of fixed income securities
resulting solely from the inverse relationship between the price and yield of
fixed income securities; that is, when interest rates rise, bond prices
generally fall and, conversely, when interest rates fall, bond prices generally
rise. In general, bonds with longer maturities are more sensitive to interest
rate changes than bonds with shorter maturities.

The fund, as a non-diversified investment company, may invest in a smaller
number of individual issuers than a diversified investment company. Therefore,
an investment in the fund may present greater risk and volatility to an investor
than an investment in a diversified investment company.

INVESTMENT PHILOSOPHY

The investment philosophy of the fund is premised upon the belief that
successful investing in real estate securities requires in-depth knowledge of
the securities market and a complete understanding of the factors influencing
the performance of real estate assets. The fund strives to provide superior
performance via investment in a select group of real estate securities with
strong cash flow growth potential and, therefore, the capacity for sustained
dividend increases.

The fund's approach is initially driven by an internally generated
systematic assessment of changing real estate markets, an important input to
sound investment decisions. The subadvisor tracks economic conditions and real
estate market performance in major metropolitan areas and screens markets to
identify areas of risk and opportunity, and will focus investment activity in
property types and geographic areas it identifies as growth sectors.

This fundamental approach focuses on identifying changes in property level
net operating income and the impact on the ultimate stock performance of
individual REITs. It requires extensive local research on property markets
across the United States, direct inspection of individual property assets, and
familiarity with company management and operating strategies. Rigorous
securities analyses are performed to identify investments with unappreciated
potential to produce superior, long-term returns. Strategic sector allocations
are directed by the subadvisor's Strategic Investment Committee, which has
become increasingly more important as sectors have grown and as attractive
companies have emerged in each major sector.

This approach can be broken down into three areas. First, it involves a
macroeconomic review of supply-demand characteristics and the outlook for
economic growth within specific markets. Next, it involves a top-down analysis
of the relative pricing of real estate securities. Finally, a fundamental
analysis of each REIT portfolio on a property-by-property basis coupled with a
review of the company's management depth, financial structure and business
strategy is performed.

In managing the fund, the subadvisor uses a nationwide network of real
estate professionals employed by RREEF America L.L.C. and its affiliates to
assist in evaluating and monitoring properties held by public REITs. (See
"Investment Management," page 22.)

PROSPECTUS INFORMATION REGARDING THE FUND 7

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

U.S. FIXED INCOME SECURITIES

The fund may invest in fixed income securities for income or as a defensive
strategy when the manager believes adverse economic or market conditions exist.
As a temporary defensive strategy, the manager may invest part or all of the
fund's assets in debt securities. Fixed income securities are affected primarily
by changes in interest rates. The prices of these securities tend to rise when
interest rates fall, and conversely fall when interest rates rise. Generally,
the debt securities in which the fund may invest are investment grade
securities. These are securities rated in the four highest grades assigned by
Moody's Investors Service, Inc. or Standard and Poor's Corporation, or that are
unrated but deemed to be of comparable quality by the manager. For a description
of fixed income securities ratings, see "An Explanation of Fixed Income
Securities Ratings" in the Statement of Additional Information.

Securities rated in the lowest investment-grade category may have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case for higher-grade bonds. The fund may
invest in securities below investment grade although the fund will not purchase
such bonds if such investment would cause more than 5% of its net assets to be
so invested. Such bonds are considered speculative. In the event a debt security
held by the fund is downgraded to below investment grade, the fund is not
automatically required to sell the issue, but the manager will consider this in
determining whether to hold the security. However, if such a downgrade would
cause more than 5% of net assets to be invested in debt securities below
investment grade, sales will be made as soon as practicable to reduce the
proportion of debt below investment grade to 5% of net assets or less. When the
manager believes that economic or market conditions require a more defensive
strategy, the fund's assets may be invested without limitation in cash or cash
equivalents such as obligations issued or guaranteed by the U.S. government, its
agencies and/or instrumentalities or high-quality money-market instruments such
as notes, certificates of deposit or bankers' acceptances.

DIVERSIFICATION

The fund is classified as a "non-diversified" investment company under the
Investment Company Act of 1940, which means the fund is not limited by the
Investment Company Act in the proportion of its assets that may be invested in
the securities of a single issuer. However, the fund intends to conduct its
operations so as to qualify as a regulated investment company for purposes of
the Internal Revenue Code, so that it will not be subject to U.S. federal income
tax on income and capital gains distributions to shareholders. (See
"Distributions," page 20, and "Taxes," page 20.) To so qualify, among other
requirements, the fund will limit its investments so that, at the close of each
quarter of the taxable year, (i) not more than 25% of the market value of the
fund's total assets will be invested in the securities of a single issuer, and
(ii) with respect to 50% of the market value of its total assets, not more than
5% of the market value of its total assets will be invested in the securities of
a single issuer, and the fund will not own more than 10% of the outstanding
voting securities of a single issuer. The fund's investments in U.S. government
securities are not subject to these limitations.

WHEN-ISSUED SECURITIES

The fund may purchase new issues of securities on a when-issued basis
without limit when, in the opinion of management, such purchases will further
the investment objectives of the fund. The price of when-issued securities is
established at the time the commitment to purchase is made. Delivery of and
payment for these securities typically occur 15 to 45 days after the commitment
to purchase. Market rates of interest on debt securities at the time of delivery
may be higher or lower than those contracted for on when-issued securities.
Accordingly, the value of a when-issued security may decline prior to delivery,
which could result in a loss to the fund. The fund will segregate cash or
appropriate liquid assets in an amount at least equal to the when-issued
commitments. No income will accrue to the fund prior to delivery.

8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

RULE 144A SECURITIES

The fund may, from time to time, purchase Rule 144A securities when they
present attractive investment opportunities that otherwise meet the fund's
criteria for selection. Rule 144A securities are securities that are privately
placed with and traded among qualified institutional buyers rather than the
general public. Although Rule 144A securities are considered "restricted
securities," they are not necessarily illiquid.

Because the secondary market for such securities is limited to certain
qualified institutional buyers, the liquidity of such securities may be limited
accordingly and the fund may, from time to time, hold a Rule 144A security that
is illiquid. In such an event, the fund's manager will consider appropriate
remedies to minimize the effect on the fund's liquidity. The fund may not invest
more than 15% of its assets in illiquid securities (securities that may not be
sold within seven days at approximately the price used in determining the net
asset value of fund shares).

BORROWING

The fund's investment restrictions allow the fund to borrow money, 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).

PORTFOLIO TURNOVER

The total portfolio turnover rate of the fund is shown in the Financial
Highlights tables of the Prospectus.

Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objective. The manager believes that the rate of portfolio turnover is
irrelevant when it or the subadvisor determines a change is in order to achieve
its objective and, accordingly, the annual portfolio turnover rate cannot be
anticipated.

The portfolio turnover of the fund may be higher than other investment
companies with similar investment objectives. Higher turnover would generate
correspondingly greater brokerage commissions that the fund pays directly.
Higher portfolio turnover also may increase the likelihood of realized capital
gains, if any, distributed by the fund. See "Taxes," page 20.

REPURCHASE AGREEMENTS

The fund may enter into 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 its investment policies.

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase 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

PROSPECTUS INFORMATION REGARDING THE FUND 9

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 Directors.

The fund will invest no more than 15% of its assets in repurchase agreements
maturing in more than seven days.

FUTURES AND OPTIONS

The fund may invest in financial futures contracts and options thereon. A
financial futures contract is an agreement to take or make delivery of a
financial asset or an amount of cash, as specified in the applicable contract,
at some time in the future. The value of the asset or cash to be delivered at
the end of the contract period is calculated based upon the difference in value
between the making of the contract and the end of the contract period of a
financial index, indicator or security underlying the futures contract.

Rather than actually purchasing a financial asset (e.g., a long- or
short-term treasury security) or all of the securities contained in a specific
index (e.g., the S&P 500), the manager may choose to purchase a futures contract
that reflects the value of such securities or index. For example, an S&P 500
futures contract reflects the value of the underlying companies that comprise
the S&P 500 Composite Stock Price Index. If the aggregate market value of the
index securities increases or decreases during the contract period of an S&P 500
futures contract, the amount of cash to be paid to the contract holder at the
end of the period would correspondingly increase or decrease. As a result, the
manager is able to expose to the market cash that is held by the fund to meet
anticipated redemptions or for future investment opportunities. Because futures
contracts generally settle more quickly than their underlying securities, the
manager believes that the use of futures and options thereon allows the fund to
be fully invested while maintaining the needed liquidity.

The fund will not purchase leveraged futures. When a fund enters into a
futures contract, it must make a deposit of cash or high-quality debt
securities, known as "initial margin," as partial security for its performance
under the contract. As the value of the contract fluctuates, a party to the
contract may be required to make additional margin payments, known as "variation
margin," to cover a portion of such fluctuation. A fund will segregate cash or
appropriate liquid assets in an amount equal to the fund's payment obligation
under the futures contract, less any initial or variation margin. For options
sold, a fund will segregate cash or appropriate liquid assets equal to the value
of the securities underlying the option unless the option is otherwise covered.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

The fund may invest in the securities of issuers with limited operating
histories. The manager considers an issuer to have a limited operating history
if that issuer has a record of less than three years of continuous operation.

Investments in securities of issuers with limited operating histories may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating histories and financial
information upon which the manager may base its investment decision on behalf of
the fund. In addition, financial and other information regarding such issuers,
when available, may be incomplete or inaccurate.

The fund will not invest more than 5% of its total assets in the securities
of issuers with less than a three-year operating history. The manager will
consider periods of capital formation, incubation, consolidation, and research
and development in determining whether a particular issuer has a record of three
years of continuous operation.

PERFORMANCE ADVERTISING

From time to time, the fund may advertise performance data. Fund performance
may be shown by presenting one or more performance measurements, including
cumulative total return or average annual total return. Performance data may be
quoted separately for the Investor Class and for the other classes.

10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

same period if the fund's performance had remained constant throughout.

A quotation of yield reflects the fund's income over a stated period
expressed as a percentage of the fund's share price.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules for all stock and bond funds. Because yield
accounting methods differ from the methods used for other accounting purposes,
the fund's yield may not equal the income paid on its shares or the income
reported in the fund's financial statements.

The fund also may include in advertisements data comparing its performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such as
Lipper Analytical Services), and publications that monitor the performance of
mutual funds. Performance information may be quoted numerically or may be
presented in a table, graph or other illustration. In addition, fund performance
may be compared to well known indices of market performance, such as Morgan
Stanley REIT Index, NAREIT Equity-Less Health Care Index, Standard & Poor's 500
Composite Stock Price Index and Wilshire REIT Only Index. The performance of the
fund also may be compared, on a relative basis, to other funds in our fund
family. This relative comparison, which may be based upon historical or expected
fund performance, volatility or other fund characteristics, may be presented
numerically, graphically or in text.

All performance information advertised by the fund is historical in nature
and is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

PROSPECTUS INFORMATION REGARDING THE FUND 11

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The fund offered by this Prospectus is a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-2021 for a brochure or prospectuses for the other funds in the
American Century Investments family.

INVESTING IN AMERICAN CENTURY

The following sections explain how to invest with American Century funds,
including purchases, redemptions, exchanges and special services. You will find
more detail about doing business with us by referring to the Investor Services
Guide that you will receive when you open an account.

HOW TO OPEN AN ACCOUNT

To open an account, you must complete and sign an application, furnishing
your taxpayer identification number. (You also must certify whether you are
subject to withholding for failing to report income to the IRS.) Investments
received without a certified taxpayer identification number will be returned.

The minimum investment is $2,500 [$1,000 for IRA and Uniform Gifts/Transfers
to Minors Acts ("UGMA/UTMA") accounts]. These minimums will be waived if you
establish an automatic investment plan to your account that is the equivalent of
at least $50 per month (see "Automatic Investment Plan," page 13). The minimum
investment requirements may be different for some types of retirement accounts.
Call one of our Investor Services Representatives for information on our
retirement plans, which are available for individual investors or for those
investing through their employers.

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see Bank to Bank Information on the following page.

12 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):
* Taxpayer identification or Social Security
number.

* If more than one account, account numbers and amount to be invested in
each account.

* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-2021 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See this
page for more information on exchanges.

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street
Kansas City, Missouri 64111

4917 Town Center Drive
Leawood, Kansas 66211

1665 Charleston Road
Mountain View, California 94043

2000 S. Colorado Blvd.
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Investor Services Representative
or use our Automated Information Line.

BY ONLINE ACCESS

Upon completion of your application and once your account is open, you may
make investments online.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 12 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same day it is received if it is
received before the fund's net asset values is calculated, which is one hour
prior to the close of the New York Stock Exchange for funds issued by the
American Century Target Maturities

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 13

Trust and at the close of the Exchange for all of our other funds. See "When
Share Price Is Determined," page 19.

If, in any 90-day period, the total of your exchanges and your redemptions
from any one account exceeds the lesser of $250,000 or 1% of the fund's assets,
further exchanges will be subject to special requirements to comply with our
policy on large redemptions (see "Special Requirements for Large Redemptions,"
page 15).

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone (either with an Investor Services
Representative or using our Automated Information Line -- see page 15) upon
completion and receipt of your application or by calling us at 1-800-345-2021 to
get the appropriate form.

BY ONLINE ACCESS

You can make exchanges online. This service is established upon completion
and receipt of your application or by calling us at 1-800-345-2021 to get the
appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Investor Services Representative.

BY CHECK-A-MONTH

OTHER AUTOMATIC REDEMPTIONS

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.

14 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

Wired funds are subject to a $10 fee to cover bank wire charges, which is
deducted from redemption proceeds. Once the funds are transmitted, the time of
receipt and the funds' availability are not under our control.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

We have elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates the fund to make certain redemptions in cash. This
requirement to pay redemptions in cash applies to situations where one
shareholder redeems, during any 90-day period, up to the lesser of $250,000 or
1% of the assets of the fund. Although redemptions in excess of this limitation
will also normally be paid in cash, we reserve the right under unusual
circumstances to honor these redemptions by making payment in whole or in part
in readily marketable securities (a "redemption-in-kind").

If payment is made in securities, the securities will be selected by the
fund, will be valued in the same manner as they are in computing the fund's net
asset value and will be provided without prior notice.

If you expect to make a large redemption and you would like to avoid any
possibility of being paid in securities, you may do so by providing us with an
unconditional instruction to redeem at least 15 days prior to the date on which
the redemption transaction is to occur. Receipt of your instruction 15 days
prior to the transaction provides the fund sufficient time to raise the cash in
an orderly manner to pay the redemption and thereby minimizes the effect of the
redemption on the fund and its remaining shareholders.

Despite the fund's right to redeem fund shares through a redemption-in-kind,
we do not expect to exercise this option unless the fund has an unusually low
level of cash to meet redemptions and/or is experiencing unusually strong
demands for its cash. Such a demand might be caused, for example, by extreme
market conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

Whenever the shares held in an account have a value of less than the
required minimum, a letter will be sent advising you to either bring the value
of the shares held in the account up to the minimum or to establish an automatic
investment that is the equivalent of at least $50 per month. See "How to Open An
Account," page 12. If action is not taken within 90 days of the letter's date,
the shares held in the account will be redeemed and the proceeds from the
redemption will be sent by check to your address of record. We reserve the right
to increase the investment minimums.

SIGNATURE GUARANTEE

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

Our special shareholder services include:

AUTOMATED INFORMATION LINE

We offer an Automated Information Line, 24 hours a day, seven days a week,
at 1-800-345-8765. By calling the Automated Information Line, you may listen to
fund prices, yields and total return figures. You also may use the Automated
Information Line to make investments into your accounts (if we have your bank
information on file) and obtain your share balance, account value and most
recent transactions. If you

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 15

have authorized us to accept telephone instructions, you also may exchange
shares from one fund to another via the Automated Information Line. Redemption
instructions cannot be given via the Automated Information Line.

ONLINE ACCOUNT ACCESS

You may contact us 24 hours a day, seven days a week, at
www.americancentury.com to access daily share prices, receive updates on major
market indices and view historical performance of your fund. You can use your
personal access code and Social Security number to view your account balance and
account activity, make subsequent investments from your bank account or exchange
shares from one fund to another.

OPEN ORDER SERVICE

TAX-QUALIFIED RETIREMENT PLANS

The fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

* 403(b) plans for employees of public school
systems and non-profit organizations; or

* Profit sharing plans and pension plans for
corporations and other employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

(1) We reserve the right for any reason to suspend the offering of shares for
a period of time, or to reject any specific purchase order (including
purchases by exchange). Additionally, purchases may be refused if, in the
opinion of the manager, they are of a size that would disrupt the
management of the fund.

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all shareholders
or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require evidence

16 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

satisfactory to us of the authority of the individual making the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for losses
due to unauthorized or fraudulent instructions. The company, its transfer
agent and manager will not be responsible for any loss due to
instructions they reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the registration.
If the owner's name appears in the registration as Mary Elizabeth Jones,
she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an increase
in the number of shareholder telephone calls. If you experience
difficulty in reaching us during such periods, you may send your
transaction instructions by mail, express mail or courier service, or you
may visit one of our Investor Centers. You also may use our Automated
Information Line if you have requested and received an access code and
are not attempting to redeem shares.

(10) We will perform special inquiries on shareholder accounts. A research fee
of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

EMPLOYER-SPONSORED RETIREMENT PLANS AND
INSTITUTIONAL ACCOUNTS

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan, your ability to purchase shares of the fund,
exchange them for shares of other American Century funds, and redeem them will
depend on the terms of your plan.

If you own or are considering purchasing fund shares through a bank,
broker-dealer, insurance com-

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

pany or other financial intermediary, your ability to purchase, exchange and
redeem shares will depend on your agreement with, and the policies of, such
financial intermediary.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares is also referred to as their net asset value. Net
asset value is determined by calculating the total value of the fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. Net asset values for Target Maturities funds are determined
one hour prior to the close of the Exchange.

Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

Investment and transaction instructions received by us on any business day
by mail prior to the time as of which the net asset value of the fund is
determined will receive that day's price. Investments and instructions received
after that time will receive the price determined on the next business day.

If you invest in fund shares through an employer-sponsored retirement plan
or other financial intermediary, 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 cut-off
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.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange, are valued at the last sale price on
that exchange. If no sale is reported, or if local convention or regulation so
provides, the mean of the latest bid and asked price is used. Depending on local
convention or regulation, securities traded over-the-counter are priced at the
mean of the latest bid and asked prices or at the last sale price. When market
quotations are not readily available, securities and other assets are valued at
fair value as determined in accordance with procedures adopted by the Board of
Directors.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 19

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset value of the Investor Class shares of the fund is published in
leading newspapers daily. The net asset value may also be obtained by calling us
or by accessing our Web site (www.americancentury.com).

DISTRIBUTIONS

Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, generally are declared
and paid annually, usually in December, but the fund may make distributions on a
more frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 591/2 years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

Because such gains and dividends are included in the price of your shares,
when they are distributed, the price of your shares is reduced by the amount of
the distribution. If you buy your shares through a taxable account just before
the distribution, you will pay the full price for your shares, and then receive
a portion of the purchase price back as a taxable distribution. See "Taxes,"
this page.

TAXES

The fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.

TAX-DEFERRED ACCOUNTS

TAXABLE ACCOUNTS

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 longer than 12 months but no more than 18 months (28% rate gain) and/or
assets held longer than 18 months (20% rate gain) are taxable as long-term gains
regardless of the length of time you have held the shares. Additionally, the
fund may receive distributions of "unrecaptured Section 1250" gains from REITs.
To the extent the fund receives such distributions, "unrecaptured Section 1250"
gains will be distributed to shareholders of the fund. 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
distribution of long-term capital gain (28% or 20% rate gain) to you with
respect to such shares.

Distributions are taxable to you regardless of whether they are taken in
cash or reinvested, even if the value of your shares is below your cost. If you

20 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

purchase shares shortly before a distribution, you must pay income taxes on the
distribution, even though the value of your investment (plus cash received, if
any) will not have increased. In addition, the share price at the time you
purchase shares may include unrealized gains in the securities held in the
investment portfolio of the fund. If these portfolio securities are subsequently
sold and the gains are realized, they will, to the extent not offset by capital
losses, be paid to you as a distribution of capital gains and will be taxable to
you as short-term or long-term capital gains (28% and/or 20% rate gain). See
"Distributions," page 20.

Because of the nature of REIT investments, REITs may generate significant
non cash deductions (i.e., depreciation on real estate holdings) while having a
greater cash flow to distribute to its shareholders. If a REIT distributes more
cash than it has taxable income, a "return of capital" results. A "return of
capital" represents a portion of a shareholder's original investment that is
generally non taxable when distributed (returned) to the investor. The fund may
pay a return of capital distribution to its shareholders by distributing more
cash than its taxable income. If you do not reinvest distributions, the cost
basis of your shares will be decreased by the amount of returned capital, which
may result in a larger capital gain when you sell your shares. Although a return
of capital is generally non taxable to you upon distribution, it would be
taxable to you as a capital gain if your cost basis in the shares is reduced to
zero. This could occur if you do not reinvest distributions and the returns of
capital are significant.

Because the REITs invested in by the fund do not provide complete
information about the taxability of their distributions until after the calendar
year end, American Century may not be able to determine how much of the fund's
distribution is taxable to shareholders until after the January 31 deadline for
issuing Form 1099-DIV. As a result, the fund may request permission each year
from the Internal Revenue Service for an extension of time to issue Form
1099-DIV to February 28.

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, subject to
tax at a maximum rate of 28% if shareholders have held such shares for a period
of more than 12 months but no more than 18 months, and long-term subject to tax
at a maximum rate of 20% if shareholders have held such shares for a period of
more than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Internal Revenue Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 21

therefore urged to consult their tax advisors with respect to the effect of this
investment on their own specific situations.

The fund may invest in REITs that hold residual interests in real estate
mortgage investment conduits (REMICs). Under Treasury regulations that have not
yet been issued, but may apply retroactively, a portion of the fund's income
from a REIT that is attributable to the REIT's residual interest in a REMIC will
be subject to federal income tax in all events. (See "Taxes-Taxation of Certain
Mortgage REITs" in the Statement of Additional Information.)

MANAGEMENT

INVESTMENT MANAGEMENT

Under the laws of the State of Maryland, the Board of Directors is
responsible for managing the business and affairs of the fund. Acting pursuant
to an investment management agreement entered into with the fund, American
Century Investment Management, Inc. serves as the investment manager of the
fund. Its principal place of business is American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111. The manager has been providing investment
advisory services to investment companies and institutional clients since it was
founded in 1958.

RREEF America, L.L.C., acting pursuant to a subadvisory agreement among it,
American Century Investment Management, Inc. and the fund, makes the day-to-day
investment decisions for the fund in accordance with the fund's investment
objective, policies and restrictions under the supervision of the manager and
the Board of Directors.

The portfolio manager members of the subadvisor's team that manages the fund
and their work experience for the last five years are as follows:

KIM G. REDDING, Portfolio Manager, is one of the fund's primary portfolio
managers. Mr. Redding is a Senior Vice President of RREEF America, L.L.C. From
1990 to 1993, he was a principal in K.G. Redding & Associates, an investment
advisor, and prior thereto he was the President of Redding, Melchor & Company,
an investment advisor. Mr. Redding has been professionally managing portfolios
of real estate securities since 1987.

KAREN J. KNUDSON, Portfolio Manager, is one of the fund's primary portfolio
managers. Ms. Knudson is a Senior Vice President of RREEF America, L.L.C. Prior
to joining the subadvisor, she was Senior Vice President and Chief Financial
Officer of Security Capital Group, an investment advisor, and prior thereto she
was the President, Director of Real Estate Research of Bailard, Biehl and Kaiser
Real Estate Investment Trust. Ms. Knudson has 14 years of real estate
experience, specializing in the area of real estate investment trusts.

The representative of the investment manager that will oversee the
subadvisor's operation of the fund is as follows:

MARK L. MALLON, Senior Vice President and Managing Director, American
Century Investment Management, Inc. Mr. Mallon joined American Century in April
1997. From August 1978 until he joined American Century, Mr. Mallon was employed
in several positions by Federated Investors, and had served as President and
Chief Executive Officer of Federated Investment Counseling and Executive Vice
President of Federated Research Corporation since January 1990.

The activities of the manager and the subadvisor are subject only to
directions of the fund's Board of Directors. The manager pays all the expenses
of the fund except brokerage, taxes, interest, fees and expenses of the
non-interested person directors (including counsel fees) and extraordinary
expenses.

For the services provided to the Investor Class of the fund, the manager
receives an annual fee of 1.20% of the average net assets of the fund.

On the first business day of each month, the fund pays the management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying 1.20% of the aggregate average daily
closing value of the 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).

For subadvisory services, the manager pays the subadvisor an annual fee of
0.425% of the average net assets of the fund.

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

PERFORMANCE HISTORY OF THE SUBADVISOR

While the subadvisor has limited operational history with the fund, set
forth on page 24 are certain performance data, provided by the subadvisor,
relating to the performance of all private accounts managed by the subadvisor
using investment strategies and techniques similar to those used for the fund.
Also set forth on page 24, for comparison, are the performances of widely
recognized indices of market activity based upon the aggregate performance of
selected unmanaged portfolios of publicly traded common stocks.

The results presented may not necessarily equate with the returns
experienced by the fund, owing to the differences in brokerage commissions,
investment and management fees, the size of positions taken in relation to
account size and diversification of securities, as well as other costs, such as
registration fees borne by the fund but not incurred by the private accounts.
Investors should not rely on the following data as an indication of future
performance of the subadvisor or of the fund. Investors should be aware that the
use of methods for computing performance numbers different than that used by the
subadvisor, with respect to its accounts could result in performance data
different than those shown.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 23

<TABLE>
<CAPTION>
PERFORMANCE HIGHLIGHTS

(See Notes Below)

For the Years Ended December 31,

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

ANNUAL TIME-WEIGHTED RETURNS

RREEF Real Estate Securities Advisers
Before Fees .................. 8.2% 7.7% (4.8)% 32.9% 29.4% 19.0% 4.8% 13.9% 41.1% 25.8%
After Fees ................... 6.8% 6.1% (6.4)% 30.9% 28.1% 18.0% 4.3% 13.0% 40.3% 25.1%
NAREIT Equity Less Healthcare ... 15.8% 4.6% (23.6)% 29.4% 20.7% 18.7% 3.0% 14.2% 36.4% 20.5%
Wilshire REIT Index ............. 17.5% 2.7% (23.4)% 23.8% 15.3% 15.2% 2.7% 12.2% 37.0% 19.7%
</TABLE>

Notes: The subadvisor's "After Fees" performance includes reinvested
dividends, capital gains and losses, and deducts advisory fees (generally
between 0.65% and 0.75%) and other account expenses. The subadvisor's "Before
Fees" performance is presented before applicable advisory fees and reflects
growth investment results. Other indices noted do not deduct advisory fees. Past
performance indicated for the subadvisor relates to all discretionary accounts
managed using investment strategies and techniques similar to those used by the
fund, and includes, for the period prior to July 1993, performance under a
predecessor advisor (K.G. Redding & Associates) using the same investment
approach and under the same primary portfolio manager. Past performance is not
necessarily indicative of future results nor can it be assumed that any
recommendations will be profitable.

The Wilshire REIT Index is a market capitalization weighted index comprised
of 110 equity REITs as of December 1997. It does not include special purpose or
healthcare REITs. The NAREIT Equity without Healthcare Index is a market
capitalization weighted index comprised of 169 REITs, as of December 1997, with
75% or greater of their gross assets invested in equity ownership of real estate
and excludes healthcare REITs.

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

CODE OF ETHICS

The fund and the manager have adopted a Code of Ethics, as has the
subadvisor, which restricts personal investing practices by employees of the
manager and its affiliates. Among other provisions, the fund and manager's Code
of Ethics and the subadvisor's Code of Ethics require that employees with access
to information about the purchase or sale of securities in the fund obtain
preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, both Codes of Ethics prohibit
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
The subadvisor's Code of Ethics provides that upon approval of the compliance
officer, certain acquisitions of securities in an initial public offering may be
permitted, but that such approval will be granted only in extraordinary
circumstances. These provisions are designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the fund.

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, 4500 Main Street, Kansas City,
Missouri 64111, acts as transfer agent and dividend-paying agent for the fund.
It provides facilities, equipment and personnel to the fund and is paid for such
services by the manager.

Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the fund as a funding medium, by broker-dealers and financial advisors
for their customers investing in shares of American Century, or by sponsors of
multi mutual fund no- or low-transaction fee programs. The manager or an
affiliate may enter into contracts to pay them for such recordkeeping and
administrative services out of its unified management fee.

Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or its
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.

From time to time, special services may be offered to shareholders who
maintain higher share balances in the American Century family of funds. These
services may include the waiver of minimum investment requirements, expedited
confirmation of shareholder transactions, newsletters and a team of personal
representatives. Any expenses associated with these special services will be
paid by the manager.

The manager and the transfer agent are both wholly owned by American Century
Companies, Inc. James E. Stowers Jr., Chairman of the Board of Directors of the
fund, controls American Century Companies by virtue of his ownership of a
majority of its common stock.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the fund. FDI is
responsible for (i) providing certain officers of the fund, and (ii) reviewing
and filing marketing and sales literature on behalf of the fund. The fees and
expenses of FDI are paid by the manager.

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. The
fund and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the fund's
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

of the remediation plan include: an inventory of all internal systems, vendor
products and services and data providers (substantially completed in 1997); an
assessment of all systems for date reliance and the impact of the century
rollover on each (substantially completed with respect to critical systems in
early 1998); and the renovation and testing of affected systems (targeted for
completion with respect to critical systems by the end of 1998). The manager
will pay for the remediation effort with revenues from its management fee, so
that the fund will not directly bear any of the cost.

In light of these remediation efforts, the fund does not anticipate a
material adverse impact on its business or operations. However, there can be no
assurance that the remediation plan will be sufficient and timely or that
interaction with other noncomplying computer systems will not have a material
adverse effect on the fund's business, operations or financial condition.

In addition, the issuers of the securities in which the fund invests may
have Year 2000 computer problems. Although the media and various regulatory
agencies have focused a great deal of attention on the need for issuers to
assess and remediate these problems, their failure to do so could hurt the
fund's performance.

DISTRIBUTION OF FUND SHARES

The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly owned, indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Investor Class of shares does not pay any commissions or sales loads
to the distributor or to any other broker-dealers or financial intermediaries in
connection with the distribution of fund shares.

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchases orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
funds are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc. the issuer of the fund, was
organized as a Maryland corporation on June 14, 1993.

American Century Capital Portfolios, Inc. is a diversified, open-end
management investment company whose shares were first offered for sale September
1, 1993. Its business and affairs are managed by its officers under the
direction of its Board of Directors.

The American Century Real Estate Fund commenced operations June 16, 1997,
after the RREEF Real Estate Securities Fund merged into the fund. As a successor
to the RREEF fund, the prior performance history of the RREEF fund will continue
in the fund.

The principal office of the fund is American Century Tower, 4500 Main
Street, P.O. Box 419200, Kansas City, Missouri 64141-6200. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-2021 (international
calls: 816-531-5575).

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

The other classes of shares are offered primarily to institutional investors
or through institutional distribution channels, such as employer-sponsored
retirement plans or through banks, broker-dealers, insurance companies or other
financial intermediaries. The other classes have different fees, expenses and/or
minimum investment requirements than the Investor Class. The difference in the
fee structures among 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 manager 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

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

information concerning the other classes of shares not offered by this
Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

Unless required by the Investment Company Act, it will not be necessary for
the fund to hold annual meetings of shareholders. As a result, shareholders may
not vote each year on the election of directors or the appointment of auditors.
However, pursuant to the fund's bylaws, the holders of at least 10% of the votes
entitled to be cast may request the fund to hold a special meeting of
shareholders. We will assist in the communication with other shareholders.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

NOTES

28 NOTES AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 29

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

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

AUTOMATED INFORMATION LINE:
1-800-345-8765

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

FAX: 816-340-7962

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-12606 Recycled
<PAGE>
PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Value
Small Cap Value
Equity Income

ADVISOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

PROSPECTUS

JULY 30, 1998

Value * Small Cap Value * Equity Income

ADVISOR CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load or low-load
mutual funds covering a variety of investment opportunities. Three of the funds
from our American Century Group that invest primarily in equity securities are
described in this Prospectus. Their investment objectives are listed on page 2
of this Prospectus. The other funds are described in separate prospectuses.

Each fund's shares offered in this Prospectus (the Advisor Class shares) are
sold at their net asset value with no sales charges or commissions. The Advisor
Class shares are subject to Rule 12b-1 services and distribution fees as
described in this Prospectus.

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

AMERICAN CENTURY INVESTMENTS
4500 Main Street * P.O. Box 419385
Kansas City, Missouri 64141-6385 * 1-800-345-3533
International calls: 816-531-5575
Telecommunications Device for the Deaf:
1-800-345-1833 * In Missouri: 816-444-3038
www.americancentury.com

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY VALUE FUND

AMERICAN CENTURY SMALL CAP VALUE FUND

AMERICAN CENTURY EQUITY INCOME FUND

The investment objective of Equity Income is the production of current
income. Capital appreciation is a secondary objective. The fund attempts to
achieve its objectives by investing primarily in income- producing equity
securities. In the pursuit of its objectives, the fund seeks a yield that
exceeds the yield of securities comprising the Standard & Poor's 500 Composite
Stock Price Index.

There is no assurance that the funds will achieve their investment objectives.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

INFORMATION REGARDING THE FUNDS
Investment Policies of the Funds .......................................... 9
Value ................................................................... 9
Small Cap Value ......................................................... 9
Equity Income ........................................................... 10
Policies Applicable to All Funds ........................................ 10
Other Investment Practices,
Their Characteristics and Risks ......................................... 11
Foreign Securities ....................................................... 11
Equity Securities ........................................................ 11
Forward Currency Exchange Contracts ...................................... 12
Investments in Smaller Companies ......................................... 12
Portfolio Turnover ....................................................... 13
Repurchase Agreements .................................................... 13
Futures Contracts ........................................................ 13
Derivative Securities .................................................... 14
When-Issued Securities ................................................... 14
Short Sales .............................................................. 15
Investments in Companies With
Limited Operating Histories ........................................... 15
Rule 144A Securities ..................................................... 15
Performance Advertising ................................................... 16

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
How to Purchase and Sell American
Century Funds ............................................................ 17
How to Exchange from One American
Century Fund to Another .................................................. 17
How to Redeem Shares ...................................................... 17
Special Requirements for Large Redemptions ............................... 17
Telephone Services ........................................................ 18
Investors Line ........................................................... 18

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 19
When Share Price Is Determined ........................................... 19
How Share Price Is Determined ............................................ 19
Where to Find Information About Share Price .............................. 20
Distributions ............................................................. 20
Taxes ..................................................................... 20
Tax-Deferred Accounts .................................................... 20
Taxable Accounts ......................................................... 21
Management ................................................................ 22
Investment Management .................................................... 22
Code of Ethics ........................................................... 22
Transfer and Administrative Services ..................................... 23
Year 2000 Issues ......................................................... 23
Distribution of Fund Shares ............................................... 23
Service and Distribution Fees ............................................ 24
Further Information About American Century ................................ 24

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE
Value and Small
Equity Income Cap Value
SHAREHOLDER TRANSACTION EXPENSES:
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases ...................... none none
Maximum Sales Load Imposed
on Reinvested Dividends ...................................... none none
Deferred Sales Load .......................................... none none
Redemption Fee ............................................... none none
Exchange Fee ................................................. none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees .............................................. 0.75% 1.00%
12b-1 Fees(1) ................................................ 0.50% 0.50%
Other Expenses(2) ............................................ 0.00% 0.00%
Total Fund Operating Expenses ................................ 1.25% 1.50%

EXAMPLE:
You would pay the following expenses on a 1 year $ 13 $ 15
$1,000 investment, assuming a 5% annual return 3 years 40 47
and redemption at the end of each time period: 5 years 68 81
10 years 150 178
</TABLE>

(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 manager, and a portion is used to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page 24.

(2) Other expenses, which include the fees and expenses (including legal counsel
fees) of those directors who are not "interested persons" as defined in the
Investment Company Act, were less than 0.01 of 1% of average net assets for
the most recent fiscal year.

The shares offered by this Prospectus are Advisor Class shares. The funds
offer other classes of shares, one of which is primarily made available to
retail investors and two that are primarily made available to institutional
investors. The other classes have different fee structures than the Advisor
Class. The difference in the fee structures among 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 manager for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. A difference in fees will result in different performance
for the other classes. For additional information about the various classes, see
"Further Information About American Century," page 24.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS
VALUE

The sale of the Advisor Class of the fund commenced on October 2, 1996.
Performance information of the original class of shares which commenced
operations on September 1, 1993, is presented on page 7.

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the period ended March 31, 1997, have been
audited by other independent auditors. The information presented is for a share
outstanding throughout the period ended March 31, except as noted.

1998 1997(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period .... $ 6.58 $ 6.71
------------ ------------
Income From Investment Operations
Net Investment Income(2) .............. 0.08 0.05
Net Realized and Unrealized Gain
on Investment Transactions ......... 2.35 0.48
------------ ------------
Total From Investment Operations ...... 2.43 0.53
------------ ------------
Distributions
From Net Investment Income ............ (0.08) (0.05)
In Excess of Net Investment Income .... -- --(3)
From Net Realized Gains on
Investment Transactions ............ (1.20) (0.61)
------------ ------------
Total Distributions ................... (1.28) (0.66)
------------ ------------
Net Asset Value, End of Period .......... $ 7.73 $ 6.58
============ ============
Total Return(4) ....................... 39.60% 8.07%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................ 1.25% 1.25%(5)
Ratio of Net Investment Income
to Average Net Assets ................. 1.13% 1.50%(5)
Portfolio Turnover Rate ................. 130% 111%
Average Commission Paid per
Share of Equity Security Traded ...... $ 0.0462 $ 0.0459
Net Assets, End of Period
(in thousands) ....................... $ 56,118 $ 29,250

(1) October 2, 1996 (commencement of sale) through March 31, 1997.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

FINANCIAL HIGHLIGHTS
EQUITY INCOME

The sale of the Advisor Class of the fund commenced on March 7, 1997.
Performance information of the original class of shares which commenced
operations on August 1, 1994, is presented on page 8.

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the period ended March 31, 1997, have been
audited by other independent auditors. The information presented is for a share
outstanding throughout the period ended March 31, except as noted.

1998 1997(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ........ $ 6.31 $ 6.57
--------- ---------
Income From Investment Operations
Net Investment Income(2) ................. 0.23 0.02
Net Realized and Unrealized Gain
on Investment Transactions ............ 2.00 0.21
--------- ---------
Total From Investment Operations ......... 2.23 0.19
--------- ---------
Distributions
From Net Investment Income ............... (0.22) (0.07)
In Excess of Net Investment Income ....... -- --(3)
From Net Realized Gains on
Investment Transactions ............... (1.16) --
--------- ---------
Total Distributions ...................... (1.38) (0.07)
--------- ---------
Net Asset Value, End of Period .............. $ 7.16 $ 6.31
========= =========
Total Return(4) .......................... 37.71% (2.89)%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................... 1.25% 1.25%(5)
Ratio of Net Investment Income
to Average Net Assets .................... 3.27% 1.64%(5)
Portfolio Turnover Rate ..................... 158% 159%
Average Commission Paid per
Share of Equity Security Traded .......... $ 0.0453 $ 0.0440
Net Assets, End of Period
(in thousands) ........................... $ 731 $ 18

(1) March 7, 1997 (commencement of sale) through March 31, 1997.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

6 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
VALUE

The Advisor Class of the fund was established September 3, 1996. The financial
information in this table regarding selected per share data for the fund
reflects the performance of the fund's Investor Class of shares which has a
total expense ratio that is 0.25% lower than the Advisor Class. Had the Advisor
Class been in existence for the fund for the time periods presented, the fund's
performance information would be lower as a result of the additional expense.

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the periods ended on or before March 31,
1997, have been audited by other independent auditors. The information presented
is for a share outstanding throughout the years ended March 31, except as noted

1998 1997 1996 1995 1994(1)
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ....$ 6.58 $ 6.32 $ 5.46 $ 4.98 $ 5.01
--------------- --------------- --------------- --------------- ---------------
Income From Investment Operations
Net Investment Income(2) ............... 0.10 0.12 0.13 0.12 0.08
Net Realized and Unrealized Gain
(Loss) on Investment Transactions ... 2.35 0.87 1.34 0.75 (0.04)
--------------- --------------- --------------- --------------- ---------------
Total From Investment Operations ....... 2.45 0.99 1.47 0.87 0.04
--------------- --------------- --------------- --------------- ---------------
Distributions
From Net Investment Income ............. (0.10) (0.12) (0.12) (0.12) (0.07)
In Excess of Net Investment Income ..... -- --(3) (0.01) -- --
From Net Realized Gains on
Investment Transactions ............. (1.20) (0.61) (0.48) (0.27) --
--------------- --------------- --------------- --------------- ---------------
Total Distributions .................... (1.30) (0.73) (0.61) (0.39) (0.07)
--------------- --------------- --------------- --------------- ---------------
Net Asset Value, End of Period ...........$ 7.73 $ 6.58 $ 6.32 $ 5.46 $ 4.98
=============== =============== =============== =============== ===============
Total Return(4) ........................ 39.94% 15.92% 28.06% 18.56% 0.83%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................. 1.00% 1.00% 0.97% 1.00% 1.00%(5)
Ratio of Net Investment Income
to Average Net Assets ................. 1.38% 1.86% 2.17% 2.65% 3.37%(5)
Portfolio Turnover Rate .................. 1.30% 111% 145% 94% 79%
Average Commission Paid per
Share of Equity Security Traded .......$ 0.0462 $ 0.0459 $ 0.0409 --(6) --(6)
Net Assets, End of Period
(in thousands) ........................$ 2,713,562 $ 1,743,582 $ 881,885 $ 348,281 $ 87,798
</TABLE>

(1) September 1, 1993 (inception) through March 31, 1994.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 7

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
EQUITY INCOME

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the periods ended on or before March 31,
1997, have been audited by other independent auditors. The information presented
is for a share outstanding throughout the years ended March 31, except as noted

1998 1997 1996 1995(1)
PER-SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..... $ 6.31 $ 6.10 $ 5.42 $ 5.00
------------- ------------- ------------- -------------
Income From Investment Operations
Net Investment Income(2) ................ 0.25 0.22 0.20 0.09
Net Realized and Unrealized Gain
on Investment Transactions ........... 1.99 0.75 1.13 0.44
------------- ------------- ------------- -------------
Total From Investment Operations .......... 2.24 0.97 1.33 0.53
------------- ------------- ------------- -------------
Distributions
From Net Investment Income .............. (0.24) (0.21) (0.19) (0.09)
In Excess of Net Investment Income ...... -- --(3) (0.01) --
From Net Realized Gains on
Investment Transactions .............. (1.16) (0.55) (0.45) (0.02)
------------- ------------- ------------- -------------
Total Distributions ..................... (1.40) (0.76) (0.65) (0.11)
------------- ------------- ------------- -------------
Net Asset Value, End of Period ............ $ 7.15 $ 6.31 $ 6.10 $ 5.42
============= ============= ============= =============
Total Return(4) ...................... 37.78% 16.24% 25.67% 10.69%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .................. 1.00% 1.00% 0.98% 1.00%(5)
Ratio of Net Investment Income
to Average Net Assets .................. 3.52% 3.46% 3.51% 4.04%(5)
Portfolio Turnover Rate ................... 158% 159% 170% 45%
Average Commission Paid per
Share of Equity Security Traded ........ $ 0.0453 $ 0.0440 $ 0.0378 --(6)
Net Assets, End of Period
(in thousands) ......................... $ 355,962 $ 199,388 $ 116,692 $ 52,213
</TABLE>

(1) August 1, 1994 (inception), through March 31, 1995.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

8 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

VALUE

It is management's intention that the fund will consist primarily of
domestic equity securities. However, the fund also may invest in other types of
domestic or foreign securities consistent with the accomplishment of the fund's
objective. The other securities the fund may invest in are convertible
securities (see "Other Investment Practices, Their Characteristics and
Risks--Equity Securities," page 11), preferred stocks, bonds, notes and debt
securities of companies and debt obligations of governments and their agencies.
Investments in these securities will be made when the manager believes that the
total return potential on these securities equals or exceeds the potential
return on common stocks.

SMALL CAP VALUE

The investment objective of Small Cap Value is long-term capital growth.
Income is a secondary objective. The Fund seeks to achieve its objectives by
investing primarily in equity securities of companies with smaller market
capitalizations that are believed by management to be undervalued at the time of
purchase.

PROSPECTUS INFORMATION REGARDING THE FUNDS 9

have higher book value-to-price ratios and, thus, may be more attractive to
investors using the value style of investing. As of December 31, 1997, the
largest company contained in the S&P/Barra Small-Cap 600 Value Index had a
market capitalization of approximately $2.3 billion, while the median company
contained in the index had a market capitalization of approximately $387
million.

It is management's intention that the fund will consist primarily of
domestic equity securities. However, the fund also may invest in other types of
domestic or foreign securities consistent with the accomplishment of the fund's
objective. The other securities the fund may invest in are convertible
securities (see "Other Investment Practices, Their Characteristics and
Risks--Equity Securities," page 11), preferred stocks, bonds, notes and debt
securities of companies and debt obligations of governments and their agencies.
Investments in these securities will be made when the manager believes that the
total return potential on these securities equals or exceeds the potential
return on common stocks.

EQUITY INCOME

The investment objective of Equity Income is the production of current
income. Capital appreciation is a secondary objective of the fund. The fund
seeks to achieve its objectives by screening companies primarily for favorable
dividend-paying history (yield) and prospects for continuing and/or increasing
dividend-paying ability and secondarily for capital appreciation potential. The
fund seeks a yield that exceeds the yield of securities comprising the S&P 500.
Total return for the fund will consist primarily of dividend-income and
secondarily of capital appreciation (or depreciation).

POLICIES APPLICABLE TO ALL FUNDS

Income is a primary or secondary objective of each fund. As a result, a
portion of the portfolio of each fund may consist of fixed income securities.

10 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

Notwithstanding the fact the funds will invest primarily in equity
securities, under exceptional market or economic conditions, the funds may
temporarily invest all or a substantial portion of their assets in cash or
investment grade short-term securities (denominated in U.S. dollars or foreign
currencies).

To the extent that a fund assumes a defensive position, it will not be
investing for capital growth.

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

FOREIGN SECURITIES

EQUITY SECURITIES

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

A fund's investments in convertible debt securities and other high yield,
non-convertible debt securities rated below investment grade will comprise less
than 35% of the fund's net assets. Debt securities rated below the four highest
categories are not considered "investment grade" obligations. These securities
have speculative characteristics and present more credit risk than investment
grade obligations. For a description of the S&P and Moody's ratings categories,
see "An Explanation of Fixed Income Securities Ratings" in the Statement of
Additional Information. Equity equivalents also may include securities whose
value or return is derived from the value or return of a different security.
Depositary receipts, which are described in the following section, are an
example of the type of derivative security in which a fund might invest.

FORWARD CURRENCY EXCHANGE CONTRACTS

A fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.

INVESTMENTS IN SMALLER COMPANIES

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

PORTFOLIO TURNOVER

The total portfolio turnover rates of Value and Equity Income are shown in
the Financial Highlights tables of this Prospectus.

REPURCHASE AGREEMENTS

FUTURES CONTRACTS

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

DERIVATIVE SECURITIES

No fund may invest in a derivative security unless the reference index or
the instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the S&P 500 Index would
be a permissible investment since each of the funds may invest in the securities
of companies comprising the S&P 500 Index (assuming they otherwise meet the
other requirements for the fund), while a security whose underlying value is
linked to the price of oil would not be a permissible investment because the
funds may not invest in oil and gas leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There is a range of risks associated with derivative investments, including
but not limited to:

* the risk that the underlying security, interest rate, market index or
other financial asset will not move in the direction the portfolio
manager anticipates;

* the risk that adverse price movements in an instrument will result in a
loss substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

WHEN-ISSUED SECURITIES

Each of the funds may sometimes purchase new issues of securities on a
when-issued basis or forward commitment basis when, in the opinion of the man-

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

ager, such purchases will further the investment objectives of the fund. The
price of when-issued securities is established at the time the commitment to
purchase is made. Delivery of and payment for these securities typically occur
15 to 45 days after the commitment to purchase. Market rates of interest on debt
securities at the time of delivery may be higher or lower than those contracted
for on the when-issued security. Accordingly, the value of such security may
decline prior to delivery, which could result in a loss to the fund. A separate
account for each fund consisting of cash or appropriate liquid assets in an
amount at least equal to the when-issued commitments will be established and
maintained with the custodian. No income will accrue to the fund prior to
delivery.

SHORT SALES

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

RULE 144A SECURITIES

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

PERFORMANCE ADVERTISING

A quotation of yield reflects a fund's income over a stated period of time
expressed as a percentage of the fund's share price.

16 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

The following sections explain how to purchase, exchange and redeem Advisor
Class shares of the funds offered by this Prospectus.

HOW TO PURCHASE AND SELL AMERICAN CENTURY
FUNDS

One or more of the funds offered by this Prospectus is available as an
investment option under your employer-sponsored retirement or savings plan or
through or in connection with a program, product or service offered by a
financial intermediary, such as a bank, broker-dealer or an insurance company.
Since all records of your share ownership are maintained by your plan sponsor,
plan recordkeeper or other financial intermediary, all orders to purchase,
exchange and redeem shares must be made through your employer or other financial
intermediary, as applicable.

If you are purchasing through a retirement or savings plan, the
administrator of your plan or your employee benefits office can provide you with
information on how to participate in your plan and how to select American
Century funds as an investment option.

If you are purchasing through a financial intermediary, you should contact
your service representative at the financial intermediary for information about
how to select American Century funds.

If you have questions about a fund, see "Investment Policies of the Funds,"
page 9 or call one of our Institutional Service Representatives at
1-800-345-3533.

Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 19.

We may discontinue offering shares generally in the funds (including any
class of shares of a fund) or in any particular state without notice to
shareholders.

HOW TO EXCHANGE FROM ONE AMERICAN CENTURY
FUND TO ANOTHER

Your plan or program may permit you to exchange your investment in the
shares of a fund for shares of another fund in our family. See your plan
administrator, employee benefits office or financial intermediary for details on
the rules in your plan governing exchanges.

Exchanges are made at the respective net asset values, next computed after
receipt of the exchange instruction by us. If in any 90-day period, the total of
the exchanges and redemptions from the account of any one plan participant or
financial intermediary client exceeds the lesser of $250,000 or 1% of a fund's
assets, further exchanges may be subject to special requirements to comply with
our policy on large equity fund redemptions. See "Special Requirements for Large
Redemptions," this page.

HOW TO REDEEM SHARES

Subject to any restrictions imposed by your employer's plan or financial
intermediary's program, you can sell ("redeem") your shares through the plan or
financial intermediary at their net asset value. Your plan administrator,
trustee, or financial intermediary or other designated person must provide us
with redemption instructions. The shares will be redeemed at the net asset value
next computed after receipt of the instructions in good order. See "When Share
Price Is Determined," page 19. If you have any questions about how to redeem,
contact your plan administrator, employee benefits office or service
representative at your financial intermediary, as applicable.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

We have elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates each fund to redeem shares in cash, with respect to any one
participant account during any 90-day period, up to the lesser of $250,000 or 1%
of the assets of the fund. Although redemptions in excess of this limitation
will also normally be paid in cash, we reserve the right to honor these
redemptions by making payment in whole or in part in readily marketable
securities (a "redemption-in-kind"). If payment is made in securities, the
securities will be

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

selected by the fund, will be valued in the same manner as they are in computing
the fund's net asset value and will be provided to the redeeming plan
participant or financial intermediary in lieu of cash without prior notice.

Despite the funds' right to redeem fund shares through a redemption-in-kind,
we do not expect to exercise this option unless a fund has an unusually low
level of cash to meet redemptions and/or is experiencing unusually strong
demands for its cash. Such a demand might be caused, for example, by extreme
market conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.

TELEPHONE SERVICES

INVESTORS LINE

To request information about our funds and a current prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call one of our Institutional Service Representatives at 1-800-345-3533.

18 HOW TO INVEST WITH AMERICAN CENTURY AMERICAN CENTURY INVESTMENTS

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

Investments and requests to redeem or exchange shares will receive the share
price next determined after receipt by us of the investment, redemption or
exchange request. For example, investments and requests to redeem or exchange
shares received by us or one of our agents or designees before the time as of
which the net asset value of the fund is determined, are effective on, and will
receive the price determined, that day. Investment, redemption and exchange
requests received thereafter are effective on, and receive the price determined
as of, the close of the Exchange on the next day the Exchange is open.

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

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The value of an exchange-traded foreign security is determined in its
national currency as of the close of trading on the foreign exchange on which it
is

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 19

traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then exchanged to dollars at the prevailing foreign
exchange rate.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class of the funds are published in
leading newspapers daily. Because the total expense ratio for the Advisor Class
shares is 0.25% higher than the Investor Class, their net asset values will be
lower than the Investor Class. The net asset value of the Advisor Class of each
fund may be obtained by calling us.

DISTRIBUTIONS

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders investing through taxable accounts,
distributions will be reinvested unless you elect to receive them in cash.
Distributions of less than $10 generally will be reinvested. Distributions made
shortly after a purchase by check or ACH may be held up to 15 days. You may
elect to have distributions on shares held in certain IRAs and 403(b) plans paid
in cash only if you are at least 591/2 years old or permanently and totally
disabled. Distribution checks normally are mailed within seven days after the
record date. Please consult our Investor Services Guide for further information
regarding your distribution options.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.

TAX-DEFERRED ACCOUNTS

Employer-sponsored retirement and savings plans are governed by complex tax
rules. If you elect to participate in your employer's plan, consult your plan

20 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

administrator, your plan's summary plan description, or a professional tax
advisor regarding the tax consequences of participation in the plan,
contributions to, and withdrawals or distributions from the plan.

TAXABLE ACCOUNTS

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, subject to
tax at a maximum rate of 28% if shareholders have held such shares for a period
of more than 12 months but no more than 18 months and long-term, subject to tax
at a maximum rate of 20% if shareholders have held such shares for a period of
more than 18 months. 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

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 21

sale" rules of the Internal Revenue Code, resulting in a postponement of the
recognition of such loss for federal income tax purposes.

MANAGEMENT

INVESTMENT MANAGEMENT

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

For the services provided to the Advisor Class of the funds, the manager
receives an annual fee of 0.75% of the average net assets of Value and Equity
Income and 1% of the average net assets of Small Cap Value.

CODE OF ETHICS

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, the Code of Ethics prohibits
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
These provisions are designed to ensure that the interests of fund shareholders
come before the interests of the people who manage those funds.

TRANSFER AND ADMINISTRATIVE SERVICES

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. The
funds and the manager depend upon the computer systems of various service
providers, including the transfer agent, for their day-to-day operations.
Inadequate remediation of the Year 2000 problem by these service providers and
others with whom they interact could have an adverse effect on the fund's
operations, including pricing, securities trading and settlement, and the
provision of shareholder services.

The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the funds' and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the funds will not
directly bear any of the cost.

DISTRIBUTION OF FUND SHARES

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 23

SERVICE AND DISTRIBUTION FEES

Rule 12b-1 adopted by the SEC under the Investment Company Act permits
investment companies that adopt a written plan to pay certain expenses
associated with the distribution of their shares. Pursuant to that rule, the
funds' Board of Directors and the initial shareholder of the funds' Advisor
Class shares have approved and entered into a Master Distribution and
Shareholder Services Plan (the Plan) with the distributor. Pursuant to the Plan,
each fund pays a shareholder services fee and a distribution fee, each equal to
0.25% (for a total of 0.50%) per annum of the average daily net assets of the
shares of the fund's Advisor Class. The shareholder services fee is paid for the
purpose of paying the costs of securing certain shareholder and administrative
services, and the distribution fee is paid for the purpose of paying the costs
of providing various distribution services. All or a portion of such fees are
paid by the manager, as paying agent for the funds, to the banks,
broker-dealers, insurance companies or other financial intermediaries through
which such shares are made available.

The Plan has been adopted and will be administered in accordance with the
requirements of Rule 12b-1 under the Investment Company Act. 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. Fees paid pursuant to the Plan may be paid for shareholder services
and the maintenance of accounts and therefore may constitute "service fees" for
purposes of applicable rules of the National Association of Securities Dealers.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc., (the "Corporation"), the issuer
of the funds, was organized as a Maryland corporation on June 14, 1993.

The principal office of the funds is American Century Tower, 4500 Main
Street, P.O. Box 419385, Kansas City, Missouri 64141-6385. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-3533 (international
calls: 816-531-5575).

American Century offers four classes of Value and Equity Income: an Investor
Class, an Institutional Class, a Service Class, and an Advisor Class. American
Century offers three classes of the Real Estate and Small Cap Value funds: an
Investor Class, an Institutional Class, and an Advisor Class. The shares offered
by this Prospectus are Advisor Class shares.

The Investor Class is made available primarily to retail investors. The
Institutional Class and Service Class are offered primarily to institutional
investors or through institutional distribution channels, such as
employer-sponsored retirement plans or through banks, broker-dealers, insurance
companies or other financial intermediaries. The other classes have different
fees, expenses, and/or minimum investment requirements than the Advisor Class.
The difference in the fee structures among 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 manager 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 Investor Class of shares, call one of our
Investor Services Representatives at 1-800-345-2021. For information concerning
the Institutional or Service Classes of shares, call one of our Institutional
Service Representatives at 1-800-345-3533 or contact a sales

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

representative or financial intermediary who offers those classes of shares.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385

INSTITUTIONAL SERVICES:
1-800-345-3533 OR 816-531-5575

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-444-3038

FAX: 816-340-4655

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-11948 Recycled
<PAGE>
PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Real Estate Fund

ADVISOR CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

PROSPECTUS

JULY 30, 1998

Real Estate Fund

ADVISOR CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. The American Century Real Estate
Fund is described in this Prospectus. Its investment objective is listed on page
2 of this Prospectus. The other funds are described in separate prospectuses.

The shares offered in this Prospectus (the Advisor Class shares) are sold at
their net asset value with no sales charges or commissions. The Advisor Class
shares are subject to a Rule 12b-1 shareholder services and distribution fees as
described in this Prospectus.

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVE OF THE FUND

AMERICAN CENTURY REAL ESTATE FUND

There is no assurance that the fund will achieve its investment objective.

2 INVESTMENT OBJECTIVE AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objective of the Fund .......................................... 2
Transaction and Operating Expense Table ................................... 4
Performance Information of Other Class .................................... 5

INFORMATION REGARDING THE FUND
Investment Policies of the Fund ........................................... 6
Investment Objective ................................................... 6
Investment Strategy .................................................... 6
Investments in Real Estate ............................................. 6
Investment Philosophy .................................................. 7
Other Investment Practices, Their Characteristics
and Risks ................................................................. 7
U.S. Fixed Income Securities ........................................... 7
Diversification ........................................................ 8
When-Issued Securities ................................................. 8
Rule 144A Securities ................................................... 8
Borrowing .............................................................. 9
Portfolio Turnover ..................................................... 9
Repurchase Agreements .................................................. 9
Futures and Options .................................................... 9
Investments in Companies With Limited
Operating Histories ................................................. 10
Performance Advertising ................................................... 10

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
How to Purchase and Sell American
Century Funds ............................................................. 12
How to Exchange From One American Century
Fund to Another ........................................................... 12
How to Redeem Shares ...................................................... 12
Special Requirements for Large Redemptions ............................. 12
Telephone Services ........................................................ 13
Investors Line ......................................................... 13

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 14
When Share Price Is Determined ......................................... 14
How Share Price Is Determined .......................................... 14
Where to Find Information About Share Price ............................ 14
Distributions ............................................................. 15
Taxes ..................................................................... 15
Tax-Deferred Accounts .................................................. 15
Taxable Accounts ....................................................... 15
Management ................................................................ 17
Investment Management .................................................. 17
Performance History of the Subadvisor .................................. 17
Performance Highlights ................................................. 19
Code of Ethics ......................................................... 20
Transfer and Administrative Services ................................... 20
Year 2000 Issues ....................................................... 20
Distribution of Fund Shares ............................................... 21
Service and Distribution Fees .......................................... 21
Further Information About American Century ................................ 21

PROSPECTUS TABLE OF CONTENTS 3

TRANSACTION AND OPERATING EXPENSE TABLE

SHAREHOLDER TRANSACTION EXPENSES:

Maximum Sales Load Imposed on Purchases .............................. none
Maximum Sales Load Imposed on Reinvested Dividends ................... none
Deferred Sales Load .................................................. none
Redemption Fee ....................................................... none
Exchange Fee ......................................................... none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):

Management Fees ...................................................... 0.95%
12b-1 Fees(1) ........................................................ 0.50%
Other Expenses(2) .................................................... 0.00%
Total Fund Operating Expenses ........................................ 1.45%

EXAMPLE:

You would pay the following expenses on a 1 year $15
$1,000 investment, assuming a 5% annual return and 3 years 46
redemption at the end of each time period: 5 years 79
10 years 172

(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 manager, and a portion issued to
compensate them for distribution and other shareholder services. See
"Service and Distribution Fees," page 21.

(2) Other expenses, which include the fees and expenses (including legal counsel
fees) of those directors who are not "interested persons" as defined in the
Investment Company Act, are expected to be less than 0.01 of 1% of average
net assets for the next fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by Securities
and Exchange Commission regulations.

The shares offered by this Prospectus are Advisor Class shares. The fund
offers two other classes of shares, one of which is primarily made available to
retail investors and one that is primarily made available to institutional
investors. The other classes have different fee structures than the Advisor
Class. The difference in the fee structures among 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 manager for core
investment advisory services. Accordingly, the core investment advisory expenses
do not vary by class. A difference in fees will result in different performance
for the other classes. For additional information about the various classes, see
"Further Information About American Century," page 21.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS

REAL ESTATE FUND

The Advisor Class of the fund was established June 16, 1997, however no shares
had been issued prior to the fund's fiscal year end. The financial information
in this table regarding selected per share data for the fund reflects the
performance of the fund's Investor Class shares. The Investor Class shares have
a total expense ratio that is 0.25% lower than the Advisor Class. Had the
Advisor Class been in existence for the fund for the time periods presented, the
fund's performance information would be lower as a result of the additional
expense.

1998(1) 1997 1996 1995(2)

PER-SHARE DATA

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ..................$ 16.06 $ 12.29 $ 9.82 $ 10.00
------------- ------------- ------------- -------------
Income From Investment Operations

Net Investment Income .............................. 0.25(3) 0.67(3) 0.55 0.07

Net Realized and Unrealized Gain(Loss)
on Investment Transactions ...................... 0.26 4.13 2.27 (0.25)
------------- ------------- ------------- -------------
Total From Investment Operations ................... 0.51 4.80 2.82 (0.18)
------------- ------------- ------------- -------------
Distributions

From Net Investment Income ......................... (0.18) (0.48) (0.35) --

From Net Realized Gains on Investment
Transactions .................................... (0.27) (0.55) -- --
------------- ------------- ------------- -------------
Total Distributions ................................ (0.45) (1.03) (0.35) --
------------- ------------- ------------- -------------
Net Asset Value, End of Period ........................$ 16.12 $ 16.06 $ 12.29 $ 9.82
============= ============= ============= =============
Total Return(4) .................................... 3.26% 40.69% 29.28% (1.80)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 1.15%(5) 1.17% 1.00% 1.50%(5)

Ratio of Operating Expenses to Average Net
Assets
(before expense waivers and reimbursements)(6) ..... 1.20%(5) 1.82% 6.83% 14.83%(5)

Ratio of Net Investment Income to Average Net Assets .. 3.75%(5) 4.48% 5.84% 6.66%(5)

Ratio of Net Investment Income to Average Net
Assets
(before expense waivers and reimbursements)(6) ..... 3.70%(5) 3.84% 0.01% (6.67)%(5)

Portfolio Turnover Rate ............................... 28% 69% 86% --

Average Commission Paid per Share of Equity
Security Traded ....................................$ 0.0534 $ 0.0528 $ 0.0545 --

Net Assets, End of Period (in thousands) ..............$ 135,922 $ 76,932 $ 7,209 $ 2,983
</TABLE>

(1) Five month period ended March 31, 1998. The fund's fiscal year end was
changed from October 31 to March 31 resulting in a five month annual
reporting period.

(2) September 21, 1995 (inception) through October 31, 1995.

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

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

(5) Annualized.

PROSPECTUS PERFORMANCE INFORMATION OF OTHER CLASS 5

INFORMATION REGARDING THE FUND

INVESTMENT POLICIES OF THE FUND

The fund has adopted certain investment restrictions that are set forth in
the Statement of Additional Information. Those restrictions, and any other
investment policies designated as "fundamental" in this Prospectus or in the
Statement of Additional Information, cannot be changed without shareholder
approval. The fund has implemented additional investment policies and practices
to guide its activities in the pursuit of its investment objectives. These
policies and practices, which are described throughout this Prospectus, are not
designated as fundamental policies and may be changed without shareholder
approval.

INVESTMENT OBJECTIVE

INVESTMENT STRATEGY

Under normal conditions, the fund will invest no less than 80% of its total
assets in equity securities of companies which are real estate investment trusts
(REITs) or are principally engaged in the real estate industry. Equity
securities include common stock, preferred stock and securities convertible into
common stock. A company will be considered to be "principally engaged in the
real estate industry" if, in the opinion of the manager, at the time its
securities are purchased by the fund, at least 50% of its revenues or at least
50% of the market value of its assets is attributable to the ownership,
construction, management or sale of residential, commercial or industrial real
estate. Companies principally engaged in the real estate industry may include,
among others, equity REITs and real estate master limited partnerships, mortgage
REITs, and real estate brokers and developers. See "Investments in Real Estate,"
this page.

INVESTMENTS IN REAL ESTATE

6 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

Equity REITs may be affected by changes in the value of the underlying
property owned by the trusts, while mortgage REITs may be affected by default or
payment problems relating to underlying mortgages, the quality of credit
extended, self-liquidation provisions held by mortgages may be paid in full, and
distributions of capital returns may be made at any time. Equity and mortgage
REITs are dependent upon the skill of their individual management personnel and
generally are not diversified. In addition, equity and mortgage REITs could be
adversely affected by failure to qualify for tax-free pass-through of income
under the Internal Revenue Code, or to maintain their exemptions from
registration under the Investment Company Act. By investing in REITs indirectly
through the fund, a shareholder will bear not only a proportionate share of the
expenses of the fund, but also indirectly, similar expenses of the REITs,
including compensation of management.

To the extent the fund is invested in debt securities (including asset
backed securities) or mortgage REITs, it will be subject to credit risk and
interest rate risk. Credit risk relates to the ability of the issuer to meet
interest and principal payments when due. Interest rate risk refers to the
fluctuations in the net asset value of any portfolio of fixed income securities,
resulting solely from the inverse relationship between the price and yield of
fixed income securities; that is, when interest rates rise, bond prices
generally fall and, conversely, when interest rates fall, bond prices generally
rise. In general, bonds with longer maturities are more sensitive to interest
rate changes than bonds with shorter maturities.

INVESTMENT PHILOSOPHY

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

U.S. FIXED INCOME SECURITIES

The fund may invest in fixed income securities for income or as a defensive
strategy when the manager

PROSPECTUS INFORMATION REGARDING THE FUND 7

believes adverse economic or market conditions exist. As a temporary defensive
strategy, the manager may invest part or all of the fund's assets in debt
securities. Fixed income securities are affected primarily by changes in
interest rates. The prices of these securities tend to rise when interest rates
fall, and conversely fall when interest rates rise. Generally, the debt
securities in which the fund may invest are investment grade securities. These
are securities rated in the four highest grades assigned by Moody's Investors
Service, Inc. or Standard and Poor's Corporation or that are unrated but deemed
to be of comparable quality by the manager. For a description of fixed income
securities ratings, see "An Explanation of Fixed Income Securities Ratings" in
the Statement of Additional Information.

Securities rated in the lowest investment-grade category may have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case for higher grade bonds. The fund may
invest in securities below investment grade although the fund will not purchase
such bonds if such investment would cause more than 5% of its net assets to be
so invested. Such bonds are considered speculative. In the event a debt security
held by the fund is downgraded to below investment grade, the fund is not
automatically downgraded required to sell the issue, but the manager will
consider this in determining whether to hold the security. However, if such a
downgrade would cause more than 5% of net assets to be invested in debt
securities below investment grade, sales will be made as soon as practicable to
reduce the proportion of debt below investment grade to 5% of net assets or
less. When the manager believes that economic or market conditions require a
more defensive strategy, the fund's assets may be invested without limitation in
cash or cash equivalents such as obligations issued or guaranteed by the U.S.
government, its agencies and/or instrumentalities or high quality money market
instruments such as notes, certificates of deposit or bankers' acceptances.

DIVERSIFICATION

The fund is classified as a "non-diversified" investment company under the
Investment Company Act of 1940, which means the fund is not limited by the
Investment Company Act in the proportion of its assets that may be invested in
the securities of a single issuer. However, the fund intends to conduct its
operations so as to qualify as a regulated investment company for purposes of
the Internal Revenue Code, so that it will not be subject to U.S. federal income
tax on income and capital gain distributions to shareholders. (See
"Distributions," page 15, and "Taxes," page 15.) To so qualify, among other
requirements, the fund will limit its investments so that, at the close of each
quarter of the taxable year, (i) not more than 25% of the market value of the
fund's total assets will be invested in the securities of a single issuer, and
(ii) with respect to 50% of the market value of its total assets, not more than
5% of the market value of its total assets will be invested in the securities of
a single issuer, and the fund will not own more than 10% of the outstanding
voting securities of a single issuer. The fund's investments in U.S. government
securities are not subject to these limitations.

WHEN-ISSUED SECURITIES

RULE 144A SECURITIES

With respect to securities eligible for resale under Rule 144A, the staff of
the SEC has taken the position

8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

that the liquidity of such securities in the portfolio of a fund offering
redeemable securities is a question of fact for the Board of Directors to
determine, such determination to be based upon a consideration of the readily
available trading markets and the review of any contractual restrictions. The
staff also acknowledges that, while the Board retains ultimate responsibility,
it may delegate this function to the manager. Accordingly, the Board has
established guidelines and procedures for determining the liquidity of Rule 144A
securities and has delegated the day-to-day function of determining the
liquidity of Rule 144A securities to the manager. The Board retains the
responsibility to monitor the implementation of the guidelines and procedures it
has adopted.

BORROWING

PORTFOLIO TURNOVER

The total portfolio turnover rate of the fund is shown in the Financial
Highlights table of the Prospectus.

Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objective. The manager believes that the rate of portfolio turnover is
irrelevant when it or the subadvisor determines a change is in order to achieve
those objectives and, accordingly, the annual portfolio turnover rate cannot be
anticipated.

REPURCHASE AGREEMENTS

A repurchase agreement occurs when at the time the fund purchases an
interest-bearing obligation, the seller (a bank or broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase 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.

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 Directors.

The fund will invest no more than 15% of its assets in repurchase agreements
maturing in more than seven days.

FUTURES AND OPTIONS

PROSPECTUS INFORMATION REGARDING THE FUND 9

asset or cash to be delivered at the end of the contract period is calculated
based upon the difference in value between the making of the contract and the
end of the contract period of a financial index, indicator, or security
underlying the futures contract.

Rather than actually purchasing a financial asset (e.g., a long- or
short-term treasury security) or all of the securities contained in a specific
index (e.g., the S&P 500), the manager may choose to purchase a futures contract
that reflects the value of such securities or index. For example, an S&P 500
futures contract reflects the value of the underlying companies that comprise
the S&P 500 Composite Stock Price Index. If the aggregate market value of the
index securities increases or decreases during the contract period of an S&P 500
futures contract, the amount of cash to be paid to the contract holder at the
end of the period would correspondingly increase or decrease. As a result, the
manager is able to expose to the market cash that is held by the funds to meet
anticipated redemptions or for future investment opportunities. Because futures
contracts generally settle more quickly than their underlying securities, the
manager believes that the use of futures and options thereon allows the fund to
be fully invested while maintaining the needed liquidity.

The fund will not purchase leveraged futures. When a fund enters into a
futures contract, it must make a deposit of cash or high-quality debt
securities, known as "initial margin," as partial security for its performance
under the contract. As the value of the contract fluctuates, a party to the
contract may be required to make additional margin payments, known as "variation
margin," to cover a portion of such fluctuation. A fund will segregate cash or
appropriate liquid assets in an amount equal to the fund's payment obligation
under the futures contract, less any initial or variation margin. For options
sold, a fund will segregate cash or high-quality debt securities equal to the
value of the securities underlying the option unless the option is otherwise
covered.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

Investments in securities of issuers with limited operating histories may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating histories and financial
information upon which the manager may base its investment decision on behalf of
the fund. In addition, financial and other information regarding such issuers,
when available, may be incomplete or inaccurate.

PERFORMANCE ADVERTISING

A quotation of yield reflects the fund's income over a stated period
expressed as a percentage of the fund's share price.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules for all stock and bond funds. Because yield
accounting methods differ from the methods used for other accounting purposes,
the fund's yield may not equal the income paid on its shares or the income
reported in the fund's financial statements.

The fund also may include in advertisements data comparing its performance
with the performance of

10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

non-related investment media, published editorial comments and performance
rankings compiled by independent organizations (such as Lipper Analytical
Services) and publications that monitor the performance of mutual funds.
Performance information may be quoted numerically or may be presented in a
table, graph or other illustration. In addition, fund performance may be
compared to well known indices of market performance, such as Morgan Stanley
REIT Index, NAREIT Equity-Less Health Care Index, Standard & Poor's 500
Composite Stock Price Index and Wilshire REIT Only Index. The performance of the
fund may also be compared, on a relative basis, to other funds in our fund
family. This relative comparison, which may be based upon historical or expected
fund performance, volatility or other fund characteristics, may be presented
numerically, graphically or in text.

PROSPECTUS INFORMATION REGARDING THE FUND 11

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

The following section explains how to purchase, exchange and redeem Advisor
Class shares of the fund offered by this Prospectus.

HOW TO PURCHASE AND SELL AMERICAN
CENTURY FUNDS

The fund offered by this Prospectus is available as an investment option
under your employer-sponsored retirement or savings plan or through or in
connection with a program, product or service offered by a financial
intermediary, such as a bank, broker-dealer or an insurance company. Because all
records of your share ownership are maintained by your plan sponsor, plan
recordkeeper or other financial intermediary, all orders to purchase, exchange
and redeem shares must be made through your employer or other financial
intermediary, as applicable.

If you are purchasing through a financial intermediary, you should contact
your service representative at the financial intermediary for information about
how to select American Century funds.

If you have questions about a fund, see "Investment Policies of the Fund,"
page 6, or call an Institutional Service Representative at 1-800-345-3533.

Orders to purchase shares are effective on the day we receive payment. See
"When Share Price Is Determined," page 14.

We may discontinue offering shares generally in the fund (including any
class of shares of the fund) or in any particular state without notice to
shareholders.

HOW TO EXCHANGE FROM ONE AMERICAN CENTURY
FUND TO ANOTHER

Exchanges are made at the respective net asset value, next computed after
receipt of the exchange instruction by us. If in any 90-day period, the total of
the exchanges and redemptions from the account of any one plan participant or
financial intermediary client exceeds the lesser of $250,000 or 1% of a fund's
assets, further exchanges may be subject to special requirements to comply with
our policy on large equity fund redemptions. See "Special Requirements for Large
Redemptions," this page.

HOW TO REDEEM SHARES

Subject to any restrictions imposed by your employer's plan or financial
intermediary's program, you can sell ("redeem") your shares through the plan or
financial intermediary at their net asset value. Your plan administrator,
trustee, financial intermediary or other designated person must provide us with
redemption instructions. The shares will be redeemed at the net asset value next
computed after receipt of the instructions in good order. See "When Share Price
Is Determined," page 14. If you have any questions about how to redeem, contact
your plan administrator, employee benefits office or service representative at
your financial intermediary, as applicable.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

We have elected to be governed by Rule 18f-1 under the Investment Company
Act, which obligates the fund to redeem shares in cash, with respect to any

12 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

one participant account during any 90-day period, up to the lesser of $250,000
or 1% of the assets of the fund. Although redemptions in excess of this
limitation will also normally be paid in cash, we reserve the right to honor
these redemptions by making payment in whole or in part in readily marketable
securities (a "redemption-in-kind"). If payment is made in securities, the
securities will be selected by the fund, will be valued in the same manner as
they are in computing the fund's net asset value, and will be provided to the
redeeming plan participant or financial intermediary in lieu of cash without
prior notice.

Despite the fund's right to redeem fund shares through a redemption in kind,
we do not expect to exercise this option unless a fund has an unusually low
level of cash to meet redemptions and/or is experiencing unusually strong
demands for its cash. Such a demand might be caused, for example, by extreme
market conditions that result in an abnormally high level of redemption requests
concentrated in a short period of time. Absent these or similar circumstances,
we expect redemptions in excess of $250,000 to be paid in cash in any fund with
assets of more than $50 million if total redemptions from any one account in any
90-day period do not exceed one-half of 1% of the total assets of the fund.

TELEPHONE SERVICES

INVESTORS LINE

To request information about our funds and a current prospectus, or get
answers to any questions that you may have about the funds and the services we
offer, call an Institutional Service Representative at 1-800-345-3533.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 13

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares is also referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by the American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. Net asset values for Target Maturities funds are determined
one hour prior to the close of the Exchange.

Investments and requests to redeem or exchange shares will receive the share
price next determined after we receive your investment, redemption or exchange
request. For example, investments and requests to redeem or exchange shares
received by us or one of our agents or designees before the time as of which the
net asset value of the fund is determined, are effective on, and will receive
the price determined, that day. Investment, redemption and exchange requests
received thereafter are effective on, and receive the price determined as of,
the close of the Exchange on the next day the Exchange is open.

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 cut-off time for receiving orders and to
make payment for any purchase transactions in accordance with the fund's
procedures or any contractual arrangement with the fund or the fund's
distributor in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange are valued at the last sale price on
that exchange. If no sale is reported, or if local convention or regulation so
provides, the mean of the latest bid and asked prices is used. Depending on
local convention or regulation, securities traded over-the counter are priced at
the mean of the latest bid and asked prices or at the last sale price. When
market quotations are not readily available, securities and other assets are
valued at fair value as determined in accordance with procedures adopted by the
Board of Directors.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset value of the Investor Class shares of the fund will be
published in leading newspapers daily. Because the total expense ratio for the
Advisor Class is 0.25% higher than the Investor Class, their net asset values
will be lower than the Investor Class. The net asset value of the Advisor Class
of the fund may be obtained by calling us.

14 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

DISTRIBUTIONS

Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, generally are declared
and paid annually, usually in December, but the fund may make distributions on a
more frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act.

Participants in employer-sponsored retirement or savings plans must reinvest
all distributions. For shareholders in taxable accounts, distributions will be
reinvested unless you elect to receive them in cash. Distributions of less than
$10 generally will be reinvested. Distributions made shortly after purchase by
check or ACH may be held up to 15 days. You may elect to have distributions on
shares held in certain IRAs and 403(b) plans paid in cash only if you are at
least 59-1/2 years old or permanently and totally disabled. Distribution checks
normally are mailed within seven days after the record date. Please consult our
Investor Services Guide for further information regarding your distribution
options.

A distribution on shares of a fund does not increase the value of your
shares or your total return. At any given time, the value of your shares
includes the undistributed net gains, if any, realized by the fund on the sale
of portfolio securities and undistributed dividends and interest received, less
fund expenses.

Because undistributed gains and dividends are included in the price of your
shares prior to distribution, when they are distributed, the price of your
shares will be reduced by the amount of the distribution. If you buy your shares
through a taxable account just before the distribution, you will pay the full
price for your shares and then receive a portion of the purchase price back as a
taxable distribution. See "Taxes," this page.

TAXES

The fund has elected to be taxed as a regulated investment company under
Subchapter M of the Internal Revenue Code, which means that to the extent its
income is distributed to shareholders, it pays no income taxes.

TAX-DEFERRED ACCOUNTS

If Advisor Class shares are purchased through tax-deferred accounts, such as
a qualified employer-sponsored retirement or savings plan, income and capital
gains distributions paid by the fund generally will not be subject to current
taxation, but will accumulate in your account on a tax-deferred basis.

TAXABLE ACCOUNTS

If Advisor Class 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 longer than 12 months but no more than 18 months (28%
rate gain) and/or assets held longer than 18 months (20% rate gain) are taxable
as long-term gains regardless of the length of time you have held the shares.
Additionally, the fund may receive distributions of "unrecaptured Section 1250"
gains from REITs. To the extent the fund receives such distributions,
"unrecaptured Section 1250" gains will be distributed to shareholders of the
fund. 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 distribution of long-term capital gains (28%
or 20% rate gain) to you with respect to such shares.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 15

of the fund. If these portfolio securities are subsequently sold and the gains
are realized, they will, to the extent not offset by capital losses, be paid to
you as a distribution of capital gains and will be taxable to you as short-term
or long-term capital gains (28% and/or 20% rate gain). See "Distributions," page
15.

Because of the nature of REIT investments, REITs may generate significant
non cash deductions (i.e., depreciation on real estate holdings) while having a
greater cash flow to distribute to its shareholders. If a REIT distributes more
cash than it has taxable income, a "return of capital" results. A "return of
capital" represents a portion of a shareholder's original investment that is
generally non taxable when distributed (returned) to the investor. The fund may
pay a return of capital distribution to the shareholder by distributing more
cash than its taxable income. If you do not reinvest distributions, the cost
basis of your shares will be decreased by the amount of return capital, which
may result in a larger capital gain when you sell your shares. Although a return
of capital is generally non taxable to you upon distribution, it would be
taxable to you as a capital gain if your cost basis in the shares is reduced to
zero. This could occur if you do not reinvest distribution and the returns of
capital are significant.

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, subject to
tax at a maximum rate of 28% if shareholders have held such shares for a period
of more than 12 months but no more than 18 months, and long-term subject to tax
at a maximum rate of 20% if shareholders have held such shares for a period of
more than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Internal Revenue Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

16 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

of the fund's income from a REIT that is attributable to the REIT's residual
interest in a REMIC will be subject to federal income tax in all events. (See
"Additional Information on Tax Issues-Taxation of Certain Mortgage REITs" in the
Statement of Additional Information.)

MANAGEMENT

INVESTMENT MANAGEMENT

RREEF America, L.L.C., acting pursuant to a subadvisory agreement among it,
American Century Investment Management, Inc. and the fund, makes the day-to-day
investment decisions for the fund in accordance with the fund's investment
objective, policies, and restrictions under the supervision of the manager and
the Board of Directors.

The portfolio manager members of the subadvisor's team that manages the fund
and their work experience for the last five years are as follows:

The representative of the investment manager that will oversee the
subadvisor's operation of the fund is as follows:

For the services provided to the Advisor Class of the fund, the manager
receives an annual fee of 0.95% of the average net assets of the fund.

On the first business day of each month, the fund pays the management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying 0.95% of the aggregate average daily
closing value of the 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).

For subadvisory services, the manager pays the subadvisor an annual fee of
0.425% of the average net assets of the fund.

PERFORMANCE HISTORY OF THE SUBADVISOR

While the subadvisor has limited operational history with the fund, set
forth on page 19 are certain performance data, provided by the subadvisor,
relating to the performance of all private accounts managed by the subadvisor
using investment strategies and techniques similar to those used for the fund.
Also set forth on page 19, for comparison, are the performances of widely
recognized indices of market

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 17

activity based upon the aggregate performance of selected unmanaged portfolios
of publicly traded common stocks.

The results presented may not necessarily equate with the returns
experienced by the fund, owing to the differences in brokerage commissions,
investment and management fees, the size of positions taken in relation to
account size and diversification of securities, as well as other costs, such as
registration fees borne by the fund but not incurred by the private accounts.
Investors should not rely on the following data as an indication of future
performance of the subadvisor or of the fund. Investors should be aware that the
use of methods for computing performance numbers different than that used by the
subadvisor with respect to its accounts could result in performance data
different than those shown.

18 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE HIGHLIGHTS

(See Notes Below)

ANNUALIZED RETURNS FROM OCTOBER 1987 THROUGH DECEMBER 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RREEF Real Estate Securities Advisers
Before Fees ................................................................................................... 19.7%
After Fees .................................................................................................... 19.0%
NAREIT Equity Less Healthcare .................................................................................... 16.0%
Wilshire REIT Index .............................................................................................. 15.0%

For the Years Ended December 31,

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

ANNUAL TIME-WEIGHTED RETURNS

RREEF Real Estate Securities Advisers
Before Fees ................... 8.2% 7.7% (4.8)% 32.9% 29.4% 19.0% 4.8% 13.9% 41.1% 25.8%
After Fees .................... 6.8% 6.1% (6.4)% 30.9% 28.1% 18.0% 4.3% 13.0% 40.3% 25.1%
NAREIT Equity Less Healthcare .... 15.8% 4.6% (23.6)% 29.4% 20.7% 18.7% 3.0% 14.2% 36.4% 20.5%
Wilshire REIT Index .............. 17.5% 2.7% (23.4)% 23.8% 15.3% 15.2% 2.7% 12.2% 37.0% 19.7%
</TABLE>

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 19

CODE OF ETHICS

The fund and the manager have adopted a Code of Ethics, as has the
subadvisor, which restricts personal investing practices by employees of the
manager and its affiliates. Among other provisions, the fund's and manager's
Code of Ethics and the subadvisor's Code of Ethics require that employees with
access to information about the purchase or sale of securities in the fund
obtain preclearance before executing personal trades. With respect to Portfolio
Managers and other investment personnel, both Codes of Ethics prohibit
acquisition of securities in an initial public offering, as well as profits
derived from the purchase and sale of the same security within 60 calendar days.
The subadvisor's Code of Ethics provides that upon approval of the compliance
officer, certain acquisitions of securities in an initial public offering may be
permitted, but that such approval will be granted only in extraordinary
circumstances. These provisions are designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the fund.

TRANSFER AND ADMINISTRATIVE SERVICES

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the fund. FDI is
responsible for (i) providing certain officers of the fund and (ii) reviewing
and filing marketing and sales literature on behalf of the fund. The fees and
expenses of FDI are paid by the manager.

YEAR 2000 ISSUES

The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the fund's and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected systems (targeted for completion with respect to
critical systems by the end of 1998). The manager will pay for the remediation
effort with revenues from its management fee, so that the fund will not directly
bear any of the cost.

20 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

DISTRIBUTION OF FUND SHARES

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
funds are paid by the manager.

SERVICE AND DISTRIBUTION FEES

Rule 12b-1 adopted by the Securities and Exchange Commission under the
Investment Company Act permits investment companies that adopt a written plan to
pay certain expenses associated with the distribution of their shares. Pursuant
to that rule, the fund's Board of Directors and the initial shareholder of the
fund's Advisor Class shares have approved and adopted a Master Distribution and
Shareholder Services Plan (the "Plan"). Pursuant to the Plan, the fund pays a
shareholder services fee and a distribution fee, each equal to 0.25% (for a
total of 0.50%) per annum of the average daily net assets of the fund's Advisor
Class shares. The shareholder services fee is paid for the purpose of paying the
costs of securing certain shareholder and administrative services, and the
distribution fee is paid for the purpose of paying the costs of providing
various distribution services. All or a portion of such fees are paid by the
manager, as paying agent for the funds, to the banks, broker-dealers, insurance
companies or other financial intermediaries through which such shares are made
available.

The Plan has been adopted and will be administered in accordance with the
requirements of Rule 12b-1 under the Investment Company Act. 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. Fees paid pursuant to the Plan may be paid for shareholder services
and the maintenance of accounts and therefore may constitute "service fees" for
purposes of applicable rules of the National Association of Securities Dealers.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc., the issuer of the fund, was
organized as a Maryland corporation on June 14, 1993.

The principal office of the fund is American Century Tower, 4500 Main
Street, P.O. Box 419385, Kansas City, Missouri 64141-6385. All inquiries may be
made by mail to that address, or by telephone to 1-800-345-3533 (international
calls: 816-531-5575).

American Century offers three classes of the fund: an Investor Class, an
Institutional Class, and an Advisor Class. The shares offered by this Prospectus
are Advisor Class shares.

The Investor Class is made available primarily to retail investors. The
Institutional Class is offered primarily to institutional investors or through
institutional distribution channels, such as employer-sponsored retirement plans
or through banks, broker- dealers, insurance companies or other financial
intermediaries. The other classes have different fees, expenses and/or minimum
investment requirements than the Advisor Class. The difference in the fee

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 21

structures among 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 manager 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 Investor Class of shares, call one of our Investor Services
Representatives at 1-800-345-2021. For information concerning the Institutional
Class of shares call an Institutional Service Representative at 1-800-345-3533
or contact a sales representative or financial intermediary who offers those
classes of shares.

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 23

NOTES

24 NOTES AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 25

P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385

INSTITUTIONAL SERVICES:
1-800-345-3533 OR 816-531-5575

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-444-3038

FAX: 816-340-4655

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-12607 Recycled
<PAGE>
PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Value
Small Cap Value
Equity Income

INSTITUTIONAL CLASS

AMERICAN CENTURY INVESTMENTS
FAMILY OF FUNDS

PROSPECTUS
JULY 30, 1998

Value * Small Cap Value * Equity Income
INSTITUTIONAL CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

Each fund's shares offered in this Prospectus (the Institutional Class
shares) are sold at their net asset value with no sales charges or commissions.

The Institutional Class shares are made available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
endowments, foundations and financial advisors that meet the funds' minimum
investment requirements. Institutional Class shares are not available for
purchase by insurance companies or participant-directed employer-sponsored
retirement plans.

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVES OF THE FUNDS

AMERICAN CENTURY VALUE FUND

AMERICAN CENTURY SMALL CAP VALUE FUND

AMERICAN CENTURY EQUITY INCOME FUND

The investment objective of Equity Income is the production of current income.
Capital appreciation is a secondary objective. The fund attempts to achieve its
objectives by investing primarily in income producing equity securities. In the
pursuit of its objectives, the fund seeks a yield that exceeds the yield of
securities comprising the Standard & Poor's 500 Composite Stock Price Index.

There is no assurance that the funds will achieve
their respective investment objectives.

2 INVESTMENT OBJECTIVES AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

Investment Objectives of the Funds ........................................ 2
Transaction and Operating Expense Table ................................... 4
Financial Highlights ...................................................... 5
Performance Information of Other Class .................................... 6
INFORMATION REGARDING THE FUNDS
Investment Policies of the Funds .......................................... 8
Value ................................................................. 8
Small Cap Value ....................................................... 8
Equity Income ......................................................... 9
Policies Applicable to All Funds ...................................... 9
Other Investment Practices, Their Characteristics
and Risks ............................................................... 10
Foreign Securities .................................................... 10
Equity Securities ..................................................... 10
Forward Currency Exchange Contracts ................................... 11
Investments in Smaller Companies ...................................... 11
Portfolio Turnover .................................................... 12
Repurchase Agreements ................................................. 12
Futures Contracts ..................................................... 12
Derivative Securities ................................................. 13
When-Issued Securities ................................................ 13
Short Sales ........................................................... 14
Investments in Companies With
Limited Operating Histories ................................ 14
Rule 144A Securities .............................................. 14
Performance Advertising .................................................. 14

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments .............................................. 16
Investing in American Century ............................................. 16
How to Open an Account .................................................... 16
By Mail .................................................... 16
By Wire .................................................... 16
By Exchange ................................................ 16
In Person .................................................. 17
Subsequent Investments ............................................ 17
By Mail .................................................... 17
By Telephone ............................................... 17
By Wire .................................................... 17
In Person .................................................. 17
Automatic Investment Plan ......................................... 17
Minimum Investment ....................................................... 17
How to Exchange from One Account to Another .............................. 17
By Mail .................................................... 18
By Telephone ............................................... 18
How to Redeem Shares ..................................................... 18
By Mail ..................................................... 18
By Telephone ................................................ 18
By Check-A-Month ............................................ 18
Other Automatic Redemptions ................................. 18
Redemption Proceeds ............................................... 18
By Check .................................................... 18
By Wire and ACH ............................................. 18
Special Requirements for Large Redemptions ........................ 19
Signature Guarantee ...................................................... 19
Special Shareholder Services ............................................. 19
Open Order Service .......................................... 19
Tax-Qualified Retirement Plans .............................. 20
Important Policies Regarding Your Investments ............................ 20
Reports to Shareholders .................................................. 21
Customers of Banks, Broker-Dealers
and Other Financial Intermediaries ..................................... 21

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 22
When Share Price Is Determined ........................................ 22
How Share Price Is Determined ......................................... 22
Where to Find Information About Share Price ........................... 23
Distributions ............................................................. 23
Taxes ..................................................................... 23
Tax-Deferred Accounts ................................................. 23
Taxable Accounts ...................................................... 24
Management ................................................................ 25
Investment Management ................................................. 25
Code of Ethics ........................................................ 25
Transfer and Administrative Services .................................. 26
Year 2000 Issues ...................................................... 26
Distribution of Fund Shares ............................................... 27
Further Information About American Century ................................ 27

PROSPECTUS TABLE OF CONTENTS 3

<TABLE>
<CAPTION>
TRANSACTION AND OPERATING EXPENSE TABLE
Value and Small Cap
Equity Income Value
SHAREHOLDER TRANSACTION EXPENSES:
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases .................................. none none
Maximum Sales Load Imposed on Reinvested Dividends ....................... none none
Deferred Sales Load ...................................................... none none
Redemption Fee ........................................................... none none
Exchange Fee ............................................................. none none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):
Management Fees .......................................................... 0.80% 1.05%
12b-1 Fees ............................................................... none none
Other Expenses(1) ........................................................ 0.00% 0.00%
Total Fund Operating Expenses ............................................ 0.80% 1.05%

EXAMPLE:
You would pay the following expenses on a 1 year $8 $11
$1,000 investment, assuming a 5% annual return and 3 years 26 33
redemption at the end of each time period: 5 years 44 58
10 years 99 128
</TABLE>

(1) Other expenses, which include the fees and expenses (including legal
counsel fees) of those directors who are not "interested persons" as
defined in the Investment Company Act, were less than 0.01 of 1% of average
net assets for the most recent fiscal year.

The shares offered by this Prospectus are Institutional Class shares. The
funds offer other classes of shares, one of which is primarily made available to
retail investors and two that are primarily made available to institutional
investors. The other classes have different fee structures than the
Institutional Class. The difference in the fee structures among 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 manager
for core investment advisory services. Accordingly, the core investment advisory
expenses do not vary by class. A difference in fees will result in different
performance for those classes. For additional information about the various
classes, see "Further Information About American Century," page 27.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

FINANCIAL HIGHLIGHTS
VALUE

The sale of the Institutional Class of the fund commenced on July 31, 1997.
Performance information of the original class of shares, which commenced
operations on September 1, 1993, is presented on page 6. The Financial
Highlights for the fiscal period presented have been audited by Deloitte &
Touche LLP, independent auditors, whose report thereon appears in the fund's
annual report, which is incorporated by reference into the Statement of
Additional Information. The annual report contains additional performance
information and will be made available without charge upon request. The
information presented is for a share outstanding throughout the period ended
March 31, 1998.

1998(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period ...........................$ 7.84
-----------
Income From Investment Operations
Net Investment Income(2) ...................................... 0.15
Net Realized and Unrealized Gain on Investment Transactions ... 1.02
-----------
Total From Investment Operations .............................. 1.17
-----------
Distributions
From Net Investment Income .................................... (0.08)
From Net Realized Gains on Investment Transactions ............ (1.20)
-----------
Total Distributions ........................................... (1.28)
-----------
Net Asset Value, End of Period .................................$ 7.73
===========
TOTAL RETURN(3) ............................................... 17.14%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets .............. 0.80%(4)
Ratio of Net Investment Income to Average Net Assets ........... 2.97%(4)
Portfolio Turnover Rate ........................................ 130%
Average Commission Paid per Share of Equity Security Traded ....$ 0.0462
Net Assets, End of Period (in thousands) .......................$ 5,944

(1) July 31, 1997 (commencement of sale) through March 31, 1998.

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

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

(4) Annualized.

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
VALUE

The Institutional Class of the fund was established September 3, 1996. The
financial information in this table regarding selected per share data for the
fund reflects the performance of the fund's Investor Class of shares which has a
total expense ratio that is 0.20% higher than the Institutional Class. Had the
Institutional Class been in existence for the fund for the time periods
presented, the fund's performance information would be higher as a result of the
lower expenses.

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the periods ended on or before March 31,
1997, have been audited by other independent auditors. The information presented
is for a share outstanding throughout the years ended March 31, except as noted.

1998 1997 1996 1995 1994(1)
PER-SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ...$ 6.58 $ 6.32 $ 5.46 $ 4.98 $ 5.01
--------------- --------------- --------------- --------------- ---------------
Income From Investment Operations
Net Investment Income(2) ............. 0.10 0.12 0.13 0.12 0.08
Net Realized and Unrealized
Gain (Loss)
on Investment Transactions ........... 2.35 0.87 1.34 0.75 (0.04)
--------------- --------------- --------------- --------------- ---------------
Total From Investment Operations ..... 2.45 0.99 1.47 0.87 0.04
--------------- --------------- --------------- --------------- ---------------
Distributions
From Net Investment Income ........... (0.10) (0.12) (0.12) (0.12) (0.07)
In Excess of Net Investment Income ... -- --(3) (0.01) -- --
From Net Realized Gains on
Investment Transactions .......... (1.20) (0.61) (0.48) (0.27) --
--------------- --------------- --------------- --------------- ---------------
Total Distributions .................. (1.30) (0.73) (0.61) (0.39) (0.07)
--------------- --------------- --------------- --------------- ---------------
Net Asset Value, End of Period .........$ 7.73 $ 6.58 $ 6.32 $ 5.46 $ 4.98
=============== =============== =============== =============== ===============

TOTAL RETURN(4) ...................... 39.94% 15.92% 28.06% 18.56% 0.83%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................ 1.00% 1.00% 0.97% 1.00% 1.00%(5)
Ratio of Net Investment
Income to Average Net Assets ......... 1.38% 1.86% 2.17% 2.65% 3.37%(5)
Portfolio Turnover Rate ................ 130% 111% 145% 94% 79%
Average Commission Paid per
Share of Equity Security Traded ......$ 0.0462 $ 0.0459 $ 0.0409 --(6) --(6)
Net Assets, End of Period
(in thousands) .......................$ 2,713,562 $ 1,743,582 $ 881,885 $ 348,281 $ 87,798
</TABLE>

(1) September 1, 1993 (inception) through March 31, 1994.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

6 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS
EQUITY INCOME

The Institutional Class of the fund was established September 3, 1996,
however, no shares had been issued prior to the fund's fiscal year end. The
financial information in this table regarding selected per share data for the
fund reflects the performance of the fund's Investor Class of shares which has a
total expense ratio that is 0.20% higher than the Institutional Class. Had the
Institutional Class been in existence for the fund for the time periods
presented, the fund's performance information would be higher as a result of the
lower expenses.

The Financial Highlights for the fiscal year ended March 31, 1998, have been
audited by Deloitte & Touche LLP, independent auditors, whose report thereon
appears in the fund's annual report, which is incorporated by reference into the
Statement of Additional Information. The annual report contains additional
performance information and will be made available upon request and without
charge. The Financial Highlights for the periods ended on or before March 31,
1997, have been audited by other independent auditors. The information presented
is for a share outstanding throughout the years ended March 31, except as noted.

1998 1997 1996 1995(1)
PER-SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period ... $ 6.31 $ 6.10 $ 5.42 $ 5.00
------------- ------------- ------------- -------------
Income From Investment Operations
Net Investment Income(2) ............ 0.25 0.22 0.20 0.09
Net Realized and Unrealized Gain
on Investment Transactions .......... 1.99 0.75 1.13 0.44
------------- ------------- ------------- -------------
Total From Investment Operations .... 2.24 0.97 1.33 0.53
------------- ------------- ------------- -------------
Distributions
From Net Investment Income .......... (0.24) (0.21) (0.19) (0.09)
In Excess of Net Investment Income .. -- --(3) (0.01) --
From Net Realized Gains on
Investment Transactions ......... (1.16) (0.55) (0.45) (0.02)
------------- ------------- ------------- -------------
Total Distributions ................. (1.40) (0.76) (0.65) (0.11)
------------- ------------- ------------- -------------
Net Asset Value, End of Period ......... $ 7.15 $ 6.31 $ 6.10 $ 5.42
============= ============= ============= =============
TOTAL RETURN(4) ..................... 37.78% 16.24% 25.67% 10.69%

RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ............... 1.00% 1.00% 0.98% 1.00%(5)
Ratio of Net Investment Income
to Average Net Assets ............... 3.52% 3.46% 3.51% 4.04%(5)
Portfolio Turnover Rate ................ 158% 159% 170% 45%
Average Commission Paid per
Share of Equity Security Traded ..... $ 0.0453 $ 0.0440 $ 0.0378 --(6)
Net Assets, End of Period
(in thousands) ...................... $ 355,962 $ 199,388 $ 116,692 $ 52,213
</TABLE>

(1) August 1, 1994 (inception) through March 31, 1995.

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

(3) Per share amount was less than $0.01.

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

(5) Annualized.

(6) Disclosure of average commission paid per share of equity security traded
was not required prior to the year ended March 31, 1996.

PROSPECTUS PEFORMANCE INFORMATION OF OTHER CLASS 7

INFORMATION REGARDING THE FUNDS

INVESTMENT POLICIES OF THE FUNDS

VALUE

It is management's intention that the fund will consist primarily of
domestic equity securities. However, the fund also may invest in other types of
domestic or foreign securities consistent with the accomplishment of the fund's
objective. The other securities the fund may invest in are convertible
securities (see "Other Investment Practices, Their Characteristics and
Risks-Equity Securities," page 10), preferred stocks, bonds, notes and debt
securities of companies and debt obligations of governments and their agencies.
Investments in these securities will be made when the manager believes that the
total return potential on these securities equals or exceeds the potential
return on common stocks.

SMALL CAP VALUE

8 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

be more attractive to investors using the value style of investing. As of
December 31, 1997, the largest company contained in the S&P/Barra Small-Cap 600
Value Index had a market capitalization of approximately $2.3 billion, while the
median company contained in the index had a market capitalization of
approximately $387 million.

It is management's intention that the fund will consist primarily of
domestic equity securities. However, the fund also may invest in other types of
domestic or foreign securities consistent with the accomplishment of the fund's
objective. The other securities the fund may invest in are convertible
securities (see "Other Investment Practices, Their Characteristics and
Risks--Equity Securities," page 10), preferred stocks, bonds, notes and debt
securities of companies and debt obligations of governments and their agencies.
Investments in these securities will be made when the manager believes that the
total return potential on these securities equals or exceeds the potential
return on common stocks.

EQUITY INCOME

POLICIES APPLICABLE TO ALL FUNDS

Income is a primary or secondary objective of each fund. As a result, a
portion of the portfolio of each fund may consist of fixed income securities.

The funds will not necessarily dispose of high yield securities if the
aggregate value of such securities exceeds 5% of a fund's assets, if such level
is

PROSPECTUS INFORMATION REGARDING THE FUNDS 9

exceeded as a result of market appreciation of the value of such securities or
market depreciation of the value of the other assets of the fund. Rather, the
manager will cease purchasing any additional high yield securities until the
value of such securities is less than 5% of the fund's assets and will monitor
such investments to determine whether continuing to hold such investments is
likely to assist the fund in meeting its investment objectives.

To the extent that a fund assumes a defensive position, it will not be
investing for capital growth.

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

FOREIGN SECURITIES

Subject to their individual investment objectives and policies, the funds
may invest in common stocks, convertible securities, preferred stocks, bonds,
notes and other debt securities of foreign issuers and debt securities of
foreign governments and their agencies. The funds will limit their purchase of
debt securities to investment-grade obligations.

EQUITY SECURITIES

Each fund will limit its holdings of convertible debt securities to those
that, at the time of purchase, are rated at least B- by S&P or B3 by Moody's,
or, if not rated by S&P or Moody's, are of equivalent investment quality as
determined by the manager. A fund's investments in convertible debt securities
and other high yield, non-convertible debt securities rated below investment
grade will comprise less than 35% of the fund's net assets. Debt securities
rated

10 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

below the four highest categories are not considered "investment grade"
obligations. These securities have speculative characteristics and present more
credit risk than investment grade obligations. For a description of the S&P and
Moody's ratings categories, see "An Explanation of Fixed Income Securities
Ratings" in the Statement of Additional Information. Equity equivalents also may
include securities whose value or return is derived from the value or return of
a different security. Depositary receipts, which are described in the following
section, are an example of the type of derivative security in which a fund might
invest.

FORWARD CURRENCY EXCHANGE CONTRACTS

A fund may elect to enter into a forward currency exchange contract with
respect to a specific purchase or sale of a security, or with respect to the
fund's portfolio positions generally.

INVESTMENTS IN SMALLER COMPANIES

Small Cap Value will invest primarily in securities of companies having
smaller market capitalizations. These smaller companies may present greater
opportunities for capital appreciation, but may also involve greater risks than
larger issuers. Such companies may have limited product lines, markets or
financial resources, and their securities may trade less frequently and in more
limited volume than the securities of larger companies. In addition, the
securities of such companies may be more likely to be delisted

PROSPECTUS INFORMATION REGARDING THE FUNDS 11

from trading on their primary exchange. As a result, the securities of smaller
companies may experience significantly more price volatility and less liquidity
than securities of larger companies, and this volatility and limited liquidity
may be reflected in the net asset value of the fund.

PORTFOLIO TURNOVER

The total portfolio turnover rates of Value and Equity Income are shown in
the Financial Highlights tables of this Prospectus.

REPURCHASE AGREEMENTS

FUTURES CONTRACTS

12 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

gin may not be disposed of so long as the fund maintains the contract.

DERIVATIVE SECURITIES

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There is a range of risks associated with derivative investments, including
but not limited to:

* the risk that the underlying security, interest rate, market index or
other financial asset will not move in the direction the portfolio
manager anticipates;

* the risk that adverse price movements in an instrument will result in a
loss substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

WHEN-ISSUED SECURITIES

Each of the funds may sometimes purchase new issues of securities on a
when-issued basis or forward commitment basis when, in the opinion of the
manager, such purchases will further the investment objectives of the fund. The
price of when-issued securities is established at the time the commitment to
purchase is made. Delivery of and payment for these securities typically occur
15 to 45 days after the commitment to purchase. Market rates of interest on debt
securities at the time of delivery may be higher or lower than those contracted
for on the when-issued security. Accordingly, the value of such security may
decline prior to delivery, which could result in a loss

PROSPECTUS INFORMATION REGARDING THE FUNDS 13

to the fund. A separate account for each fund consisting of cash or appropriate
liquid assets in an amount at least equal to the when-issued commitments will be
established and maintained with the custodian. No income will accrue to the fund
prior to delivery.

SHORT SALES

INVESTMENTS IN COMPANIES WITH LIMITED
OPERATING HISTORIES

RULE 144A SECURITIES

PERFORMANCE ADVERTISING

From time to time, the funds may advertise performance data. Fund
performance may be shown by presenting one or more performance measurements,

14 INFORMATION REGARDING THE FUNDS AMERICAN CENTURY INVESTMENTS

including cumulative total return or average annual total return and yield.
Performance data may be quoted separately for the Institutional Class and for
the other classes.

A quotation of yield reflects a fund's income over a stated period of time
expressed as a percentage of the fund's share price.

The funds also may include in advertisements data comparing performance with
the performance of non-related investment media, published editorial comments
and performance rankings compiled by independent organizations such as Lipper
Analytical Services or Donoghue's Money Fund Report and publications that
monitor the performance of mutual funds. Performance information may be quoted
numerically or may be presented in a table, graph or other illustration. In
addition, fund performance may be compared to well-known indices of market
performanceincluding the Standard and Poor's 500 Index, the Dow Jones Industrial
Average, the S&P/Barra Value Index (with regard to Value), the S&P/Barra
Small-Cap 600 Value Index (with regard to Small Cap Value) and the Lipper Equity
Income Fund Index (with regard to Equity Income). Fund performance also may be
compared, on a relative basis, to other funds in our fund family. This relative
comparison, which may be based upon historical fund performance or historical or
expected volatility or other fund characteristics, may be presented numerically,
graphically or in text. Fund performance also may be combined or blended with
other funds in our fund family, and that combined or blended performance may be
compared to the same indices to which individual funds may be compared.

PROSPECTUS INFORMATION REGARDING THE FUNDS 15

HOW TO INVEST WITH
AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The funds offered by this Prospectus are a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-3533 for a brochure or prospectuses for the other funds in the
American Century Investments family.

INVESTING IN AMERICAN CENTURY

If you own or are considering purchasing fund shares through an
employer-sponsored retirement plan or through a bank, broker-dealer or other
financial intermediary, the following sections, as well as the information
contained in our Investor Services Guide, may not apply to you. Please read
"Minimum Investment," page 17 and "Customers of Banks, Broker-Dealers and Other
Financial Intermediaries," page 21.

HOW TO OPEN AN ACCOUNT

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64111

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see Bank to Bank Information below.

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

o BANK TO BANK INFORMATION (BBI OR FREE FORMTEXT):
* Taxpayer identification or Social Security number.
* If more than one account, account numbers
and amount to be invested in each account.
* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditonal IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-3533 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See page
17 for more information on exchanges.

16 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street
Kansas City, Missouri 64111

4917 Town Center Drive
Leawood, Kansas 66211

1665 Charleston Road
Mountain View, California 94043

2000 S. Colorado Blvd.
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Institutional Service
Representative or use our Automated Information Line.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 16 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

MINIMUM INVESTMENT

The minimum investment is $5 million ($3 million for endowments and
foundations). If you invest with us through a bank, broker-dealer or other
financial intermediary, the minimum investment requirement may be met by
aggregating the investments of various clients of your financial intermediary.
The minimum investment requirement may be waived if you or your financial
intermediary, if applicable, has an aggregate investment in our family of funds
of $10 million or more ($5 million for endowments and foundations). If your
balance or the balance of your financial intermediary, if applicable, falls
below the minimum investment requirements due to redemptions or exchanges, we
reserve the right to convert your shares to Investor Class shares of the same
fund. The Investor Class shares have a unified management fee that is 0.20%
higher than the Institutional Class shares.

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone upon completion and receipt of
your application or by calling us at 1-800-345-3533 to get the appropriate form

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
redeem your shares by calling an Institutional Service Representative.

BY CHECK-A-MONTH

You may redeem shares by Check-A-Month. A Check-A-Month plan automatically
redeems enough shares each month to provide you with a check in an amount you
choose (minimum $50). To set up a Check-A-Month plan, please call and request
our Check-A-Month brochure.

OTHER AUTOMATIC REDEMPTIONS

You may elect to make redemptions automatically by authorizing us to send
funds to you or to your account at a bank or other financial institution. To set
up automatic redemptions, call an Institutional Service Representative.

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

Your bank will usually receive wired funds within 48 hours of transmission.
Funds transferred by ACH may be received up to seven days after transmission.
Once the funds are transmitted, the time of receipt and the funds' availability
are not under our control.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

SIGNATURE GUARANTEE

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

We offer several services to make your account easier to manage. These are
listed on the account application. You will find more information about each of
these service options in our Investor Services Guide.

Our special shareholder services include:

OPEN ORDER SERVICE

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 19

TAX-QUALIFIED RETIREMENT PLANS

Each fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:

* Individual Retirement Accounts (IRAs);

* 403(b) plans for employees of public school
systems and non-profit organizations; or

* Profit sharing plans and pension plans for corporations and other
employers.

You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

(2) We reserve the right to make changes to any stated investment
requirements, including those that relate to purchases, transfers and
redemptions. In addition, we also may alter, add to or terminate any
investor services and privileges. Any changes may affect all
shareholders or only certain series or classes of shareholders.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(10) We will perform special inquiries on shareholder accounts. A research
fee of $15 per hour may be applied.

20 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

REPORTS TO SHAREHOLDERS

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

CUSTOMERS OF BANKS, BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES

Information contained in our Investor Services Guide pertains to
shareholders who invest directly with American Century rather than through a
bank, broker-dealer or other financial intermediary.

If you own or are considering purchasing fund shares through a bank,
broker-dealer or other financial intermediary, your ability to purchase,
exchange and redeem shares will depend on your agreement with, and the policies
of, such financial intermediary.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 21

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

If you invest in fund shares through a bank, financial advisor or other
financial intermediary, it is the responsibility of your financial intermediary
to transmit your purchase, exchange and redemption requests to the funds'
transfer agent prior to the applicable cut-off time for receiving orders and to
make payment for any purchase transaction in accordance with the funds'
procedures or any contractual arrangements with the funds or the funds'
distributor in order for you to receive that day's price.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

as determined in accordance with procedures adopted by the Board of Directors.

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset values of the Investor Class are published in leading
newspapers daily. The net asset value of the Institutional Class of each fund
may be obtained by calling us.

DISTRIBUTIONS

For shareholders investing through taxable accounts, distributions will be
reinvested unless you elect to receive them in cash. Distributions of less than
$10 generally will be reinvested. Distributions made shortly after a purchase by
check or ACH may be held up to 15 days. You may elect to have distributions on
shares held in certain IRAs and 403(b) plans paid in cash only if you are at
least 59 1/2 years old or permanently and totally disabled. Distribution checks
normally are mailed within seven days after the record date. Please consult our
Investor Services Guide for further information regarding your distribution
options.

TAXES

Each fund has elected to be taxed under Subchapter M of the Internal Revenue
Code, which means that to the extent its income is distributed to shareholders,
it pays no income tax.

TAX-DEFERRED ACCOUNTS

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 23

income and capital gains distributions paid by the fund generally will not be
subject to current taxation, but will accumulate in your account under the plan
on a tax-deferred basis.

TAXABLE ACCOUNTS

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term, subject to
tax at a maximum rate of 28% if shareholders have held such shares for a period
of more than 12 months but no more than 18 months and long-term, subject to tax
at a maximum rate of 20% if shareholders have held such shares for a period of
more than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

the redemption may be subject to the "wash sale" rules of the Internal Revenue
Code, resulting in a postponement of the recognition of such loss for federal
income tax purposes.

MANAGEMENT

INVESTMENT MANAGEMENT

The portfolio manager members of the teams managing the funds described in
this Prospectus and their work experience for the last five years are as
follows:

For the services provided to the Institutional Class of the funds, the
manager receives an annual fee of 0.80% of the average net assets of Value and
Equity Income and 1.05% of the average net assets of Small Cap Value.

CODE OF ETHICS

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

TRANSFER AND ADMINISTRATIVE SERVICES

American Century Services Corporation, American Century Tower, 4500 Main
Street, Kansas City, Missouri 64111, acts as transfer agent and dividend-paying
agent for the funds. It provides facilities, equipment and personnel to the
funds, and is paid for such services by the manager.

YEAR 2000 ISSUES

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

DISTRIBUTION OF FUND SHARES

The funds' shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly-owned indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Institutional Class of shares does not pay any commissions or sales
loads to the distributor or to any other broker-dealers or financial
intermediaries in connection with the distribution of fund shares.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc., (the "Corporation"), the issuer
of the funds, was organized as a Maryland corporation on June 14, 1993.

American Century offers four classes of Value and Equity Income: an Investor
Class, an Institutional Class, a Service Class, and an Advisor Class. American
Century offers three classes of the Real Estate and Small Cap Value funds: an
Investor Class, an Institutional Class, and an Advisor Class. The shares offered
by this Prospectus are Institutional Class shares and have no up-front charges,
commissions or 12b-1 fees.

The Investor Class is made available primarily to retail investors. The
Service Class and Advisor Class are offered primarily to institutional investors
or through institutional distribution channels, such as employer-sponsored
retirement plans or through banks, broker-dealers, insurance companies or other
financial intermediaries. The other classes have different fees, expenses,
and/or minimum investment requirements than the Institutional Class. The
difference in the fee structures among 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 manager for core investment
advisory services. Accordingly, the core investment advisory expenses do not
vary by class. Different fees and expenses will affect performance. For
additional information concerning the other classes of shares not offered by
this Prospectus, call us at 1-800-345-3533 or contact a sales representative or
financial intermediary who offers those classes of shares.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

exclusive voting rights with respect to matters solely affecting such class, (d)
each class may have different exchange privileges, and (e) the Institutional
Class may provide for automatic conversion from that class into shares of the
Investor Class of the same fund.

28 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 29

P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385

INSTITUTIONAL SERVICES:
1-800-345-3533 OR 816-531-5575

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-444-3038

FAX: 816-340-4655

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-11947 Recycled
<PAGE>
PROSPECTUS

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

JULY 30, 1998

AMERICAN
CENTURY
GROUP

Real Estate Fund

INSTITUTIONAL CLASS

AMERICAN CENTURY INVESTMENTS

FAMILY OF FUNDS

PROSPECTUS

JULY 30, 1998

Real Estate Fund

INSTITUTIONAL CLASS

AMERICAN CENTURY CAPITAL PORTFOLIOS, INC.

American Century Capital Portfolios, Inc. is a part of American Century
Investments, a family of funds that includes nearly 70 no-load mutual funds
covering a variety of investment opportunities. The American Century Real Estate
Fund is described in this Prospectus. Its investment objective is listed on page
2 of this Prospectus. The other funds are described in separate prospectuses.

The shares offered in this Prospectus (the Institutional Class shares) are
sold at their net asset value with no sales charges or commissions.

The Institutional Class shares are available for purchase by large
institutional shareholders, such as bank trust departments, corporations,
endowments, foundations and financial advisors that meet the fund's minimum
investment requirements. Institutional Class shares are not available for
purchase by insurance companies or participant-directed employer-sponsored
retirement plans.

Additional information, including this Prospectus and the Statement of
Additional Information, may be obtained by accessing the Web site maintained by
the SEC (www.sec.gov).

PROSPECTUS 1

INVESTMENT OBJECTIVE OF THE FUND

AMERICAN CENTURY REAL ESTATE FUND

There is no assurance that the fund will achieve its investment objective.

2 INVESTMENT OBJECTIVE AMERICAN CENTURY INVESTMENTS

TABLE OF CONTENTS

INFORMATION REGARDING THE FUND
Investment Policies of the Fund ........................................... 7
Investment Objective ................................................... 7
Investment Strategy .................................................... 7
Investments in Real Estate ............................................. 7
Investment Philosophy .................................................. 8
Other Investment Practices, Their Characteristics
and Risks .............................................................. 8
U.S. Fixed Income Securities ........................................... 9
Diversification ........................................................ 9
When-Issued Securities ................................................. 9
Rule 144A Securities ................................................... 9
Borrowing .............................................................. 10
Portfolio Turnover ..................................................... 10
Repurchase Agreements .................................................. 10
Futures and Options .................................................... 11
Investments in Companies With Limited
Operating Histories ................................................. 11
Performance Advertising ................................................... 11

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS
American Century Investments .............................................. 13
Investing in American Century ............................................. 13
How to Open an Account .................................................... 13
By Mail ........................................................ 13
By Wire ........................................................ 13
By Exchange .................................................... 13
In Person ...................................................... 14
Subsequent Investments .............................................. 14
By Mail ........................................................ 14
By Telephone ................................................... 14
By Wire ........................................................ 14
In Person ...................................................... 14
Automatic Investment Plan ........................................... 14
Minimum Investment .................................................. 14
How to Exchange From One Account to Another .............................. 14
By Mail ........................................................ 15
By Telephone ................................................... 15
How to Redeem Shares ..................................................... 15
By Mail ........................................................ 15
By Telephone ................................................... 15
By Check-A-Month ............................................... 15
Other Automatic Redemptions .................................... 15
Redemption Proceeds ................................................. 15
By Check ....................................................... 15
By Wire and ACH ................................................ 15
Special Requirements for Large Redemptions .......................... 15
Signature Guarantee ...................................................... 16
Special Shareholder Services ............................................. 16
Open Order Service ............................................. 16
Tax-Qualified Retirement Plans ................................. 16
Important Policies Regarding Your Investments ............................ 17
Reports to Shareholders .................................................. 17
Customers of Banks, Broker-Dealers and Other
Financial Intermediaries ............................................... 18

ADDITIONAL INFORMATION YOU SHOULD KNOW
Share Price ............................................................... 19
When Share Price Is Determined ......................................... 19
How Share Price Is Determined .......................................... 19
Where to Find Information About Share Price ............................ 20
Distributions ............................................................. 20
Taxes ..................................................................... 20
Tax-Deferred Accounts .................................................. 20
Taxable Accounts ....................................................... 20
Management ................................................................ 22
Investment Management .................................................. 22
Performance History of the Subadvisor .................................. 22
Performance Highlights ................................................. 24
Code of Ethics ......................................................... 25
Transfer and Administrative Services ................................... 25
Year 2000 Issues ....................................................... 25
Distribution of Fund Shares ............................................... 26
Further Information About American Century ................................ 26

PROSPECTUS TABLE OF CONTENTS 3

TRANSACTION AND OPERATING EXPENSE TABLE

SHAREHOLDER TRANSACTION EXPENSES:

Maximum Sales Load Imposed on Purchases ............................... none
Maximum Sales Load Imposed on Reinvested Dividends .................... none
Deferred Sales Load ................................................... none
Redemption Fee ........................................................ none
Exchange Fee .......................................................... none

ANNUAL FUND OPERATING EXPENSES (as a percentage of net assets):

Management Fees ....................................................... 1.00%
12b-1 Fees ............................................................ none
Other Expenses(1) ..................................................... 0.00%
Total Fund Operating Expenses ......................................... 1.00%

EXAMPLE:

You would pay the following expenses on a 1 year $10
$1,000 investment, assuming a 5% annual return and 3 years 32
redemption at the end of each time period: 5 years 55
10 years 122

(1) Other expenses, which include the fees and expenses (including legal counsel
fees) of those directors who are not "interested persons" as defined in the
Investment Company Act, are expected to be less than 0.01 of 1% of average
net assets for the next fiscal year.

The purpose of this table is to help you understand the various costs and
expenses that you, as a shareholder, will bear directly or indirectly in
connection with an investment in the class of shares of the fund offered by this
Prospectus. The example set forth above assumes reinvestment of all dividends
and distributions and uses a 5% annual rate of return as required by Securities
and Exchange Commission regulations.

The shares offered by this Prospectus are Institutional Class shares. The
fund offers two other classes of shares, one of which is primarily made
available to retail investors and one that is primarily made available to
institutional investors. The other classes have different fee structures than
the Institutional Class. The difference in the fee structures among 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 manager
for core investment advisory services. Accordingly, the core investment advisory
expenses do not vary by class. A difference in fees will result in different
performance for the other classes. For additional information about the various
classes, see "Further Information About American Century," page 26.

4 TRANSACTION AND OPERATING EXPENSE TABLE AMERICAN CENTURY INVESTMENTS

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

REAL ESTATE FUND

The Financial Highlights for the periods presented have been audited by
Deloitte & Touche LLP, independent auditors, whose report thereon appears in the
fund's annual report, which is incorporated by reference into the Statement of
Additional Information. The annual report contains additional performance
information and will be made available upon request and without charge. The
information presented is for a share outstanding for the period ended October
31, except as noted.

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

<S> <C> <C>
Net Asset Value, Beginning of Period ..................$ 16.06 $ 14.24
------------ ------------
Income From Investment Operations

Net Investment Income(3) ............................ 0.26 0.28

Net Realized and Unrealized Gain
on Investment Transactions .......................... 0.26 1.63
------------ ------------
Total From Investment Operations .................... 0.52 1.91
------------ ------------
Distributions

From Net Investment Income .......................... (0.19) (0.09)

From Net Realized Gains on
Investment Transactions ............................. (0.27) --
------------ ------------
Total Distributions ................................. (0.46) (0.09)
------------ ------------
Net Asset Value, End of Period ........................$ 16.12 $ 16.06
============ ============
Total Return(4) ..................................... 3.32% 13.40%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ..... 0.95%(5) 1.00%(5)

Ratio of Operating Expenses to Average Net Assets
(before expense waivers and reimbursements)(6) ...... 1.00%(5) --

Ratio of Net Investment Income to Average Net Assets .. 4.00%(5) 4.85%(5)

Ratio of Net Investment Income to Average Net Assets
(before expense waivers and reimbursements)(6) ...... 3.95%(5) --

Portfolio Turnover Rate ............................... 28% 69%

Average Commission Paid per Share of Equity
Security Traded ....................................$ 0.0534 $ 0.0528

Net Assets, End of Period (in thousands) ..............$ 14,795 $ 13,365

(1) Five month period ended March 31, 1998. The fund's fiscal year end was
changed from October 31 to March 31 resulting in a five month annual
reporting period.

(2) June 16, 1997 (commencement of sale) through October 31, 1997.

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

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

(5) Annualized.

(6) During the periods ended March 31, 1998, a portion of the subadvisory fee,
which is paid for subadvisory services, was waived.
</TABLE>

PROSPECTUS FINANCIAL HIGHLIGHTS 5

<TABLE>
<CAPTION>
PERFORMANCE INFORMATION OF OTHER CLASS

REAL ESTATE FUND

The Institutional Class of the fund was established June 16, 1997. The
financial information in this table regarding selected per share data for the
fund reflects the performance of the fund's Investor Class of shares, which has
a total expense ratio that is 0.20% higher than the Institutional Class. Had the
Institutional Class been in existence for the fund for the time periods
presented, the fund's performance information would be higher as a result of the
additional expense.

The Financial Highlights for the periods presented have been audited by
Deloitte & Touche LLP, independent auditors, whose report thereon appears in the
fund's annual report which is incorporated by reference into the Statement of
Additional Information. The annual report contains additional performance
information and will be made available upon request and without charge. The
information presented is for a share outstanding throughout the years ended
October 31, except as noted.

1998(1) 1997 1996 1995(2)

PER-SHARE DATA

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period .........................$ 16.06 $ 12.29 $ 9.82 $ 10.00
------------- ------------- ------------- -------------
Income From Investment Operations

Net Investment Income ..................................... 0.25(3) 0.67(3) 0.55 0.07

Net Realized and Unrealized Gain
(Loss)
on Investment Transactions ............................. 0.26 4.13 2.27 (0.25)
------------- ------------- ------------- -------------
Total From Investment Operations .......................... 0.51 4.80 2.82 (0.18)
------------- ------------- ------------- -------------
Distributions

From Net Investment Income ................................ (0.18) (0.48) (0.35) --

From Net Realized Gains on Investment Transactions ........ (0.27) (0.55) -- --
------------- ------------- ------------- -------------
Total Distributions ....................................... (0.45) (1.03) (0.35) --
------------- ------------- ------------- -------------
Net Asset Value, End of Period ...............................$ 16.12 $ 16.06 $ 12.29 $ 9.82
============= ============= ============= =============
Total Return(4) ........................................... 3.26% 40.69% 29.28% (1.80)%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses to Average Net Assets ............ 1.15%(5) 1.17% 1.00% 1.50%(5)

Ratio of Operating Expenses to Average Net
Assets
(before expense waivers and reimbursements)(6) ............ 1.20%(5) 1.82% 6.83% 14.83%(5)

Ratio of Net Investment Income to Average Net Assets ......... 3.75%(5) 4.48% 5.84% 6.66%(5)

Ratio of Net Investment Income to Average Net
Assets
(before expense waivers and reimbursements)(6) ............ 3.70%(5) 3.84% 0.01% (6.67)%(5)

Portfolio Turnover Rate ...................................... 28% 69% 86% --

Average Commission Paid per Share of Equity Security Traded ..$ 0.0534 $ 0.0528 $ 0.0545 --

Net Assets, End of Period (in thousands) .....................$ 135,922 $ 76,932 $ 7,209 $ 2,983

(1) Five month period ended March 31, 1998. The fund's fiscal year end was
changed from October 31 to March 31 resulting in a five month annual
reporting period.

(2) September 21, 1995 (inception) through October 31, 1995.

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

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

(5) Annualized.

(6) During the periods ended October 31, 1996 and October 31, 1995 and for a
portion of the period ended October 31, 1997, RREEF Real Estate Securities
Advisers L.P. voluntarily agreed to waive its management fee and reimburse
certain expenses incurred by the fund. The custodian offset part of its fees
for balance credits given to the fund.
</TABLE>

6 PERFORMANCE INFORMATION OF OTHER CLASS AMERICAN CENTURY INVESTMENTS

INFORMATION REGARDING THE FUND

INVESTMENT POLICIES OF THE FUND

INVESTMENT OBJECTIVE

INVESTMENT STRATEGY

INVESTMENTS IN REAL ESTATE

The fund may be subject to certain risks similar to those associated with
the direct ownership of real estate because of its policy of concentration in
the securities of REITs and companies that are principally engaged in the real
estate industry. The risks of direct ownership of real estate include: risks
related to general, regional, and local economic conditions and fluctuations in
interest rates; overbuilding and increased competition; increases in property
taxes and operating expenses; changes in zoning laws; heavy cash flow
dependency; possible lack of availability of mortgage funds; losses due to
natural disasters; regulatory limitations on rents; variations in market rental
rates; and changes in neighborhood values. In addition, the fund may incur
losses due to environmental problems. If there is historic contamination at a
site, the current owner is one of the parties that may be responsible for
clean-up costs.

PROSPECTUS INFORMATION REGARDING THE FUND 7

Equity REITs may be affected by changes in the value of the underlying
property owned by the trusts, while mortgage REITs may be affected by default or
payment problems relating to underlying mortgages, the quality of credit
extended, self-liquidation provisions by held mortgages may be paid in full, and
distributions of capital returns may be made at any time. Equity and mortgage
REITs are dependent upon the skill of their individual management personnel and
generally are not diversified. In addition, equity and mortgage REITs could be
adversely affected by failure to qualify for tax-free pass-through of income
under the Internal Revenue Code, or to maintain their exemptions from
registration under the Investment Company Act. By investing in REITs indirectly
through the fund, a shareholder will bear not only a proportionate share of the
expenses of the fund, but also indirectly, similar expenses of the REITs,
including compensation of management.

INVESTMENT PHILOSOPHY

OTHER INVESTMENT PRACTICES, THEIR CHARACTERISTICS
AND RISKS

For additional information, see "Investment Restrictions" in the Statement
of Additional Information.

8 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

U.S. FIXED INCOME SECURITIES

The fund may invest in fixed income securities for income or as a defensive
strategy when the manager believes adverse economic or market conditions exist.
As a temporary defensive strategy, the manager may invest part or all of the
fund's assets in debt securities. Fixed income securities are affected primarily
by changes in interest rates. The prices of these securities tend to rise when
interest rates fall, and conversely fall when interest rates rise. Generally,
the debt securities in which the fund may invest are investment grade
securities. These are securities rated in the four highest grades assigned by
Moody's Investors Services, Inc. or Standard and Poor's Corporation or that are
unrated but deemed to be of comparable quality by the manager. For a description
of fixed income securities ratings, see "An Explanation of Fixed Income
Securities Ratings" in the Statement of Additional Information.

Securities rated in the lowest investment-grade category may have
speculative characteristics. Changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than is the case for higher grade bonds. The fund may
invest in securities below investment grade although the fund will not purchase
such bonds if such investment would cause more than 5% of its net assets to be
so invested. Such bonds are considered speculative. In the event a debt security
held by the fund is downgraded to below investment grade, the fund is not
automatically required to sell the issue, but the manager will consider this in
determining whether to hold the security. However, if such a downgrade would
cause more than 5% of net assets to be invested in debt securities below
investment grade, sales will be made as soon as practicable to reduce the
proportion of debt below investment grade to 5% of net assets or less. When the
manager believes that economic or market conditions require a more defensive
strategy, the fund's assets may be invested without limitation in cash or cash
equivalents such as obligations issued or guaranteed by the U.S. government, its
agencies and/or instrumentalities or high quality money market instruments such
as notes, certificates of deposit or bankers' acceptances.

DIVERSIFICATION

The fund is classified as a "non-diversified" investment company under the
Investment Company Act of 1940, which means the fund is not limited by the
Investment Company Act in the proportion of its assets that may be invested in
the securities of a single issuer. However, the fund intends to conduct its
operations so as to qualify as a regulated investment company for purposes of
the Internal Revenue Code, so that it will not be subject to U.S. federal income
tax on income and capital gains distributions to shareholders. (See
"Distributions," page 20, and "Taxes," page 20.) To so qualify, among other
requirements, the fund will limit its investments so that, at the close of each
quarter of the taxable year, (i) not more than 25% of the market value of the
fund's total assets will be invested in the securities of a single issuer, and
(ii) with respect to 50% of the market value of its total assets, not more than
5% of the market value of its total assets will be invested in the securities of
a single issuer and the fund will not own more than 10% of the outstanding
voting securities of a single issuer. The fund's investments in U.S. government
securities are not subject to these limitations.

WHEN-ISSUED SECURITIES

RULE 144A SECURITIES

The fund may, from time to time, purchase Rule 144A securities when they
present attractive investment opportunities that otherwise meet the fund's

PROSPECTUS INFORMATION REGARDING THE FUND 9

criteria for selection. Rule 144A securities are securities that are privately
placed with and traded among qualified institutional buyers rather than the
general public. Although Rule 144A securities are considered "restricted
securities," they are not necessarily illiquid.

BORROWING

The fund's investment restrictions allow the fund to borrow money, 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).

PORTFOLIO TURNOVER

The total portfolio turnover rate of the fund is shown in the Financial
Highlights tables of the Prospectus.

Investment decisions to purchase and sell securities are based on the
anticipated contribution of the security in question to the fund's investment
objective. The manager believes that the rate of portfolio turnover is
irrelevant when it or the subadvisor determines a change is in order to achieve
those objectives and, accordingly, the annual portfolio turnover rate cannot be
anticipated.

REPURCHASE AGREEMENTS

A repurchase agreement occurs when, at the time the fund purchases an
interest-bearing obligation, the seller (a bank or broker-dealer registered
under the Securities Exchange Act of 1934) agrees to repurchase 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.

10 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

The fund will invest no more than 15% of its assets in repurchase agreements
maturing in more than seven days.

FUTURES AND OPTIONS

The fund may invest in financial contracts and options thereon. A financial
futures contract is an agreement to take or make delivery of a financial asset
or an amount of cash, as specified in the applicable contract, at some time in
the future. The value of the asset or cash to be delivered at the end of the
contract period is calculated based upon the difference in value between the
making of the contract and the end of the contract period of a financial index,
indicator or security underlying the futures contract.

Rather than actually purchasing a financial asset (e.g., a long- or
short-term treasury security) or all of the securities contained in a specific
index (e.g., the S&P 500), the manager may choose to purchase a futures contract
which reflects the value of such securities or index. For example, an S&P 500
futures contract reflects the value of the underlying companies that comprise
the S&P 500 Composite Stock Price Index. If the aggregate market value of the
index securities increases or decreases during the contract period of an S&P 500
futures contract, the amount of cash to be paid to the contract holder at the
end of the period would correspondingly increase or decrease. As a result, the
manager is able to expose to the market cash that is held by the fund to meet
anticipated redemptions or for future investment opportunities. Because futures
contracts generally settle more quickly than their underlying securities, the
manager believes that the use of futures and options thereon allows the fund to
be fully invested while maintaining the needed liquidity.

INVESTMENTS IN COMPANIES WITH LIMITED OPERATING HISTORIES

Investments in securities of issuers with limited operating histories may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating histories and financial
information upon which the manager may base its investment decision on behalf of
the fund. In addition, financial and other information regarding such issuers,
when available, may be incomplete or inaccurate.

PERFORMANCE ADVERTISING

PROSPECTUS INFORMATION REGARDING THE FUND 11

A quotation of yield reflects the fund's income over a stated period
expressed as a percentage of the fund's share price.

Yields are calculated according to accounting methods that are standardized
in accordance with SEC rules for all stock and bond funds. Because yield
accounting methods differ from the methods used for other accounting purposes,
the fund's yield may not equal the income paid on its shares or the income
reported in the fund's financial statements.

The fund also may include in advertisements data comparing its performance
with the performance of non-related investment media, published editorial
comments and performance rankings compiled by independent organizations (such as
Lipper Analytical Services) and publications that monitor the performance of
mutual funds. Performance information may be quoted numerically or may be
presented in a table, graph or other illustration. In addition, fund performance
may be compared to well known indices of market performance, such as Morgan
Stanley REIT Index, NAREIT Equity-Less Health Care Index, Standard & Poor's 500
Composite Stock Price Index and Wilshire REIT Only Index. The performance of the
fund may also be compared, on a relative basis, to other funds in our fund
family. This relative comparison, which may be based upon historical or expected
fund performance, volatility or other fund characteristics, may be presented
numerically, graphically or in text.

12 INFORMATION REGARDING THE FUND AMERICAN CENTURY INVESTMENTS

HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS

AMERICAN CENTURY INVESTMENTS

The fund offered by this Prospectus is a part of the American Century
Investments family of mutual funds. Our family provides a full range of
investment opportunities, from the aggressive equity growth funds in our
Twentieth Century Group, to the fixed income funds in our Benham Group, to the
moderate risk and specialty funds in our American Century Group. Please call
1-800-345-3533 for a brochure or prospectuses for the other funds in the
American Century Investments family.

INVESTING IN AMERICAN CENTURY

If you own or are considering purchasing fund shares through a bank,
broker-dealer or other financial intermediary, the following sections, as well
as the information contained in our Investor Services Guide, may not apply to
you. Please read "Minimum Investment," page 14, and "Customers of Banks,
Broker-Dealers and Other Financial Intermediaries," page 18.

HOW TO OPEN AN ACCOUNT

You may invest in the following ways:

BY MAIL

Send a completed application and check or money order payable in U.S.
dollars to American Century Investments.

BY WIRE

You may make your initial investment by wiring funds. To do so, call us or
mail a completed application and provide your bank with the following
information:

o RECEIVING BANK AND ROUTING NUMBER:
Commerce Bank, N.A. (101000019)

o BENEFICIARY (BNF):
American Century Services Corporation
4500 Main St., Kansas City, Missouri 64141

o BENEFICIARY ACCOUNT NUMBER (BNF ACCT):
2804918

o REFERENCE FOR BENEFICIARY (RFB):
American Century account number into which you are investing. If more than
one, leave blank and see Bank to Bank Information below.

o ORIGINATOR TO BENEFICIARY (OBI):
Name and address of owner of account into which you are investing.

o BANK TO BANK INFORMATION
(BBI OR FREE FORM TEXT):

* Taxpayer identification or Social Security
number.

* If more than one account, account numbers and amount to be invested in
each account.

* Current tax year, previous tax year or rollover designation if an IRA.
Specify whether traditional IRA, Roth IRA, Education IRA, SEP-IRA,
SARSEP-IRA, SIMPLE Employer or SIMPLE Employee.

BY EXCHANGE

Call 1-800-345-3533 from 7 a.m. to 7 p.m. Central time to get information on
opening an account by exchanging from another American Century account. See page
14 for more information on exchanges.

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 13

IN PERSON

If you prefer to work with a representative in person, please visit one of
our Investor Centers, located at:

4500 Main Street
Kansas City, Missouri 64111

4917 Town Center Drive
Leawood, Kansas 66211

1665 Charleston Road
Mountain View, California 94043

2000 S. Colorado Blvd.
Denver, Colorado 80222

SUBSEQUENT INVESTMENTS

BY MAIL

BY TELEPHONE

Upon completion of your application and once your account is open, you may
make investments by telephone. You may call an Institutional Service
Representative.

BY WIRE

You may make subsequent investments by wire. Follow the wire transfer
instructions on page 13 and indicate your account number.

IN PERSON

You may make subsequent investments in person at one of our Investor
Centers. The locations of our Investor Centers are listed on this page.

AUTOMATIC INVESTMENT PLAN

MINIMUM INVESTMENT

HOW TO EXCHANGE FROM ONE ACCOUNT TO ANOTHER

As long as you meet any minimum investment requirements, you may exchange
your fund shares to our other funds up to six times per year per account. An
exchange request will be processed as of the same day it is received if it is
received before the fund's net asset value is calculated, which is one hour
prior to the close of the New York Stock Exchange for the American Century
Target Maturities Trust, and at the close of the Exchange for all of our other
funds (see "When Share Price Is Determined," page 19).

14 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

of at least $50 per month. See our Investor Services Guide for further
information about exchanges.

If, in any 90-day period, the total of your exchanges and your redemptions
from any one account exceeds the lesser of $250,000 or 1% of the fund's assets,
further exchanges will be subject to special requirements to comply with our
policy on large redemptions (see "Special Requirements for Large Redemptions,"
on this page).

BY MAIL

You may direct us in writing to exchange your shares from one American
Century account to another. For additional information, please see our Investor
Services Guide.

BY TELEPHONE

You can make exchanges over the telephone upon completion and receipt of
your application or by calling an Institutional Service Representative at
1-800-345-3533 to get the appropriate form.

HOW TO REDEEM SHARES

We will redeem or "buy back" your shares at any time. Redemptions will be
made at the next net asset value determined after a complete redemption request
is received. For large redemptions, please read "Special Requirements for Large
Redemptions," on this page.

Please note that a request to redeem shares in an IRA or 403(b) plan must be
accompanied by an executed IRS Form W4-P and a reason for withdrawal as
specified by the IRS.

BY MAIL

BY TELEPHONE

If you have authorized us to accept telephone instructions, you may redeem
your shares by calling an Institutional Service Representative.

BY CHECK-A-MONTH

OTHER AUTOMATIC REDEMPTIONS

REDEMPTION PROCEEDS

Redemption proceeds may be sent to you in one of the following ways:

BY CHECK

BY WIRE AND ACH

You may authorize us to transmit redemption proceeds by wire or ACH. These
services will be effective 15 days after we receive the authorization.

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 15

cash, we reserve the right under unusual circumstances to honor these
redemptions by making payment in whole or in part in readily marketable
securities (a "redemption-in-kind").

SIGNATURE GUARANTEE

We reserve the right to require a signature guarantee on any transaction, or
to change this policy at any time.

SPECIAL SHAREHOLDER SERVICES

Our special shareholder services include:

OPEN ORDER SERVICE

TAX-QUALIFIED RETIREMENT PLANS

This fund is available for your tax-deferred retirement plan. Call or write
us and request the appropriate forms for:

o Individual Retirement Accounts (IRAs);

o 403(b) plans for employees of public school
systems and non-profit organizations; or

16 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

o Profit sharing plans and pension plans for corporations and other
employers.

If your IRA and 403(b) accounts do not total $10,000, each account is
subject to an annual $10 fee, up to a total of $30 per year.

You can also transfer your tax-deferred plan to us from another company or
custodian. Call or write us for a Request to Transfer form.

IMPORTANT POLICIES REGARDING YOUR INVESTMENTS

(1) We reserve the right for any reason to suspend the offering of shares for
a period of time, or to reject any specific purchase order (including
purchases by exchange). Additionally, purchases may be refused if, in the
opinion of the manager, they are of a size that would disrupt the
management of the fund.

(3) Shares being acquired must be qualified for sale in your state of
residence.

(4) Transactions requesting a specific price and date, other than open orders,
will be refused. Once you have mailed or otherwise transmitted your
transaction instructions to us, they may not be modified or canceled.

(5) If a transaction request is made by a corporation, partnership, trust,
fiduciary, agent or unincorporated association, we will require evidence
satisfactory to us of the authority of the individual making the request.

(6) We have established procedures designed to assure the authenticity of
instructions received by telephone. These procedures include requesting
personal identification from callers, recording telephone calls, and
providing written confirmations of telephone transactions. These
procedures are designed to protect shareholders from unauthorized or
fraudulent instructions. If we do not employ reasonable procedures to
confirm the genuineness of instructions, then we may be liable for losses
due to unauthorized or fraudulent instructions. The company, its transfer
agent and manager will not be responsible for any loss due to instructions
they reasonably believe are genuine.

(7) All signatures should be exactly as the name appears in the registration.
If the owner's name appears in the registration as Mary Elizabeth Jones,
she should sign that way and not as Mary E. Jones.

(8) Unusual stock market conditions have in the past resulted in an increase
in the number of shareholder telephone calls. If you experience difficulty
in reaching us during such periods, you may send your transaction
instructions by mail, express mail or courier service, or you may visit
one of our Investor Centers. You also may use our Automated Information
Line if you have requested and received an access code and are not
attempting to redeem shares.

(10) We will perform special inquiries on shareholder accounts. A research fee
of $15 per hour may be applied.

REPORTS TO SHAREHOLDERS

PROSPECTUS HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS 17

No later than January 31 of each year, we will send you reports that you may
use in completing your U.S. income tax return. See the Investor Services Guide
for more information.

CUSTOMERS OF BANKS, BROKER-DEALERS
AND OTHER FINANCIAL INTERMEDIARIES

Information contained in our Investor Services Guide pertains to
shareholders who invest directly with American Century rather than through a
bank, broker-dealer or other financial intermediary.

You may reach an Institutional Service Representative by calling
1-800-345-3533 to request information about our funds and services, to obtain a
current prospectus or to get answers to any questions about our funds that you
are unable to obtain through your financial intermediary.

18 HOW TO INVEST WITH AMERICAN CENTURY INVESTMENTS AMERICAN CENTURY INVESTMENTS

ADDITIONAL INFORMATION YOU SHOULD KNOW

SHARE PRICE

WHEN SHARE PRICE IS DETERMINED

The price of your shares is also referred to as their net asset value. Net
asset value is determined by calculating the total value of a fund's assets,
deducting total liabilities and dividing the result by the number of shares
outstanding. For all American Century funds, except funds issued by American
Century Target Maturities Trust, net asset value is determined as of the close
of regular trading on each day that the New York Stock Exchange is open, usually
3 p.m. Central time. Net asset values for Target Maturities funds are determined
one hour prior to the close of the Exchange.

Investments and requests to redeem or exchange shares will receive the share
price next determined after we receive your investment, redemption or exchange
request. For example, investments and requests to redeem or exchange shares
received by us or our agents or designees before the time as of which the net
asset value of the fund is determined, are effective on, and will receive the
price determined, that day. Investment, redemption and exchange requests
received thereafter are effective on, and receive the price determined as of,
the close of the Exchange on the next day the Exchange is open.

Investments by telephone pursuant to your prior authorization to us to draw
on your bank account are considered received at the time of your telephone call.

If you invest in fund shares through a bank, financial advisor or other
financial intermediary, it is the responsibility of your financial intermediary
to transmit your purchase, exchange and redemption requests to the fund's
transfer agent prior to the applicable cut-off time for receiving orders, and to
make payment for any purchase transactions in accordance with the fund's
procedures or any contractual arrangement with the fund or the fund's
distributor, in order for you to receive that day's price.

We have contractual relationships with certain financial intermediaries in
which such intermediaries represent that they have systems to track the time at
which investment orders are received and to segregate orders received at
different times. Based on these representations, the fund has authorized such
intermediaries and their designees to accept purchase and redemption orders on
the fund's behalf up to the applicable cut-off time. The fund will be deemed to
have received such orders upon acceptance by the duly authorized intermediary,
and such orders will be priced at the fund's net asset value next determined
after acceptance on the fund's behalf by such intermediary.

HOW SHARE PRICE IS DETERMINED

The valuation of assets for determining net asset value may be summarized as
follows:

The portfolio securities of the fund, except as otherwise noted, listed or
traded on a domestic securities exchange, are valued at the last sale price on
that exchange. If no sale is reported, or if local convention or regulation so
provides, the mean of the latest bid and asked prices is used. Depending on
local convention or regulation, securities traded over-the counter are priced at
the mean of the latest bid and asked prices or at the last sale price. When
market quotations are not readily available, securities and other assets are
valued at fair value as determined in accordance with procedures adopted by the
Board of Directors.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 19

WHERE TO FIND INFORMATION ABOUT SHARE PRICE

The net asset value of the Investor Class shares of the fund is published in
leading newspapers daily. The net asset value of the Institutional Class of the
fund may be obtained by calling us.

DISTRIBUTIONS

Distributions from net investment income are declared and paid quarterly.
Distributions from net realized securities gains, if any, are generally declared
and paid annually, usually in December, but the fund may make distributions on a
more frequent basis to comply with the distribution requirements of the Internal
Revenue Code, in all events in a manner consistent with the provisions of the
Investment Company Act.

Because such gains and dividends are included in the price of your shares
prior to distribution, when they are distributed, the price of your shares will
be reduced by the amount of the distribution. If you buy your shares through a
taxable account just before the distribution, you will pay the full price for
your shares and then receive a portion of the purchase price back as a taxable
distribution. See "Taxes," this page.

TAXES

TAX-DEFERRED ACCOUNTS

If fund shares are purchased through tax-deferred accounts, such as a
qualified employer-sponsored retirement or savings plan (excluding
participant-directed employer-sponsored retirement plans, which are ineligible
to invest in Institutional Class shares), income and capital gains distributions
paid by the fund generally will not be subject to current taxation, but will
accumulate in your account on a tax-deferred basis.

TAXABLE ACCOUNTS

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 longer than 12 months but no more than 18 months (28% rate gain) and/or
assets held longer than 18 months (20% rate gain) are taxable as long-term gains
regardless of the length of time you have held the shares. Additionally, the
fund may receive distributions of "unrecaptured Section 1250" gains from REITs.
To the extent the fund receives such distributions, "unrecaptured Section 1250"
gains will be distributed to shareholders of the fund. 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
distribution of long-term capital gains (28% or 20% rate gain) to you with
respect to such shares.

20 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

realized, they will, to the extent not offset by capital losses, be paid to you
as a distribution of capital gains and will be taxable to you as short-term or
long-term capital gains (28% and/or 20% rate gains). See "Distributions," page
20.

Because of the nature of REIT investments, REITs may generate significant
non cash deductions (i.e., depreciation on real estate holdings) while having a
greater cash flow to distribute to its shareholders. If a REIT distributes more
cash than it has taxable income, a "return of capital" results. A "return of
capital" represents a portion of a shareholder's original investment that is
generally non taxable when distributed (returned) to the investor. The fund may
pay a return of capital distribution to the shareholders by distributing more
cash than its taxable income. If you do not reinvest distributions, the cost
basis of your shares will be decreased by the amount of return capital, which
may result in a larger capital gain when you sell your shares. Although a return
of capital is generally non taxable to you upon distribution, it would be
taxable to you as a capital gain if your cost basis in the shares is reduced to
zero. This could occur if you do not reinvest distributions and the returns of
capital are significant.

Redemption of shares of a fund (including redemptions made in an exchange
transaction) will be a taxable transaction for federal income tax purposes, and
shareholders generally will recognize a gain or loss in an amount equal to the
difference between the basis of the shares and the amount received. Assuming
that shareholders hold such shares as a capital asset, the gain or loss will be
a capital gain or loss and generally will be considered long-term subject to tax
at a maximum rate of 28% if shareholders have held such shares for a period of
more than 12 months but no more than 18 months, and long-term subject to tax at
a maximum rate of 20% if shareholders have held such shares for a period of more
than 18 months. If a loss is realized on the redemption of fund shares, the
reinvestment in additional fund shares within 30 days before or after the
redemption may be subject to the "wash sale" rules of the Internal Revenue Code,
resulting in a postponement of the recognition of such loss for federal income
tax purposes.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 21

of the fund's income from a REIT that is attributable to the REIT's residual
interest in a REMIC will be subject to federal income tax in all events. (See
"Taxes-Taxation of Certain Mortgage REITs" in the Statement of Additional
Information.)

MANAGEMENT

INVESTMENT MANAGEMENT

RREEF America, L.L.C., acting pursuant to a subadvisory agreement among it,
American Century Investment Management, Inc. and the fund, makes the day-to-day
investment decisions for the fund in accordance with the fund's investment
objective, policies, and restrictions under the supervision of the manager and
the Board of Directors.

The portfolio manager members of the subadvisor's team that manages the fund
and their work experience for the last five years are as follows:

The representative of the investment manager that will oversee the
subadvisor's operation of the fund is as follows:

For the services provided to the Institutional Class of the fund, the
manager receives an annual fee of 1.00% of the average net assets of the fund.

On the first business day of each month, the fund pays the management fee to
the manager for the previous month at the specified rate. The fee for the
previous month is calculated by multiplying 1.00% of the aggregate average daily
closing value of each 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).

For subadvisory services, the manager pays the subadvisor an annual fee of
0.425% of the average net assets of the fund.

PERFORMANCE HISTORY OF THE SUBADVISOR

22 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

activity based upon the aggregate performance of selected unmanaged portfolios
of publicly traded common stocks.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 23

<TABLE>
<CAPTION>
PERFORMANCE HIGHLIGHTS

(See Notes Below)

ANNUALIZED RETURNS FROM OCTOBER 1987 THROUGH DECEMBER 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
RREEF Real Estate Securities Advisers
Before Fees .................................................................................................. 19.7%
After Fees ................................................................................................... 19.0%
NAREIT Equity Less Healthcare ................................................................................... 16.0%
Wilshire REIT Index ............................................................................................. 15.0%

For the Years Ended December 31,

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

ANNUAL TIME-WEIGHTED RETURNS

24 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

CODE OF ETHICS

TRANSFER AND ADMINISTRATIVE SERVICES

Certain recordkeeping and administrative services that would otherwise be
performed by the transfer agent may be performed by an insurance company or
other entity providing similar services for various retirement plans using
shares of the fund as a funding medium, by broker-dealers and financial advisors
for their customers investing in shares of American Century, or by sponsors of
multi mutual fund no- or low-transaction fee programs.

Although there is no sales charge levied by the fund, transactions in shares
of the fund may be executed by brokers or investment advisors who charge a
transaction-based fee or other fee for their services. Such charges may vary
among broker-dealers and financial advisors, but in all cases will be retained
by the broker-dealer or financial advisor and not remitted to the fund or its
manager. You should be aware of the fact that these transactions may be made
directly with American Century without incurring such fees.

Pursuant to a Sub-Administration Agreement with the manager, Funds
Distributor, Inc. (FDI) serves as the co-administrator for the fund. FDI is
responsible for (i) providing certain officers of the fund and (ii) reviewing
and filing marketing and sales literature on behalf of the fund. The fees and
expenses of FDI are paid by the manager.

YEAR 2000 ISSUES

The transfer agent, in cooperation with the manager, has assembled a team of
information technology professionals who are taking steps to address Year 2000
issues with respect to its own computers and to obtain satisfactory assurances
that comparable steps are being taken by the fund's and the manager's other
major service providers and vendors. The key phases of the remediation plan
include: an inventory of all internal systems, vendor products and services, and
data providers (substantially completed in 1997); an assessment of all systems
for date reliance and the impact of the century rollover on each (substantially
completed with respect to critical systems in early 1998); and the renovation
and testing of affected

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 25

systems (targeted for completion with respect to critical systems by the end of
1998). The manager will pay for the remediation effort with revenues from its
management fee, so that the fund will not directly bear any of the cost.

DISTRIBUTION OF FUND SHARES

The fund's shares are distributed by FDI, a registered broker-dealer. FDI is
a wholly owned, indirect subsidiary of Boston Institutional Group, Inc. FDI's
principal business address is 60 State Street, Suite 1300, Boston, Massachusetts
02109. The Institutional Class of shares does not pay any commissions or sales
loads to the distributor or to any other broker-dealers or financial
intermediaries in connection with the distribution of fund shares.

Investors may open accounts with American Century only through the
distributor. All purchase transactions in the fund offered by this Prospectus
are processed by the transfer agent, which is authorized to accept any
instructions relating to fund accounts. All purchase orders must be accepted by
the distributor. All fees and expenses of FDI in acting as distributor for the
funds are paid by the manager.

FURTHER INFORMATION ABOUT AMERICAN CENTURY

American Century Capital Portfolios, Inc., the issuer of the fund, was
organized as a Maryland corporation on June 14, 1993.

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

The Investor Class is made available primarily to retail investors. The
Advisor Class is offered primarily to institutional investors or through
institutional distribution channels, such as employer-sponsored retirement plans
or through banks, broker-dealers, insurance companies or other financial
intermediaries. The other classes have different fees, expenses and/or minimum
investment requirements than the Institutional Class. The difference in the fee
structures among 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 manager 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 Investor Class of shares, call one of our Investor Services
Representatives at 1-800-345-2021. For information concerning the other classes
of shares offered by this Prospectus, call an Institutional Service
Representative at 1-800-345-3533, or contact a sales representative or financial
intermediary who offers those classes of shares.

26 ADDITIONAL INFORMATION YOU SHOULD KNOW AMERICAN CENTURY INVESTMENTS

class may be subject to different expenses specific to that class, (b) each
class has a different identifying designation or name, (c) each class has
exclusive voting rights with respect to matters solely affecting such class, (d)
each class may have different exchange privileges, and (e) the Institutional
Class may provide for automatic conversion from that class into shares of the
Investor Class of the same fund.

PROSPECTUS ADDITIONAL INFORMATION YOU SHOULD KNOW 27

NOTES

28 NOTES AMERICAN CENTURY INVESTMENTS

NOTES

PROSPECTUS NOTES 29

P.O. BOX 419385
KANSAS CITY, MISSOURI
64141-6385

INSTITUTIONAL SERVICES:
1-800-345-3533 OR 816-531-5575

TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-345-1833 OR 816-444-3038

FAX: 816-340-4655

WWW.AMERICANCENTURY.COM

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

9807 [recycled logo]
SH-BKT-12608 Recycled