SEMIANNUAL REPORT
[american century logo]
American
Century(sm)
May 31, 1997
AMERICAN
CENTURY
GROUP
Strategic Allocation: Conservative
Strategic Allocation: Moderate
Strategic Allocation: Aggressive
[front cover]
TABLE OF CONTENTS
Report Highlights........................................... 1
Our Message to You.......................................... 2
Period Overview............................................. 3
Strategic Allocation: Conservative
Performance & Portfolio Information...................... 5
Management Q & A......................................... 6
Schedule of Investments.................................. 9
Financial Highlights.....................................54
Strategic Allocation: Moderate
Performance & Portfolio Information......................17
Management Q & A.........................................18
Schedule of Investments..................................21
Financial Highlights.....................................55
Strategic Allocation: Aggressive
Performance & Portfolio Information......................32
Management Q & A.........................................33
Schedule of Investments..................................36
Financial Highlights.....................................56
Statements of Assets and Liabilities........................47
Statements of Operations....................................48
Statements of Changes in Net Assets.........................49
Notes to Financial Statements...............................50
Share Class and Retirement
Account Information.........................................57
Background Information
Investment Philosophy & Policies.........................60
Comparative Indices......................................60
Lipper Rankings..........................................60
Portfolio Management Team................................60
Neutral Asset Mixes......................................60
Glossary....................................................61
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 needs, we have divided American Century funds
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 -- Family of Funds
BENHAM GROUP AMERICAN CENTURY GROUP TWENTIETH CENTURY GROUP
MONEY MARKET FUNDS ASSET ALLOCATION &
GOVERNMENT BOND FUNDS BALANCED FUNDS U.S. GROWTH FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS INTERNATIONAL FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
Strategic Allocation: Conservative
Strategic Allocation: Moderate
Strategic Allocation: Aggressive
We welcome your comments or questions about this report.
See the back cover for ways to contact us by mail, phone or e-mail.
Twentieth Century and the Benham Group are registered marks of American Century
Services Corporation and Benham Management Corporation, respectively. American
Century is a service mark of American Century Services Corporation.
American Century Investments
REPORT HIGHLIGHTS
Period Overview
o U.S. stocks continued to produce healthy gains during the six months ended
May 31, 1997. However, the market experienced significant price volatility.
o U.S. bond performance was mixed but relatively flat overall. Strong
economic growth in the first quarter of 1997 led to rising interest rates.
o Among foreign stock markets, Europe had the strongest returns of any
region, while Asian markets suffered sizable losses.
o Foreign bond markets produced favorable returns as interest rates declined
around the globe.
o The U.S. dollar strengthened against most major foreign currencies,
reducing returns from foreign investments.
Strategic Allocation: Conservative
o The fund underperformed its Lipper peer group average during the six-month
period.
o The fund maintained a fairly neutral asset mix during the period, although
we expanded its foreign stock position late in the period.
o We adjusted the fund's U.S. stock investment approach by adding a
quantitative component. We believe this will help provide greater stability
to the fund's U.S. stock holdings.
o Going forward, we plan to continue overweighting the fund's foreign stock
holdings, especially in Europe, while underweighting U.S. stocks.
Strategic Allocation: Moderate
o The fund underperformed its Lipper peer group average during the six-month
period.
o The fund maintained a fairly neutral asset mix during the period, although
we expanded its foreign stock position late in the period.
o We adjusted the fund's U.S. stock investment approach by adding a
quantitative component. We believe this will help provide greater balance
to the fund's U.S. stock holdings.
o Going forward, we plan to continue overweighting the fund's foreign stock
holdings, especially in Europe, while underweighting U.S. stocks.
Strategic Allocation: Aggressive
o The fund underperformed its Lipper peer group average during the six-month
period.
o The fund maintained a fairly neutral asset mix during the period, although
we expanded its foreign stock position late in the period.
o We adjusted the fund's U.S. stock investment approach by adding a
quantitative component. We believe this will help provide greater diversity
to the fund's U.S. stock holdings.
o Going forward, we plan to continue overweighting the fund's foreign stock
holdings, especially in Europe, while underweighting U.S. stocks.
CONSERVATIVE
INVESTOR CLASS(1)
Total Returns: AS OF 5/31/97
6 Months 2.84%(2)
1 Year 9.16%
Net Assets: $52.1 million
(AS of 5/31/97)
Inception Date: 2/15/96
Ticker Symbol: TWSCX
MODERATE
INVESTOR CLASS(1)
Total Returns: AS OF 5/31/97
6 Months 4.06%(2)
1 Year 10.92%
Net Assets: $131.2 million
(AS of 5/31/97)
Inception Date: 2/15/96
Ticker Symbol: TWSMX
AGGRESSIVE
INVESTOR CLASS(1)
Total Returns: AS OF 5/31/97
6 Months 4.55%(2)
1 Year 10.55%
Net Assets: $85.2 million
(AS of 5/31/97)
Inception Date: 2/15/96
Ticker Symbol: TWSAX
(1) See Share Classes, page 57.
(2) Not annualized.
Semiannual Report Report Highlights 1
OUR MESSAGE TO YOU
[photo of James E. Stowers III]
The widely divergent performance of the world's financial markets during the six
months ended May 31, 1997, underscored the importance of diversified investing.
European and American stock markets produced strong returns, but Asian stock
markets suffered losses. Domestic bond returns were mixed, while the stronger
U.S. dollar hurt foreign bond returns.
Within this environment, the diversified portfolios of the Strategic Asset
Allocation funds produced positive returns consistent with their asset
allocation strategies. In the following pages, our investment management team
discusses the performance of the global financial markets in more detail and
describes how your fund was managed during the period.
The Strategic Asset Allocation funds' management team, headed by Jeff Tyler and
Brian Howell, includes some of American Century's most experienced investment
professionals. Recently, our international investment team, which manages the
foreign stock portion of the funds, welcomed Mark Kopinski back after a two-year
stint with another investment company. Kopinski helped create American Century's
international management team in 1991, and his years of experience and expertise
in Asia will be invaluable to the management of our international stock funds,
as well as the Strategic Asset Allocation funds.
We also strengthened our corporate team. In June, Bill Lyons, American Century's
chief operating officer, was named president, assuming full responsibility for
the company's day-to-day operations. With this change, I will be able to focus
more time on developing and refining new investment technologies and tools that
build on and leverage the proprietary system my father pioneered 25 years ago.
One of our goals is to ensure that we continue to evolve and innovate--building
the investment tools today that will help lead us and our investors to success
in the next century.
We appreciate your confidence in American Century and look forward to continuing
to serve you.
Sincerely,
/s/James E. Stowers III
James E. Stowers III
Chief Executive Officer
2 Our Message to You American Century Investments
PERIOD OVERVIEW
U.S. Stocks
The U.S. stock market, which has been rising steadily since the beginning of
1995, produced healthy gains during the six months ended May 31, 1997. The major
U.S. stock indexes (such as the Dow Jones Industrials and the S&P 500) reached
record highs on their way to returns of more than 10% for the six-month period.
Despite solidly positive returns, U.S. stocks experienced substantial price
volatility, especially among the stocks of smaller companies. Uncertainty about
the economy and corporate earnings growth led to a significant amount of
day-to-day volatility early in the six-month period.
In February and March, concerns about rising interest rates and declining
corporate profits took their toll, and stock prices began to slide. Technology
companies and other "aggressive growth" stocks--so called because of their
propensity for sharp price swings--suffered the biggest losses, falling as much
as 25% as a group.
But the downward trend reversed in May, when interest rate expectations leveled
off and first-quarter corporate earnings reports showed surprisingly strong
growth. Aggressive growth stocks produced the strongest rebound, retracing most
of their earlier losses in just a few weeks.
As the accompanying table shows, small-capitalization stocks (such as those in
the Russell 2000) underperformed large-capitalization stocks (such as those in
the S&P 500) during the period. This was a continuation of a trend that began in
early 1996, when uncertain investors fled from smaller-company stocks and
flocked to the largest, most-liquid stocks.
The greater volatility of small-cap stocks compounded this disparity. The
small-cap stock universe includes many aggressive growth stocks, whose inherent
volatility hurt their performance during the period.
However, the more extreme price swings of small-cap stocks worked in their favor
toward the end of the period. Renewed optimism and relatively attractive prices
brought investors back into small-cap stocks in late April. After reaching its
lowest point of the period on April 25, the Russell 2000 returned nearly 14%
through the end of May. By comparison, the S&P 500 posted a return of about 11%
during the same period.
U.S. Bonds
U.S. bonds produced mixed returns during the six months ended May 31. Rising
yields caused bond prices to fall, but the interest paid out to bondholders
offset the price declines to a large degree. Short-term securities, which
usually suffer less price depreciation than longer-term securities when interest
rates rise, were the best performers. For example, the two-year Treasury note
posted a 2.2% return for the six-month period, while the 30-year Treasury bond
returned -3.6%.
Bond yields fell (and bond prices rose) at the beginning of the period in
response to evidence of moderating U.S. economic growth and low inflation. But
by the beginning of 1997, stronger economic growth and rising wage pressures
rekindled concerns about inflation. In an effort to head off potential
inflation, the Federal Reserve raised short-term interest rates in March.
As a result, bond yields soared throughout the first quarter of 1997. The
30-year Treasury bond yield, which had fallen as low as 6.35% in December,
climbed to 7.10% by the end of March. The bond market settled down in April and
May, rallying slightly as inflation remained subdued and economic growth began
to slow.
U.S. STOCK MARKET PERFORMANCE
For the six-month period ended May 31, 1997
S&P 500 13.17%
Russell 2000 8.40%
U.S. BOND MARKET PERFORMANCE
For the six-month period ended May 31, 1997
Salomon Brothers Broad
Investment Grade Bond Index 0.96%
Lehman Aggregate Bond Index 0.94%
Semiannual Report Period Overview 3
PERIOD OVERVIEW
Mortgage-backed securities were the top performers among U.S. bonds during the
six-month period, followed by corporate bonds. With bond prices declining
slightly overall, yield was the most significant contributor to bond returns.
Mortgage-backed and corporate securities tend to have higher yields than other
domestic bonds. Treasury bonds, which typically offer the lowest yields among
U.S. fixed-income securities, produced the weakest returns.
Foreign Stocks
Global stock returns varied dramatically by region during the six months ended
May 31. Europe's stock markets produced the strongest returns of any region in
the world, while Asian markets suffered sizable losses. The Morgan Stanley
EAFE(R) Index--a broad measure of international stock performance--returned
4.04% (in U.S. dollar terms) during the six-month period.
The continued strength of the U.S. dollar weighed heavily on foreign stock
returns for U.S. investors. The dollar rose by 11% against the German mark and
2% against the Japanese yen during the period. As the accompanying table shows,
the EAFE(R)'s return in local currencies was substantially higher than its
return in dollars.
European stock markets excelled during the period because of favorable economic
conditions, falling interest rates and low inflation. Corporate restructuring
also boosted the performance of European equities. Although Spain and
Switzerland were the top-performing stock markets in Europe--with returns of
more than 30% (in local currencies) during the period--nearly all of the
continent's markets returned 20% or more.
The Japanese stock market continued to languish. Although the Japanese economy
showed signs of life after seven years of recession, most of the growth was
driven by export industries. The rest of Southeast Asia--including Thailand, the
Philippines and Singapore--struggled as economic growth in the region slowed.
Collapsing speculative investments and a failure to invest in infrastructure
during the good times dragged down stock prices in these countries. Hong Kong
was a notable exception, producing strong stock market performance thanks to a
thriving economy.
Latin America replaced Asia as the hottest region for growth. Political changes,
increased privatization and economic reform have improved the global credibility
of the Latin equity markets.
Foreign Bonds
Foreign bond markets produced favorable returns during the six months ended May
31 as global interest rates continued to decline. However, the strengthening
U.S. dollar hurt foreign bond returns for U.S. investors.
As the index returns in the tables on this page and the previous page
illustrate, foreign bonds outperformed U.S. bonds in local currencies during the
six-month period. But when the foreign bond index's return is translated into
dollars, U.S. bonds win out by a substantial margin.
Interest rates generally declined as the world's central banks made a concerted
effort to revitalize economic growth. In Europe, preparation for Economic and
Monetary Union in 1999 held interest rates down across the continent. Japanese
rates remained at historic lows as the country tried to end its lengthy economic
downturn.
The exception is Latin America, where interest rates have remained relatively
high. Many Latin American countries are experiencing explosive levels of
economic growth, and the potential for rising inflation has propped up interest
rates.
FOREIGN STOCK MARKET PERFORMANCE
For the six-month period ended May 31, 1997
Morgan Stanley EAFE(R) Index (in U.S. dollars) 4.04%
Morgan Stanley EAFE(R) Index (in local currencies) 8.96%
FOREIGN BOND MARKET PERFORMANCE
For the six-month period ended May 31, 1997
Salomon Brothers Non-U.S. World Government
Bond Index (in U.S. dollars) - 4.98%
Salomon Brothers Non-U.S. World Government
Bond Index (in local currencies) 2.01%
4 Period Overview American Century Investments
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: CONSERVATIVE
TOTAL RETURNS AS OF MAY 31, 1997
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR LIFE OF FUND
INVESTOR CLASS (inception 2/15/96)
<S> <C> <C> <C>
Strategic Allocation: Conservative ................................... 2.84% 9.16% 7.59%
S&P 500 .............................................................. 13.17% 29.48% 25.38%
Lehman Aggregate Bond Index .......................................... 0.94% 8.32% 5.36%(1)
Three-Month U.S. Treasury Bill ....................................... 2.56% 5.17% 5.15%(1)
Average Income Fund(2) ............................................... 4.46% 13.26% 10.73%
Fund's Ranking Among Income Funds(2) ................................. -- 42 out of 47 39 out of 46
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Conservative ................................... 2.68% -- 6.11%
S&P 500 .............................................................. 13.17% -- 23.44%
Lehman Aggregate Bond Index .......................................... 0.94% -- 4.94%
Three-Month U.S. Treasury Bill ....................................... 2.56% -- 3.41%
</TABLE>
(1) Since 2/29/96, the date closest to the fund's inception for which index
return data are available.
(2) According to Lipper Analytical Services.
See pages 57, 60 and 61 for more information about returns, share classes, the
comparative indices and Lipper fund rankings.
<TABLE>
[line graph - data below]
GROWTH OF $10,000 OVER THE LIFE OF THE FUND (Investor Class)
Value on 5/31/97
$10,000 investment made 2/29/96
Strategic: Conservative S&P 500 Lehman Aggregate Bond Index 3-Month T-Bill Index
<C> <C> <C> <C> <C>
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,040 $10,133 $9,930 $10,041
4/30/96 $10,145 $10,269 $9,875 $10,082
5/31/96 $10,186 $10,504 $9,855 $10,125
6/30/96 $10,221 $10,586 $9,987 $10,167
7/31/96 $10,037 $10,102 $10,014 $10,211
8/31/96 $10,160 $10,292 $9,997 $10,254
9/30/96 $10,440 $10,911 $10,172 $10,297
10/31/96 $10,584 $11,197 $10,397 $10,339
11/30/96 $10,832 $12,018 $10,575 $10,382
12/31/96 $10,772 $11,822 $10,477 $10,425
1/31/97 $10,876 $12,544 $10,509 $10,469
2/28/97 $10,814 $12,619 $10,535 $10,513
3/31/97 $10,636 $12,141 $10,418 $10,558
4/30/97 $10,762 $12,847 $10,574 $10,603
5/31/97 $11,118 $13,600 $10,674 $10,648
</TABLE>
Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. Data quoted is for Investor Class only; performance for other
classes will vary due to differences in fee structures (see the Total Returns
table above). The graph begins on 2/29/96, the date closest to the fund's
2/15/96 inception date for which index return data are available.
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the total
return lines of the indices do not.
[pie chart]
ASSET ALLOCATION AS OF MAY 31, 1997
Percent of Fund Investments
U.S. Stocks 32%
Foreign Stocks 8%
U.S. Bonds 38%
Foreign Bonds 7%
Money Market
Securities 15%
See page 60 for the fund's neutral asset mix.
Semiannual Report Strategic Allocation: Conservative 5
STRATEGIC ALLOCATION: CONSERVATIVE
Management Q & A
An interview with Jeff Tyler and Brian Howell, lead portfolio managers on the
American Century Strategic Asset Allocation funds management team.
How did the fund perform?
For the six-month period ended May 31, 1997, the fund's Investor Class shares
posted a total return of 2.84%, compared with the 4.46% average return of the 57
"Income Funds" tracked by Lipper Analytical Services. (See the Total Returns
table on the previous page for other fund performance comparisons.)
How did the fund's asset mix change over the past six months?
We maintained a mostly neutral position for the fund. The only significant
adjustment we made to the fund's asset mix was to underweight domestic stocks
and overweight foreign stocks during the latter half of the six-month period.
Increased volatility in the U.S. stock market led us to look abroad, where stock
returns were beginning to reflect improving economic conditions.
In particular, we emphasized European stocks (see the chart on the next page),
which provided the best equity returns of any region in the world during the
period.
But weren't those returns reduced by the stronger U.S. dollar?
That's true, but even after you account for the currency losses, European stock
returns were still on par with U.S. stock returns and better than returns in
other regions of the world. In addition, we mitigated some of the currency
losses by hedging a portion of the fund's foreign investments against European
currencies.
What is currency hedging?
It's a strategy designed to reduce or eliminate the negative effects of currency
fluctuations on foreign investment returns. When the U.S. dollar strengthens
against foreign currencies, gains earned on investments denominated in those
currencies translate into fewer dollars; hedging is intended to offset these
currency losses.
For the fund, currency hedges typically involve forward currency contracts that
allow the fund to lock in a specific exchange rate. This approach removes the
effect of currency exchange rates and creates a "pure play" on the foreign
securities.
Did you hedge all of the fund's European investments?
No. Although the fund can hedge as much as 100% of its foreign assets, we only
hedged about 35% of the fund's European holdings. We felt this was a prudent
amount that would help mitigate currency losses while retaining the fund's
exposure to non-dollar-denominated investments.
We also hedged a portion of the fund's Japanese holdings early in the period. We
removed the hedge in April, when the dollar reached a four-year high against the
Japanese yen and Japanese finance ministry officials publicly expressed their
desire for a weaker dollar.
What are your plans for the fund's asset allocation structure going forward?
We will likely continue its current positioning--neutral in bonds and cash,
underweighted in U.S. stocks and overweighted in foreign stocks. We still think
the most attractive opportunities are in the stock markets of Europe, where we
see parallels with the U.S. in the early 1990s.
6 Strategic Allocation: Conservative American Century Investments
STRATEGIC ALLOCATION: CONSERVATIVE
Coming out of a recession, U.S. corporations used technological innovation and
downsizing to cut costs, improve efficiency and increase productivity. In
addition, the rise of temporary employment services and outsourcing changed the
nature of the U.S. labor market and lowered the unemployment rate.
Much of Europe is now in the same situation--a weak economic environment and
high levels of unemployment are leading to changing labor markets and corporate
restructuring. We expect these changes to boost corporate profits in Europe
going forward.
What about the U.S. stock market?
We continue to marvel at the resiliency of the U.S. stock market. We've had
reservations about the market's stretched valuations for some time, but stock
prices have continued to climb. Despite our concerns, we followed our asset
allocation model, and the fund's weighting in domestic stocks did not stray too
far from neutral.
The danger to U.S. stocks in the second half of 1997 is stronger economic
growth, which would likely result in rising inflation and higher interest rates.
Higher rates could squeeze corporate earnings, and weaker earnings growth has
been responsible for much of the punishment and volatility in the U.S. stock
market recently.
FUND'S U.S. STOCKS AS OF MAY 31, 1997
Number of Companies 268
Dividend Yield 2.00%
Price/Earnings Ratio 24.9
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
Exxon Corp. 2.4% 0.8%
Giant Food Inc. CI A 2.2% 0.7%
Amoco Corp. 1.7% 0.5%
Mallinckrodt Inc. 1.7% 0.5%
Florida Progress Corp. 1.6% 0.5%
FUND'S FOREIGN STOCKS AS OF MAY 31, 1997
Number of Companies 64
Dividend Yield 1.31%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 5.2% 0.4%
Volkswagen AG Germany 4.3% 0.3%
Credit Suisse Group Switzerland 3.9% 0.3%
Sankyo Co. Ltd. Japan 3.5% 0.3%
Daimler-Benz AG Germany 3.2% 0.3%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 65%
Asia/Pacific 28%
Americas
(excluding U.S.) 7%
Semiannual Report Strategic Allocation: Conservative 7
STRATEGIC ALLOCATION: CONSERVATIVE
We plan to maintain a slightly underweighted position in U.S. stocks going
forward. We've also made some adjustments to our investment approach to make the
fund's domestic stock allotment more conservative.
Can you elaborate on these adjustments?
The fund's U.S. stock holdings represent a combination of aggressive growth and
value stocks, with an emphasis on the more-conservative value style. However,
this mix has produced more volatility than we feel is appropriate for a
conservative asset allocation fund. As a result, we are adding a quantitative
equity component to complement the other two investment styles.
Our quantitative approach employs a highly structured model that ranks stocks
based on a variety of performance and risk-related criteria. The ultimate goal
is to produce a group of stocks that balance high return potential with the risk
characteristics of the S&P 500.
We believe that combining this quantitative strategy with our aggressive growth
and value approaches will provide greater stability and balance to the fund's
U.S. stock holdings.
Bonds still make up the largest portion of the fund's portfolio. What's your
outlook for bonds?
We feel that interest rates have bottomed worldwide, and we expect
stable-to-rising interest rates going forward. The Federal Reserve has already
raised rates in the U.S., and economic growth is likely to pick up in Europe and
Japan by the end of the year.
As a result, our outlook is neutral to somewhat negative for bonds, and we may
look to reduce the fund's bond position later this year. We could see fairly
flat bond performance worldwide over the next six months, much like the past six
months.
[pie charts]
FUND'S U.S. BONDS AS OF MAY 31, 1997
Number of Securities 29
Weighted Average Maturity 12.06 years
Average Duration 4.66 years
Percent of Fund's U.S. Bonds
U.S. Treasury Notes 54%
Mortgage-Backed
Securities 28%
Corporate Bonds 14%
U.S. Treasury Bonds 4%
FUND'S FOREIGN BONDS AS OF MAY 31, 1997
Number of Securities 6
Weighted Average Maturity 4.89 years
Average Duration 4.23 years
Percent of Fund's Foreign Bonds
Europe 88%
Americas
(excluding U.S.) 12%
8 Strategic Allocation: Conservative American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION:CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE--1.1%
2,300 Bombardier Inc. ORD $ 48,433
5,100 British Aerospace plc ORD 103,891
200 General Dynamics Corp. 14,975
4,100 Litton Industries, Inc.(1) 185,525
1,100 Lockheed Martin Corp. 102,988
2,800 Raytheon Co. 133,700
1,200 SIFCO Industries, Inc. 17,400
1,000 Triumph Group, Inc.(1) 25,625
---------
632,537
---------
AIRLINES--0.2%
800 AMR Corp.(1) 79,500
100 Delta Air Lines Inc. 9,375
---------
88,875
---------
AUTOMOBILES & AUTO PARTS--1.6%
125 Beyerische Motoren Werke (BMW)
AG ORD 102,536
2,000 Bridgestone Corp. ORD 45,269
2,300 Cooper Tire and Rubber Company 51,463
1,900 Daimler-Benz AG ORD 146,497
300 Excel Industries, Inc. 5,437
2,700 Ford Motor Co. 101,250
400 General Motors Corp. 22,900
100 Magna International Inc. Cl A 5,375
5,000 Sanden Corp. ORD 41,267
4,300 Superior Industries International, Inc. 109,650
900 Tower Automotive, Inc.(1) 35,662
300 Volkswagen AG ORD 194,195
---------
861,501
---------
BANKING--2.6%
600 Banc One Corp. 25,950
200 BankAmerica Corp. 23,375
1,900 Bank of Nova Scotia ORD 78,985
700 Chase Manhattan Corp. 66,150
500 Citicorp 57,187
11,000 Credito Italiano ORD 16,403
Shares Value
- --------------------------------------------------------------------------------
1,400 Deutsche Pfandbrief-und
Hypothekenbank AG ORD $ 82,498
200 First Chicago NBD Corp. 11,850
800 First Union Corp. 68,700
4,800 First Virginia Banks, Inc. 268,800
4,300 Mercantile Bancorporation Inc. 253,700
500 Morgan (J.P.) & Co. 53,750
600 Norwest Corp. 32,100
3,700 PNC Bank Corp. 154,937
200 Pacific Century Financial
Corporation 9,200
5,112 Royal Bank of Scotland Group plc
ORD 50,287
500 Societe Generale ORD 55,636
2,200 Wachovia Corp. 133,925
---------
1,443,433
---------
BIOTECHNOLOGY--0.6%
200 Agouron Pharmaceuticals, Inc(1) 16,038
1,000 Amgen Inc. 66,937
1,700 Centocor, Inc.(1) 59,712
200 Incyte Pharmaceuticals, Inc.(1) 13,050
1,400 PAREXEL International Corp.(1) 45,763
700 PathoGenesis Corp.(1) 19,206
2,500 QLT PhotoTherapeutics Inc. ORD(1) 56,276
700 Quintiles Transnational Corp.(1) 43,750
200 Sangstat Medical Corp.(1) 4,963
200 Vertex Pharmaceuticals, Inc.(1) 8,050
---------
333,745
---------
BUILDING & HOME IMPROVEMENTS--0.1%
1,000 American Woodmark Corp. 16,313
400 Hunter Douglas N.V. ORD 35,338
1,600 Johns Manville Corp. 18,200
300 Triangle Pacific Corp.(1) 8,906
---------
78,757
---------
BUSINESS SERVICES & SUPPLIES--0.8%
1,800 AccuStaff, Inc.(1) 43,200
100 Ceridian Corp.(1) 3,675
1,500 Corrections Corp. of America(1) 54,375
1,200 F.Y.I. Inc.(1) 26,100
800 Kvaerner ASA ORD 45,830
1,200 Lason, Inc.(1) 26,175
1,000 Market Facts, Inc. 12,063
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Conservative 9
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
1,300 NCO Group, Inc.(1) $ 43,306
400 Omnicom Group Inc. 23,200
500 Randstad Holdings N.V. ORD 50,297
2,200 Stork N.V. ORD 97,467
---------
425,688
---------
CHEMICALS & RESINS--1.6%
300 Akzo Nobel ORD 39,982
1,200 Dow Chemical Co. 100,050
100 du Pont (E.I.) de Nemours & Co. 10,888
5,300 Great Lakes Chemical Corp. 259,037
50 Henkel KGaA ORD 2,621
4,600 Lubrizol Corp. 163,875
11,300 Millennium Chemicals Inc. 217,525
2,900 Nalco Chemical Co. 107,663
---------
901,641
---------
COMMUNICATIONS EQUIPMENT--1.0%
2,000 ADC Telecommunications, Inc.(1) 68,625
300 Allen Group Inc. (The)(1) 6,975
100 Ascend Communications, Inc.(1) 5,581
900 Boston Technology, Inc.(1) 25,875
600 Comverse Technology, Inc.(1) 27,375
1,000 Lucent Technologies Inc. 63,625
1,000 Motorola, Inc. 66,375
600 Natural MicroSystems Corp.(1) 14,738
700 Nokia Corp. Cl A ADR 46,200
2,100 PairGain Technologies, Inc.(1) 43,969
800 SeaChange International, Inc.(1) 17,450
2,900 Tellabs, Inc.(1) 145,906
---------
532,694
---------
COMMUNICATIONS SERVICES--1.2%
1,400 AT&T Corp. 51,625
600 Ameritech Corp. 39,300
1,700 BellSouth Corp. 77,138
9,300 Frontier Corp. 170,888
7 Nippon Telegraph & Telephone ORD 66,870
2,800 SBC Communications Inc. 163,800
1,000 Telefonica de Espana ORD 28,878
3,100 Worldcom Inc.(1) 92,031
---------
690,530
---------
Shares Value
- --------------------------------------------------------------------------------
COMPUTER PERIPHERALS--0.3%
100 Adaptec, Inc.(1) $ 3,681
300 Cisco Systems Inc.(1) 20,269
1,700 EMC Corp. (Mass.)(1) 67,787
1,100 Quantum Corp.(1) 42,831
100 Seagate Technology, Inc.(1) 4,063
100 3Com Corp.(1) 4,838
---------
143,469
---------
COMPUTER SOFTWARE & SERVICES--0.9%
100 Adobe Systems Inc. 4,478
300 Cadence Design Systems, Inc.(1) 9,975
1,100 HBO & Co. 70,606
500 JDA Software Group, Inc.(1) 13,781
1,300 Konami Co., Ltd. ORD 46,431
1,400 McAfee Associates, Inc.(1) 92,137
600 Microsoft Corp.(1) 74,438
5,418 Misys plc ORD 121,028
650 Oracle Systems Corp.(1) 30,347
100 Parametric Technology Corp.(1) 4,494
1,200 Viisage Technology, Inc.(1) 13,800
---------
481,515
---------
COMPUTER SYSTEMS--0.7%
1,000 Compaq Computer Corp.(1) 108,250
300 Hewlett-Packard Co. 15,450
3,000 International Business Machines
Corp. 259,500
100 Sun Microsystems, Inc.(1) 3,231
---------
386,431
---------
CONSUMER PRODUCTS--0.5%
1,200 Avon Products, Inc. 76,500
4,000 Canon, Inc. ORD 101,553
800 Colgate-Palmolive Co. 49,600
1,500 Helen of Troy Ltd.(1) 39,750
---------
267,403
---------
CONTROL & MEASUREMENT--0.1%
200 Coherent, Inc.(1) 8,675
200 Keyence Corporation ORD 28,917
1,300 Molecular Devices Corp.(1) 19,094
---------
56,686
---------
See Notes to Financial Statements
10 Strategic Allocation: Conservative American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
DIVERSIFIED COMPANIES--0.8%
10,842 BBA Group plc ORD $ 59,459
800 General Electric Co. (U.S.) 48,300
5,240 Granada Group plc ORD 74,441
1,000 Honeywell Inc. 72,750
5,136 Siebe plc ORD 80,794
1,400 Tyco International Ltd. 88,900
---------
424,644
---------
EDUCATION--0.1%
950 Apollo Group Inc. Cl A(1) 33,428
1,000 Learning Tree International, Inc.(1) 39,250
---------
72,678
---------
ELECTRICAL & ELECTRONIC
COMPONENTS--2.7%
6,900 AMP, Inc. 283,762
1,400 Advantest Corp. ORD 95,426
800 ANADIGICS, Inc.(1) 26,500
3,300 Anicom, Inc.(1) 31,144
100 Franklin Electronic Co., Inc. 4,750
2,000 Hoya Corp. ORD 91,054
600 II-VI, Inc.(1) 11,550
400 Innovex, Inc. 11,200
700 Intel Corp. 106,006
800 JPM Co. (The)(1) 24,400
500 Jabil Circuit, Inc.(1) 29,281
500 Lattice Semiconductor Corp.(1) 28,938
1,000 Nintendo Co., Ltd. ORD 78,317
1,700 Phillips Electronics N.V. 95,200
1,200 REMEC, Inc.(1) 35,175
1,000 Rohm Co. Ltd. ORD 104,135
600 SGL CARBON Aktiengesellschaft
ORD 86,895
300 Sanmina Corp.(1) 17,381
900 Schneider SA ORD(1) 43,323
600 Siemens AG ORD 33,889
1,100 Sipex Corp.(1) 32,725
800 Sony Corp. ORD 67,542
1,000 Texas Instruments Inc. 89,875
1,900 Vitesse Semiconductor Corp.(1) 68,281
---------
1,496,749
---------
Shares Value
- --------------------------------------------------------------------------------
ENERGY (PRODUCTION & MARKETING)--3.7%
3,400 Amoco Corp. $ 303,875
800 Atlantic Richfield Co. 116,400
1,660 British-Borneo Petroleum
Syndicate plc ORD 34,564
3,500 Burlington Resources Inc. 162,750
4,200 Cairn Energy plc ORD(1) 36,048
2,200 Chevron Corp. 154,000
7,200 Exxon Corp. 426,600
3,400 MAPCO Inc. 107,950
3,500 Murphy Oil Corp. 162,312
1,800 Rigel Energy Corp. ORD(1) 22,481
12,700 Santos Ltd. ORD 51,986
8,800 Seagull Energy Corp.(1) 158,400
1,000 Talisman Energy, Inc. ORD(1) 32,785
1,200 Texaco Inc. 130,950
200 Union Texas Petroleum Holdings,
Inc. 4,025
2,000 Unocal Corp. 85,250
6,500 Woodside Petroleum Limited ORD 54,821
---------
2,045,197
---------
ENERGY (SERVICES)--0.8%
1,400 Baker Hughes Inc. 52,500
300 Diamond Offshore Drilling, Inc.(1) 21,338
800 Hvide Marine, Inc.(1) 19,000
900 Marine Drilling Companies, Inc.(1) 18,056
1,900 Noble Drilling Corp.(1) 41,325
400 Oceaneering International, Inc.(1) 6,800
100 Rowan Companies, Inc.(1) 2,313
400 Schlumberger Ltd. 47,650
2,700 Smedvig ASA Cl A ORD 65,966
1,500 Smith International, Inc.(1) 78,562
1,400 Tidewater Inc. 58,975
300 Trico Marine Services, Inc.(1) 11,325
---------
423,810
---------
ENVIRONMENTAL SERVICES--0.8%
8,600 Browning-Ferris Industries, Inc. 281,650
1,400 Superior Services Inc.(1) 30,800
1,500 USA Waste Services, Inc.(1) 54,375
1,400 U.S. Filter Corp.(1) 44,100
900 United Waste Systems, Inc.(1) 34,369
---------
445,294
---------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Conservative 11
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--1.0%
3,100 BHW Holding AG ORD(1) $ 54,202
300 Bear Stearns Companies Inc. 9,750
1,400 Credit Suisse Group ORD(1) 176,115
2,300 Federal National Mortgage
Association 100,337
300 Green Tree Financial Corp. 10,500
1,116 ING Groep N.V. ORD 49,384
200 Lehman Brothers Holdings, Inc. 8,075
300 Merrill Lynch & Co., Inc. 31,800
200 Morgan Stanley Group, Inc. 13,500
700 Rental Service Corp.(1) 15,225
1,000 Salomon Inc. 53,625
50 Takefuji Corporation ORD 2,337
866 Travelers Group, Inc. 47,522
---------
572,372
---------
FOOD & BEVERAGE--1.2%
13,525 Archer-Daniels-Midland Co. 270,500
300 Interstate Bakeries Corp. 16,125
600 Lance, Inc. 11,738
300 Michael Foods, Inc. 4,256
100 Nestle S.A. ORD 124,558
2,200 Northland Cranberries, Inc. 28,462
10,000 Ralcorp Holdings, Inc.(1) 121,250
2,900 Universal Foods Corp. 104,037
---------
680,926
---------
FURNITURE & FURNISHINGS--0.1%
1,300 Miller (Herman), Inc. 46,312
---------
HEALTHCARE--0.7%
1,100 Health Management
Associates, Inc.(1) 32,175
5,900 Humana Inc.(1) 133,487
200 Lincare Holdings Inc.(1) 7,788
700 Oxford Health Plans, Inc.(1) 49,219
100 PhyCor, Inc.(1) 2,856
1,900 Quorum Health Group, Inc.(1) 67,569
1,500 Tenet Healthcare Corp.(1) 41,250
1,200 United Healthcare Corp. 67,800
---------
402,144
---------
Shares Value
- --------------------------------------------------------------------------------
INDUSTRIAL EQUIPMENT & MACHINERY--0.5%
100 Caterpillar Inc. $ 9,762
4,400 Cooper Industries, Inc. 224,400
400 Ingersoll-Rand Co. 21,800
100 Mannesmann AG ORD 40,692
---------
296,654
---------
INSURANCE--2.6%
1,000 AXA-UAP ORD 59,975
1,700 Allstate Corp. 125,163
200 American International Group, Inc. 27,075
1,513 Assurantieconcern Stad Rotterdam
ORD 67,819
2,300 CNA Financial Corp.(1) 235,462
2,600 Chubb Corp. (The) 158,600
2,100 Conseco Inc. 84,000
300 General Re Corp. 52,575
300 ITT Hartford Group, Inc. 23,400
400 Lincoln National Corp. 24,350
2,600 NAC Re Corp. 103,675
100 Ohio Casualty Corp. 4,125
3,800 SAFECO Corp. 165,062
1,000 Sampo Insurance Company Ltd.
ORD 87,417
1,200 Skandia Forsakrings AB ORD 42,406
1,900 St. Paul Companies, Inc. 136,088
700 UNUM Corp. 55,388
---------
1,452,580
---------
LEISURE--0.3%
700 Doubletree Corp.(1) 31,456
400 HFS, Inc.(1) 21,550
1,300 Hilton Hotels Corporation 36,725
500 King World Productions, Inc. 18,812
200 WMS Industries Inc.(1) 4,150
3,000 Yamaha Corp. ORD 57,059
---------
169,752
---------
MACHINERY & EQUIPMENT--0.3%
600 Applied Materials, Inc.(1) 39,113
300 Cymer, Inc.(1) 15,900
1,000 Diebold, Inc. 37,500
2,300 Intevac, Inc.(1) 36,512
100 Timken Co. 6,863
1,000 Veeco Instruments Inc.(1) 41,500
---------
177,388
---------
See Notes to Financial Statements
12 Strategic Allocation: Conservative American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
MEDICAL EQUIPMENT & SUPPLIES--0.3%
400 Hillenbrand Industries, Inc. $ 18,850
1,200 Sabratek Corp.(1) 32,025
1,600 SeaMED Corp.(1) 27,600
3,000 Terumo Corporation ORD 52,928
100 Thermo Instrument Systems Inc.(1) 3,425
200 US Surgical Corp. 6,750
---------
141,578
---------
METALS & MINING--0.2%
1,500 Reynolds Metals Co. 101,813
300 Vulcan Materials Co. 21,900
100 Zeigler Coal Holding Co. 2,325
100 Zurn Industries, Inc. 2,650
---------
128,688
---------
OFFICE EQUIPMENT & SUPPLIES--0.2%
1,700 Xerox Corp. 115,175
---------
PAPER & FOREST PRODUCTS--0.9%
3,300 Chesapeake Corp. 110,550
1,300 Rayonier, Inc. 55,738
2,000 Uni-Charm Corporation ORD 67,473
2,600 Union Camp Corp. 136,500
3,500 Westvaco Corp. 109,375
---------
479,636
---------
PERSONAL SERVICES--0.1%
1,900 Stewart Enterprises, Inc. Cl A 63,769
---------
PHARMACEUTICALS--2.3%
700 Abbott Laboratories 44,100
400 Bristol-Myers Squibb Co. 29,350
2,400 Dura Pharmaceuticals, Inc.(1) 95,850
1,300 Lilly (Eli) & Co. 120,900
8,000 Mallinckrodt Inc. 299,000
850 Medicis Pharmaceutical Corp.(1) 28,953
1,400 Merck & Co., Inc. 125,825
174 Novartis AG ORD 237,049
1,500 Omnicare, Inc. 42,937
1,500 Pharmacia & Upjohn Inc. 51,937
5,000 Sankyo Company, Ltd. ORD 158,785
600 Warner-Lambert Co. 60,450
200 Watson Pharmaceuticals Inc.(1) 7,863
---------
1,302,999
---------
Shares Value
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING--0.5%
2,000 Banta Corp. $ 55,250
100 Bowne & Co., Inc. 2,988
2,000 McClatchy Newspapers, Inc. 55,750
500 Meredith Corp. 12,937
2,200 Moore Corporation Ltd. ORD 49,203
4,800 VNU Tijdschriftengroep Nederland
ORD 108,579
---------
284,707
---------
RAILROADS--0.4%
4,400 CSX Corp. 233,200
---------
RESTAURANTS--0.1%
400 Boston Chicken, Inc.(1) 7,225
500 Logan's Roadhouse, Inc.(1) 11,688
200 Lone Star Steakhouse &
Saloon, Inc.(1) 4,588
1,000 PJ America, Inc.(1) 17,500
1,000 Rainforest Cafe, Inc.(1) 24,437
---------
65,438
---------
RETAIL (APPAREL)--0.3%
800 Genesco Inc.(1) 11,000
600 Gucci Group N.V. 41,850
900 Hot Topic, Inc.(1) 25,987
1,500 Jones Apparel Group, Inc.(1) 70,312
1,200 Ross Stores, Inc. 34,125
---------
183,274
---------
RETAIL (FOOD & DRUG)--1.2%
5,800 Albertson's, Inc. 194,300
1,440 Circle K Japan Co., Ltd. ORD 76,960
11,600 Giant Food Inc. Cl A 382,075
400 Universal Corp. 14,550
---------
667,885
---------
RETAIL (GENERAL MERCHANDISE)--1.2%
800 Consolidated Stores Corp.(1) 30,600
8,000 Dillard Department Stores, Inc. Cl A 270,000
1,400 Family Dollar Stores, Inc. 36,050
300 Fingerhut Companies, Inc. 5,288
1,300 Kohl's Corp.(1) 70,037
4,200 Penney (J.C.) Company, Inc. 216,300
100 Pinault-Printemps-Redoute SA
ORD 42,009
---------
670,284
---------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Conservative 13
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
RETAIL (SPECIALTY)--0.2%
1,500 Action Performance Cos. Inc.(1) $ 36,094
1,700 Cortefiel, S.A. ORD 62,867
600 Home Depot, Inc. 37,800
---------
136,761
---------
RUBBER & PLASTICS(2)
200 Carlisle Companies, Inc. 6,100
---------
STEEL(2)
300 Intermet Corp. 4,125
400 USX-Marathon Group 11,900
---------
16,025
---------
TEXTILES & APPAREL--0.2%
700 Sport-Haley, Inc.(1) 13,213
300 Timberland Co. (The)(1) 17,587
2,400 Wolverine World Wide, Inc. 62,100
---------
92,900
---------
TOBACCO--0.2%
600 Consolidated Cigar Holdings, Inc.(1) 18,150
400 Fortune Brands Pty. Ltd.(1) 19,600
600 General Cigar Holdings, Inc.(1) 17,700
900 Philip Morris Companies Inc. 39,600
---------
95,050
---------
TRANSPORTATION--0.2%
1,200 Allied Holdings, Inc.(1) 11,850
5,014 Stagecoach Holdings plc ORD 54,995
1,200 XTRA Corp. 51,450
---------
118,295
---------
UTILITIES--2.4%
9,900 Florida Progress Corp. 290,812
700 General Public Utilities Corp. 24,500
10,100 New York State Electric & Gas
Corp. 219,675
4,500 Potomac Electric Power 103,500
1,600 Public Service Enterprise Group Inc. 39,600
6,300 Texas Utilities Electric Co. 216,563
5,600 Union Electric Co. 205,100
9,800 Wisconsin Energy Corp. 236,425
---------
1,336,175
---------
TOTAL COMMON STOCKS--39.8% 22,169,344
(Cost $19,853,567) ----------
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.1%
CHEMICALS & RESINS
1,050 Henkel KGaA ORD $ 59,349
---------
(Cost $48,751)
U.S. TREASURY SECURITIES
$2,200,000 U.S. Treasury Note, 5.00%,
2/15/99 2,160,136
3,250,000 U.S. Treasury Note, 6.375%,
3/31/01 3,239,860
335,000 U.S. Treasury Note, 6.625%,
7/31/01 336,779
2,145,000 U.S. Treasury Note, 7.50%,
5/15/02 2,234,832
300,000 U.S. Treasury Note, 5.875%,
11/15/05 284,625
3,040,000 U.S Treasury Note, 7.00%,
7/15/06 3,103,658
875,000 U.S. Treasury Bond, 6.75%,
8/15/26 851,760
---------
TOTAL U.S. TREASURY SECURITIES--21.9% 12,211,650
(Cost $12,235,548) ----------
MORTGAGE-BACKED SECURITIES(3)
236,816 FNMA Pool #369034, 6.50%,
2/1/12 231,296
525,170 FNMA Pool #377181, 6.50%,
4/1/12 512,928
946,157 FNMA Pool #378039, 6.50%,
5/1/12 924,102
97,783 FNMA Pool #250576, 7.00%,
6/1/26 95,307
1,003,167 FNMA Pool #373510, 7.50%,
3/1/27 1,000,559
264,252 GNMA Pool #392995, 8.75%,
3/15/25 276,014
193,198 GNMA Pool #372335, 7.50%,
4/15/25 192,665
148,517 GNMA Pool #001991, 9.00%,
4/20/25 155,100
526,784 GNMA Pool #416856, 7.50%,
10/15/25 526,094
See Notes to Financial Statements
14 Strategic Allocation: Conservative American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$ 294,140 GNMA Pool #422006, 7.50%,
5/15/26 $ 293,328
100,060 GNMA Pool #402682, 7.50%,
6/15/26 99,784
1,664,034 GNMA Pool #431942, 8.25%,
7/15/26 1,708,481
---------
TOTAL MORTGAGE-BACKED
SECURITIES--10.8% 6,015,658
---------
(Cost $5,989,676)
CORPORATE BONDS
AEROSPACE & DEFENSE--0.9%
200,000 Lockheed Martin Corp., 6.85%,
5/15/01 200,000
300,000 Lockheed Martin Corp., 7.25%,
5/15/06 301,125
---------
501,125
---------
BANKING--1.9%
550,000 Citicorp, 7.125%, 5/15/06 545,875
500,000 First Bank System Inc., 7.625%,
5/1/05 512,500
---------
1,058,375
---------
ENERGY (PRODUCTION & MARKETING)--0.9%
500,000 Enron Corp., 6.75%, 7/1/05 482,500
---------
FINANCIAL SERVICES--0.3%
200,000 Ford Motor Credit Co., 6.125%,
1/9/06 185,750
---------
METALS & MINING--0.2%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 98,125
---------
RETAIL (GENERAL MERCHANDISE)--0.2%
100,000 Sears, Roebuck and Co., 6.00%,
5/1/00 98,125
---------
TOBACCO--0.4%
250,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 244,375
---------
UTILITIES--0.5%
250,000 Virginia Electric & Power, 8.00%,
3/1/04 263,437
---------
TOTAL CORPORATE BONDS--5.3% 2,931,812
---------
(Cost $2,923,467)
Principal Amount Value
- --------------------------------------------------------------------------------
SOVEREIGN GOVERNMENTS & AGENCIES
DEM1,200,000 Bundesobligation, 5.875%,
5/15/00 $ 737,239
DEM1,750,000 Federal Republic of Germany,
6.00%, 9/15/03 1,066,828
CAD600,000 Government of Canada, 7.25%,
6/1/03 461,235
FRF1,500,000 Government of France, 8.50%,
4/25/03 304,520
ITL75,000,000 Republic of Italy, 3.50%,
6/20/01 684,598
GBP300,000 United Kingdom Treasury,
8.00%, 6/10/03 512,139
---------
TOTAL SOVEREIGN
GOVERNMENTS & AGENCIES--6.8% 3,766,559
---------
(Cost $3,911,670)
COMMERCIAL PAPER(4)
BANKING--1.8%
$1,000,000 Spintab-Swedmortgage AB, 5.39%,
6/30/97 995,449
---------
FINANCIAL SERVICES--8.3%
1,163,000 Bass Finance (C.I.) Ltd., 5.43%,
6/13/97 1,160,849
3,500,000 Hitachi Credit America Corp.,
5.40%-5.45%, 6/25/97
through 7/17/97 3,483,350
---------
4,644,199
---------
UTILITIES--1.8%
1,000,000 Southern California Gas Co., 5.42%,
7/7/97 (Acquired 4/4/97,
$985,456)(5) 994,430
---------
TOTAL COMMERCIAL PAPER--11.9% 6,634,078
---------
(Cost $6,634,078)
TEMPORARY CASH INVESTMENTS--3.4%
Repurchase Agreement, Morgan (J.P.) & Co. Inc.,
(U.S. Treasury obligations), in a joint trading
account at 5.50%, dated 5/30/97, due
6/2/97 (Delivery value $1,900,871) 1,900,000
---------
(Cost $1,900,000)
TOTAL INVESTMENT SECURITIES--100.0% $55,688,450
===========
(Cost $53,496,757)
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Conservative 15
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
MAY 31, 1997 (UNAUDITED)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value (Loss)
- --------------------------------------------------------------------
191,406 CHF 6/30/97 $135,940 $ (6,157)
1,120,704 DEM 6/30/97 658,359 (13,039)
768,768 FRF 6/30/97 133,671 (2,023)
113,679 GBP 6/30/97 186,270 (1,865)
225,166 NLG 6/30/97 177,567 (1,807)
------------------------------
$1,291,807 $(24,891)
==============================
(Value on Settlement Date $1,266,916)
Notes to Schedule of Investments
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
FNMA = Federal National Mortgage Association
FRF = French Franc
GBP = British Pound
GNMA = Government National Mortgage Association
ITL = Italian Lira
JPY = Japanese Yen
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
(1) Non-income producing.
(2) Industry is less than 0.05% of the Fund's total investment securities.
(3) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(4) The rates for commercial paper are the yield to maturity at May 31, 1997.
(5) Security was purchased under Rule 144A or Section 4(2) of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
only be sold to qualified institutional investors. The aggregate value of
restricted securities at May 31, 1997, was $994,430, which represented 1.8% of
net assets.
See Notes to Financial Statements
16 Strategic Allocation: Conservative American Century Investments
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: MODERATE
TOTAL RETURNS AS OF MAY 31, 1997
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR LIFE OF FUND
INVESTOR CLASS (inception 2/15/96)
<S> <C> <C> <C>
Strategic Allocation: Moderate ........................................ 4.06% 10.92% 11.02%
S&P 500 ............................................................... 13.17% 29.48% 25.38%
Lehman Aggregate Bond Index ........................................... 0.94% 8.32% 5.36%(1)
Three-Month U.S. Treasury Bill ........................................ 2.56% 5.17% 5.15%(1)
Average Balanced Fund(2) .............................................. 5.98% 16.15% 13.61%
Fund's Ranking Among Balanced Funds(2) ................................ -- 269 out of 301 238 out of 289
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Moderate ........................................ 3.91% -- 7.48%
S&P 500 ............................................................... 13.17% -- 23.44%
Lehman Aggregate Bond Index ........................................... 0.94% -- 4.94%
Three-Month U.S. Treasury Bill ........................................ 2.56% -- 3.41%
(1) Since 2/29/96, the date closest to the fund's inception for which index
return data are available.
(2) According to Lipper Analytical Services.
</TABLE>
See pages 57, 60 and 61 for more information about returns, share classes, the
comparative indices and Lipper fund rankings.
<TABLE>
[line graph - data below]
GROWTH OF $10,000 OVER THE LIFE OF THE FUND (Investor Class)
Value on 5/31/97
$10,000 investment made 2/29/96
Strategic: Moderate S&P 500 Lehman Aggregate Bond Index 3-Month T-Bill Index
<C> <C> <C> <C> <C>
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,081 $10,133 $9,930 $10,041
4/30/96 $10,314 $10,269 $9,875 $10,082
5/31/96 $10,394 $10,504 $9,855 $10,125
6/30/96 $10,411 $10,586 $9,987 $10,167
7/31/96 $10,085 $10,102 $10,014 $10,211
8/30/96 $10,309 $10,292 $9,997 $10,254
9/30/96 $10,650 $10,911 $10,172 $10,297
10/31/96 $10,773 $11,197 $10,397 $10,339
11/30/96 $11,080 $12,018 $10,575 $10,382
12/31/96 $11,019 $11,822 $10,477 $10,425
1/31/97 $11,204 $12,544 $10,509 $10,469
2/28/97 $11,122 $12,619 $10,535 $10,513
3/31/97 $10,825 $12,141 $10,418 $10,558
4/30/97 $10,990 $12,847 $10,574 $10,603
5/31/97 $11,530 $13,600 $10,674 $10,648
Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. Data quoted is for Investor Class only; performance for other
classes will vary due to differences in fee structures (see the Total Returns
table above). The graph begins on 2/29/96, the date closest to the fund's
2/15/96 inception date for which index return data are available.
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the total
return lines of the indices do not.
</TABLE>
[pie chart]
ASSET ALLOCATION AS OF MAY 31, 1997
Percent of Fund Investments
U.S. Stocks 44%
Foreign Stocks 15%
U.S. Bonds 22%
Foreign Bonds 8%
Money Market
Securities 11%
See page 60 for the fund's neutral asset mix.
Semiannual Report Strategic Allocation: Moderate 17
STRATEGIC ALLOCATION: MODERATE
Management Q & A
An interview with Jeff Tyler and Brian Howell, lead portfolio managers on the
American Century Strategic Asset Allocation funds management team.
How did the fund perform?
For the six-month period ended May 31, 1997, the fund's Investor Class shares
posted a total return of 4.06%, compared with the 5.98% average return of the
338 "Balanced Funds" tracked by Lipper Analytical Services. (See the Total
Returns table on the previous page for other fund performance comparisons.)
How did the fund's asset mix change over the past six months?
The fund was underweighted in cash and overweighted in foreign stocks for most
of the period. We brought the fund's cash position back to neutral by the end of
the period.
We retained the fund's overweighting in foreign equities by underweighting U.S.
stocks. Increased volatility in the U.S. stock market led us to look abroad,
where stock returns were beginning to reflect improving economic conditions. In
particular, we emphasized European stocks (see the chart on the next page),
which provided the best equity returns of any region in the world during the
period.
But weren't those returns reduced by the stronger U.S. dollar?
That's true, but even after you account for the currency losses, European stock
returns were still on par with U.S. stock returns and better than returns in
other regions of the world. In addition, we mitigated some of the currency
losses by hedging a portion of the fund's foreign investments against European
currencies.
What is currency hedging?
It's a strategy designed to reduce or eliminate the negative effects of currency
fluctuations on foreign investment returns. When the U.S. dollar strengthens
against foreign currencies, gains earned on investments denominated in those
currencies translate into fewer dollars; hedging is intended to offset these
currency losses.
For the fund, currency hedges typically involve forward currency contracts that
allow the fund to lock in a specific exchange rate. This approach removes the
effect of currency exchange rates and creates a "pure play" on the foreign
securities.
Did you hedge all of the fund's European investments?
No. Although the fund can hedge as much as 100% of its foreign assets, we only
hedged about 35% of the fund's European holdings. We felt this was a prudent
amount that would help mitigate currency losses while retaining the fund's
exposure to non-dollar-denominated investments.
We also hedged a portion of the fund's Japanese holdings early in the period. We
removed the hedge in April, when the dollar reached a four-year high against the
Japanese yen and Japanese finance ministry officials publicly expressed their
desire for a weaker dollar.
What are your plans for the fund's asset allocation structure going forward?
We will likely continue its current positioning--neutral in bonds and cash,
underweighted in U.S. stocks and overweighted in foreign stocks. We still think
the most attractive opportunities are in the stock markets of Europe, where we
see parallels with the U.S. in the early 1990s.
18 Strategic Allocation: Moderate American Century Investments
STRATEGIC ALLOCATION: MODERATE
Coming out of a recession, U.S. corporations used technological innovation and
downsizing to cut costs, improve efficiency and increase productivity. In
addition, the rise of temporary employment services and outsourcing changed the
nature of the U.S. labor market and lowered the unemployment rate.
Much of Europe is now in the same situation--a weak economic environment and
high levels of unemployment are leading to changing labor markets and corporate
restructuring. We expect these changes to boost corporate profits in Europe
going forward.
What about the U.S. stock market?
We continue to marvel at the resiliency of the U.S. stock market. We've had
reservations about the market's stretched valuations for some time, but stock
prices have continued to climb. Despite our concerns, we followed our asset
allocation model, and the fund's weighting in domestic stocks did not stray too
far from neutral.
The danger to U.S. stocks in the second half of 1997 is stronger economic
growth, which would likely result in rising inflation and higher interest rates.
Higher rates could squeeze corporate earnings, and weaker earnings growth has
been responsible for much of the punishment and volatility in the U.S. stock
market recently.
FUND'S U.S. STOCKS AS OF MAY 31, 1997
Number of Companies 307
Dividend Yield 1.74%
Price/Earnings Ratio 26.5
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
Exxon Corp. 1.7% 0.8%
Giant Food Inc. CI A 1.5% 0.7%
Amoco Corp. 1.4% 0.6%
IBM Corp. 1.3% 0.6%
Browning-Ferris Industries, Inc. 1.2% 0.5%
FUND'S FOREIGN STOCKS AS OF MAY 31, 1997
Number of Companies 149
Dividend Yield 1.32%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 2.8% 0.4%
Volkswagen AG Germany 2.6% 0.4%
Daimler-Benz AG Germany 2.6% 0.4%
Credit Suisse Group Switzerland 2.2% 0.3%
HSBC Holdings plc Hong Kong 2.2% 0.3%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 68%
Asia/Pacific 26%
Americas
(excluding U.S.) 6%
Semiannual Report Strategic Allocation: Moderate 19
STRATEGIC ALLOCATION: MODERATE
We plan to maintain a slightly underweighted position in U.S. stocks going
forward. We've also made some adjustments to our investment approach to give the
fund's domestic stock allotment more balance.
Can you elaborate on these adjustments?
The fund's U.S. stock holdings represent a combination of aggressive growth and
value stocks. However, this mix has produced more volatility than we feel is
appropriate for the fund. As a result, we are adding a quantitative equity
component to complement the other two investment styles.
Our quantitative approach employs a highly structured model that ranks stocks
based on a variety of performance and risk-related criteria. The ultimate goal
is to produce a group of stocks that balance high return potential with the risk
characteristics of the S&P 500.
We believe that combining this quantitative strategy with our aggressive growth
and value approaches will provide greater stability and balance to the fund's
U.S. stock holdings.
What's your outlook for bonds?
We feel that interest rates have bottomed worldwide, and we expect
stable-to-rising interest rates going forward. The Federal Reserve has already
raised rates in the U.S., and economic growth is likely to pick up in Europe and
Japan by the end of the year.
As a result, our outlook is neutral to somewhat negative for bonds, and we may
look to reduce the fund's bond position later this year. We could see fairly
flat bond performance worldwide over the next six months, much like the past six
months.
[pie charts]
FUND'S U.S. BONDS AS OF MAY 31, 1997
Number of Securities 45
Weighted Average Maturity 11.05 years
Average Duration 4.57 years
Percent of Fund's U.S. Bonds
U.S. Treasury Notes 45%
Mortgage-Backed
Securities 26%
Corporate Bonds 22%
U.S. Treasury Bonds 7%
FUND'S FOREIGN BONDS AS OF MAY 31, 1997
Number of Securities 8
Weighted Average Maturity 4.87 years
Average Duration 4.21 years
Percent of Fund's Foreign Bonds
Europe 91%
Americas
(excluding U.S.) 9%
20 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS
AEROSPACE & DEFENSE--1.7%
1,100 Boeing Co. $ 115,775
5,500 Bombardier Inc. ORD 115,819
16,000 British Aerospace plc ORD 325,933
18,500 Cobham PLC ORD 198,666
500 Falck A/S ORD 137,021
1,100 General Dynamics Corp. 82,362
11,000 Litton Industries, Inc.(1) 497,750
2,800 Lockheed Martin Corp. 262,150
7,100 Raytheon Co. 339,025
6,000 SIFCO Industries, Inc. 87,000
6,300 Triumph Group, Inc.(1) 161,438
----------
2,322,939
----------
AIRLINES--0.2%
1,800 AMR Corp.(1) 178,875
1,100 Delta Air Lines Inc. 103,125
----------
282,000
----------
AUTOMOBILES & AUTO PARTS--2.0%
300 Beyerische Motoren Werke
(BMW) AG ORD 246,086
6,000 Bridgestone Corp. ORD 135,806
5,800 Cooper Tire and Rubber Company 129,775
6,700 Daimler-Benz AG ORD 516,593
900 Excel Industries, Inc. 16,313
7,000 Ford Motor Co. 262,500
2,500 General Motors Corp. 143,125
1,200 ITT Industries, Inc. 29,700
900 Kiekert AG ORD(1) 38,997
8,000 MBM Resources Berhad ORD 18,623
1,700 Magna International Inc. Cl A 91,375
100 Porsche AG ORD 120,786
11,000 Sanden Corp. ORD 90,787
10,700 Superior Industries International, Inc. 272,850
4,300 Tower Automotive, Inc.(1) 170,388
800 Volkswagen AG ORD 517,854
----------
2,801,558
----------
Shares Value
- --------------------------------------------------------------------------------
BANKING--3.8%
2,800 Banc One Corp. $ 121,100
4,800 Bank of Nova Scotia ORD 199,543
1,100 BankAmerica Corp. 128,563
900 Bankers Trust New York Corp. 76,163
2,900 Banque Nationale de Paris ORD(1) 119,258
3,300 Chase Manhattan Corp. 311,850
2,400 Citicorp 274,500
27,100 Credito Italiano ORD 40,410
2,900 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 170,888
2,300 First Chicago NBD Corp. 136,275
3,600 First Union Corp. 309,150
12,100 First Virginia Banks, Inc. 677,600
14,400 HSBC Holdings plc ORD 436,730
10,800 Mercantile Bancorporation Inc. 637,200
2,600 Morgan (J.P.) & Co. 279,500
3,200 Nordlandsbanken ORD 76,833
2,700 Norwest Corp. 144,450
9,300 PNC Bank Corp. 389,437
48,000 PT Bank Bira ORD 73,474
17,512 Royal Bank of Scotland Group
plc ORD 172,266
4,100 Security Bank Corp. ORD(1) 6,373
1,100 Societe Generale ORD 122,398
100 Unionbancal Corp. 6,625
5,300 Wachovia Corp. 322,638
----------
5,233,224
----------
BIOTECHNOLOGY--1.1%
900 Agouron Pharmaceuticals, Inc.(1) 72,169
5,100 Amgen Inc. 341,381
4,683 Biocompatibles International plc
ORD(1) 99,811
5,700 Centocor, Inc.(1) 200,212
700 Incyte Pharmaceuticals, Inc.(1) 45,675
6,800 PAREXEL International Corp.(1) 222,275
3,200 PathoGenesis Corp.(1) 87,800
10,200 QLT PhotoTherapeutics, Inc. ORD(1) 229,605
2,300 Quintiles Transnational Corp.(1) 143,750
1,300 Sangstat Medical Corp.(1) 32,256
1,200 Vertex Pharmaceuticals, Inc.(1) 48,300
----------
1,523,234
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 21
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
BROADCASTING & MEDIA--0.1%
300 Central European Media
Enterprises Ltd. Cl A(1) $ 6,975
627 Havas Advertising SA ORD 66,611
----------
73,586
----------
BUILDING & HOME IMPROVEMENTS--0.4%
5,200 American Woodmark Corp. 84,825
900 Hunter Douglas N.V. ORD 79,511
8,500 Johns Manville Corp. 96,687
2,100 Lafarge Corp. 51,975
5,000 Royal Group Technologies Ltd.
ORD(1) 122,354
1,800 Triangle Pacific Corp.(1) 53,438
----------
488,790
----------
BUSINESS SERVICES & SUPPLIES--1.5%
5,700 AccuStaff, Inc.(1) 136,800
37,800 Capita Group Plc ORD 154,933
30,000 Corporate Services Group plc ORD 89,271
5,000 Corrections Corp. of America(1) 181,250
3,000 Esselte AB Cl B ORD 70,935
6,000 F.Y.I. Inc.(1) 130,500
600 Goudsmit NV ORD 81,935
1,600 Kvaerner ASA ORD 91,661
5,900 Lason, Inc.(1) 128,694
17,000 M.A.I.D. plc ORD(1) 51,980
5,600 Market Facts, Inc. 67,550
6,500 NCO Group, Inc.(1) 216,531
1,500 Omnicom Group Inc. 87,000
12,000 Parity plc ORD 110,174
1,700 Randstad Holdings N.V. ORD 171,010
6,100 Stork N.V. ORD 270,249
----------
2,040,473
----------
CHEMICALS & RESINS--1.6%
650 Akzo Nobel ORD 86,628
3,000 Dow Chemical Co. 250,125
13,300 Great Lakes Chemical Corp. 650,038
60 Henkel KGaA ORD 3,145
11,600 Lubrizol Corp. 413,250
28,100 Millennium Chemicals Inc. 540,925
7,200 Nalco Chemical Co. 267,300
----------
2,211,411
----------
Shares Value
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--1.6%
5,700 ADC Telecommunications, Inc.(1) $ 195,581
2,600 Allen Group Inc. (The)(1) 60,450
100 Ascend Communications, Inc.(1) 5,581
4,400 Boston Technology, Inc.(1) 126,500
2,800 Comverse Technology, Inc.(1) 127,750
2,100 Ericsson (L.M.) Telephone Co. ADR 74,944
4,391 Lucent Technologies Inc. 279,377
2,500 Motorola, Inc. 165,938
2,900 Natural MicroSystems Corp.(1) 71,231
1,400 Nokia Corp. Cl A ADR 92,400
1,000 Northern Telecom Ltd. ORD(1) 83,905
4,800 Orckit Communications Ltd.(1) 64,200
7,000 PairGain Technologies, Inc.(1) 146,563
4,000 SeaChange International, Inc.(1) 87,250
11,600 Tandberg Television ASA ORD(1) 105,871
10,900 Tellabs, Inc.(1) 548,406
----------
2,235,947
----------
COMMUNICATIONS SERVICES--2.0%
3,500 AT&T Corp. 129,062
700 Alcatel Alsthom Compagnie
Generale ORD(1) 75,946
2,800 Ameritech Corp. 183,400
1,300 Bell Atlantic Corp. 91,000
4,200 BellSouth Corp. 190,575
18,000 Datacraft Asia Limited ORD 54,720
23,200 Frontier Corp. 426,300
33,600 Hong Kong Telecommunications
Ltd. ORD 74,368
32 Nippon Telegraph & Telephone ORD 305,693
8,100 SBC Communications Inc. 473,850
2,100 Telecom Argentina STET - France
Telecom S.A. ADR 112,087
5,800 Telefonica de Espana ORD 167,493
14,500 Worldcom Inc.(1) 430,469
----------
2,714,963
----------
COMPUTER PERIPHERALS--0.4%
800 Adaptec, Inc.(1) 29,450
1,400 Cisco Systems Inc.(1) 94,587
7,700 EMC Corp. (Mass.)(1) 307,038
3,800 Quantum Corp.(1) 147,963
----------
579,038
----------
See Notes to Financial Statements
22 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES--1.9%
1,300 Adobe Systems Inc. $ 58,216
3,400 Azlan Group plc ORD 33,585
1,600 Cadence Design Systems, Inc.(1) 53,200
3,300 Getronics NV ORD 112,660
5,000 HBO & Co. 320,937
8,000 JBA Holdings Plc ORD 124,602
2,700 JDA Software Group, Inc.(1) 74,419
3,800 Konami Co., Ltd. ORD 135,720
4,600 McAfee Associates, Inc.(1) 302,737
600 Medic Computer Systems, Inc.(1) 10,388
3,100 Microsoft Corp.(1) 384,594
12,434 Misys plc ORD 277,753
2,850 Oracle Systems Corp.(1) 133,059
2,080 Ordina Beheer N.V. ORD(1) 156,331
5,800 Sage Group plc (The) ORD 62,142
1,000 Shared Medical Systems Corp. 52,688
1,400 TT Tieto OY ORD 118,032
3,000 Tecnomatix Technologies Ltd.(1) 92,625
500 Veritas Software Corp.(1) 24,813
5,700 Viisage Technology, Inc.(1) 65,550
----------
2,594,051
----------
COMPUTER SYSTEMS--1.1%
5,000 Compaq Computer Corp.(1) 541,250
1,200 Computerland Poland S.A. ORD 33,245
400 Dell Computer Corp.(1) 44,975
800 Gateway 2000, Inc.(1) 53,100
1,700 Hewlett-Packard Co. 87,550
9,000 International Business Machines
Corp. 778,500
1,000 OPTIMUS S.A. ORD 32,322
----------
1,570,942
----------
CONSUMER PRODUCTS--0.9%
5,900 Avon Products, Inc. 376,125
2,300 Bang & Olufsen Holding A/S ORD 137,625
13,000 Canon, Inc. ORD 330,049
3,400 Colgate-Palmolive Co. 210,800
7,000 Helen of Troy Ltd.(1) 185,500
----------
1,240,099
----------
Shares Value
- --------------------------------------------------------------------------------
CONTROL & MEASUREMENT--0.2%
700 Coherent, Inc.(1) $ 30,362
400 Keyence Corporation ORD 57,834
8,100 Molecular Devices Corp.(1) 118,969
----------
207,165
----------
DIVERSIFIED COMPANIES--1.3%
27,675 BBA Group plc ORD 151,773
4,556 Bidvest Group Ltd. ORD 31,968
5,900 Bodycote International plc ORD 72,064
3,400 General Electric Co. (U.S.) 205,275
18,409 Granada Group plc ORD 261,523
80,000 Guangzhou Investments Company
Ltd. ORD 39,750
2,500 Hexagon AB ORD 70,095
4,600 Honeywell Inc. 334,650
8,100 Investment AB Bure ORD 100,472
6,598 Siebe plc ORD 103,793
6,300 Tyco International Ltd. 400,050
----------
1,771,413
----------
EDUCATION--0.2%
3,300 Apollo Group Inc. Cl A(1) 116,119
4,300 Learning Tree International, Inc.(1) 168,775
----------
284,894
----------
ELECTRICAL & ELECTRONIC
COMPONENTS--3.9%
17,100 AMP, Inc. 703,237
2,520 Advantest Corp. ORD 171,766
4,100 ANADIGICS, Inc.(1) 135,812
14,700 Anicom, Inc.(1) 138,731
13,000 Elec & Eltek International Company
Ltd. ORD 76,700
1,100 Fujimi Incorporated ORD 64,943
5,000 Hoya Corp. ORD 227,635
3,500 II-VI, Inc.(1) 67,375
2,100 Innovex Inc. 58,800
3,800 Intel Corp. 575,462
2,700 Jabil Circuit, Inc.(1) 158,119
4,000 JPM Co. (The)(1) 122,000
1,500 Lattice Semiconductor Corp.(1) 86,813
500 Leitch Technology Corp. ORD 11,854
3,200 Nintendo Co., Ltd. ORD 250,613
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 23
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
1,200 Noritsu Koki Co. Limited ORD $ 55,252
6,100 Phillips Electronics N.V. 341,600
5,800 REMEC, Inc.(1) 170,013
2,300 Rofin-Sinar Technologies Inc.(1) 35,363
3,000 Rohm Co. Ltd. ORD 312,406
1,500 SGL CARBON Aktiengesellschaft
ORD 217,238
1,700 Sanmina Corp.(1) 98,494
3,200 Schneider SA ORD(1) 154,037
1,400 Siemens AG ORD 79,075
6,100 Sipex Corp.(1) 181,475
2,000 Sony Corp. ORD 168,854
4,600 Texas Instruments Inc. 413,425
6,500 Vitesse Semiconductor Corp.(1) 233,594
----------
5,310,686
----------
ENERGY (PRODUCTION & MARKETING)--4.2%
9,200 Amoco Corp. 822,250
1,900 Atlantic Richfield Co. 276,450
5,270 British-Borneo Petroleum
Syndicate plc ORD 109,730
8,700 Burlington Resources Inc. 404,550
22,200 Cairn Energy plc ORD(1) 190,538
6,700 Chevron Corp. 469,000
17,900 Exxon Corp. 1,060,575
8,400 MAPCO Inc. 266,700
8,600 Murphy Oil Corp. 398,825
2,800 Quaker Chemical Corp. 45,850
1,900 Rigel Energy Corp. ORD(1) 23,730
500 Royal Dutch Petroleum Co. 97,625
23,900 Santos Ltd. ORD 97,832
21,800 Seagull Energy Corp.(1) 392,400
1,100 Shell Transport & Trading Co. ADR 131,312
8,000 Talisman Energy, Inc. ORD(1) 262,281
3,600 Texaco Inc. 392,850
600 Union Texas Petroleum Holdings,
Inc. 12,075
5,000 Unocal Corp. 213,125
9,600 Woodside Petroleum Limited ORD 80,967
----------
5,748,665
----------
Shares Value
- --------------------------------------------------------------------------------
ENERGY (SERVICES)--1.2%
2,500 Aker Maritime ASA ORD $ 41,948
3,600 Baker Hughes Inc. 135,000
700 Diamond Offshore Drilling, Inc.(1) 49,787
4,500 Hvide Marine, Inc.(1) 106,875
2,000 IHC Caland N.V. ORD(1) 108,204
5,200 Marine Drilling Companies, Inc.(1) 104,325
7,000 Noble Drilling Corp.(1) 152,250
2,600 Oceaneering International, Inc.(1) 44,200
1,300 Rowan Companies, Inc.(1) 30,062
1,500 Schlumberger Ltd. 178,687
5,800 Smedvig ASA Cl A ORD 141,704
775 Smedvig ASA Cl B ORD 18,826
4,500 Smith International, Inc.(1) 235,688
4,800 Tidewater Inc. 202,200
1,400 Trico Marine Services, Inc.(1) 52,850
1,300 Western Atlas Inc.(1) 88,238
----------
1,690,844
----------
ENVIRONMENTAL SERVICES--1.0%
22,100 Browning-Ferris Industries, Inc. 723,775
7,300 Superior Services Inc.(1) 160,600
4,000 Tomra Systems ASA ORD 91,549
4,800 USA Waste Services, Inc.(1) 174,000
5,200 U.S. Filter Corp.(1) 163,800
3,000 United Waste Systems, Inc.(1) 114,562
----------
1,428,286
----------
FINANCIAL SERVICES--2.2%
9,900 BHW Holding AG ORD(1) 173,098
2,600 Bear Stearns Companies Inc. 84,500
3,600 Credit Suisse Group ORD(1) 452,866
1,300 Equitable Companies Inc. 40,950
10,200 Federal National Mortgage
Association 444,975
1,600 Green Tree Financial Corp. 56,000
5,240 ING Groep N.V. ORD 231,875
100 Julius Baer Holding AG ORD 137,650
6,235 Kempen & Company NV ORD 190,436
2,600 Lehman Brothers Holdings, Inc. 104,975
1,800 Merrill Lynch & Co., Inc. 190,800
900 Money Store Inc. (The) 23,119
2,300 Morgan Stanley Group, Inc. 155,250
See Notes to Financial Statements
24 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
5,880 Newcourt Credit Group, Inc. ORD
(Acquired 2/15/96 through
4/10/97, Cost $76,580)(2) $ 137,484
4,000 Rental Service Corp.(1) 87,000
3,500 Salomon Inc. 187,687
250 Takefuji Corporation ORD 11,683
5,866 Travelers Group, Inc. 321,897
16,000 United Merchant Group ORD(1) 25,468
----------
3,057,713
----------
FOOD & BEVERAGE--1.3%
33,350 Archer-Daniels-Midland Co. 667,000
50,000 Guangnan Holdings ORD 80,338
7,900 Guinness plc ORD 73,697
1,500 Huhtamaki Group ORD 65,854
1,100 Interstate Bakeries Corp. 59,125
1,500 Lance, Inc. 29,344
200 Michael Foods, Inc. 2,837
100 Nestle S.A. ORD 124,558
11,300 Northland Cranberries, Inc. 146,194
600 OY Hartwall AB ORD 27,973
24,900 Ralcorp Holdings, Inc.(1) 301,913
7,200 Universal Foods Corp. 258,300
----------
1,837,133
----------
FURNITURE & FURNISHINGS--0.1%
4,000 Miller (Herman), Inc. 142,500
----------
HEALTHCARE--0.9%
400 Columbia/HCA Healthcare Corp. 14,650
4,000 Health Management Associates,
Inc.(1) 117,000
14,500 Humana Inc.(1) 328,062
1,200 Lincare Holdings Inc.(1) 46,725
1,800 Oxford Health Plans, Inc.(1) 126,563
6,100 Quorum Health Group, Inc.(1) 216,931
3,500 Tenet Healthcare Corp.(1) 96,250
6,300 United HealthCare Corp. 355,950
----------
1,302,131
----------
INDUSTRIAL EQUIPMENT & MACHINERY--1.0%
11,000 Ashtead Group plc ORD 55,907
1,500 Caterpillar Inc. 146,437
10,900 Cooper Industries, Inc. 555,900
1,600 Dover Corp. 91,600
Shares Value
- --------------------------------------------------------------------------------
2,100 Dresser Industries, Inc. $ 71,925
4,000 Ingersoll-Rand Co. 218,000
100 Mannesmann AG ORD 40,692
7,200 Pfeiffer Vacuum Technology
AG ADR(1) 162,900
----------
1,343,361
----------
INSURANCE--3.4%
3,300 AXA-UAP ORD 197,919
7,600 Allstate Corp. 559,550
1,400 American International Group, Inc. 189,525
3,748 Assurantieconcern Stad Rotterdam
ORD 168,002
400 CIGNA Corp. 69,500
5,600 CNA Financial Corp.(1) 573,300
6,400 Chubb Corp. (The) 390,400
7,000 Companhia de Seguros Mundial
Confianca, SA ORD(1) 92,739
9,800 Conseco Inc. 392,000
600 Gallagher (Arthur J.) & Co. 19,050
1,900 General Re Corp. 332,975
700 ITT Hartford Group, Inc. 54,600
2,100 Lincoln National Corp. 127,837
7,200 NAC Re Corp. 287,100
100 Old Republic International Corp. 3,012
3,900 Pohjola Insurance Group Cl B ORD 113,642
21,370 Reinsurance Australia Corporation
Ltd. ORD 67,476
9,300 SAFECO Corp. 403,969
1,700 Sampo Insurance Company Ltd. ORD 148,609
3,000 Skandia Forsakrings AB ORD 106,015
4,600 St. Paul Companies, Inc. 329,475
1,600 UNUM Corp. 126,600
----------
4,753,295
----------
LEISURE--0.6%
3,100 Doubletree Corp.(1) 139,306
3,400 HFS, Inc.(1) 183,175
5,800 Hilton Hotels Corporation 163,850
2,100 King World Productions, Inc. 79,013
11,000 Yamaha Corp. ORD 209,217
----------
774,561
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 25
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
MACHINERY & EQUIPMENT--0.9%
2,700 Applied Materials, Inc.(1) $ 176,006
1,300 Barmag AG ORD(1) 226,766
3,000 Boewe Systec AG ORD 108,707
1,200 Cymer, Inc.(1) 63,600
3,500 Diebold, Inc. 131,250
11,800 Intevac, Inc.(1) 187,325
240 Rieter Holdings Ltd. ORD 78,132
300 Swisslog Holding AG ORD(1) 106,157
800 Thermedics Inc.(1) 13,400
4,500 Veeco Instruments Inc.(1) 186,750
----------
1,278,093
----------
MEDICAL EQUIPMENT & SUPPLIES--0.7%
3,400 Hillenbrand Industries, Inc. 160,225
800 Hologic, Inc.(1) 19,050
2,000 Instrumentarium Group Cl A ORD 83,920
1,500 Physician Sales & Service, Inc.(1) 21,562
5,000 Sabratek Corp.(1) 133,437
7,400 SeaMED Corp.(1) 127,650
3,900 Spectra-Physics AB ORD 67,020
14,000 Terumo Corporation ORD 246,999
500 Thermo Electron Corp.(1) 17,250
900 Thermo Instrument Systems Inc.(1) 30,825
1,700 US Surgical Corp. 57,375
----------
965,313
----------
METALS & MINING--0.3%
1,100 Oregon Metallurgical Corp.(1) 28,325
3,700 Reynolds Metals Co. 251,138
1,200 Vulcan Materials Co. 87,600
900 Zeigler Coal Holding Co. 20,925
----------
387,988
----------
OFFICE EQUIPMENT & SUPPLIES--0.4%
4,000 Canon Copyer Sales Co. ORD 41,654
7,400 Xerox Corp. 501,350
----------
543,004
----------
PAPER & FOREST PRODUCTS--0.9%
8,100 Chesapeake Corp. 271,350
3,100 Rayonier, Inc. 132,912
Shares Value
- --------------------------------------------------------------------------------
6,000 Uni-Charm Corporation ORD $ 202,418
6,400 Union Camp Corp. 336,000
8,600 Westvaco Corp. 268,750
----------
1,211,430
----------
PERSONAL SERVICES--0.1%
5,500 Stewart Enterprises, Inc. Cl A 184,594
----------
PHARMACEUTICALS--3.5%
3,200 Abbott Laboratories 201,600
3,000 Apothekers Cooperative OPG
ORD 91,473
4,000 Bio-Technology General
Corporation(1) 57,500
2,200 Bristol-Myers Squibb Co. 161,425
600 Christian Hansen Holding A/S
Cl B ORD 71,989
8,600 Dura Pharmaceuticals, Inc.(1) 343,462
7,400 Getinge Industrier AB ORD 134,337
5,900 Lilly (Eli) & Co. 548,700
18,400 Mallinckrodt Inc. 687,700
2,000 Matsumoto Medical Instruments,
Inc. ORD 79,349
4,500 Medicis Pharmaceutical Corp.(1) 153,281
7,300 Merck & Co., Inc. 656,088
422 Novartis AG ORD 574,912
4,600 Omnicare, Inc. 131,675
3,800 Pharmacia & Upjohn Inc. 131,575
10 Roche Holding AG ORD 89,030
12,000 Sankyo Company, Ltd. ORD 381,084
3,000 Warner-Lambert Co. 302,250
1,200 Watson Pharmaceuticals Inc.(1) 47,175
----------
4,844,605
----------
PRINTING & PUBLISHING--0.5%
4,900 Banta Corp. 135,362
5,000 McClatchy Newspapers, Inc. 139,375
1,200 Meredith Corp. 31,050
1,700 Moore Corporation Ltd. 37,825
5,000 Moore Corporation Ltd. ORD 111,825
1,200 Tribune Co. 51,900
8,500 VNU Tijdschriftengroep
Nederland ORD 192,276
----------
699,613
----------
See Notes to Financial Statements
26 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
RAILROADS--0.4%
11,000 CSX Corp. $ 583,000
----------
REAL ESTATE--0.1%
37,000 Parkway Holdings Ltd. ORD 183,642
----------
RESTAURANTS--0.3%
1,000 Applebee's International Inc.(1) 24,688
1,200 Boston Chicken, Inc.(1) 21,675
2,500 Logan's Roadhouse, Inc.(1) 58,438
300 Lone Star Steakhouse &
Saloon, Inc.(1) 6,881
3,700 PJ America, Inc.(1) 64,750
4,000 PizzaExpress plc ORD 44,758
5,100 Rainforest Cafe, Inc.(1) 124,631
----------
345,821
----------
RETAIL (APPAREL)--0.7%
4,700 Fast Retailing Co. Ltd. ORD 152,494
4,100 Genesco Inc.(1) 56,375
2,400 Gucci Group N.V. 167,400
2,500 Hennes & Mauritz AB Cl B ORD 81,724
4,100 Hot Topic, Inc.(1) 118,387
5,000 Jones Apparel Group, Inc.(1) 234,375
3,100 Ross Stores, Inc. 88,156
800 TJX Companies, Inc. (The) 38,400
----------
937,311
----------
RETAIL (FOOD & DRUG)--1.3%
14,200 Albertson's, Inc. 475,700
3,360 Circle K Japan Co., Ltd. ORD 179,574
27,500 Giant Food Inc. Cl A 905,781
1,918 Koninklijke Ahold NV ORD 145,854
2,300 Richfood Holdings, Inc. 53,188
1,900 Universal Corp. 69,113
----------
1,829,210
----------
RETAIL (GENERAL MERCHANDISE)--1.4%
2,900 Consolidated Stores Corp.(1) 110,925
20,000 Dillard Department Stores, Inc. Cl A 675,000
4,700 Family Dollar Stores, Inc. 121,025
100 Fingerhut Companies, Inc. 1,763
Shares Value
- --------------------------------------------------------------------------------
4,000 Grupo Elektra, S.A. de C.V. GDR $ 76,000
4,300 Kohl's Corp.(1) 231,662
900 Lands' End, Inc.(1) 27,112
10,800 Next Plc ORD 131,294
10,400 Penney (J.C.) Company, Inc. 535,600
200 Pinault-Printemps-Redoute SA ORD 84,018
----------
1,994,399
----------
RETAIL (SPECIALTY)--0.5%
7,800 Action Performance Cos. Inc.(1) 187,688
2,500 Cortefiel, S.A. ORD 92,452
6,800 DeoDeo Corporation ORD 143,380
3,600 Home Depot, Inc. 226,800
----------
650,320
----------
RUBBER & PLASTICS(3)
400 Carlisle Companies, Inc. 12,200
----------
STEEL--0.1%
500 Intermet Corp. 6,875
2,500 USX-Marathon Group 74,375
----------
81,250
----------
TEXTILES & APPAREL--0.4%
4,300 Dexter Corp. 129,537
900 Nautica Enterprises, Inc.(1) 21,206
800 NIKE, Inc. 45,600
400 Russell Corp. 12,250
3,300 Sport-Haley, Inc.(1) 62,287
1,700 Timberland Co. (The)(1) 99,663
6,900 Wolverine World Wide, Inc. 178,537
----------
549,080
----------
TOBACCO--0.4%
2,700 Consolidated Cigar Holdings, Inc.(1) 81,675
1,800 Fortune Brands Pty. Ltd.(1) 88,200
2,900 General Cigar Holdings, Inc.(1) 85,550
5,700 Philip Morris Companies Inc. 250,800
2,600 RJR Nabisco, Inc. 84,175
----------
590,400
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 27
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
TRANSPORTATION--0.6%
5,800 Allied Holdings, Inc.(1) $ 57,275
6,150 Internatio-Muller NV ORD 198,097
120,000 International Container Terminal
Services, Inc. ORD(1) 64,834
2,575 Koninklijke Pakhoed NV ORD 87,238
2,500 Koninklijke Van Ommeren N.V.
ORD 101,506
14,028 Stagecoach Holdings plc ORD 153,863
3,000 XTRA Corp. 128,625
----------
791,438
----------
UTILITIES--2.8%
2,600 Commonwealth Energy System 56,550
500 Compagnie Generale des Eaux
ORD(1) 61,624
600 Entergy Corp. 15,825
24,500 Florida Progress Corp. 719,687
1,100 General Public Utilities Corp. 38,500
7,200 Houston Industries Inc. 149,400
25,000 New York State Electric & Gas Corp. 543,750
11,100 Potomac Electric Power 255,300
12,600 Public Service Enterprise Group Inc. 311,850
15,700 Texas Utilities Electric Co. 539,688
14,000 Union Electric Co. 512,750
24,300 Wisconsin Energy Corp. 586,238
----------
3,791,162
----------
TOTAL COMMON STOCKS--58.1% 80,018,775
----------
(Cost $70,849,410)
PREFERRED STOCKS
BANKING--0.1%
100 Liechtenstein Global Trust AG ORD 57,891
----------
CHEMICALS & RESINS--0.1%
3,140 Henkel KGaA ORD 177,482
----------
COMMUNICATIONS SERVICES--0.2%
1,700 Telecomunicacoes Brasileiras
S.A. ADR 233,538
----------
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--0.2%
1,340 Marschollek, Lautenschlaeger und
Partner AG ORD $ 322,134
----------
MEDICAL EQUIPMENT & SUPPLIES--0.1%
777 Fresenius AG ORD 172,076
----------
TOTAL PREFERRED STOCKS--0.7% 963,121
----------
(Cost $663,445)
U.S. TREASURY SECURITIES
$2,250,000 U.S. Treasury Notes, 5.00%,
2/15/99 2,209,230
3,275,000 U.S. Treasury Notes, 6.625%,
7/31/01 3,292,390
4,600,000 U.S. Treasury Notes, 7.50%,
5/15/02 4,792,648
3,875,000 U.S. Treasury Notes, 5.75%,
8/15/03 3,716,358
100,000 U.S. Treasury Notes, 5.875%,
11/15/05 94,875
2,075,000 U.S. Treasury Bonds, 7.25%,
5/15/16 2,134,013
----------
TOTAL U.S. TREASURY SECURITIES--11.8% 16,239,514
----------
(Cost $16,219,755)
MORTGAGE-BACKED SECURITIES(4)
121,661 FHLMC Gold Pool #C00465,
8.00%, 6/1/26 124,158
459,321 FHLMC Gold Pool #D72306,
8.00%, 6/1/26 468,746
177,119 FHLMC Gold Pool #D72431,
8.00%, 6/1/26 180,753
382,351 FHLMC Gold Pool #D72499,
8.00%, 7/1/26 390,196
964,268 FNMA Pool #373899, 6.50%,
3/1/12 941,790
201,272 FNMA Pool #125477, 6.50%,
4/1/12 196,581
956,024 FNMA Pool #369085, 6.50%,
4/1/12 933,739
65,371 FNMA Pool #377181, 6.50%,
4/1/12 63,847
See Notes to Financial Statements
28 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
$ 996,592 FNMA Pool #377379, 6.50%,
4/1/12 $ 973,361
244,655 FNMA Pool #341078, 7.00%,
5/1/26 238,460
391,132 FNMA Pool #250576, 7.00%,
6/1/26 381,229
1,003,167 FNMA Pool #373510, 7.50%,
3/1/27 1,000,559
541,395 GNMA Pool #397233, 9.50%,
2/20/25 577,295
440,420 GNMA Pool #392995, 8.75%,
3/15/25 460,023
371,292 GNMA Pool #001991, 9.00%,
4/20/25 387,752
287,337 GNMA Pool #416856, 7.50%,
10/15/25 286,960
181,505 GNMA Pool #421254, 7.50%,
11/15/25 181,268
341,887 GNMA Pool #416761, 7.50%,
6/15/26 340,943
----------
TOTAL MORTGAGE-BACKED SECURITIES--5.9% 8,127,660
----------
(Cost $8,073,821)
CORPORATE BONDS
AEROSPACE & DEFENSE--0.4%
400,000 Lockheed Martin Corp., 6.85%,
5/15/01 400,000
200,000 Lockheed Martin Corp., 7.25%,
5/15/06 200,750
----------
600,750
----------
BANKING--1.1%
400,000 Citicorp, 7.125%, 5/15/06 397,000
650,000 First Bank System Inc., 7.625%,
5/1/05 666,250
400,000 Santander Financial Issuances Ltd.,
7.00%, 4/1/06 393,000
----------
1,456,250
----------
COMMUNICATIONS SERVICES--0.3%
250,000 360 Communications Co., 7.125%,
3/1/03 248,125
100,000 Tele-Communications Inc., 8.25%,
1/15/03 101,875
----------
350,000
----------
Principal Amount Value
- --------------------------------------------------------------------------------
ENERGY (PRODUCTION & MARKETING)--0.7%
$ 750,000 Oryx Energy Co., 8.375%,
7/15/04 $ 782,813
200,000 Triton Energy Ltd., 8.75%,
4/15/02 202,000
----------
984,813
----------
FINANCIAL SERVICES--0.8%
400,000 Ford Motor Credit Co., 6.125%,
1/9/06 371,500
200,000 Merrill Lynch & Co. Inc., 8.00%,
2/1/02 208,500
500,000 Wharf International Finance Ltd.,
7.625%, 3/13/07 (Acquired
3/6/97, Cost $496,045)(2) 493,750
----------
1,073,750
----------
FOOD & BEVERAGE--0.1%
125,000 RJR Nabisco Holdings Corp.,
8.75%, 4/15/04 126,406
----------
INSURANCE--0.3%
400,000 Aetna Inc., 6.75%, 8/15/01 399,000
----------
LEISURE--0.1%
100,000 Paramount Communications, Inc.,
7.50%, 1/15/02 99,750
100,000 Time Warner Inc., 8.11%, 8/15/06 102,500
----------
202,250
----------
METALS & MINING--0.1%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 98,125
----------
PAPER & FOREST PRODUCTS--0.1%
150,000 Domtar, Inc. 8.75%, 8/1/06 150,750
----------
REAL ESTATE--0.2%
300,000 Spieker Properties, Inc., 6.80%,
12/15/01 297,375
----------
RETAIL (GENERAL MERCHANDISE)--0.1%
150,000 Federated Department Stores,
8.50%, 6/15/03 159,187
----------
TOBACCO--0.3%
450,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 439,875
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 29
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
UTILITIES--0.3%
$ 400,000 Pacific Gas and Electric Company,
6.25%, 3/1/04 $ 384,500
----------
TOTAL CORPORATE BONDS--4.9% 6,723,031
----------
(Cost $6,665,864)
SOVEREIGN GOVERNMENTS & AGENCIES
DEM2,700,000 Bundesobligation, 5.875%,
5/15/00 1,658,786
DEM4,400,000 Federal Republic of Germany,
6.00%, 9/15/03 2,682,310
CAD1,300,000 Government of Canada, 7.25%,
6/1/03 999,343
FRF4,000,000 Government of France, 8.50%,
4/25/03 812,054
ITL1,200,000,000 Government of Italy, 9.50%,
2/1/01 769,503
ESP40,000,000 Government of Spain,
10.50%, 10/30/03 338,837
ITL270,000,000 Republic of Italy, 3.50%,
6/20/01 2,464,553
GBP650,000 United Kingdom Treasury,
8.00%, 6/10/03 1,109,634
----------
TOTAL SOVEREIGN
GOVERNMENTS & AGENCIES--7.9% 10,835,020
----------
(Cost $11,086,714)
COMMERCIAL PAPER(5)
BANKING--5.4%
6,500,000 Nordbanken North America,
5.45%, 7/18/97 6,452,817
1,000,000 Spintab-Swedmortgage AB, 5.39%,
6/30/97 995,449
----------
7,448,266
----------
FINANCIAL SERVICES--2.5%
3,500,000 Hitachi Credit America Corp.,
5.39%-5.45%, 6/12/97
through 7/17/97 3,482,804
----------
INSURANCE--2.0%
2,735,000 Principal Mutual, 5.51%, 6/5/97 2,733,320
----------
TOTAL COMMERCIAL PAPER--9.9% 13,664,390
----------
(Cost $13,664,390)
Principal Amount Value
- --------------------------------------------------------------------------------
TEMPORARY CASH INVESTMENTS--0.8%
Repurchase Agreement, Morgan (J.P.) & Co.
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.50%, dated 5/30/97,
due 6/2/97 (Delivery value $1,100,504) $ 1,100,000
----------
(Cost $1,100,000)
TOTAL INVESTMENT SECURITIES--100.0% $ 137,671,511
==========
(Cost $128,323,399)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Loss
578,327 CHF 6/30/97 $ 410,741 $ (18,116)
3,202,860 DEM 6/30/97 1,881,523 (35,510)
2,489,515 FRF 6/30/97 432,868 (7,356)
390,488 GBP 6/30/97 639,838 (6,407)
1,247,648 NLG 6/30/97 651,442 (9,776)
------------------------------
$ 4,016,412 $ (77,165)
==============================
(Value on Settlement Date $3,939,247)
See Notes to Financial Statements
30 Strategic Allocation: Moderate American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
Notes to Schedule of Investments
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
ESP = Spanish Peseta
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
FRF = French Franc
GBP = British Pound
GDR = Global Depositary Receipt
GNMA = Government National Mortgage Association
ITL = Italian Lira
JPY = Japanese Yen
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
(1) Non-income producing.
(2) Security was purchased under Rule 144A of the Securities Act of 1933 and,
unless registered under the Act or exempted from registration, may only be sold
to qualified institutional investors. The aggregate value of restricted
securities at May 31, 1997, was $631,234, which represented 0.5% of net assets.
(3) Industry is less than 0.05% of the Fund's total investment securities.
(4) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(5) The rates for commercial paper are the yield to maturity at May 31, 1997.
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Moderate 31
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: AGGRESSIVE
TOTAL RETURNS AS OF MAY 31, 1997
AVERAGE ANNUAL RETURNS
6 MONTHS 1 YEAR LIFE OF FUND
INVESTOR CLASS (inception 2/15/96)
<S> <C> <C> <C>
Strategic Allocation: Aggressive ...................................... 4.55% 10.55% 11.97%
S&P 500 ............................................................... 13.17% 29.48% 25.38%
Lehman Aggregate Bond Index ........................................... 0.94% 8.32% 5.36%(1)
Three-Month U.S. Treasury Bill ........................................ 2.56% 5.17% 5.15%(1)
Average Growth & Income Fund(2) ....................................... 10.15% 20.84% 20.99%
Fund's Ranking Among Growth & Income Funds(2) ......................... -- 521 out of 548 505 out of 521
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Aggressive ...................................... 4.51% -- 7.62%
S&P 500 ............................................................... 13.17% -- 23.44%
Lehman Aggregate Bond Index ........................................... 0.94% -- 4.94%
Three-Month U.S. Treasury Bill ........................................ 2.56% -- 3.41%
(1) Since 2/29/96, the date closest to the fund's inception for which index
return data are available.
(2) According to Lipper Analytical Services.
</TABLE>
See pages 57, 60 and 61 for more information about returns, share classes, the
comparative indices and Lipper fund rankings.
<TABLE>
[line graph - data below]
GROWTH OF $10,000 OVER THE LIFE OF THE FUND
Value on 5/31/97
$10,000 investment made 2/29/96
Strategic: Aggressive S&P 500 Lehman Aggregate Bond Index 3-Month T-Bill Index
<S> <C> <C> <C> <C>
2/29/96 $10,000 $10,000 $10,000 $10,000
3/31/96 $10,101 $10,133 $9,930 $10,041
4/30/96 $10,423 $10,269 $9,875 $10,082
5/31/96 $10,544 $10,504 $9,855 $10,125
6/30/96 $10,524 $10,586 $9,987 $10,167
7/31/96 $10,081 $10,102 $10,014 $10,211
8/30/96 $10,323 $10,292 $9,997 $10,254
9/30/96 $10,766 $10,911 $10,172 $10,297
10/31/96 $10,847 $11,197 $10,397 $10,339
11/30/96 $11,149 $12,018 $10,575 $10,382
12/31/96 $11,068 $11,822 $10,477 $10,425
1/31/97 $11,352 $12,544 $10,509 $10,469
2/28/97 $11,190 $12,619 $10,535 $10,513
3/31/97 $10,804 $12,141 $10,418 $10,558
4/30/97 $11,007 $12,847 $10,574 $10,603
5/31/97 $11,657 $13,600 $10,674 $10,648
Past performance does not guarantee future results. Investment return and
principal value will fluctuate, and redemption value may be more or less than
original cost. Data quoted is for Investor Class only; performance for other
classes will vary due to differences in fee structures (see the Total Returns
table above). The graph begins on 2/29/96, the date closest to the fund's
2/15/96 inception date for which index return data are available.
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the total
return lines of the indices do not.
</TABLE>
[pie chart]
ASSET ALLOCATION AS OF MAY 31, 1997
Percent of Fund Investments
U.S. Stocks 54%
Foreign Stocks 19%
U.S. Bonds 13%
Foreign Bonds 8%
Money Market
Securities 6%
See page 60 for the fund's neutral asset mix.
32 Strategic Allocation: Aggressive American Century Investments
STRATEGIC ALLOCATION: AGGRESSIVE
Management Q & A
An interview with Jeff Tyler and Brian Howell, lead portfolio managers on the
American Century Strategic Asset Allocation funds management team.
How did the fund perform?
For the six-month period ended May 31, 1997, the fund's Investor Class shares
posted a total return of 4.55%, compared with the 10.15% average return of the
621 "Growth & Income Funds" tracked by Lipper Analytical Services. (See the
Total Returns table on the previous page for other fund performance
comparisons.)
Why did the fund underperform its Lipper category average?
As we've mentioned before, the funds in this category are typically large-cap
U.S. stock funds, whereas Strategic Allocation: Aggressive is an asset
allocation fund that invests in foreign stocks, bonds and cash. In addition, the
fund's U.S. stock holdings tend to be primarily small-cap, aggressive growth
stocks. Lipper Analytical Services felt that the "Growth & Income" category was
the best place for the fund, but we think it's an apples-and-oranges comparison.
How did the fund's asset mix change over the past six months?
We maintained a mostly neutral position for the fund. The only significant
adjustment we made to the fund's asset mix was to underweight U.S. stocks and
overweight foreign stocks. Increased volatility in the U.S. stock market led us
to look abroad, where stock returns were beginning to reflect improving economic
conditions.
In particular, we emphasized European stocks (see the chart on the next page),
which provided the best equity returns of any region in the world during the
period.
But weren't those returns reduced by the stronger U.S. dollar?
That's true, but even after you account for the currency losses, European stock
returns were still on par with U.S. stock returns and better than returns in
other regions of the world. In addition, we mitigated some of the currency
losses by hedging a portion of the fund's foreign investments against European
currencies.
What is currency hedging?
It's a strategy designed to reduce or eliminate the negative effects of currency
fluctuations on foreign investment returns. When the U.S. dollar strengthens
against foreign currencies, gains earned on investments denominated in those
currencies translate into fewer dollars; hedging is intended to offset these
currency losses.
For the fund, currency hedges typically involve forward currency contracts that
allow the fund to lock in a specific exchange rate. This approach removes the
effect of currency exchange rates and creates a "pure play" on the foreign
securities.
Did you hedge all of the fund's European investments?
No. Although the fund can hedge as much as 100% of its foreign assets, we only
hedged about 35% of the fund's European holdings. We felt this was a prudent
amount that would help mitigate currency losses while retaining the fund's
exposure to non-dollar-denominated investments.
We also hedged a portion of the fund's Japanese holdings early in the period. We
removed the hedge in April, when the dollar reached a four-year high against the
Japanese yen and Japanese finance ministry officials publicly expressed their
desire for a weaker dollar.
Semiannual Report Strategic Allocation: Aggressive 33
STRATEGIC ALLOCATION: AGGRESSIVE
What are your plans for the fund's asset allocation structure going forward?
We will likely continue its current positioning--neutral in bonds and cash,
underweighted in U.S. stocks and overweighted in foreign stocks. We still think
the most attractive opportunities are in the stock markets of Europe, where we
see parallels with the U.S. in the early 1990s.
Coming out of a recession, U.S. corporations used technological innovation and
downsizing to cut costs, improve efficiency and increase productivity. In
addition, the rise of temporary employment services and outsourcing changed the
nature of the U.S. labor market and lowered the unemployment rate.
Much of Europe is now in the same situation--a weak economic environment and
high levels of unemployment are leading to changing labor markets and corporate
restructuring. We expect these changes to boost corporate profits in Europe
going forward.
What about the U.S. stock market?
We continue to marvel at the resiliency of the U.S. stock market. We've had
reservations about the market's stretched valuations for some time, but stock
prices have continued to climb. Despite our concerns, we followed our asset
allocation model, and the fund's weighting in domestic stocks did not stray too
far from neutral.
FUND'S U.S. STOCKS AS OF MAY 31, 1997
Number of Companies 310
Dividend Yield 1.49%
Price/Earnings Ratio 27.7
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
Merck & Co., Inc. 1.5% 0.8%
Allstate Corp. 1.4% 0.7%
Intel Corp. 1.3% 0.7%
Tellabs, Inc. 1.3% 0.7%
IBM Corp. 1.3% 0.7%
FUND'S FOREIGN STOCKS AS OF MAY 31, 1997
Number of Companies 167
Dividend Yield 1.36%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 2.5% 0.5%
Daimler-Benz AG Germany 2.1% 0.4%
Marschollek,
Lautenschlaeger und
Partner AG Germany 2.0% 0.4%
Credit Suisse Group Switzerland 1.9% 0.4%
Volkswagen AG Germany 1.9% 0.4%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 86%
Asia/Pacific 6%
Americas
(excluding U.S.) 8%
34 Strategic Allocation: Aggressive American Century Investments
STRATEGIC ALLOCATION: AGGRESSIVE
The danger to U.S. stocks in the second half of 1997 is stronger economic
growth, which would likely result in rising inflation and higher interest rates.
Higher rates could squeeze corporate earnings, and weaker earnings growth has
been responsible for much of the punishment and volatility in the U.S. stock
market recently.
We plan to maintain a slightly underweighted position in U.S. stocks going
forward. We've also made some adjustments to our investment approach to give the
fund's domestic stock allotment more diversity.
Can you elaborate on these adjustments?
The fund's U.S. stock holdings represent a combination of aggressive growth and
value stocks, with an emphasis on aggressive growth. However, we are adding a
quantitative equity component to complement the other two investment styles.
Our quantitative approach employs a highly structured model that ranks stocks
based on a variety of performance and risk-related criteria. The ultimate goal
is to produce a group of stocks that balance high return potential with the risk
characteristics of the S&P 500.
We believe that combining this quantitative strategy with our aggressive growth
and value approaches will provide greater balance and diversity to the fund's
U.S. stock holdings.
What's your outlook for bonds?
We feel that interest rates have bottomed worldwide, and we expect
stable-to-rising interest rates going forward. The Federal Reserve has already
raised rates in the U.S., and economic growth is likely to pick up in Europe and
Japan by the end of the year.
As a result, our outlook is neutral to somewhat negative for bonds, and we may
look to reduce the fund's bond position later this year. We could see fairly
flat bond performance worldwide over the next six months, much like the past six
months.
Nonetheless, the fund may be able to take advantage of opportunities in emerging
market debt. We believe that Latin America is one of the few regions in the
world with a legitimate reason for declining interest rates. For example, Brazil
is the only country in the world that has single-digit inflation and
double-digit real interest rates. We'll be looking to Latin America for
attractive bond valuations.
[pie charts]
FUND'S U.S. BONDS AS OF MAY 31, 1997
Number of Securities 33
Weighted Average Maturity 11.23 years
Average Duration 4.51 years
Percent of Fund's U.S. Bonds
U.S. Treasury Notes 40%
Corporate Bonds 39%
Mortgage-Backed
Securities 19%
U.S. Treasury Bonds 2%
FUND'S FOREIGN BONDS AS OF MAY 31, 1997
Number of Securities 14
Weighted Average Maturity 4.94 years
Average Duration 4.26 years
Percent of Fund's Foreign Bonds
Europe 62%
Americas
(excluding U.S.) 38%
Semiannual Report Strategic Allocation: Aggressive 35
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS & WARRANTS
AEROSPACE & DEFENSE--1.7%
800 Boeing Co. $ 84,200
7,900 Bombardier Inc. ORD 166,358
13,400 British Aerospace plc ORD 272,969
2,000 Cobham PLC ORD 21,477
400 Falck A/S ORD 109,617
900 General Dynamics Corp. 67,387
6,400 Litton Industries, Inc.(1) 289,600
1,600 Lockheed Martin Corp. 149,800
3,900 Raytheon Co. 186,225
4,700 SIFCO Industries, Inc. 68,150
4,900 Triumph Group, Inc.(1) 125,563
----------
1,541,346
----------
AIRLINES--0.2%
1,200 AMR Corp.(1) 119,250
800 Delta Air Lines Inc. 75,000
----------
194,250
----------
AUTOMOBILES & AUTO PARTS--2.2%
225 Beyerische Motoren Werke
(BMW) AG ORD 184,565
4,000 Bridgestone Corp. ORD 90,537
3,300 Cooper Tire and Rubber Company 73,837
4,800 Daimler-Benz AG ORD 370,097
700 Excel Industries, Inc. 12,688
4,400 Ford Motor Co. 165,000
2,100 General Motors Corp. 120,225
4,000 Goode Durrant plc ORD 29,741
700 ITT Industries, Inc. 17,325
800 Kiekert AG ORD(1) 34,664
7,000 MBM Resources Berhad ORD 16,295
1,300 Magna International Inc. Cl A 69,875
100 Porsche AG ORD 120,786
14,000 Sanden Corp. ORD 115,547
6,100 Superior Industries International, Inc. 155,550
3,300 Tower Automotive, Inc.(1) 130,762
500 Volkswagen AG ORD 323,659
----------
2,031,153
----------
Shares Value
- --------------------------------------------------------------------------------
BANKING--4.3%
2,200 Banc One Corp. $ 95,150
4,000 Bank of Nova Scotia ORD 166,285
900 BankAmerica Corp. 105,187
700 Bankers Trust New York Corp. 59,238
2,800 Banque Nationale de Paris ORD(1) 115,146
3,600 Chase Manhattan Corp. 340,200
2,700 Citicorp 308,812
17,900 Credito Italiano ORD 26,692
2,500 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 147,318
1,800 First Chicago NBD Corp. 106,650
3,500 First Union Corp. 300,562
6,900 First Virginia Banks, Inc. 386,400
9,641 HSBC Holdings plc ORD 292,397
6,200 Mercantile Bancorporation Inc. 365,800
1,700 Morgan (J.P.) & Co. 182,750
2,400 Nordlandsbanken ORD 57,625
2,900 Norwest Corp. 155,150
5,300 PNC Bank Corp. 221,938
37,500 PT Bank Bira ORD 57,402
11,562 Royal Bank of Scotland Group
plc ORD 113,735
5,492 Security Bank Corp. ORD(1) 8,537
700 Societe Generale ORD 77,890
100 Unionbancal Corp. 6,625
3,100 Wachovia Corp. 188,713
----------
3,886,202
----------
BIOTECHNOLOGY--1.8%
700 Agouron Pharmaceuticals, Inc.(1) 56,131
5,300 Amgen Inc. 354,769
4,116 Biocompatibles International plc
ORD(1) 87,726
7,200 Centocor, Inc.(1) 252,900
700 Incyte Pharmaceuticals, Inc.(1) 45,675
5,500 PAREXEL International Corp.(1) 179,781
2,800 PathoGenesis Corp.(1) 76,825
4,300 QIAGEN N.V.(1) 166,625
8,200 QLT PhotoTherapeutics, Inc. ORD(1) 184,584
2,300 Quintiles Transnational Corp.(1) 143,750
1,000 Sangstat Medical Corp.(1) 24,813
900 Vertex Pharmaceuticals, Inc.(1) 36,225
----------
1,609,804
----------
See Notes to Financial Statements
36 Strategic Allocation: Aggressive American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
BROADCASTING & MEDIA--0.2%
200 Central European Media
Enterprises Ltd. Cl A(1) $ 4,650
784 Havas Advertising SA ORD 83,290
1,000 Nippon Broadcasting System ORD 92,087
----------
180,027
----------
BUILDING & HOME IMPROVEMENTS--0.3%
4,500 American Woodmark Corp. 73,406
600 Hunter Douglas N.V. ORD 53,007
6,700 Johns Manville Corp. 76,213
1,600 Lafarge Corp. 39,600
1,300 Royal Group Technologies Ltd.
ORD(1) 31,812
1,300 Triangle Pacific Corp.(1) 38,594
----------
312,632
----------
BUSINESS SERVICES & SUPPLIES--2.0%
6,200 AccuStaff, Inc.(1) 148,800
100 Altran Technologies SA ORD 32,114
25,500 Capita Group Plc ORD 104,518
30,000 Corporate Services Group plc ORD 89,271
5,800 Corrections Corp. of America(1) 210,250
2,800 Esselte AB Cl B ORD 66,206
5,000 F.Y.I. Inc.(1) 108,750
192 GZI Transport Ltd. Warrants ORD
(Expiration date 1/29/99)(1) 29
400 Goudsmit NV ORD 54,623
1,400 Kvaerner ASA ORD 80,203
1,975 Larsen & Toubro Ltd.
(Acquired 8/1/96 through
8/28/96, Cost $32,228)(1)(2) 26,119
4,300 Lason, Inc.(1) 93,794
13,000 M.A.I.D. plc ORD(1) 39,750
4,600 Market Facts, Inc. 55,488
4,100 NCO Group, Inc.(1) 136,581
1,200 Omnicom Group Inc. 69,600
9,000 Parity plc ORD 82,631
1,200 Randstad Holdings N.V. ORD 120,713
4,700 Stork N.V. ORD 208,225
600 VA Technologie AG ORD 106,039
----------
1,833,704
----------
Shares Value
- --------------------------------------------------------------------------------
CHEMICALS & RESINS--1.5%
480 Akzo Nobel ORD $ 63,972
1,700 Dow Chemical Co. 141,738
7,500 Great Lakes Chemical Corp. 366,562
1,282 Henkel KGaA ORD 67,201
6,500 Lubrizol Corp. 231,562
16,000 Millennium Chemicals Inc. 308,000
4,100 Nalco Chemical Co. 152,212
----------
1,331,247
----------
COMMUNICATIONS EQUIPMENT--2.4%
6,400 ADC Telecommunications, Inc.(1) 219,600
2,200 Allen Group Inc. (The)(1) 51,150
100 Ascend Communications, Inc.(1) 5,581
3,900 Boston Technology, Inc.(1) 112,125
2,200 Comverse Technology, Inc.(1) 100,375
1,300 Ericsson (L.M.) Telephone Co.
ADR 46,394
938,800 Ericsson Telecomunicacoes S/A
ORD 52,618
5,100 Lucent Technologies Inc. 324,487
1,500 Motorola, Inc. 99,562
2,000 Natural MicroSystems Corp.(1) 49,125
1,500 Nokia Corp. Cl A ADR 99,000
700 Northern Telecom Ltd. ORD(1) 58,734
3,000 Orckit Communications Ltd.(1) 40,125
7,700 PairGain Technologies, Inc.(1) 161,219
2,200 SeaChange International, Inc.(1) 47,988
9,800 Tandberg Television ASA ORD(1) 89,442
12,800 Tellabs, Inc.(1) 644,000
----------
2,201,525
----------
COMMUNICATIONS SERVICES--2.4%
2,000 AT&T Corp. 73,750
1,000 Alcatel Alsthom Compagnie
Generale ORD(1) 108,494
2,100 Ameritech Corp. 137,550
1,000 Bell Atlantic Corp. 70,000
2,400 BellSouth Corp. 108,900
14,000 Datacraft Asia Limited ORD 42,560
13,200 Frontier Corp. 242,550
22,400 Hong Kong Telecommunications
Ltd. ORD 49,579
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Aggressive 37
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
22 Nippon Telegraph & Telephone
ORD $ 210,164
5,300 SBC Communications Inc. 310,050
1,800 Telecom Argentina STET - France
Telecom S.A. ADR 96,075
6,400 Telefonica de Espana ORD 184,820
16,900 Worldcom Inc.(1) 501,719
----------
2,136,211
----------
COMPUTER PERIPHERALS--0.7%
600 Adaptec, Inc.(1) 22,087
1,600 Cisco Systems Inc.(1) 108,100
9,000 EMC Corp. (Mass.)(1) 358,875
4,100 Quantum Corp.(1) 159,644
----------
648,706
----------
COMPUTER SOFTWARE & SERVICES--2.5%
1,000 Adobe Systems Inc. 44,781
2,700 Azlan Group plc ORD 26,671
1,300 Cadence Design Systems, Inc.(1) 43,225
2,200 Getronics NV ORD 75,107
4,500 HBO & Co. 288,844
4,900 JBA Holdings Plc ORD 76,319
2,100 JDA Software Group, Inc.(1) 57,881
2,600 Konami Co., Ltd. ORD 92,861
5,000 McAfee Associates, Inc.(1) 329,062
100 Medic Computer Systems, Inc.(1) 1,731
3,200 Microsoft Corp.(1) 397,000
10,329 Misys plc ORD 230,731
3,300 Oracle Systems Corp.(1) 154,069
1,144 Ordina Beheer N.V. ORD(1) 85,982
8,200 Sage Group plc (The) ORD 87,856
700 Shared Medical Systems Corp. 36,881
700 TT Tieto OY ORD 59,016
3,000 Tecnomatix Technologies Ltd.(1) 92,625
400 Veritas Software Corp.(1) 19,850
5,100 Viisage Technology, Inc.(1) 58,650
----------
2,259,142
----------
Shares Value
- --------------------------------------------------------------------------------
COMPUTER SYSTEMS--1.6%
5,300 Compaq Computer Corp.(1) $ 573,725
2,400 Computerland Poland S.A. ORD 66,490
300 Dell Computer Corp.(1) 33,731
600 Gateway 2000, Inc.(1) 39,825
1,300 Hewlett-Packard Co. 66,950
7,400 International Business Machines
Corp. 640,100
1,000 OPTIMUS S.A. ORD 32,322
----------
1,453,143
----------
CONSUMER PRODUCTS--1.5%
7,000 Avon Products, Inc. 446,250
1,700 Bang & Olufsen Holding A/S ORD 101,723
9,000 Canon, Inc. ORD 228,495
4,200 Colgate-Palmolive Co. 260,400
5,400 Helen of Troy Ltd.(1) 143,100
7,650 Wolverine World Wide, Inc. 197,944
----------
1,377,912
----------
CONTROL & MEASUREMENT--0.2%
800 Coherent, Inc.(1) 34,700
300 Keyence Corporation ORD 43,375
5,900 Molecular Devices Corp.(1) 86,656
----------
164,731
----------
DIVERSIFIED COMPANIES--2.0%
32,839 BBA Group plc ORD 180,093
4,800 Bodycote International plc ORD 58,629
4,200 General Electric Co. (U.S.) 253,575
15,772 Granada Group plc ORD 224,061
50,000 Guangzhou Investments Company
Ltd. ORD 24,844
2,200 Hexagon AB ORD 61,684
5,400 Honeywell Inc. 392,850
5,000 Investment AB Bure ORD 62,020
6,474 Siebe plc ORD 101,842
7,500 Tyco International Ltd. 476,250
----------
1,835,848
----------
EDUCATION--0.3%
3,600 Apollo Group Inc. Cl A(1) 126,675
3,300 Learning Tree International, Inc.(1) 129,525
----------
256,200
----------
See Notes to Financial Statements
38 Strategic Allocation: Aggressive American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
ELECTRICAL & ELECTRONIC
COMPONENTS--5.2%
9,800 AMP, Inc. $ 403,025
1,160 Advantest Corp. ORD 79,067
3,100 ANADIGICS, Inc.(1) 102,687
12,000 Anicom, Inc.(1) 113,250
3,000 Applied Materials, Inc. 195,562
12,000 Elec & Eltek International
Company Ltd. ORD 70,800
1,100 Fujimi Incorporated ORD 64,943
3,000 Hoya Corp. ORD 136,581
2,500 II-VI, Inc.(1) 48,125
1,700 Innovex Inc. 47,600
4,300 Intel Corp. 651,181
3,300 JPM Co. (The)(1) 100,650
1,800 Jabil Circuit, Inc.(1) 105,412
1,700 Lattice Semiconductor Corp.(1) 98,388
500 Leitch Technology Corp ORD 11,854
2,500 Nintendo Co., Ltd. ORD 195,792
1,200 Noritsu Koki Co. Limited ORD 55,252
5,600 Phillips Electronics N.V. 313,600
4,600 REMEC, Inc.(1) 134,837
3,000 Rofin-Sinar Technologies Inc.(1) 46,125
3,000 Rohm Co. Ltd. ORD 312,406
1,400 SGL CARBON Aktiengesellschaft
ORD 202,756
1,300 Sanmina Corp.(1) 75,319
2,200 Schneider SA ORD(1) 105,900
900 Siemens AG ORD 50,834
4,200 Sipex Corp.(1) 124,950
1,300 Sony Corp. ORD 109,755
5,400 Texas Instruments Inc. 485,325
7,200 Vitesse Semiconductor Corp.(1) 258,750
----------
4,700,726
----------
ENERGY (PRODUCTION & MARKETING)--4.3%
6,800 Amoco Corp. 607,750
1,100 Atlantic Richfield Co. 160,050
4,040 British-Borneo Petroleum
Syndicate plc ORD 84,119
5,000 Burlington Resources Inc. 232,500
11,200 Cairn Energy plc ORD(1) 96,127
5,500 Chevron Corp. 385,000
Shares Value
- --------------------------------------------------------------------------------
10,200 Exxon Corp. $ 604,350
4,800 MAPCO Inc. 152,400
4,900 Murphy Oil Corp. 227,237
300 Phillips Petroeum Co. 12,750
2,100 Quaker Chemical Corp. 34,388
6,100 Rigel Energy Corp. ORD(1) 76,186
400 Royal Dutch Petroleum Co. 78,100
27,100 Santos Ltd. ORD 110,930
12,500 Seagull Energy Corp.(1) 225,000
800 Shell Transport & Trading Co. ADR 95,500
5,400 Talisman Energy, Inc. ORD(1) 177,040
2,700 Texaco Inc. 294,637
500 Union Texas Petroleum Holdings,
Inc. 10,063
2,900 Unocal Corp. 123,613
7,400 Woodside Petroleum Limited ORD 62,412
----------
3,850,152
----------
ENERGY (SERVICES)--1.7%
2,000 Aker Maritime ASA ORD 33,558
2,000 Baker Hughes Inc. 75,000
800 Diamond Offshore Drilling, Inc.(1) 56,900
3,500 Hvide Marine, Inc.(1) 83,125
1,300 IHC Caland N.V. ORD(1) 70,333
3,700 Marine Drilling Companies, Inc.(1) 74,231
6,300 Noble Drilling Corp.(1) 137,025
2,000 Oceaneering International, Inc.(1) 34,000
1,000 Rowan Companies, Inc.(1) 23,125
1,200 Schlumberger Ltd. 142,950
4,000 Smedvig ASA Cl A ORD 97,727
1,000 Smedvig ASA Cl B ORD 24,291
5,900 Smith International, Inc.(1) 309,012
5,000 Tidewater Inc. 210,625
1,600 Trico Marine Services, Inc.(1) 60,400
1,000 Western Atlas Inc.(1) 67,875
----------
1,500,177
----------
ENVIRONMENTAL SERVICES--1.2%
12,800 Browning-Ferris Industries, Inc. 419,200
6,200 Superior Services Inc.(1) 136,400
1,600 Tomra Systems ASA ORD 36,619
5,300 USA Waste Services, Inc.(1) 192,125
5,700 U.S. Filter Corp.(1) 179,550
3,200 United Waste Systems, Inc.(1) 122,200
----------
1,086,094
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Aggressive 39
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--3.0%
6,800 BHW Holding AG ORD(1) $ 118,895
2,000 Bear Stearns Companies Inc. 65,000
2,600 Credit Suisse Group ORD(1) 327,070
1,200 Equitable Companies Inc. 37,800
11,900 Federal National Mortgage
Association 519,138
1,200 Green Tree Financial Corp. 42,000
4,365 ING Groep N.V. ORD 193,156
100 Julius Baer Holding AG ORD 137,650
4,939 Kempen & Company NV ORD 150,852
2,000 Lehman Brothers Holdings, Inc. 80,750
1,300 Merrill Lynch & Co., Inc. 137,800
700 Money Store Inc. (The) 17,981
1,800 Morgan Stanley Group, Inc. 121,500
5,200 Newcourt Credit Group, Inc. ORD
(Acquired 2/15/96 through
4/10/97, Cost $55,743)(2) 121,584
33,000 Peregrine Investments Holdings
Limited ORD 58,773
3,100 Rental Service Corp.(1) 67,425
2,000 Salomon Inc. 107,250
130 Takefuji Corporation ORD 6,075
6,500 Travelers Group, Inc. 356,687
13,000 United Merchant Group ORD(1) 20,692
----------
2,688,078
----------
FOOD & BEVERAGE--1.5%
19,055 Archer-Daniels-Midland Co. 381,100
30,000 Guangnan Holdings ORD 48,203
8,300 Guinness plc ORD 77,429
1,000 Huhtamaki Group ORD 43,903
1,200 Interstate Bakeries Corp. 64,500
2,900 J.D. Wetherspoon plc ORD 62,641
1,200 Lance, Inc. 23,475
600 Michael Foods, Inc. 8,512
100 Nestle S.A. ORD 124,558
8,700 Northland Cranberries, Inc. 112,556
1,100 OY Hartwall AB ORD 51,285
14,200 Ralcorp Holdings, Inc.(1) 172,175
4,100 Universal Foods Corp. 147,087
----------
1,317,424
----------
Shares Value
- --------------------------------------------------------------------------------
FURNITURE & FURNISHINGS--0.2%
4,400 Miller (Herman), Inc. $ 156,750
----------
HEALTHCARE--1.6%
500 Columbia/HCA Healthcare Corp. 18,313
4,400 Health Management Associates,
Inc.(1) 128,700
8,300 Humana Inc.(1) 187,787
1,000 Lincare Holdings Inc.(1) 38,938
2,600 Oxford Health Plans, Inc.(1) 182,812
6,700 Quorum Health Group, Inc.(1) 238,269
500 Rhoen Klinikum AG ORD 61,272
4,000 Tenet Healthcare Corp.(1) 110,000
7,800 United HealthCare Corp. 440,700
----------
1,406,791
----------
INDUSTRIAL EQUIPMENT & MACHINERY--1.0%
22,000 Ashtead Group plc ORD 111,814
1,200 Caterpillar Inc. 117,150
6,200 Cooper Industries, Inc. 316,200
1,300 Dover Corp. 74,425
1,600 Dresser Industries, Inc. 54,800
3,000 Ingersoll-Rand Co. 163,500
100 Mannesmann AG ORD 40,692
3,400 Pfeiffer Vacuum Technology AG
ADR(1) 76,925
----------
955,506
----------
INSURANCE--4.0%
2,400 AXA-UAP ORD 143,941
8,900 Allstate Corp. 655,262
1,600 American International Group, Inc. 216,600
100 Argonaut Group, Inc. 2,913
1,930 Assurantieconcern Stad Rotterdam
ORD 86,511
300 CIGNA Corp. 52,125
3,200 CNA Financial Corp.(1) 327,600
3,700 Chubb Corp. (The) 225,700
6,000 Companhia de Seguros Mundial
Confianca, SA ORD(1) 79,490
11,300 Conseco Inc. 452,000
500 Gallagher (Arthur J.) & Co. 15,875
1,200 General Re Corp. 210,300
600 ITT Hartford Group, Inc. 46,800
1,600 Lincoln National Corp. 97,400
See Notes to Financial Statements
40 Strategic Allocation: Aggressive American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
4,500 NAC Re Corp. $ 179,438
200 Old Republic International Corp. 6,025
4,700 Pohjola Insurance Group Cl B
ORD 136,953
16,056 Reinsurance Australia Corporation
Ltd. ORD 50,697
5,400 SAFECO Corp. 234,562
800 Sampo Insurance Company Ltd.
ORD 69,933
2,000 Skandia Forsakrings AB ORD 70,676
2,700 St. Paul Companies, Inc. 193,388
900 UNUM Corp. 71,213
----------
3,625,402
----------
LEISURE--1.0%
47,000 Corporacion Interamericana de
Entretenimiento S.A. ORD(1) 190,043
2,600 Doubletree Corp.(1) 116,837
3,500 HFS, Inc.(1) 188,562
6,700 Hilton Hotels Corporation 189,275
1,600 King World Productions, Inc. 60,200
82,000 Solid Group, Inc. ORD 15,390
10,000 Yamaha Corp. ORD 190,198
----------
950,505
----------
MACHINERY & EQUIPMENT--0.8%
100 Barmag AG ORD(1) 17,444
3,100 Boewe Systec AG ORD 112,331
900 Cymer, Inc.(1) 47,700
3,850 Diebold, Inc. 144,375
9,100 Intevac, Inc.(1) 144,462
220 Rieter Holdings Ltd. ORD 71,621
200 Swisslog Holding AG ORD(1) 70,771
600 Thermedics Inc.(1) 10,050
3,400 Veeco Instruments Inc.(1) 141,100
----------
759,854
----------
MEDICAL EQUIPMENT & SUPPLIES--0.9%
2,600 Hillenbrand Industries, Inc. 122,525
600 Hologic, Inc.(1) 14,288
2,000 Instrumentarium Group Cl A ORD 83,920
1,000 Ortivus AB Cl B ORD(1) 38,504
1,200 Physician Sales & Service, Inc.(1) 17,250
4,400 Sabratek Corp.(1) 117,425
Shares Value
- --------------------------------------------------------------------------------
5,000 SeaMED Corp.(1) $ 86,250
2,500 Spectra-Physics AB ORD 42,961
12,000 Terumo Corporation ORD 211,713
200 Thermo Electron Corp.(1) 6,900
700 Thermo Instrument Systems Inc.(1) 23,975
1,300 US Surgical Corp. 43,875
----------
809,586
----------
METALS & MINING--0.3%
700 Oregon Metallurgical Corp.(1) 18,025
2,100 Reynolds Metals Co. 142,538
900 Vulcan Materials Co. 65,700
700 Zeigler Coal Holding Co. 16,275
----------
242,538
----------
OFFICE EQUIPMENT & SUPPLIES--0.7%
3,000 Canon Copyer Sales Co. ORD 31,241
8,900 Xerox Corp. 602,975
----------
634,216
----------
PAPER & FOREST PRODUCTS--0.9%
4,600 Chesapeake Corp. 154,100
5,500 Kimberly-Clark de Mexico, SA de
CV ORD 19,077
1,900 Rayonier, Inc. 81,462
7,000 Uni-Charm Corporation ORD 236,155
3,700 Union Camp Corp. 194,250
4,900 Westvaco Corp. 153,125
----------
838,169
----------
PERSONAL SERVICES--0.3%
6,900 Stewart Enterprises, Inc. Cl A 231,581
----------
PHARMACEUTICALS--4.8%
4,000 Abbott Laboratories 252,000
3,000 Apothekers Cooperative OPG
ORD 91,473
2,500 Bio-Technology General
Corporation(1) 35,938
1,700 Bristol-Myers Squibb Co. 124,737
500 Christian Hansen Holding A/S
Cl B ORD 59,991
8,700 Dura Pharmaceuticals, Inc.(1) 347,456
5,035 Getinge Industrier AB ORD 91,404
6,800 Lilly (Eli) & Co. 632,400
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Aggressive 41
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
10,500 Mallinckrodt Inc. $ 392,437
1,000 Matsumoto Medical Instruments,
Inc. ORD 39,675
2,800 Medicis Pharmaceutical Corp.(1) 95,375
7,900 Merck & Co., Inc. 710,012
323 Novartis AG ORD 440,039
4,700 Omnicare, Inc. 134,538
2,200 Pharmacia & Upjohn Inc. 76,175
22 Roche Holding AG ORD 195,867
8,000 Sankyo Company, Ltd. ORD 254,056
3,400 Warner-Lambert Co. 342,550
900 Watson Pharmaceuticals Inc.(1) 35,381
----------
4,351,504
----------
PRINTING & PUBLISHING--0.6%
2,800 Banta Corp. 77,350
2,875 McClatchy Newspapers, Inc. 80,141
1,000 Meredith Corp. 25,875
1,300 Moore Corporation Ltd. 28,925
3,800 Moore Corporation Ltd. ORD 84,987
1,000 Tribune Co. 43,250
7,400 VNU Tijdschriftengroep Nederland
ORD 167,393
----------
507,921
----------
RAILROADS--0.4%
6,300 CSX Corp. 333,900
----------
REAL ESTATE--0.1%
27,000 Parkway Holdings Ltd. ORD 134,009
----------
RESTAURANTS--0.4%
700 Applebee's International Inc.(1) 17,281
1,000 Boston Chicken, Inc.(1) 18,063
2,000 Logan's Roadhouse, Inc.(1) 46,750
300 Lone Star Steakhouse & Saloon,
Inc.(1) 6,881
3,400 PJ America, Inc.(1) 59,500
3,500 PizzaExpress plc ORD 39,164
5,600 Rainforest Cafe, Inc.(1) 136,850
----------
324,489
----------
Shares Value
- --------------------------------------------------------------------------------
RETAIL (APPAREL)--0.9%
3,400 Blacks Leisure Group PLC ORD $ 30,073
3,100 Fast Retailing Co. Ltd. ORD 100,581
3,200 Genesco Inc.(1) 44,000
1,600 Gucci Group N.V. 111,600
2,500 Hennes & Mauritz AB Cl B ORD 81,724
2,700 Hot Topic, Inc.(1) 77,963
5,500 Jones Apparel Group, Inc.(1) 257,812
3,400 Ross Stores, Inc. 96,687
600 TJX Companies, Inc. (The) 28,800
----------
829,240
----------
RETAIL (FOOD & DRUG)--1.3%
8,100 Albertson's, Inc. 271,350
2,760 Circle K Japan Co., Ltd. ORD 147,507
15,800 Giant Food Inc. Cl A 520,412
1,530 Koninklijke Ahold NV ORD 116,349
1,800 Richfood Holdings, Inc. 41,625
1,500 Universal Corp. 54,562
----------
1,151,805
----------
RETAIL (GENERAL MERCHANDISE)--1.6%
3,200 Consolidated Stores Corp.(1) 122,400
11,500 Dillard Department Stores, Inc. Cl A 388,125
5,200 Family Dollar Stores, Inc. 133,900
100 Fingerhut Companies, Inc. 1,763
3,000 Grupo Elektra, S.A. de C.V. GDR 57,000
100 Harcourt General, Inc. 4,737
4,800 Kohl's Corp.(1) 258,600
700 Lands' End, Inc.(1) 21,087
11,400 Next Plc ORD 138,589
5,900 Penney (J.C.) Company, Inc. 303,850
100 Pinault-Printemps-Redoute SA
ORD 42,009
----------
1,472,060
----------
RETAIL (SPECIALTY)--0.6%
6,700 Action Performance Cos. Inc.(1) 161,219
2,300 Cortefiel, S.A. ORD 85,055
4,500 DeoDeo Corporation ORD 94,884
3,900 Home Depot, Inc. 245,700
----------
586,858
----------
RUBBER & PLASTICS(3)
400 Carlisle Companies, Inc. 12,200
----------
See Notes to Financial Statements
42 Strategic Allocation: Aggressive American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Shares Value
- --------------------------------------------------------------------------------
STEEL--0.1%
500 Intermet Corp. $ 6,875
1,900 USX-Marathon Group 56,525
1,300 Vallourec SA ORD 74,470
----------
137,870
----------
TEXTILES & APPAREL--0.3%
3,300 Dexter Corp. 99,412
700 Nautica Enterprises, Inc.(1) 16,494
700 NIKE, Inc. 39,900
2,800 Sport-Haley, Inc.(1) 52,850
1,400 Timberland Co. (The)(1) 82,075
----------
290,731
----------
TOBACCO--0.6%
2,300 Consolidated Cigar Holdings, Inc.(1) 69,575
1,500 Fortune Brands Pty. Ltd.(1) 73,500
2,700 General Cigar Holdings, Inc.(1) 79,650
5,800 Philip Morris Companies Inc. 255,200
2,000 RJR Nabisco, Inc. 64,750
----------
542,675
----------
TRANSPORTATION--0.7%
4,600 Allied Holdings, Inc.(1) 45,425
3,000 Go-Ahead Group (The) PLC ORD 21,346
25,000 International Container Terminal
Services, Inc. ORD(1) 13,507
5,740 Internatio-Muller NV ORD 184,891
1,545 Koninklijke Pakhoed NV ORD 52,343
2,300 Koninklijke Van Ommeren N.V.
ORD 93,386
11,634 Stagecoach Holdings plc ORD 127,605
1,700 XTRA Corp. 72,888
----------
611,391
----------
UTILITIES--2.5%
142,000 Compenhia de Saneamento
Basico do Estado de Sao
Paulo ORD(1) 33,832
2,000 Commonwealth Energy System 43,500
200 Compagnie Generale des Eaux
ORD(1) 24,650
700 Entergy Corp. 18,462
14,000 Florida Progress Corp. 411,250
900 General Public Utilities Corp. 31,500
Shares Value
- --------------------------------------------------------------------------------
4,800 Houston Industries Inc. $ 99,600
14,200 New York State Electric &
Gas Corp. 308,850
6,300 Potomac Electric Power 144,900
9,800 Public Service Enterprise Group Inc. 242,550
8,900 Texas Utilities Electric Co. 305,937
7,900 Union Electric Co. 289,337
13,800 Wisconsin Energy Corp. 332,925
----------
2,287,293
----------
TOTAL COMMON STOCKS
& WARRANTS--71.3% 64,581,278
----------
(Cost $56,973,628)
PREFERRED STOCKS
BANKING--0.1%
200 Liechtenstein Global Trust AG ORD 115,782
----------
CHEMICALS & RESINS--0.2%
2,938 Henkel KGaA ORD 166,065
----------
COMMUNICATIONS SERVICES--0.2% 1,100 Telecomunicacoes Brasileiras S.A.
ADR 151,112
218,476 Telecomunicacoes de Minas
Gerais - Telemig ORD 32,863
----------
183,975
----------
COMPUTER SOFTWARE & SERVICES(3)
200 SAP AG ORD 36,470
----------
FINANCIAL SERVICES--0.4%
1,429 Marschollek, Lautenschlaeger und
Partner AG ORD 343,530
----------
MEDICAL EQUIPMENT & SUPPLIES--0.3%
1,022 Fresenius AG ORD 226,332
----------
RETAIL (FOOD & DRUG)(3)
700 Bompreco S.A. Supermercados do
Nordeste GDR (Acquired 5/5/97,
Cost $16,275)(2) 15,890
----------
TOTAL PREFERRED STOCKS--1.2% 1,088,044
----------
(Cost $660,496)
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Aggressive 43
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
U.S. TREASURY SECURITIES(4)
$ 400,000 U.S. Treasury Bill, 4.13%, 6/5/97 $ 399,778
675,000 U.S. Treasury Note, 6.375%,
3/31/01 672,894
190,000 U.S. Treasury Note, 6.625%,
7/31/01 191,009
2,075,000 U.S. Treasury Note, 7.50%,
5/15/02 2,161,901
1,425,000 U.S. Treasury Note, 5.75%,
08/15/03 1,366,660
400,000 U.S. Treasury Note, 5.875%,
11/15/05 379,500
225,000 U.S. Treasury Bond, 6.75%,
8/15/26 219,024
----------
TOTAL U.S. TREASURY SECURITIES--5.9% 5,390,766
----------
(Cost $5,393,621)
MORTGAGE-BACKED SECURITIES(5)
402,588 FNMA Pool #377181, 6.50%,
4/1/12 393,204
97,783 FNMA Pool #250576, 7.00%,
6/1/26 95,307
1,003,167 FNMA Pool #373510, 7.50%,
3/1/27 1,000,559
215,748 GNMA Pool #397233, 9.50%,
2/20/25 230,054
176,168 GNMA Pool #392995, 8.75%,
3/15/25 184,009
154,558 GNMA Pool #372335, 7.50%,
4/15/25 154,132
143,668 GNMA Pool #416856, 7.50%,
10/15/25 143,480
150,090 GNMA Pool #402682, 7.50%,
6/15/26 149,676
----------
TOTAL MORTGAGE-BACKED
SECURITIES--2.6% 2,350,421
----------
(Cost $2,348,957)
CORPORATE BONDS
AEROSPACE & DEFENSE--0.3%
300,000 Lockheed Martin Corp., 7.25%,
5/15/06 301,125
----------
Principal Amount Value
- --------------------------------------------------------------------------------
AIRLINES--0.2%
$ 150,000 UAL Corp., 9.00%, 12/15/03 $161,812
----------
AUTOMOBILES & AUTO PARTS--0.1%
100,000 General Motors Acceptance Corp.,
8.50%, 2/4/02 106,250
----------
BANKING--0.5%
300,000 Citicorp, 7.125%, 5/15/06 297,750
100,000 Santander Financial Issuances Ltd.,
7.00%, 4/1/06 98,250
----------
396,000
----------
COMMUNICATIONS SERVICES--0.3%
150,000 360 Communications Co., 7.125%,
3/1/03 148,875
100,000 Tele-Communications Inc., 8.25%,
1/15/03 101,875
----------
250,750
----------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.4%
350,000 Anixter Intl. Inc., 8.00%, 9/15/03 357,437
----------
ENERGY (PRODUCTION & MARKETING)--0.8%
525,000 Oryx Energy Co., 8.375%,
7/15/04 547,969
200,000 Triton Energy Ltd., 8.75%,
4/15/02 202,000
----------
749,969
----------
FINANCIAL SERVICES--0.8%
250,000 Guangdong Enterprises, 8.875%,
5/22/07 (Acquired 5/15/97,
Cost $249,625)(2) 251,875
500,000 Wharf International Finance Ltd.,
7.625%, 3/13/07 (Acquired
3/6/97, Cost $496,045)(2) 493,750
----------
745,625
----------
HEALTHCARE--0.6%
500,000 Tenet Healthcare Corp., 7.875%,
1/15/03 500,625
----------
INSURANCE--0.1%
100,000 Aetna Inc., 6.75%, 8/15/01 99,750
----------
LEISURE--0.2%
125,000 Time Warner Inc., 8.11%, 8/15/06 128,125
----------
See Notes to Financial Statements
44 Strategic Allocation: Aggressive American Century Investments
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
REAL ESTATE--0.3%
$ 275,000 Spieker Properties, Inc., 6.80%,
12/15/01 $ 272,594
----------
RETAIL (GENERAL MERCHANDISE)--0.2%
200,000 Federated Department Stores,
8.50%, 6/15/03 212,250
----------
TOBACCO--0.3%
300,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 293,250
----------
UTILITIES--0.1%
100,000 Pacific Gas and Electric Company,
6.25%, 3/1/04 96,125
----------
TOTAL CORPORATE BONDS--5.2% 4,671,687
----------
(Cost $4,630,543)
SOVEREIGN GOVERNMENTS & AGENCIES
$ 500,000 Argentine Discount Notes,
VRN, 6.875%, 11/28/97,
resets semi-annually off the
6-month LIBOR plus
0.8125% with no caps,
final maturity 3/31/23 427,500
$ 250,000 Brazil NMB L, VRN, 6.94%,
10/15/97, resets
semi-annually off the
6-month LIBOR plus
0.875% with no caps, final
maturity 4/15/09 218,594
DEM1,300,000 Bundesobligation, 5.875%,
5/15/00 798,675
DEM2,000,000 Federal Republic of Germany,
6.00%, 9/15/03 1,219,232
CAD800,000 Government of Canada,
7.25%, 6/01/03 614,980
FRF1,500,000 Government of France, 8.50%,
4/25/03 304,520
ITL500,000,000 Government of Italy, 9.50%,
2/1/01 320,626
$ 100,000 Quebec Province, 8.80%,
4/15/03 108,625
Principal Amount Value
- --------------------------------------------------------------------------------
$ 250,000 Republic of Brazil EI, VRN,
6.875%, 10/15/97, resets
semi-annually off the
6-month LIBOR plus
0.8125% with no caps, final
maturity 4/15/06 $ 230,312
ITL125,000,000 Republic of Italy, 3.50%,
6/20/01 1,140,997
GBP350,000 United Kingdom Treasury,
8.00%, 6/10/03 597,495
$ 250,000 United Mexican States, 8.50%,
9/15/02 251,575
$ 500,000 United Mexican States, VRN,
6.835%, 11/3/97, resets
semi-annually off the
6-month LIBOR plus
0.8125% with no caps, final
maturity 12/31/19 460,625
$ 476,190 Venezuela FLIRB, VRN, 6.75%,
9/30/97, resets
semi-annually off the
6-month LIBOR plus
0.875% with no caps, final
maturity 3/31/07 436,011
----------
TOTAL SOVEREIGN
GOVERNMENTS & AGENCIES--7.9% 7,129,767
----------
(Cost $7,176,223)
COMMERCIAL PAPER(4)
BANKING--2.2%
1,700,000 Nordbanken North America,
5.45%, 7/18/97 1,687,660
350,000 Spintab-Swedmortgage AB, 5.39%,
6/30/97 348,407
----------
2,036,067
----------
FINANCIAL SERVICES--1.5%
1,335,000 Hitachi Credit America Corp.,
5.40%-5.44%, 6/12/97 through
6/25/97 1,330,495
----------
INSURANCE--0.6%
500,000 Principal Mutual, 5.51%, 6/5/97 499,693
----------
See Notes to Financial Statements
Semiannual Report Strategic Allocation: Aggressive 45
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
MAY 31, 1997 (UNAUDITED)
Principal Amount Value
- --------------------------------------------------------------------------------
UTILITIES--0.7%
$ 636,000 Southern California Gas Co.,
5.42%, 7/7/97 (Acquired
4/4/97, Cost $626,750)(2) $ 632,457
----------
TOTAL COMMERCIAL PAPER--5.0% 4,498,712
----------
(Cost $4,498,712)
TEMPORARY CASH INVESTMENTS--0.9%
Repurchase Agreement, Morgan (J.P.) & Co.
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.50%, dated 5/30/97,
due 6/2/97 (Delivery value $800,367)
(Cost $800,000) 800,000
----------
TOTAL INVESTMENT SECURITIES--100.0% $90,510,675
==========
(Cost $82,482,180)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value (Loss)
- --------------------------------------------------------------------
529,841 CHF 6/30/97 $ 376,305 $ (15,265)
2,006,427 DEM 6/30/97 1,178,677 (22,567)
1,684,718 FRF 6/30/97 292,933 (6,143)
290,174 GBP 6/30/97 475,467 (4,761)
1,044,233 NLG 6/30/97 545,232 (7,399)
----------------------------
$2,868,614 $(56,135)
============================
(Value on Settlement Date $2,812,479)
Notes to Schedule of Investments
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
FNMA = Federal National Mortgage Association
FRF = French Franc
GBP = British Pound
GDR = Global Depositary Receipt
GNMA = Government National Mortgage Association
ITL = Italian Lira
JPY = Japanese Yen
LIBOR = London Interbank Offered Rate
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
resets = The frequency with which a fixed-income security's coupon changes,
based on current market conditions or an underlying index. The more frequently a
security resets, the less risk the investor is taking that the coupon will vary
significantly from current market rates.
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is effective May
31, 1997.
(1) Non-income producing.
(2) Security was purchased under Rule 144A or Section 4(2) of the Securities Act
of 1933 and, unless registered under the Act or exempted from registration, may
only be sold to qualified institutional investors. The aggregate value of
restricted securities at May 31, 1997, was $1,541,675, which represented 1.7% of
net assets.
(3) Industry is less than 0.05% of the Fund's total investment securities.
(4) The rates for U.S. Treasury Bills and commercial paper are the yield to
maturity as of May 31, 1997.
(5) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
See Notes to Financial Statements
46 Strategic Allocation: Aggressive American Century Investments
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED)
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
ASSETS
Investment securities, at value (identified cost of $53,496,757,
<S> <C> <C> <C>
$128,323,399 and $82,482,180, respectively) (Note 3) .......... $55,688,450 $137,671,511 $90,510,675
Foreign currency holdings, at value (identified cost
of $8,496, $22,043 and $29,433, respectively) ................ 8,505 20,682 28,812
Cash ............................................................ 30,670 37,377 78,298
Receivable for investments sold ................................. 150,590 503,523 524,188
Receivable for capital shares sold .............................. 38,255 247,098 139,851
Dividends and interest receivable ............................... 390,122 796,028 436,602
---------- ----------- ----------
56,306,592 139,276,219 91,718,426
---------- ----------- ----------
LIABILITIES
Disbursements in excess of demand deposit cash .................. 1,022 57,723 175,264
Payable for forward foreign currency exchange contracts ......... 24,891 77,165 56,135
Payable for investments purchased ............................... 51,879 188,755 116,518
Payable for capital shares redeemed ............................. 42,257 144,247 76,027
Accrued management fees (Note 2) ................................ 46,108 125,528 89,951
Distribution fees payable (Note 2) .............................. 830 1,552 1,237
Service fees payable (Note 2) ................................... 830 1,552 1,237
---------- ----------- ----------
167,817 596,522 516,369
---------- ----------- ----------
Net assets ...................................................... $56,138,775 $138,679,697 $91,202,057
=========== ============ ===========
NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) ......................... $53,697,218 $130,191,798 $84,445,510
Undistributed net investment income ............................. 339,356 352,106 532,626
Accumulated undistributed net realized loss
from investment and foreign currency transactions ............. (55,484) (1,106,769) (1,728,110)
Net unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies (Note 3) ......... 2,157,685 9,242,562 7,952,031
---------- ----------- ----------
$56,138,775 $138,679,697 $91,202,057
=========== ============ ===========
Investor Class
Net assets ...................................................... $52,126,036 $131,245,756 $85,241,540
Shares outstanding .............................................. 9,825,358 23,596,917 14,843,861
Net asset value per share ....................................... $ 5.31 $ .56 $ 5.74
Advisor Class
Net assets ...................................................... $ 4,012,739 $ 7,433,941 $ 5,960,517
Shares outstanding .............................................. 756,106 1,337,509 1,039,017
Net asset value per share ....................................... $ 5.31 $ 5.56 $ 5.74
</TABLE>
See Notes to Financial Statements
Semiannual Report Statements of Assets and Liabilities 47
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
INVESTMENT INCOME
Income:
<S> <C> <C> <C>
Interest ....................................................... $ 898,838 $1,434,595 $ 650,321
Dividends (net of foreign taxes withheld of $5,546,
$24,684, and $21,055, respectively) ......................... 166,002 544,597 410,757
--------- --------- ---------
1,064,840 1,979,192 1,061,078
--------- --------- ---------
Expenses (Note 2):
Management fees ................................................ 235,052 600,268 439,611
Distribution fees - Advisor Class .............................. 4,888 9,169 7,377
Shareholder services fees - Advisor Class ...................... 4,888 9,169 7,377
Directors' fees and expenses ................................... 283 663 444
--------- --------- ---------
245,111 619,269 454,809
--------- --------- ---------
Net investment income .......................................... 819,729 1,359,923 606,269
--------- --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY (NOTE 3)
Net realized gain (loss) on:
Investments .................................................... (152,913) (1,422,449) (1,716,788)
Foreign currency transactions .................................. 144,752 402,085 293,647
--------- --------- ---------
(8,161) (1,020,364) (1,423,141)
--------- --------- ---------
Change in net unrealized appreciation on:
Investments .................................................... 806,821 5,464,752 4,984,313
Translation of assets and liabilities in foreign currencies .... (41,194) (122,383) (89,670)
--------- --------- ---------
765,627 5,342,369 4,894,643
--------- --------- ---------
Net realized and unrealized gain on
investments and foreign currency ............................... 757,466 4,322,005 3,471,502
--------- --------- ---------
Net Increase in Net Assets
Resulting from Operations ...................................... $1,577,195 $5,681,928 $4,077,771
========== ========== ==========
</TABLE>
See Notes to Financial Statements
48 Statements of Operations American Century Investments
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED) AND PERIOD ENDED NOVEMBER 31, 1996
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Increase (Decrease) in Net Assets 1997 1996(1) 1997 1996(1) 1997 1996(1)
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income ...............$ 819,729 $ 439,906 $ 1,359,923 $ 675,244 $ 606,269 $ 312,027
Net realized gain (loss) on
investments and foreign currency
transactions ...................... (8,161) 60,039 (1,020,364) (5,837) (1,423,141) (315,887)
Change in net unrealized
appreciation on investments and
translation of assets and
liabilites in foreign currencies .. 765,627 1,392,058 5,342,369 3,900,193 4,894,643 3,057,388
--------- --------- --------- --------- --------- ---------
Net increase in net assets resulting
from operations ................... 1,577,195 1,892,003 5,681,928 4,569,600 4,077,771 3,053,528
--------- --------- --------- --------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class .................... (620,330) (233,977) (1,191,477) (397,443) (334,673) --
Advisor Class ..................... (52,638) -- (83,235) -- (40,079) --
From net realized gain from
investment transactions:
Investor Class .................... (107,668) -- (80,981) -- -- --
Advisor Class ..................... (13,028) -- (10,493) -- -- --
--------- --------- --------- --------- --------- ---------
Decrease in net assets from
distributions ..................... (793,664) (233,977) (1,366,186) (397,443) (374,752) --
--------- --------- --------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS (NOTE 4)
Net increase in net assets from
capital share transactions ........ 18,272,297 35,424,921 68,961,633 61,230,165 35,350,998 49,094,512
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets .......... 19,055,828 37,082,947 73,277,375 65,402,322 39,054,017 52,148,040
Net Assets
Beginning of period ................. 37,082,947 -- 65,402,322 -- 52,148,040 --
--------- --------- --------- --------- --------- ---------
End of period ....................... $56,138,775 $37,082,947 $138,679,697 $65,402,322 $91,202,057 $52,148,040
=========== =========== ============ =========== =========== ===========
Undistributed net investment income . $ 339,356 $ 192,595 $ 352,106 $ 266,895 $ 532,626 --
=========== =========== ============ =========== =========== ===========
(1) February 16, 1996 (inception) through November 31, 1996.
</TABLE>
See Notes to Financial Statements
Semiannual Report Statements of Changes in Net Assets 49
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED)
1. Organization and Summary of Significant Accounting Policies
Organization--American Century Strategic Asset Allocations, Inc. (the
Corporation) is registered under the Investment Company Act of 1940 as an
open-end diversified management investment company. Three series of funds are
currently issued as American Century Strategic Allocation: Conservative
(Strategic Allocation: Conservative), American Century Strategic Allocation:
Moderate (Strategic Allocation: Moderate) and Amerian Century Strategic
Allocation: Aggressive (Strategic Allocation: Aggressive) (the Funds). The
Funds' investment objective is to provide as high a level of total return
(capital appreciation plus dividend and interest income) as is consistent with
its risk profile. The Funds' seek to achieve this by diversifying investments
among three asset classes - equity securities, bonds and cash equivalent
instruments, the mix of which will depend on the risk profile of each particular
Fund. Each Fund is authorized to issue two classes of shares: the Investor class
and the Advisor Class. The two classes of shares differ principally in their
respective shareholder servicing and distribution expenses and arrangements. All
shares of each Fund represent an equal pro rata interest in the assets of the
class to which such shares belong, and have identical voting, dividend,
liquidation and other rights and the same terms and conditions, except for class
specific expenses and exclusive rights to vote on matters affecting only
individual classes. The following significant accounting policies, related to
all classes of the Funds, are in accordance with accounting policies generally
accepted in the investment company industry.
Security Valuations--Portfolio securities traded primarily on a principal
securities exchange are valued at the last reported sales price, or the mean of
the latest bid and asked prices where no last sales price is available.
Securities traded over-the-counter are valued at the mean of the latest bid and
asked prices or, in the case of certain foreign securities, at the last reported
sales price, depending on local convention or regulation. Debt securities not
traded on a principal securities exchange are valued through valuations obtained
from a commercial pricing service or at the mean of the most recent bid and
asked prices. When valuations are not readily available, securities are valued
at fair value as determined in accordance with procedures adopted by the Board
of Directors.
Security Transactions--Security transactions are accounted for on the date
purchased or sold. Net realized gains and losses are determined on the
identified cost basis, which is also used for federal income tax purposes.
Investment Income--Dividend income less foreign taxes withheld (if any) is
recorded as of the ex-dividend date. Interest income is recorded on the accrual
basis and includes amortization of discounts and premiums.
Foreign Currency Transactions--The accounting records of the Funds are
maintained in U.S. dollars. All assets and liabilities initially expressed in
foreign currencies are converted into U.S. dollars at prevailing exchange rates.
Purchases and sales of investment securities, dividend and interest income, and
certain expenses are translated at the rates of exchange prevailing on the
respective dates of such transactions.
Net realized foreign currency exchange gains or losses arise from sales of
foreign currencies and the difference between asset and liability amounts
initially stated in foreign currencies and the U.S. dollar value of the amounts
actually received or paid. Net unrealized foreign currency exchange gains or
losses arise from changes in the value of assets and liabilities, other than
portfolio securities, resulting from changes in the exchange rates.
Net realized and unrealized foreign currency exchange gains or losses occurring
during the holding period of portfolio securities are a component of realized
gain (loss) on investments and unrealized appreciation (depreciation) on
investments, respectively.
Forward Foreign Currency Exchange Contracts--The Funds may enter into forward
foreign currency exchange contracts for the purpose of settling specific
purchases or sales of securities denominated in a foreign currency or to hedge
the Funds' exposure to foreign currency exchange rate fluctuations. When
required, the Funds will segregate assets in an amount sufficient to cover their
obligations under the hedge contracts. The net U.S. dollar value of foreign
currency underlying all contractual commitments held by the Funds and the
resulting unrealized appreciation or depreciation are determined daily using
prevailing exchange rates. Forward contracts involve elements of market risk in
excess of the amount reflected in the Statements of Assets and Liabilities. The
Funds bear the risk of an unfavorable change in the foreign currency exchange
rate underlying the forward contract. Additionally, losses may arise if the
counterparties do not perform under the contract terms.
Repurchase Agreements--The Funds may enter into repurchase agreements with
institutions that the Funds' investment manager, American Century Investment
Management, Inc. (ACIM), has determined are creditworthy pursuant to criteria
adopted by the Board of Directors. Each repurchase agreement is recorded at
cost. The Funds require that the securities purchased in a repurchase
transaction be
50 Notes to Financial Statements American Century Investments
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED)
transferred to the custodian in a manner sufficient to enable the Funds to
obtain those securities in the event of a default under the repurchase
agreement. ACIM monitors, on a daily basis, the value of the securities
transferred to ensure the value, including accrued interest, of the securities
under each repurchase agreement is equal to or greater than amounts owed to the
Funds under each repurchase agreement.
Joint Trading Account--Pursuant to an Exemptive Order issued by the Securities
and Exchange Commission, the Funds, along with other registered investment
companies having management agreements with ACIM and Benham Management
Corporation, may transfer uninvested cash balances into a joint trading account.
These balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Agency obligations.
Income Tax Status--It is the policy of the Funds to distribute all taxable
income and capital gains to shareholders and to otherwise qualify as a regulated
investment company under provisions of the Internal Revenue Code. Accordingly,
no provision has been made for federal income taxes.
Distributions to Shareholders--Distributions to shareholders are recorded on the
ex-dividend date. Distributions from net investment income are declared and paid
quarterly, with the exception of Strategic Allocation: Aggressive which is
declared and paid annually. Distributions from net realized gains are declared
and paid annually.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. These differences are primarily due to differences
in the recognition of income and expense items for financial statement and tax
purposes.
Supplementary Information--Certain officers and directors of the Corporation are
also officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc., the parent of the Corporation's investment
manager, ACIM, the Corporation's distributor, American Century Investment
Services, Inc. (ACIS), and the Corporation's transfer agent, American Century
Services Corporation.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
- --------------------------------------------------------------------------------
2. Transactions with Related Parties
The Corporation has entered into Management Agreements with ACIM that provides
each Fund with investment advisory and management services in exchange for a
single, unified management fee per class. The Agreements provide that all
expenses of the Funds, except brokerage commissions, taxes, interest, expenses
of those directors who are not considered "interested persons" as defined in the
Investment Company Act of 1940 (including counsel fees) and extraordinary
expenses, will be paid by ACIM. The fee is computed daily and paid monthly based
on each class's average daily closing net assets during the previous month. The
annual management fee for each class of the Funds is as follows:
<TABLE>
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Investor Advisor Investor Advisor Investor Advisor
Class Class Class Class Class Class
AVERAGE NET ASSETS
<S> <C> <C> <C> <C> <C> <C> <C>
First $1 billion .............................. 1.00% 0.75% 1.10% 0.85% 1.20% 0.95%
Over $1 billion ............................... 0.90% 0.65% 1.00% 0.75% 1.10% 0.85%
</TABLE>
Semiannual Report Notes to Financial Statements 51
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED)
The Board of Directors has adopted a shareholder services and distribution plan
for the Advisor Class, pursuant to Rule 12b-1 of the Investment Company Act of
1940. The Advisor Class Master Distribution and Shareholder Services Plan
provides that the Funds will pay ACIM an annual distribution fee equal to 0.25%
and service fee equal to 0.25%. The fees are computed daily and paid monthly
based on the Advisor Class's average daily closing net assets during the
previous month. The distribution fee provides compensation for distribution
expenses incurred in connection with distributing shares of the Advisor Class
including, but not limited to, payments to brokers, dealers, and financial
institutions that have entered into sales agreements with ACIS and/or ACIM. The
service fee provides compensation for shareholder and administrative services
rendered by ACIM, its affiliates or independent third party providers. Fees
incurred under the Master Distribution and Shareholder Services Plan during the
six months ended May 31, 1997, were $9,776 in Strategic Allocation:
Conservative, $18,338 in Strategic Allocation: Moderate and $14,754 in Strategic
Allocation: Aggressive.
- --------------------------------------------------------------------------------
3. Investment Transactions
<TABLE>
Investment transactions (excluding short-term investments) for the six months
ended May 31, 1997 were as follows:
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
PURCHASES
<S> <C> <C> <C>
Other Investment Securities .................... $25,668,129 $102,731,206 $80,469,176
U.S. Government & Agency Obligations ........... 10,630,600 20,676,341 6,883,411
PROCEEDS FROM SALES
Other Investment Securities .................... $16,740,510 $ 56,081,310 $50,243,043
U.S. Government & Agency Obligations ........... 4,003,715 7,805,317 3,936,718
On May 31, 1997, the composition of unrealized appreciation and (depreciation)
of investment securities based on the aggregate cost of investments for federal
income tax purposes was as follows:
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Appreciation ................................... $ 2,633,025 $ 10,469,758 $ 8,780,500
(Depreciation) ................................. (487,264) (1,196,600) (797,033)
Net ............................................ 2,145,761 9,273,158 7,983,467
Federal Tax Cost ............................... 53,542,689 128,398,353 82,527,208
</TABLE>
52 Notes to Financial Statements American Century Investments
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
4. Capital Share Transactions
There are 50,000,000 shares of the Investor Class and 25,000,000 shares of the
Advisor Class authorized for issuance in each of the Funds. All shares are $0.01
par value. Transactions in shares of the Funds were as follows:
<TABLE>
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Shares Amount Shares Amount Shares Amount
INVESTOR CLASS Six months ended May 31, 1997:
<S> <C> <C> <C> <C> <C> <C>
Sold .......................................... 8,824,809 $ 45,634,683 17,733,307 $ 95,091,568 10,345,849 $ 56,793,166
Issued in reinvestment of distributions ....... 140,691 720,598 237,805 1,256,463 61,578 333,773
Redeemed ...................................... (5,436,586) (28,083,854) (5,050,300) (27,066,922) (3,926,343) (21,659,968)
---------- ----------- ---------- ----------- ---------- -----------
Net increase .................................. 3,528,914 $ 18,271,427 12,920,812 $ 69,281,109 6,481,084 $ 35,466,971
========= ============ ========== ============ ========= ============
INVESTOR CLASS
February 15, 1996(1) through November 30, 1996:
Sold .......................................... 7,164,621 $ 35,925,344 16,034,505 $ 81,994,470 10,377,899 $ 53,860,559
Issued in reinvestment of distributions ....... 46,166 232,102 76,326 394,738 -- --
Redeemed ...................................... (914,343) (4,590,760) (5,434,726 (28,493,182) (2,015,122) (10,487,280)
-------- ---------- ---------- ----------- ---------- -----------
Net increase .................................. 6,296,444 $ 31,566,686 10,676,105 $ 53,896,026 8,362,777 $ 43,373,279
========= ============ ========== ============ ========= ============
ADVISOR CLASS Six months ended May 31, 1997:
Sold .......................................... 310,996 $ 1,593,787 505,651 $ 2,671,768 356,314 $ 1,926,059
Issued in reinvestment of distributions ....... 12,791 65,666 17,707 93,728 7,394 40,079
Redeemed ...................................... (323,335) (1,658,583) (582,872) (3,084,972) (386,050) (2,082,111)
-------- ---------- -------- ---------- -------- ----------
Net increase .................................. 452 $ 870 (59,514) $ (319,476) (22,342) $ (115,973)
=== ============ ======= ============ ======= ============
ADVISOR CLASS
October 2, 1996(2) through November 30, 1996:
Sold .......................................... 779,853 $ 3,982,634 1,432,659 $ 7,524,438 1,076,959 $ 5,806,112
Redeemed ...................................... (24,199) (124,399) (35,636) (190,299) (15,600) (84,879)
------- -------- ------- -------- ------- -------
Net increase .................................. 755,654 $ 3,858,235 1,397,023 $ 7,334,139 1,061,359 $ 5,721,233
======= ============ ========= ============ ========= ============
(1) Inception of the Funds.
(2) Commencement of sale of the Advisor Class.
</TABLE>
Semiannual Report Notes to Financial Statements 53
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: CONSERVATIVE
For a Share Outstanding Throughout the Periods as Indicated
Investor Class Advisor Class
1997(1) 1996(2) 1997(1) 1996(3)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C>
Beginning of Period .......................................... $5.26 $5.00 $5.26 $5.09
----- ----- ----- -----
Income From Investment Operations
Net Investment Income(4) ................................... 0.09 0.13 0.08 0.03
Net Realized and Unrealized Gain on
Investment Transactions .................................... 0.06 0.22 0.06 0.14
---- ---- ---- ----
Total From Investment Operations ........................... 0.15 0.35 0.14 0.17
---- ---- ---- ----
Distributions
From Net Investment Income ................................. (0.08) (0.09) (0.07) --
From Net Realized Gain on Investment Transactions .......... (0.02) -- (0.02) --
---- ---- ---- ----
Total Distributions ........................................ (0.10) (0.09) (0.09) --
---- ---- ---- ----
Net Asset Value, End of Period ............................... $5.31 $5.26 $5.31 $5.26
===== ===== ===== =====
Total Return(5) ............................................ 2.84% 7.02% 2.68% 3.34%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets(6) ..................................... 1.00% 1.01% 1.25% 1.25%
Ratio of Net Investment Income
to Average Net Assets(6) ..................................... 3.43% 3.67% 3.18% 3.25%
Portfolio Turnover Rate ...................................... 53% 44% 53% 44%
Average Commission Paid
per Investment Security Traded ............................... $0.0330 $0.0271 $0.0330 $0.0271
Net Assets, End of Period (in thousands) ..................... $52,126 $33,110 $4,013 $3,973
(1) Six months ended May 31, 1997 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) October 2, 1996 (commencement of sale of Advisor Class) through November
30, 1996.
(4) Computed using average shares outstanding throughout the period.
(5) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns are not annualized.
(6) Annualized.
</TABLE>
See Notes to Financial Statements
54 Financial Highlights American Century Investments
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: MODERATE
For a Share Outstanding Throughout the Periods as Indicated
Investor Class Advisor Class
1997(1) 1996(2) 1997(1) 1996(3)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C>
Beginning of Period ......................................... $5.42 $5.00 $5.42 $5.24
----- ----- ----- -----
Income From Investment Operations
Net Investment Income(4) .................................. 0.07 0.10 0.06 0.02
Net Realized and Unrealized Gain on
Investment Transactions ................................... 0.15 0.39 0.15 0.16
---- ---- ---- ----
Total From Investment Operations .......................... 0.22 0.49 0.21 0.18
---- ---- ---- ----
Distributions
From Net Investment Income ................................ (0.07) (0.07) (0.06) --
From Net Realized Gain
on Investment Transactions ................................ (0.01) -- (0.01) --
---- ---- ---- ----
Total Distributions ....................................... (0.08) (0.07) (0.07) --
---- ---- ---- ----
Net Asset Value, End of Period .............................. $5.56 $5.42 $5.56 $5.42
===== ===== ===== =====
Total Return(5) ........................................... 4.06% 9.91% 3.91% 3.44%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets(6) .................................... 1.10% 1.10% 1.35% 1.35%
Ratio of Net Investment Income
to Average Net Assets(6) .................................... 2.53% 2.52% 2.28% 2.10%
Portfolio Turnover Rate ..................................... 68% 78% 68% 78%
Average Commission Paid
per Investment Security Traded .............................. $0.0264 $0.0186 $0.0264 $0.0186
Net Assets, End
of Period (in thousands) .................................... $131,246 $57,836 $7,434 $7,566
(1) Six months ended May 31, 1997 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) October 2, 1996 (commencement of sale of Advisor Class) through November
30, 1996.
(4) Computed using average shares outstanding throughout the period.
(5) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns are not annualized.
(6) Annualized.
</TABLE>
See Notes to Financial Statements
Semiannual Report Financial Highlights 55
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: AGGRESSIVE
For a Share Outstanding Throughout the Periods as Indicated
Investor Class Advisor Class
1997(1) 1996(2) 1997(1) 1996(3)
PER-SHARE DATA
Net Asset Value,
<S> <C> <C> <C> <C>
Beginning of Period ......................................... $5.53 $5.00 $5.53 $5.37
----- ----- ----- -----
Income From Investment Operations
Net Investment Income(4) .................................. 0.04 0.07 0.04 0.01
Net Realized and Unrealized Gain
on Investment Transactions ................................ 0.21 0.46 0.21 0.15
---- ---- ---- ----
Total From Investment Operations .......................... 0.25 0.53 0.25 0.16
---- ---- ---- ----
Distributions
From Net Investment Income ................................ (0.04) -- (0.04) --
---- ---- ---- ----
Net Asset Value, End of Period .............................. $5.74 $5.53 $5.74 $5.53
===== ===== ===== =====
Total Return(5) ........................................... 4.55% 10.60% 4.51% 2.98%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets(6) .................................... 1.20% 1.20% 1.45% 1.45%
Ratio of Net Investment Income
to Average Net Assets(6) .................................... 1.66% 1.72% 1.41% 1.31%
Portfolio Turnover Rate ..................................... 82% 64% 82% 64%
Average Commission Paid
per Investment Security Traded .............................. $0.0192 $0.0202 $0.0192 $0.0202
Net Assets, End of Period (in thousands) .................... $85,242 $46,276 $5,961 $5,872
(1) Six months ended May 31, 1997 (unaudited).
(2) February 15, 1996 (inception) through November 30, 1996.
(3) October 2, 1996 (commencement of sale of Advisor Class) through November
30, 1996.
(4) Computed using average shares outstanding throughout the period.
(5) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns are not annualized.
(6) Annualized.
</TABLE>
See Notes to Financial Statements
56 Financial Highlights American Century Investments
SHARE CLASS AND RETIREMENT ACCOUNT
INFORMATION
Share Classes
Until September 3, 1996, the Strategic Asset Allocation funds issued one class
of fund shares, reflecting the fact that most investors bought their shares
directly from American Century. All investors paid the same annual unified
management fee and did not pay any commissions or other fees to purchase shares
from American Century.
But increasing numbers of investors are purchasing fund shares through financial
intermediaries who are ordinarily compensated for the additional services they
provide. In September, American Century began to offer two classes of shares for
many of its funds, including the Strategic Asset Allocation funds. One class is
for investors who buy directly from American Century, the other for investors
who buy through financial intermediaries.
The original class of Strategic Asset Allocation fund shares is called the
Investor Class. All shares issued and outstanding before September 3, 1996, have
been designated as Investor Class shares. Investor Class shares may still be
purchased after September 3, 1996. Investor Class shareholders do not pay any
commissions or other fees for purchase of fund shares directly from American
Century. Investors who buy Investor Class shares through a broker-dealer may be
required to pay the broker-dealer a transaction fee. The price and performance
of the Investor Class shares are listed in newspapers. No other class is
currently listed.
In addition, there is an Advisor Class, which is sold through banks,
broker-dealers, insurance companies and financial advisors. Advisor Class shares
are subject to a 0.50% Rule 12b-1 service and distribution fee. Half of that fee
is available to pay for recordkeeping and administrative services, and half is
available to pay for distribution services provided by the financial
intermediary through which the Advisor Class shares are purchased. The total
expense ratio of the Advisor Class shares is 0.25% higher than the total expense
ratio of the Investor Class shares.
Both classes of shares represent a pro rata interest in the funds and generally
have the same rights and preferences.
Retirement Account Information
As required by law, any distributions you receive from an IRA and certain 403(b)
distributions [not eligible for rollover to an IRA or to another 403(b)] are
subject to federal income tax withholding at the rate of 10% of the total amount
withdrawn, unless you elect not to have withholding apply. If you don't want us
to withhold on this amount, you may send us a written notice not to have the
federal income tax withheld. Your written notice is valid for six months from
the date of receipt at American Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
Exchange/Redemption form or an IRS Form W-4P. Call American Century for either
form. Your written election is valid for only six months from the date of
receipt at American Century. You may revoke your election at any time by sending
a written notice to us.
Remember, even if you elect not to have income tax withheld, you are liable for
paying income tax on the taxable portion of your withdrawal. If you elect not to
have income tax withheld or you don't have enough income tax withheld, you may
be responsible for payment of estimated tax. You may incur penalties under the
estimated tax rules if your withholding and estimated tax payments are not
sufficient.
Semiannual Report Share Class and Retirement Account Information 57
NOTES
58 Notes American Century Investments
NOTES
Semiannual Report Notes 59
BACKGROUND INFORMATION
Investment Philosophy & Policies
Each American Century Strategic Asset Allocation fund invests in a diversified
portfolio of stocks, bonds and money market securities, with the objective of
achieving as high a level of total return as is consistent with the fund's asset
mix. The funds rely on a team management approach--groups of managers are
responsible for the ongoing active management of the individual fund components.
Strategic Allocation: Conservative emphasizes bonds and money market securities
to provide regular income and principal protection. The fund also provides the
potential for moderate long-term growth by investing a portion of its assets in
stocks.
Strategic Allocation: Moderate emphasizes common stocks for their long-term
growth prospects, but it maintains a sizable stake in bonds and money market
securities to provide some income and increase overall price stability.
Strategic Allocation: Aggressive focuses primarily on common stocks as a source
of long-term growth, but it maintains a small portion of its assets in bonds and
money market securities to help cushion the share price volatility of the stock
portion.
Comparative Indices
The following indices are used in the report as fund performance comparisons.
They are not investment products available for purchase.
The S&P 500 Index is composed of 500 large-capitalization stocks traded on
domestic exchanges. It is considered to be a broad measure of U.S. stock market
performance.
The Lehman Aggregate Bond Index reflects the price fluctuations of Treasury
securities, agency securities, corporate bond issues and mortgage-backed
securities.
The Morgan Stanley Europe, Australia, Far East (EAFE(R)) Index is a widely
followed group of stocks from 20 different countries.
The Salomon Brothers Non-U.S. World Government Bond Index consists of
fixed-income government bonds from 13 countries.
The Three-Month Treasury Bill Index is derived from secondary market interest
rates as published by the Federal Reserve Bank.
Lipper Rankings
Lipper Analytical Services, Inc. is an independent mutual fund ranking service
that groups funds according to their investment objectives. Rankings are based
on average annual returns for each fund in a given category for the periods
indicated. Rankings are not included for periods less than one year. The Lipper
categories for the Strategic Allocation funds are:
Income Funds (Conservative)--funds that normally seek a high level of
current income through investing in income-producing stocks, bonds and
money market instruments.
Balanced Funds (Moderate)--funds whose primary objective is to conserve
principal by maintaining a balanced portfolio of stocks and bonds.
Typically, the stock/bond ratio is 60%/40%.
Growth & Income Funds (Aggressive)--equity funds that combine growth of
earnings orientation and an income requirement for level and/or rising
dividends.
THE FUNDS' NEUTRAL ASSET MIXES*
CON MOD AGG
Stocks 40% 60% 75%
Bonds 45% 30% 20%
Cash (money market securities) 15% 10% 5%
PORTFOLIO MANAGEMENT TEAM
Lead Manager Jeff Tyler, Brian Howell
U.S. Stocks Phil Davidson, Glenn Fogle,
Peter Zuger
Foreign Stocks Henrik Strabo, Mark Kopinski
U.S. Bonds Casey Colton, Bud Hoops,
Jeff Houston, Dave Schroeder
Foreign Bonds Dave Schroeder
Money Market Securities Denise Tabacco
* The funds' actual asset mixes will vary from the neutral mixes based on
investment performance. Fund managers regularly review the portfolios and
rebalance the asset mixes to stay within the funds' preset operating ranges.
60 Background Information American Century Investments
GLOSSARY
Returns
o Total Return figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.
o Average Annual Returns illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 54-56.
Stock Portfolio Statistics
o Number of Companies--the number of different companies held by a fund on a
given date.
o Dividend Yield--a percentage return calculated by dividing a company's annual
cash dividend by the current market value of the company's stock.
o Price/Earnings Ratio--a stock value measurement calculated by dividing a
company's stock price by its earnings per share, with the result expressed as a
multiple instead of a percentage. (Earnings per share is calculated by dividing
a company's after-tax earnings by its outstanding shares.)
Bond Portfolio Statistics
o Number of Securities--the number of different securities held by a fund on a
given date.
o Weighted Average Maturity (WAM)--a measurement of the sensitivity of a
fixed-income portfolio to interest rate changes. WAM indicates the average time
until the securities in the portfolio mature, weighted by dollar amount. The
longer the WAM, the more interest rate exposure and sensitivity the portfolio
has.
o Average Duration--another measure of the sensitivity of a fixed-income
portfolio to interest rate changes. Duration is a time-weighted average of the
interest and principal payments of the securities in a portfolio. As the
duration of a portfolio increases, so does the impact of a change in interest
rates on the value of the portfolio.
Fixed-Income Security Types
o Corporate Securities--debt securities or instruments issued by corporations.
Short-term corporate securities are typically issued to raise cash and cover
current expenses in anticipation of future revenues; long-term corporate
securities are issued to finance capital expenditures, such as new plant
construction or equipment purchases.
o Foreign Government Securities--debt securities issued or guaranteed by foreign
governments or their political subdivisions. Some of these securities are direct
obligations of the issuing government; others are backed by some form of
government sponsorship.
o Mortgage-Backed Securities--debt securities that represent ownership in pools
of mortgage loans. Most mortgage-backed securities are structured as
"pass-throughs"--the monthly payments of principal and interest on the mortgages
in the pool are collected by the bank that is servicing the mortgages and are
"passed through" to investors. While the payments of principal and interest are
considered secure (many are backed by government agency guarantees), the cash
flow is less certain than in other fixed-income investments. Mortgages that are
paid off early reduce future interest payments from the pool.
o U.S. Government Agency Securities--debt securities issued by U.S. government
agencies (such as the Federal Home Loan Bank and the Federal Farm Credit Bank).
Some agency securities are backed by the full faith and credit of the U.S.
government, while others are guaranteed only by the issuing agency. Government
agency securities include discount notes (maturing in one year or less) and
medium-term notes, debentures and bonds (maturing in three months to 50 years).
o U.S. Treasury Securities--debt securities issued by the U.S. Treasury and
backed by the direct "full faith and credit" pledge of the U.S. government.
Treasury securities include bills (maturing in one year or less), notes
(maturing in two to ten years) and bonds (maturing in more than ten years).
Semiannual Report Glossary 61
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AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
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American Century Investment Management, Inc.
This report and the statements it contains are submitted for the general
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