ANNUAL
REPORT
[american century logo]
American
Century(reg.sm)
NOVEMBER 30, 1997
AMERICAN
CENTURY
GROUP
Strategic Allocation: Conservative
Strategic Allocation: Moderate
Strategic Allocation: Aggressive
TABLE OF CONTENTS
Report Highlights .......................................................... 1
Our Message to You ......................................................... 2
Market Perspective ......................................................... 3
Strategic Allocation: Conservative
Performance & Portfolio Information ............................. 5
Management Q & A ................................................ 6
Schedule of Investments ......................................... 9
Financial Highlights ............................................ 61
Strategic Allocation: Moderate
Performance & Portfolio Information ............................. 20
Management Q & A ................................................ 21
Schedule of Investments ......................................... 24
Financial Highlights ............................................ 62
Strategic Allocation: Aggressive
Performance & Portfolio Information ............................. 37
Management Q & A ................................................ 38
Schedule of Investments ......................................... 41
Financial Highlights ............................................ 63
Statements of Assets and Liabilities ....................................... 53
Statements of Operations ................................................... 54
Statements of Changes in Net Assets ........................................ 55
Notes to Financial Statements .............................................. 56
Independent Auditors' Report ............................................... 64
Proxy Voting Results ....................................................... 65
Share Class and Retirement
Account Information
Background Information
Investment Philosophy & Policies ................................ 72
Comparative Indices ............................................. 72
Neutral Asset Mixes ............................................. 72
Investment Team Leaders ......................................... 72
Glossary ................................................................... 73
American Century Investments offers you nearly 70 fund choices covering
stocks, bonds, money markets, specialty investments and blended portfolios.
We've organized our funds into three distinct groups, based on investment style
and objectives, to help simplify your fund decisions. These groups appear below.
AMERICAN CENTURY INVESTMENTS--FAMILY OF FUNDS
- -------------------------------------------------------------------------------
Benham American Century Twentieth Century(reg. tm)
Group(reg. tm) Group Group
- -------------------------------------------------------------------------------
MONEY MARKET FUNDS ASSET ALLOCATION & GROWTH FUNDS
GOVERNMENT BOND FUNDS BALANCED FUNDS INTERNATIONAL FUNDS
DIVERSIFIED BOND FUNDS CONSERVATIVE EQUITY FUNDS
MUNICIPAL BOND FUNDS SPECIALTY FUNDS
- -------------------------------------------------------------------------------
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 American Century are registered marks of American Century
Services Corporation. Benham Group is a registered mark of Benham Management
Corporation.
AMERICAN CENTURY INVESTMENTS
REPORT HIGHLIGHTS
MARKET PERSPECTIVE
* U.S. stocks produced strong returns during the year ended November 30,
1997, despite increased market volatility.
* Domestic bonds struggled early in the year but bounced back as investors
looked to the U.S. bond market as a "safe haven" from global currency
crises and volatile markets.
* The biggest story in international markets was the currency crisis in
Southeast Asia, which sent financial markets in the region plummeting and
impacted markets around the world.
* Stock and bond markets in Europe performed well during the year,
benefiting from low inflation and falling interest rates.
STRATEGIC ALLOCATION: CONSERVATIVE
* Performance during the fiscal year reflected the fund's emphasis on
lower-volatility investments.
* The fund's asset mix was fairly neutral for much of the period; the most
significant adjustment was a slight underweighting in U.S. stocks early in
the year.
* The financial meltdown in Southeast Asia had virtually no effect on fund
performance.
* The merger with American Century Capital Manager fund in August went
smoothly and had little impact on the fund or its performance.
* Going forward, we plan to maintain a neutral asset mix, though we may look
to underweight U.S. stocks and overweight cash in the coming months.
STRATEGIC ALLOCATION: MODERATE
* Performance during the fiscal year reflected the fund's balance between
bonds and stocks.
* The fund's asset mix was fairly neutral for much of the period; the most
significant adjustment was a slight underweighting in U.S. stocks early in
the year.
* The financial meltdown in Southeast Asia had little impact on fund
performance.
* Going forward, we plan to maintain a neutral asset mix, though we may look
to underweight U.S. stocks and overweight cash in the coming months.
STRATEGIC ALLOCATION: AGGRESSIVE
* Performance during the fiscal year reflected the fund's asset allocation
structure.
* The fund's asset mix was fairly neutral for much of the period; the most
significant adjustment was a slight underweighting in U.S. stocks early in
the year.
* The financial meltdown in Southeast Asia had little impact on fund
performance.
* Going forward, we plan to maintain a neutral asset mix, though we may look
to underweight U.S. stocks and overweight cash in the coming months.
CONSERVATIVE
INVESTOR CLASS(1)
TOTAL RETURNS: AS OF 11/30/97
6 Months 8.01%(2)
1 Year 10.87%
NET ASSETS: $156.7 million
(AS OF 11/30/97)
INCEPTION DATE: 2/15/96
TICKER SYMBOL: TWSCX
MODERATE
INVESTOR CLASS(1)
TOTAL RETURNS: AS OF 11/30/97
6 Months 8.61%(2)
1 Year 13.02%
NET ASSETS: $201.4 million
(AS OF 11/30/97)
INCEPTION DATE: 2/15/96
TICKER SYMBOL: TWSMX
AGGRESSIVE
INVESTOR CLASS(1)
TOTAL RETURNS: AS OF 11/30/97
6 Months 8.89%(2)
1 Year 13.84%
NET ASSETS: $109.5 million
(AS OF 11/30/97)
INCEPTION DATE: 2/15/96
TICKER SYMBOL: TWSAX
(1) See Share Classes, page 68.
(2) Not annualized.
ANNUAL REPORT REPORT HIGHLIGHTS 1
OUR MESSAGE TO YOU
[photo of James E. Stowers III]
The year ended November 30, 1997, was a volatile one in the global financial
markets, but the Strategic Asset Allocation funds produced solid, double-digit
returns that were consistent with their asset allocation strategies. Upheaval in
Southeast Asia led to turmoil in markets around the world, but the funds were
bolstered by the strong performance of the U.S. stock and bond markets. 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.
During the year, we took steps that will enable us to expand and enhance our
investment tools and services. On January 15, 1998, American Century signed a
business partnership agreement with J.P. Morgan & Co., Inc., which became a
significant minority shareholder of American Century Companies, Inc. J.P. Morgan
has been in business for more than 150 years, serving institutions, governments
and individuals with complex financial needs.
Within the framework of this relationship, American Century will continue to
operate as an independent company. Our corporate management team will remain the
same, and the Stowers family will retain voting control of the company. No
changes in your fund's investment managers, policies or fees are anticipated as
a result of this transaction.
Another step we took was to begin to address the year 2000 problem. As
detailed in numerous news reports, many of the world's computer systems are at
risk because they cannot distinguish between the years 1900 and 2000. A team of
computer professionals is reviewing each of American Century's systems and
programs to identify and fix those that could cause problems. Our goal is to
have all of our computer systems and programs 100% year-2000 compliant by the
end of 1998.
On a more personal note, 1998 will be a landmark year for another reason. It
marks 40 years since my father, Jim Stowers, Jr., launched the first two
Twentieth Century funds, Growth and Select. Not many fund companies have a
40-year track record, nor have many built a fund family such as ours, which
includes nearly 70 stock, bond, money market and combination funds that provide
investors with a wide range of choice and flexibility.
Whatever your financial goals, we believe we have an outstanding lineup of
funds to help you reach them.
Sincerely,
/s/James E. Stowers III
James E. Stowers III
Chief Executive Officer
American Century Investment Management, Inc.
2 OUR MESSAGE TO YOU AMERICAN CENTURY INVESTMENTS
MARKET PERSPECTIVE
U.S. STOCKS
The latest U.S. economic expansion passed 80 months during the fourth
quarter of 1997, making it the third longest since World War II. U.S. stock
performance, represented by the S&P 500 and the Russell 2000 in the accompanying
table, reflected the continued strong economic growth, increased employee
productivity, low borrowing costs and high corporate profit margins during the
year ended November 30, 1997. The major U.S. stock indices posted gains well
above historical averages for the third consecutive year.
The ride was not smooth, however, with sizable dips in March (following an
increase in short-term interest rates by the Federal Reserve), August and
October. A handful of large, multinational stocks continued their two-year
dominance of the market until August, when earnings disappointments caused
investors to begin questioning the valuations of these securities. Slower
corporate earnings growth caused the S&P 500 to drop 5.8% for the month. Stock
prices resumed their upward move in September, but the gains of small- and
mid-cap stocks exceeded those of large-company stocks as investors temporarily
rotated away from bigger companies.
October saw another reversal as the market reacted to news of currency
devaluations across Southeast Asia (see the Foreign Stocks section on page 4).
Stock markets plummeted throughout the region, and investor concerns in the U.S.
grew when the panic selling spread to Hong Kong and affected European markets.
The S&P 500 dropped 3.5% in October, and the Russell 2000 fell 4.4%. The decline
was driven by fears that the sell-off overseas would translate into reduced
corporate profits in 1998 for U.S. multinational companies and for technology
companies dependent upon economic growth in Asia.
But despite the fears and setbacks, the final word on the year in stocks was
very positive. Financial services stocks were among the biggest winners, while
precious metals stocks were the biggest losers.
U.S. BONDS
U.S. bonds bounced back from a rocky start to provide solid returns for the
period, as shown in the accompanying table. Bonds benefited from low inflation,
stock market turmoil and favorable supply and demand factors. Low inflation,
represented by an annualized consumer price growth rate of just 1.9% during the
year ended November 30, 1997, kept interest rates low and boosted bond prices.
Wage pressure, a key component of inflation, didn't materialize despite the
lowest unemployment rates since the early 1970s.
Supply and demand also helped bonds. The shrinking federal budget deficit
allowed the U.S. Treasury to reduce its bond issuance to finance government
debt, diminishing the supply of fixed-income securities. On the demand side,
investors began turning to U.S. bonds as a "safe haven" from equity-market
volatility and for their interest rates, which were generally higher than
foreign rates.
Bond returns for the period reflected an early sell-off, then a later rally.
Interest rates soared after the Fed made a pre-emptive strike against inflation
in March and raised short-term interest rates for the first time in two years.
The Fed's action fueled speculation that there might be a series of interest
rate hikes, as there had been in the past, to slow down economic growth and keep
inflation in check.
Instead, economic growth slowed somewhat from its rapid first-quarter pace,
and inflation remained under control. As a result, interest rates and bond
yields fell from April through the end of November.
U.S. STOCK MARKET PERFORMANCE
For the year ended November 30, 1997
S&P 500 28.56%
Russell 2000 23.41%
U.S. BOND MARKET PERFORMANCE
For the year ended November 30, 1997
Salomon Brothers Broad
Investment Grade Bond Index 7.57%
Lehman Aggregate Bond Index 7.55%
ANNUAL REPORT MARKET PERSPECTIVE 3
MARKET PERSPECTIVE
FOREIGN STOCKS
Foreign stock returns varied dramatically from region to region, but they
were positive overall. The Morgan Stanley EAFE Index--a broad measure of
international stock performance--returned 9.27% (in local currencies) during the
one-year period. However, the stronger U.S. dollar hurt foreign stock returns
for U.S. investors; translating the EAFE's one-year return into U.S. dollars
erases the entire gain (see the accompanying table).
The biggest international story was the implosion of the Southeast Asian
markets and currencies. Many of the countries in this region had their
currencies "pegged" to the U.S. dollar, meaning their currencies moved in tandem
with the dollar. In the early 1990s, the currency peg was an advantage--with the
dollar (and therefore their own currencies) weakening, Asian exports became
cheaper in the global marketplace. Booming exports fueled strong economic growth
in the region, which in turn attracted a great deal of foreign lending and
sparked a flurry of development.
But by 1997, a stronger dollar had eliminated the competitive advantage of
the Southeast Asian countries, and their export-led economies weakened. The
region's banks, which had funneled hundreds of billions of dollars from foreign
lenders into questionable investments, began to look shaky. Manufacturing
capacity was overbuilt, real estate was overdeveloped, and everything came down
like a house of cards. One by one, Southeast Asian countries abandoned their peg
to the dollar, and their currencies and financial markets plummeted.
The effects of the Southeast Asian crisis spread to other parts of the
world. Japan, in particular, was one of the biggest lenders in the region, and
the potential damage to an already struggling banking system weighed on Japan's
stock market. The crisis also had a negative impact on other "emerging markets,
"such as Latin America and Eastern Europe, but the shockwaves were less
traumatic.
Western European stock markets, on the other hand, enjoyed solid returns for
the year. Most of the economies on the continent slowed as governments
concentrated on meeting the requirements for European economic and monetary
union. But despite this environment, European equities performed well as many
companies restructured their operations and cut costs. In addition, the
combination of falling interest rates and low inflation benefited stocks.
FOREIGN BONDS
Foreign bond markets also saw divergent returns, but they performed
favorably overall as interest rates declined in much of the world. Foreign bond
performance matched that of U.S. bonds in local currencies, as the tables on
this page and the previous page illustrate. But when foreign bond returns are
converted into U.S. dollars, the currency losses produce negative foreign bond
returns for U.S. investors.
In Europe, slowing economic growth and low inflation led to falling interest
rates for much of 1997. Efforts to cut government budget deficits also benefited
fixed-income securities on the continent. In Japan, interest rates remained at
historically low levels as the country's long-suffering economy showed little
signs of life.
The currency crisis in Southeast Asia pushed up interest rates in the region
and produced bond market losses. Central banks repeatedly hiked interest rates
in an effort to maintain their currencies' peg to the U.S. dollar. After the
crisis, interest rates continued to rise, reflecting credit rating downgrades
for government debt in the region.
FOREIGN STOCK MARKET PERFORMANCE
For the year ended November 30, 1997
Morgan Stanley EAFE(reg.tm) Index
(in U.S. dollars) -0.40%
Morgan Stanley EAFE(reg.tm) Index
(in local currencies) 9.27%
FOREIGN BOND MARKET PERFORMANCE
For the year ended November 30, 1997
Salomon Brothers Non-U.S. World Government
Bond Index (in U.S. dollars) -3.97%
Salomon Brothers Non-U.S. World Government
Bond Index (in local currencies) 7.52%
4 MARKET PERSPECTIVE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: CONSERVATIVE
TOTAL RETURNS AS OF NOVEMBER 30, 1997(1)
6 MONTHS 1 YEAR LIFE OF
FUND
- --------------------------------------------------------------------------------------------
INVESTOR CLASS (inception 2/15/96)
<S> <C> <C> <C>
Strategic Allocation: Conservative 8.01% 10.87% 10.06%
S&P 500 13.60% 28.56% 26.42%
Lehman Aggregate Bond Index 6.55% 7.55% 7.63%(2)
Three-Month U.S. Treasury Bill 2.55% 5.17% 5.15%(2)
- --------------------------------------------------------------------------------------------
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Conservative 7.88% 10.77% 12.34%
S&P 500 13.60% 28.56% 33.97%
Lehman Aggregate Bond Index 6.55% 7.55% 10.05%
Three-Month U.S. Treasury Bill 2.55% 5.17% 5.16%
</TABLE>
- ----------
(1) Returns for periods less than one year are not annualized.
(2) Returns from 2/29/96, the date nearest the class's inception for which
data are available.
See pages 68, 72 and 73 for more information about returns, share classes, and
the comparative indices.
[line graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND (Investor Class)
$10,000 investment made2/29/96*
Value on 11/30/97
Strategic: Lehman 3-Month
Conservative S&P 500 Aggregate T-Bill
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
6/30/97 $11,386 $14,258 $10,801 $10,691
7/31/97 $11,830 $15,367 $11,092 $10,736
8/31/97 $11,642 $14,484 $10,998 $10,783
9/30/97 $12,053 $15,319 $11,160 $10,827
10/31/97 $11,901 $14,791 $11,322 $10,871
11/30/97 $12,009 $15,450 $11,374 $10,919
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 the other
class will vary due to differences in fee structures (see the Total Returns
table above).
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.
* 2/29/96 is the date closest to Investor Class inception for which comparable
performance data exist. The class's actual inception date is 2/15/96.
[pie chart]
ASSET ALLOCATION AS OF NOVEMBER 30, 1997
Percent of Fund Investments
U.S. Stocks 32%
Foreign Stocks 6%
U.S. Bonds 39%
Foreign Bonds 5%
Money Market
Securities 18%
See page 72 for the fund's neutral asset mix.
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 5
STRATEGIC ALLOCATION: CONSERVATIVE
MANAGEMENT Q & A
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
American Century Strategic Allocation funds management team.
HOW DID THE FUND PERFORM?
For the fiscal year ended November 30, 1997, the fund's Investor Class
shares posted a total return of 10.87%, compared with the 12.08% return of the
fund's benchmark. The benchmark is composed of several market indexes, each
representing a specific asset type (e.g., domestic stocks), that are weighted to
match the fund's neutral asset mix. (See the Total Returns table on the previous
page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
It was the fund's U.S. stock holdings. Our stocks underperformed the broader
market overall, and we also underweighted domestic stocks for much of the fiscal
year.
WAS THIS A SIGNIFICANT ADJUSTMENT TO THE FUND'S ASSET MIX?
Not really. The fund's strategic approach dictates that we maintain a
relatively stable asset mix. Within this structure, we typically make some minor
adjustments in a narrow range around the fund's neutral mix of 40% stocks, 45%
bonds, and 15% cash.
In early 1997, we underweighted U.S. stocks--not by much, just a percent or
two below what we consider neutral--and overweighted foreign stocks. Volatility
in the domestic stock market was increasing, and we felt there were better
values in overseas markets.
Foreign stocks, especially those in Europe, performed well during the first
half of the year, so we took some profits in July and brought our foreign stock
allocation back to neutral.
Immediately following the dramatic U.S. stock market declines in late
October, we boosted our domestic stock allocation closer to neutral to take
advantage of what we felt were attractive buying opportunities. By the end of
the period, our only overweighted position was in cash (money market
securities).
ALTHOUGH THE FUND'S BOND ALLOCATION DIDN'T CHANGE MUCH DURING THE YEAR, THE
COMPOSITION OF ITS U.S. BOND HOLDINGS DID. CAN YOU EXPLAIN THESE CHANGES?
The benchmark index for the domestic bond portion of the fund's portfolio is
the Lehman Aggregate Bond Index, and our adjustments reflected an effort to
match the composition of the index.
Toward this end, we nearly doubled the fund's corporate bond holdings and
cut back on its Treasury securities (see the chart on page 8). We made most of
these adjustments toward the end of the fiscal year, when corporate bonds became
more attractive compared with Treasury securities.
Corporate bonds typically offer higher yields than Treasury securities, so
these changes should enhance the fund's ability to meet its primary goal, which
is regular income. But they should also increase the price volatility of the
fund's bond component slightly.
HOW DID THE FINANCIAL MELTDOWN IN SOUTHEAST ASIA AFFECT THE FUND?
It had virtually no effect on the fund, for two reasons. First, the foreign
component of the fund is a small part of its portfolio--typically around 12%
- --and Southeast Asian securities make up an even smaller subset of this
component. As a result, the price declines of securities in this region had very
little impact on the fund's performance.
Second, we underweighted our investments in the Far East because our
analysis of growth potential at individual companies gave us early warning of
the
6 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
troubles ahead. Most foreign stock and bond indexes allocate about 30% to the
Asia/Pacific region, but we devoted just 10% of the fund's foreign holdings to
this area. And the majority of this was in Hong Kong, the largest, most stable
market in the region. Hong Kong's markets held up the best among Southeast Asian
countries during the turmoil.
WITH REGARD TO THE FUND'S FOREIGN HOLDINGS, DID YOU DO ANY CURRENCY HEDGING?
Yes. We hedged around 25-35% of the fund's foreign holdings throughout the
fiscal year. With the dollar strengthening against most major foreign
currencies, gains earned on investments denominated in these currencies
translated into fewer dollars. We felt that our hedging strategy would provide a
suitable balance between offsetting currency losses and retaining the fund's
exposure to non-dollar-denominated investments.
AT THE END OF AUGUST, THE AMERICAN CENTURY CAPITAL MANAGER FUND MERGED INTO
STRATEGIC ALLOCATION: CONSERVATIVE. DID THIS MERGER HAVE ANY IMPACT ON THE FUND
OR ITS PERFORMANCE?
Not really. In the weeks leading up to the merger, we gradually shifted the
Capital Manager fund's portfolio to look more like the Strategic Allocation:
Conservative fund. This approach made the merger of the two portfolios virtually
seamless.
FUND'S U.S. STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 289
Dividend Yield 2.00%
Price/Earnings Ratio 23.7
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
Giant Food Inc. CI A 2.0% 0.6%
NationsBank Corp. 1.7% 0.5%
Exxon Corp. 1.6% 0.5%
Chevron Corp. 1.6% 0.5%
IBM Corp. 1.4% 0.4%
FUND'S FOREIGN STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 96
Dividend Yield 1.58%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 5.1% 0.3%
British Aerospace PLC UK 2.4% 0.2%
Sony Corp. Japan 2.3% 0.1%
Credito Italiano Italy 2.3% 0.1%
Axa-UAP France 2.1% 0.1%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 82%
Asia/Pacific 11%
Americas
(excluding U.S.) 7%
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 7
STRATEGIC ALLOCATION: CONSERVATIVE
WHAT ARE YOUR PLANS FOR THE FUND'S ASSET ALLOCATION STRUCTURE GOING FORWARD?
For the time being, we will likely continue its current positioning,
maintaining a roughly neutral asset mix. However, one change we may make in the
coming months is to cut back on our U.S. stock holdings.
Between 1994 and 1996, stock market volatility in the U.S. was relatively
low compared with historical norms. But in 1997, we've seen more volatility than
normal, especially during the last half of the year. As a result, we feel the
need to be more selective in our domestic stock portion.
We may look to underweight domestic stocks and overweight cash in early
1998, but we hesitate to underweight more than a percent or two because economic
conditions remain favorable for U.S. stocks. Within the fund's U.S. stock
component, we also plan to emphasize stocks we feel are undervalued.
WHAT ABOUT THE U.S. BOND MARKET?
U.S. bonds, especially Treasury securities, have rallied dramatically in the
last six months, primarily because of low inflation in the U.S. and demand from
foreign investors seeking a "safe haven" from global market volatility. The
problems in Southeast Asia could help bonds going forward--they could lead to
slower economic growth in the U.S. and more safe-haven demand from abroad.
The one potentially negative factor also comes from Asia--some countries in
the region, especially Japan, may be selling Treasurys to bring cash back home
and rebuild their currencies.
IN THE FUND'S SEMIANNUAL REPORT IN MAY, YOU TALKED FAVORABLY ABOUT EUROPEAN
STOCK MARKETS. DO YOU STILL LIKE THEM?
From a long-term perspective, we still like the markets in this region. We
believe that corporate restructuring, increased privatization and a greater
focus on the customer will boost productivity and corporate profits--as well as
stock prices--in Europe. However, economic difficulties stemming from both the
Southeast Asian crisis and the move toward European economic and monetary union
may weigh these stocks down in the short term.
FUND'S U.S. BONDS AS OF NOVEMBER 30, 1997
Number of Securities 83
Weighted Average Maturity 12.6 years
Average Duration 4.6 years
[pie chart]
Percent of Fund's U.S. Bomds
U.S. Treasury Notes 34%
Mortgage-Backed
Securities 31%
Corporate Bonds 21%
U.S. Treasury Bonds 8%
Asset-Backed Securities 6%
FUND'S FOREIGN BONDS AS OF NOVEMBER 30, 1997
Number of Securities 18
Weighted Average Maturity 5.4 years
Average Duration 4.6 years
[pie chart]
Percent of Fund's Foreign Bonds
Europe 87%
Asia/Pacific 8%
Americas
(excluding U.S.) 5%
8 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
COMMON STOCKS
<S> <C> <C>
AEROSPACE & DEFENSE -- 1.6%
2,100 Anaren Microwave, Inc.(1) $ 42,262
2,800 Boeing Co. 148,750
9,200 British Aerospace PLC ORD 251,092
3,800 General Dynamics Corp. 329,175
9,800 Litton Industries, Inc.(1) 493,675
3,600 Lockheed Martin Corp. 351,225
6,500 Raytheon Co. 363,594
8,000 United Technologies Corp. 599,500
-----------------------
2,579,273
-----------------------
AGRICULTURE -- 0.1%
7,000 AgriBioTech, Inc.(1) 69,562
700 Pioneer Hi-Bred International, Inc. 71,488
-----------------------
141,050
-----------------------
AIRLINES(2)
1,300 KLM Royal Dutch Air Lines NV ORD 46,767
-----------------------
AUTOMOBILES & AUTO PARTS -- 0.7%
1,700 Dura Automotive Systems, Inc.(1) 44,306
1,500 Excel Industries, Inc. 29,156
15,400 Ford Motor Co. 662,200
1,000 General Motors Corp. 61,000
15,600 Superior Industries International, Inc. 405,600
1,400 Tower Automotive, Inc.(1) 55,475
-----------------------
1,257,737
-----------------------
BANKING -- 4.0%
3,000 Banc One Corp. 154,125
1,687 Banca Popolare di Bergamo
Credito Varesino SpA ORD(1) 27,001
3,600 Banco Bilbao Vizcaya, S.A. ORD 108,780
3,000 Bank of Nova Scotia ORD 130,210
7,700 BankAmerica Corp. 562,100
2,100 Bankers Trust New York Corp. 248,981
1,900 Bayerische Hypotheken-und
Wechsel-Bank AG ORD 82,421
2,600 Chase Manhattan Corp. 282,425
900 Citicorp 107,944
1,200 Credit Suisse Group ORD 175,444
85,300 Credito Italiano ORD 233,549
Shares Value
- -------------------------------------------------------------------------------------------
2,200 Deutsche Pfandbrief-und
Hypothekenbank AG ORD $ 124,752
8,200 First Union Corp. 399,750
14,100 First Virginia Banks, Inc. 674,156
48,000 Long-Term Credit Bank of Japan,
Ltd. (The) ORD 80,862
13,500 Mercantile Bancorporation Inc. 702,000
22,200 Merita OY Ltd. Cl A ORD 112,429
15,000 NationsBank Corp. 900,938
4,400 Norwest Corp. 164,725
6,400 PNC Bank Corp. 344,400
6,400 Skandinaviska Enskilda
Banken ORD 75,426
1,100 Societe Generale ORD 144,597
6,700 Standard Chartered plc ORD 74,400
100 Union Bank of Switzerland ORD 127,270
7,000 Wachovia Corp. 539,000
-----------------------
6,577,685
-----------------------
BIOTECHNOLOGY -- 0.2%
700 Agouron Pharmaceuticals, Inc.(1) 26,797
3,500 Centocor, Inc.(1) 152,359
1,000 PAREXEL International Corp.(1) 34,375
1,500 PathoGenesis Corp.(1) 53,438
200 Sangstat Medical Corp.(1) 6,925
-----------------------
273,894
-----------------------
BROADCASTING & MEDIA -- 0.2%
2,500 CBS Corporation 75,000
1,500 Clear Channel Communications,
Inc.(1) 101,625
1,700 Flextech plc ORD (Acquired
6/26/97 through 10/27/97,
Cost $17,288)(1)(3) 16,150
1,400 Heftel Broadcasting Corp.(1) 103,950
1,800 Jacor Communications, Inc.(1) 78,525
-----------------------
375,250
-----------------------
BUILDING & HOME IMPROVEMENTS -- 0.1%
32,700 Pilkington plc ORD 70,691
1,900 Premark International, Inc. 49,637
-----------------------
120,328
-----------------------
BUSINESS SERVICES & SUPPLIES -- 0.6%
200 AccuStaff, Inc.(1) 5,913
2,600 Corrections Corp. of America(1) 90,025
2,500 Hall, Kinion & Associates, Inc.(1) 44,375
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 9
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
9,400 Hays plc ORD $ 115,892
3,900 Kelly Services, Inc. 112,856
2,200 Lason, Inc.(1) 61,600
2,100 NCO Group, Inc.(1) 80,325
1,100 Quintiles Transnational Corp.(1) 85,731
2,300 Randstad Holdings N.V. ORD 85,404
1,700 Stork N.V. ORD 62,269
2,500 U.S. Filter Corp.(1) 78,438
700 VA Technologie AG ORD 105,427
----------------------
928,255
----------------------
CHEMICALS & RESINS -- 1.2%
600 Church & Dwight Co., Inc. 17,625
800 Compagnie Francaise d'Etudes et
de Construction Technip ORD 82,937
5,300 Dow Chemical Co. 523,375
13,800 Great Lakes Chemical Corp. 619,275
100 Lubrizol Corp. 3,900
6,600 Nalco Chemical Co. 256,162
6,300 Praxair, Inc. 276,806
2,600 Rhone-Poulenc ORD 116,891
1,700 VEBA AG ORD 101,026
----------------------
1,997,997
----------------------
COMMUNICATIONS EQUIPMENT -- 0.5%
1,600 Boston Technology, Inc.(1) 34,400
7,800 Cable & Wireless plc ORD 70,873
100 Comverse Technology, Inc.(1) 3,372
1,900 Ericsson (L.M.) Telephone Co. ADR 76,772
1,500 Lucent Technologies Inc. 120,187
3,100 Motorola, Inc. 194,912
2,200 Newbridge Networks Corp.(1) 92,675
600 Nokia Corp. Cl A ADR 49,875
800 Northern Telecom Ltd. ORD 71,918
3,200 Scientific-Atlanta, Inc. 64,000
2,500 Tekelec(1) 94,688
----------------------
873,672
----------------------
COMMUNICATIONS SERVICES -- 1.9%
3,600 Airtouch Communications, Inc.(1) 141,300
618 Alcatel Alsthom Compagnie
Generale ORD 77,469
7,500 Ameritech Corp. 577,969
8,200 Bell Atlantic Corp. 731,850
3,300 BellSouth Corp. 180,675
Shares Value
- -------------------------------------------------------------------------------------------
3,600 France Telecom S.A. ADR(1) $ 130,500
14,300 Frontier Corp. 350,350
11,300 GTE Corp. 571,356
1 NTT Data Corp. ORD 48,580
2,700 SBC Communications Inc. 196,594
6,800 Worldcom, Inc.(1) 217,812
----------------------
3,224,455
----------------------
COMPUTER PERIPHERALS -- 0.3%
1,600 Adaptec, Inc.(1) 79,150
1,400 Cisco Systems Inc.(1) 120,706
3,200 EMC Corp. (Mass.)(1) 97,000
1,400 Quantum Corp.(1) 37,144
1,700 SCI Systems, Inc.(1) 77,881
200 3Com Corp.(1) 7,244
----------------------
419,125
----------------------
COMPUTER SOFTWARE & SERVICES -- 1.3%
900 Advantage Learning Systems, Inc.(1) 20,869
1,400 CBT Group Plc ADR(1) 99,138
1,560 Cap Gemini SA ORD 132,922
2,700 Dassault Systemes S.A. ADR 70,875
10,200 First Data Corp. 288,788
5,000 Geac Computer Corp. Ltd. ORD(1) 126,769
3,300 Getronics N.V. ORD 113,404
500 HBO & Co. 22,406
2,100 JDA Software Group, Inc.(1) 64,641
2,800 McAfee Associates, Inc.(1) 127,925
3,500 Microsoft Corp.(1) 495,141
6,018 Misys plc ORD 169,735
3,000 Omtool Ltd.(1) 31,125
1,775 Oracle Systems Corp.(1) 59,074
2,300 QuadraMed Corp.(1) 60,231
700 SAP AG ORD 203,629
2,300 SPR Inc.(1) 36,800
300 Shared Medical Systems Corp. 19,200
600 Veritas Software Corp.(1) 26,231
----------------------
2,168,903
----------------------
COMPUTER SYSTEMS -- 0.7%
4,300 Compaq Computer Corp(1) 268,481
200 Dell Computer Corp.(1) 16,831
2,100 Digital Equipment Corp.(1) 103,425
See Notes to Financial Statements
10 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
6,700 International Business Machines
Corp. $ 734,069
100 Sun Microsystems, Inc.(1) 3,597
-----------------------
1,126,403
-----------------------
CONSTRUCTION & PROPERTY
DEVELOPMENT -- 0.1%
5,700 Fluor Corp. 204,844
-----------------------
CONSUMER PRODUCTS -- 0.5%
2,200 Avon Products, Inc. 127,187
600 Colgate-Palmolive Co. 40,088
1,000 Electrolux AB Cl B ORD 78,741
1,400 Gillette Company 129,238
5,200 Helen of Troy Ltd.(1) 73,125
400 National Service Industries 18,725
2,100 Procter & Gamble Co. (The) 160,256
5,000 Shiseido Co., Ltd. ORD 67,777
2,500 Whirlpool Corp. 137,031
300 Wolverine World Wide, Inc. 6,844
-----------------------
839,012
-----------------------
CONTROL & MEASUREMENT -- 0.3%
1,600 Aehr Test Systems(1) 14,950
3,400 Beckman Instruments, Inc. 133,025
100 Coherent, Inc.(1) 3,756
2,500 Emerson Electric Co. 137,500
1,600 Fluke Corp. 38,000
400 Keyence Corporation ORD 58,296
1,900 Molecular Dynamics, Inc.(1) 38,594
-----------------------
424,121
-----------------------
DIVERSIFIED COMPANIES -- 0.5%
2,200 General Electric Co. (U.S.) 162,250
21,200 General Electric Company plc ORD 138,027
100 Honeywell Inc. 6,550
5,236 Siebe plc ORD 95,240
7,600 Tyco International Ltd. 298,300
2,800 Unilever N.V. 162,575
-----------------------
862,942
-----------------------
EDUCATION(2)
50 Apollo Group Inc. Cl A(1) 2,147
-----------------------
Shares Value
- -------------------------------------------------------------------------------------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 1.4%
100 ABB AG ORD $ 133,020
7,800 AMP, Inc. 338,812
1,500 ANADIGICS, Inc.(1) 49,500
800 Burr-Brown Corp.(1) 24,050
4,000 Fujikura Ltd. ORD 28,803
3,200 General Signal Corp. 130,600
400 Intel Corp. 31,062
2,300 Jabil Circuit, Inc.(1) 110,687
500 KLA-Tencor Corporation(1) 19,344
700 Linear Technology Corp. 45,019
1,600 Microchip Technology Inc.(1) 55,850
13,000 Minebea Company Ltd. ORD 144,643
600 Nintendo Co., Ltd. ORD 62,057
1,000 Phillips Electronics N.V. 67,000
1,500 Raychem Corp. 141,844
2,300 REMEC, Inc.(1) 53,187
400 Sanmina Corp.(1) 27,300
800 Siemens AG ORD 46,975
2,800 Sipex Corp.(1) 88,550
400 SMART Modular Technologies, Inc.(1) 24,800
2,600 Solectron Corp.(1) 94,737
2,800 Sony Corp. ORD 239,138
2,600 Texas Instruments Inc. 128,050
5,700 Vari-L Co., Inc.(1) 56,288
3,100 Vitesse Semiconductor Corp.(1) 138,338
-----------------------
2,279,654
-----------------------
ENERGY (PRODUCTION & MARKETING) -- 3.4%
6,400 Amoco Corp. 576,000
5,500 Atlantic Richfield Co. 448,250
6,800 British Petroleum Co. plc ORD 93,025
19,284 British-Borneo Petroleum
Syndicate plc ORD 144,442
11,700 Burlington Resources Inc. 520,650
100 Cairn Energy plc ORD(1) 795
10,800 Chevron Corp. 866,025
900 Elf Aquitaine SA ORD 104,433
1,700 Energy Ventures, Inc.(1) 87,444
13,400 Ente Nazionale ORD 78,225
14,300 Exxon Corp. 872,300
8,500 Murphy Oil Corp. 467,500
500 NICOR Inc. 20,125
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 11
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
1,100 Talisman Energy, Inc. ORD(1) $ 32,331
5,400 Texaco Inc. 305,100
500 USX-Marathon Group 17,125
6,500 Ultramar Diamond Shamrock Corp. 197,844
17,000 Unocal Corp. 676,813
14,200 Woodside Petroleum Limited ORD 101,900
----------------------
5,610,327
----------------------
ENERGY (SERVICES) -- 0.5%
1,600 Diamond Offshore Drilling, Inc. 79,800
500 Global Marine Inc.(1) 13,156
800 Hvide Marine, Inc.(1) 22,650
4,100 Input/Output, Inc.(1) 106,088
1,100 Key Energy Group, Inc.(1) 26,744
1,400 Noble Drilling Corp.(1) 42,088
100 Petroleum Geo-Services ASA
ORD(1) 6,438
500 Smedvig ASA Cl A ORD 13,349
100 Smedvig ASA Cl B ORD 2,531
1,200 Smith International, Inc.(1) 76,800
6,400 Tidewater Inc. 358,800
1,500 Transocean Offshore 71,156
2,000 Trico Marine Services, Inc.(1) 55,875
----------------------
875,475
----------------------
ENVIRONMENTAL SERVICES -- 0.6%
1,400 American Disposal Services, Inc.(1) 50,050
2,500 Superior Services Inc.(1) 58,750
3,222 USA Waste Services, Inc.(1) 106,527
27,300 WMX Technologies, Inc. 672,263
2,000 Waste Industries, Inc.(1) 40,375
----------------------
927,965
----------------------
FINANCIAL SERVICES -- 1.9%
10,000 Amvescap Plc ORD 72,285
13,700 Banco Ambrosiano Veneto S.p.A.
ORD 44,885
13,700 Banco Ambrosiano Veneto S.p.A.
Rights for Bonds ORD(1) 7,216
13,700 Banco Ambrosiano Veneto S.p.A.
Rights for Stock ORD(1) 49,802
2,000 Bayerische Vereinsbank AG ORD 118,798
2,400 Bear Stearns Companies Inc. 99,600
2,400 Deutsche Bank AG ORD 153,921
3,700 Equitable Companies Inc. 176,444
Shares Value
- -------------------------------------------------------------------------------------------
4,200 Fannie Mae $ 221,812
1,000 Green Tree Financial Corp. 30,625
4,434 ING Groep N.V. ORD 180,260
3,600 Investor's Group, Inc. ORD 99,112
82 Julius Baer Holding AG ORD 133,686
1,500 Lehman Brothers Holdings, Inc. 75,844
12,400 Lloyds TSB Group plc ORD 141,361
5,700 Merrill Lynch & Co., Inc. 400,069
1,300 Morgan Stanley, Dean Witter,
Discover & Co. 70,606
3,620 Newcourt Credit Group Inc. ORD
(Acquired 4/10/97 through
11/18/97, Cost $140,261)(3) 114,281
270 Newcourt Credit Group, Inc.
Subscription Receipts ORD(1) 8,438
1,350 Paine Webber Group, Inc. 45,394
1,800 Promise Co., Ltd. ORD 99,432
3,800 Skandia Forsakrings AB ORD 200,298
11,499 Travelers Group, Inc. 580,699
----------------------
3,124,868
----------------------
FOOD & BEVERAGE -- 1.3%
2,500 American Italian Pasta Co. Cl A(1) 59,063
25,171 Archer-Daniels-Midland Co. 538,030
27,400 IBP, Inc. 625,063
300 Lancaster Colony Corp. 15,047
800 Lance, Inc. 20,375
106 Nestle S.A. ORD 155,941
3,100 Northland Cranberries, Inc. 43,497
700 Raisio Group plc ORD 80,486
1,300 Smithfield Foods, Inc.(1) 45,906
2,200 Smucker (J.M.) Co. 54,450
11,600 Universal Foods Corp. 481,400
----------------------
2,119,258
----------------------
FURNITURE & FURNISHINGS(2)
300 Ethan Allen Interiors Inc. 11,550
200 Miller (Herman), Inc. 10,125
----------------------
21,675
----------------------
HEALTHCARE -- 0.4%
8,900 Columbia/HCA Healthcare Corp. 262,550
2,700 Concentra Managed Care, Inc.(1) 91,547
1,050 Health Management Associates,
Inc.(1) 25,725
6,100 Humana Inc.(1) 135,344
See Notes to Financial Statements
12 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
100 Oxford Health Plans, Inc.(1) $ 2,381
2,500 Quorum Health Group, Inc.(1) 60,312
500 Tenet Healthcare Corp.(1) 15,844
400 United HealthCare Corp. 20,825
3,000 Wellpoint Health Networks Inc.(1) 138,000
-----------------------
752,528
-----------------------
INDUSTRIAL EQUIPMENT &
MACHINERY -- 0.8%
8,000 Caterpillar Inc. 383,500
8,000 Cooper Industries, Inc. 413,000
8,900 Ingersoll-Rand Co. 363,787
400 Mannesmann AG ORD 186,221
-----------------------
1,346,508
-----------------------
INSURANCE -- 2.1%
4,300 Aetna Life and Casualty Co. 324,112
3,300 Allstate Corp. 283,388
800 American International Group, Inc. 80,650
1,924 Assurantieconcern Stad Rotterdam
ORD 98,935
2,962 Axa-UAP ORD 214,951
800 CIGNA Corp. 133,800
4,300 CNA Financial Corp.(1) 526,750
6,700 Chubb Corp. (The) 475,281
6,900 Conseco Inc. 321,281
100 General Re Corp. 19,850
2,000 ITT Hartford Group, Inc. 167,500
2,700 Orion Capital Corp. 121,669
9,700 SAFECO Corp. 475,906
1,600 Sampo Insurance Company Ltd.
ORD 50,419
1,600 St. Paul Companies, Inc. 128,000
2,700 UNUM Corp. 128,081
-----------------------
3,550,573
-----------------------
LEISURE -- 0.5%
925 Accor SA ORD 174,868
700 Doubletree Corp.(1) 30,756
8,900 Eastman Kodak Co. 539,563
400 HFS, Inc.(1) 27,450
27,000 Ladbroke Group plc ORD 122,665
-----------------------
895,302
-----------------------
Shares Value
- -------------------------------------------------------------------------------------------
MACHINERY & EQUIPMENT -- 0.1%
300 Applied Materials, Inc.(1) $ 9,891
1,700 Rental Service Corp.(1) 42,712
1,100 Veeco Instruments Inc.(1) 43,691
-----------------------
96,294
-----------------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.4%
2,500 AmeriSource Health Corp.(1) 161,875
1,600 Cyberonics, Inc.(1) 18,200
800 Guidant Corp. 51,400
8,800 Hillenbrand Industries, Inc. 392,150
1,500 Sabratek Corp.(1) 38,719
3,000 Terumo Corporation ORD 47,013
700 US Surgical Corp. 18,462
-----------------------
727,819
-----------------------
METALS & MINING -- 0.5%
7,500 Arch Coal Inc. 197,344
12,200 Homestake Mining Co. 128,100
2,900 Johnson Matthey PLC ORD 26,864
1,000 Kaynar Technologies Inc.(1) 26,625
6,900 Reynolds Metals Co. 392,869
-----------------------
771,802
-----------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.2%
2,200 Kronos Inc.(1) 68,200
3,700 Xerox Corp. 287,444
-----------------------
355,644
-----------------------
PACKAGING & CONTAINERS -- 0.1%
3,000 Crown Cork & Seal Co., Inc. 146,437
-----------------------
PAPER & FOREST PRODUCTS -- 0.5%
12,100 Chesapeake Corp. 414,425
4,500 Rayonier, Inc. 219,938
6,200 Westvaco Corp. 202,275
-----------------------
836,638
-----------------------
PHARMACEUTICALS -- 2.3%
8,000 Allergan, Inc. 271,000
2,700 Bristol-Myers Squibb Co. 252,787
1,500 Dura Pharmaceuticals, Inc.(1) 65,625
3,500 Glaxo Wellcome plc ADR 159,906
1,900 Johnson & Johnson 119,581
4,400 Lilly (Eli) & Co. 277,475
17,800 Mallinckrodt Inc. 658,600
500 McKesson Corp. 55,938
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 13
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
200 Medicis Pharmaceutical Corp.(1) $ 8,625
6,300 Merck & Co., Inc. 595,744
333 Novartis AG ORD 531,922
1,734 Novo Nordisk A/S Cl B ORD 212,273
22 Roche Holding AG ORD 196,845
4,000 Takeda Chemical Inds. ORD 116,905
1,400 Warner-Lambert Co. 195,825
2,200 Zeneca Group plc ORD 70,224
-----------------------
3,789,275
-----------------------
PRINTING & PUBLISHING -- 0.5%
13,500 Banta Corp. 340,875
500 Deluxe Corp. 17,656
500 Meredith Corp. 17,437
10,100 Mondadori (Arnoldo) Editore SpA
ORD 80,096
12,600 Pearson plc ORD 175,561
7,100 VNU Tijdschriftengroep Nederland
ORD 170,043
600 Wallace Computer Services, Inc. 20,888
-----------------------
822,556
-----------------------
RAILROAD -- 0.4%
10,300 CSX Corp. 538,819
2,400 Canadian National Railway
Company ORD 123,889
3,900 Railtrack Group PLC ORD 65,538
-----------------------
728,246
-----------------------
RESTAURANTS -- 0.3%
2,600 CKE Restaurants, Inc. 97,662
6,300 Compass Group PLC ORD 75,119
500 Fine Host Corp.(1) 14,828
1,900 Logan's Roadhouse, Inc.(1) 34,022
2,800 McDonald's Corp. 135,800
2,000 Rainforest Cafe, Inc.(1) 71,750
-----------------------
429,181
-----------------------
RETAIL (APPAREL) -- 0.5%
1,320 Burlington Coat Factory
Warehouse Corp. 24,667
1,800 Hennes & Mauritz AB Cl B ORD 83,222
1,700 Jones Apparel Group, Inc.(1) 82,875
4,100 Liz Claiborne, Inc. 206,025
3,500 Ross Stores, Inc. 137,375
Shares Value
- -------------------------------------------------------------------------------------------
3,700 Shoe Carnival, Inc.(1) $ 33,994
3,900 Stage Stores, Inc.(1) 164,044
3,500 TJX Companies, Inc. (The) 120,750
-----------------------
852,952
-----------------------
RETAIL (FOOD & DRUG) -- 1.1%
6,300 Albertson's, Inc. 279,562
1,300 CVS Corp. 86,288
1,000 Circle K Japan Co., Ltd. ORD 50,225
30,300 Giant Food Inc. Cl A 1,022,463
6,118 Koninklijke Ahold NV ORD 163,147
6,500 Universal Corp. 257,156
-----------------------
1,858,841
-----------------------
RETAIL (GENERAL MERCHANDISE) -- 1.0%
3,800 Consolidated Stores Corp.(1) 184,775
14,600 Dillards Inc. Cl A 533,812
5,500 Family Dollar Stores, Inc. 152,281
2,600 Fred's, Inc. 63,700
1,700 Kohl's Corp.(1) 123,038
8,100 Next Plc ORD 101,233
6,200 Penney (J.C.) Company, Inc. 398,350
300 Pinault-Printemps-Redoute SA ORD 153,473
-----------------------
1,710,662
-----------------------
RETAIL (SPECIALTY) -- 0.2%
2,800 Action Performance Cos. Inc.(1) 80,675
1,000 Fastenal Company 53,250
600 Hasbro, Inc. 17,437
2,300 Home Depot, Inc. 128,656
200 Micro Warehouse, Inc.(1) 2,938
2,100 Party City Corp.(1) 60,113
-----------------------
343,069
-----------------------
STEEL(2)
4,300 Bethlehem Steel Corporation(1) 44,075
-----------------------
TEXTILES & APPAREL -- 0.3%
1,500 Dexter Corp. (The) 59,719
16,300 Fruit of the Loom, Inc.(1) 379,994
600 Polo Ralph Lauren Corp.(1) 16,200
600 Timberland Co. (The)(1) 46,725
-----------------------
502,638
-----------------------
TOBACCO -- 0.2%
6,900 Philip Morris Companies Inc. 300,150
-----------------------
See Notes to Financial Statements
14 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Shares/Principal Amount Value
- -------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.2%
2,000 AirNet Systems Inc.(1) $ 40,500
4,400 Allied Holdings, Inc.(1) 86,625
3,900 XTRA Corp. 205,725
-----------------------
332,850
-----------------------
UTILITIES -- 1.6%
500 Black Hills Corp. 15,906
300 Columbia Gas System, Inc. (The) 21,825
24,000 Entergy Corp. 624,000
19,200 Florida Progress Corp. 680,400
1,500 NIPSCO Industries, Inc. 70,219
100 People's Energy Corp. 3,662
15,500 Texas Utilities Co. 620,000
15,600 Union Electric Co. 621,075
500 Utilicorp United Inc. 17,094
-----------------------
2,674,181
-----------------------
TOTAL COMMON STOCKS -- 38.1% 63,271,303
-----------------------
(Cost $57,615,618)
PREFERRED STOCKS
CHEMICALS & RESINS -- 0.1%
1,850 Henkel KGaA ORD 113,717
-----------------------
CONSUMER PRODUCTS(2)
80 Wella Aktiengesellschaft ORD 57,613
-----------------------
TOTAL PREFERRED STOCKS -- 0.1% 171,330
-----------------------
(Cost $152,084)
U.S. TREASURY SECURITIES
$ 230,000 U.S. Treasury Notes, 5.50%,
11/15/98 229,497
3,400,000 U.S. Treasury Notes, 7.75%,
11/30/99 3,523,250
2,000,000 U.S. Treasury Notes, 5.50%,
12/31/00 1,980,624
3,250,000 U.S. Treasury Notes, 6.375%,
3/31/01 3,298,750
335,000 U.S. Treasury Notes, 6.625%,
7/31/01 343,061
4,145,000 U.S. Treasury Notes, 7.50%,
5/15/02 4,404,062
Principal Amount Value
- -------------------------------------------------------------------------------------------
$ 3,100,000 U.S. Treasury Notes, 6.00%,
7/31/02 $ 3,115,500
1,660,000 U.S. Treasury Notes, 6.50%,
5/15/05 1,718,100
3,040,000 U.S Treasury Notes, 7.00%,
7/15/06 3,256,600
400,000 U.S. Treasury Notes, 6.125%,
8/15/07 407,375
1,125,000 U.S. Treasury Bonds, 12.00%,
8/15/08 1,643,906
1,050,000 U.S. Treasury Bonds, 8.75%,
5/15/17 1,358,765
875,000 U.S. Treasury Bonds, 6.75%,
8/15/26 948,828
1,000,000 U.S. Treasury Bonds, 6.375%,
8/16/27 1,038,125
-----------------------
TOTAL U.S. TREASURY SECURITIES -- 16.4% 27,266,443
-----------------------
(Cost $26,425,263)
MORTGAGE-BACKED SECURITIES(4)
1,350,000 FHLMC, 7.93%, 1/20/05 1,488,417
500,000 FHLMC, 7.09%, 11/24/06 500,395
500,000 FNMA, 6.45%, 6/10/03 497,637
1,500,000 FNMA, 7.69%, 9/13/06 1,564,996
550,000 FNMA, 7.00%, 2/20/07 564,201
700,000 FNMA MTN, 7.49%, 5/22/07 717,080
48,716 FNMA Pool #343829, 6.50%,
4/1/11 48,622
832,831 FNMA Pool #341477, 6.50%,
5/1/11 831,231
246,760 FNMA Pool #346400, 6.50%,
5/1/11 246,286
538,739 FNMA Pool #346779, 6.50%,
5/1/11 537,704
231,308 FNMA Pool #369034, 6.50%,
2/1/12 230,769
510,660 FNMA Pool #377181, 6.50%,
4/1/12 509,470
917,475 FNMA Pool #378039, 6.50%,
4/1/12 915,337
94,275 FNMA Pool #250576, 7.00%,
6/1/26 94,643
969,524 FNMA Pool #373510, 7.50%,
3/1/27 990,086
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 15
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
$ 388,384 GNMA Pool #351417, 7.00%,
1/15/24 $ 390,765
231,276 GNMA Pool #361446, 8.00%,
7/15/24 239,593
328,566 GNMA Pool #377238, 8.50%,
7/20/24 342,086
279,416 GNMA Pool #355903, 8.00%,
9/15/24 289,464
1,119,947 GNMA Pool #404303, 8.25%,
10/15/24 1,169,605
238,917 GNMA Pool #392995, 8.75%,
3/15/25 255,366
182,375 GNMA Pool #372335, 7.50%,
4/15/25 186,274
302,286 GNMA Pool #001991, 9.00%,
4/20/25 319,071
787,292 GNMA Pool #009297, 8.25%,
7/20/25 821,137
476,585 GNMA Pool #412177, 7.00%,
9/15/25 478,691
519,998 GNMA Pool #416856, 7.50%,
10/15/25 531,291
288,730 GNMA Pool #425081, 7.50%,
2/15/26 294,903
298,858 GNMA Pool #402680, 8.00%,
5/15/26 309,503
460,056 GNMA Pool #417068, 8.00%,
5/15/26 476,443
286,731 GNMA Pool #422006, 7.50%,
5/15/26 292,861
94,263 GNMA Pool #402682, 7.50%,
6/15/26 96,279
1,528,970 GNMA Pool #431942, 8.25%,
7/15/26 1,586,075
464,525 GNMA Pool #002273, 9.00%,
8/20/26 490,003
1,000,000 GNMA Pool #456569, 7.50%,
11/15/27 1,021,109
----------------------
TOTAL MORTGAGE-BACKED
SECURITIES -- 11.6% 19,327,393
----------------------
(Cost $18,840,948)
Principal Amount Value
- -------------------------------------------------------------------------------------------
WHEN-ISSUED--0.4%
$ 600,000 FHLMC, 6.50%, 12/15/12,
settlement 12/15/97 $ 598,875
----------------------
(Cost $598,875)
ASSET-BACKED SECURITIES(4)
600,000 BankAmerica Manufactured
Housing Contract, Series
1997-2, Class A5, 6.39%,
12/10/12 600,750
800,000 CIT RV Trust, Series 1997-A,
Class A6, 6.35%, 4/15/11 798,000
500,000 Capital Equipment Receivables
Trust, Series 1997-1, Class A1,
5.79%, 12/3/98 500,000
600,000 Money Store (The) Home Equity
Trust, Series 1995-C, Class A9,
6.375%, 9/15/11 599,868
600,000 TEXTRON, Series 1997-A, Class
A1, 6.05%, 3/16/09 (Acquired
9/18/97, Cost $562,340)(3) 563,131
600,000 United Companies Financial Corp.,
Series 1997-C, Class A7,
6.85%, 1/15/29 605,040
----------------------
TOTAL ASSET-BACKED SECURITIES -- 2.2% 3,666,789
----------------------
(Cost $3,660,465)
CORPORATE BONDS
AEROSPACE & DEFENSE -- 0.6%
200,000 Lockheed Martin Corp., 6.85%,
5/15/01 203,000
800,000 Lockheed Martin Corp., 7.25%,
5/15/06 842,000
----------------------
1,045,000
----------------------
BANKING -- 1.3%
550,000 Citicorp, 7.125%, 5/15/06 568,562
500,000 First Bank System Inc., 7.625%,
5/1/05 530,625
1,000,000 HSBC America Capital, 8.38%,
5/15/27 1,047,500
----------------------
2,146,687
----------------------
See Notes to Financial Statements
16 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
COMMUNICATIONS SERVICES -- 0.4%
$ 600,000 WorldCom, Inc., 7.55%, 4/1/04 $ 625,500
----------------------
DIVERSIFIED COMPANIES -- 0.2%
400,000 Hanson Overseas BV, 6.75%,
9/15/05 406,500
----------------------
ENERGY (PRODUCTION &
MARKETING) -- 0.7%
600,000 Enron Corp., 6.625%, 11/15/05 599,250
500,000 Enron Corp., 6.75%, 7/1/05 504,375
----------------------
1,103,625
----------------------
FINANCIAL SERVICES -- 2.4%
600,000 Advanta Corp., MTN, Series B,
7.00%, 5/1/01 597,750
600,000 Comdisco Inc., 7.75%, 9/1/99 615,750
200,000 Ford Motor Credit Co., 6.125%,
1/9/06 194,750
600,000 Ford Motor Credit Co., 6.25%,
11/8/00 600,750
500,000 Japanese Financial Corp. for
Municipal Enterprises, 7.375%,
4/27/05 533,750
500,000 Merrill Lynch & Co. Inc., 8.00%,
2/1/02 531,250
1,000,000 Wharf International Finances Ltd.,
7.625%, 3/13/07 (Acquired
3/6/97, Cost $992,090)(3) 992,500
----------------------
4,066,500
----------------------
MACHINERY & EQUIPMENT -- 0.2%
300,000 Time Warner Inc., 6.85%, 1/15/26 307,875
----------------------
METALS & MINING -- 0.4%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 99,500
500,000 Barrick Gold Corp., 7.50%,
5/1/07 528,750
----------------------
628,250
----------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.4%
550,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $572,132)(3) 597,437
----------------------
PRINTING & PUBLISHING -- 0.3%
500,000 News America Holdings, 9.125%,
10/15/99 525,625
----------------------
Principal Amount Value
- -------------------------------------------------------------------------------------------
RAILROAD -- 0.1%
$ 200,000 Norfolk Southern Corp., 7.90%,
5/15/97 $ 224,000
----------------------
RETAIL (GENERAL MERCHANDISE) -- 0.1%
100,000 Sears, Roebuck and Co., 6.00%,
5/1/00 99,500
----------------------
TOBACCO -- 0.3%
250,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 252,188
280,000 Philip Morris Companies Inc.,
7.75%, 5/1/99 285,600
----------------------
537,788
----------------------
UTILITIES -- 0.7%
600,000 CalEnergy Co. Inc., 7.63%,
10/15/07 606,000
300,000 Citizens Utilities Co., 7.60%,
6/1/06 323,250
250,000 Virginia Electric & Power, 8.00%,
3/1/04 271,250
----------------------
1,200,500
----------------------
TOTAL CORPORATE BONDS -- 8.1% 13,514,787
----------------------
(Cost $13,219,982)
SOVEREIGN GOVERNMENTS & AGENCIES
ESP 25,000,000 Bonos Y Oblig Del Estado,
10.50%, 10/30/03 209,898
DEM 1,200,000 Bundesobligation, 5.875%,
5/15/00 701,900
2,350,000 Deutschland Republic, 6.00%,
9/15/03 1,388,545
FRF 1,000,000 France O.A.T., 6.75%,
10/25/03 183,779
700,000 France Treasury, 7.00%,
11/12/99 124,364
CAD 500,000 Government of Canada, 6.50%,
6/1/04 371,528
FRF 1,500,000 Government of France, 8.50%,
4/25/03 295,004
NLG 200,000 Government of Netherlands,
8.25%, 2/15/02 113,006
JPY 50,000,000 Inter. American Development
Bank, 4.50%, 3/20/03 455,681
BEF 4,000,000 Kingdom of Belgium, 9.00%,
6/27/01 124,504
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 17
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
DKK 1,000,000 Kingdom of Denmark, 8.00%,
5/15/03 $ 166,858
SEK 1,000,000 Kingdom of Sweden, 13.00%,
6/15/01 158,382
AUD 300,000 Queensland Treasury Corp.,
8.00%, 8/14/01 219,295
JPY 142,000,000 Republic of Italy, 3.50%,
6/20/01 1,209,295
ITL 800,000,000 Republic of Italy, 6.75%,
2/1/07 491,792
200,000,000 Republic of Italy, 9.50%,
12/1/97 115,105
DEM 1,100,000 Rheinische Hypobank AG,
5.625%, 7/3/01 636,859
GBP 600,000 United Kingdom Treasury, 8.00%,
6/10/03 1,070,340
----------------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES -- 4.8% 8,036,135
----------------------
(Cost $8,585,259)
COMMERCIAL PAPER(5)
BANKING -- 5.2%
2,070,000 Bankers Trust New York Corp.,
5.56%, 1/12/98 2,056,573
700,000 Banque Internationale Luxembourg
S.A., 5.62%, 1/23/98 694,208
2,500,000 Cibinong International Finance B.V.,
5.57%, 12/22/97 2,491,877
2,000,000 Generale Bank, Inc., 5.55%,
1/22/98 1,983,966
1,500,000 IMI Funding Corp. (USA), 5.55%,
2/5/98 1,483,988
----------------------
8,710,612
----------------------
COMPUTER SYSTEMS -- 0.6%
1,000,000 Hitachi America, Ltd., 5.56%,
3/5/98 985,043
----------------------
FINANCIAL SERVICES -- 7.2%
1,700,000 Corporate Receivables Corporation,
5.77%, 1/6/98 (Acquired
11/26/97, Cost $1,688,829)(3) 1,690,191
4,100,000 Ford Motor Credit Co., 5.77%,
1/14/98 4,071,086
$ 1,000,000 Hitachi Credit America Corp.,
5.72%, 1/23/98 $ 991,579
1,500,000 Hitachi Credit America, 5.60%,
12/11/97 1,497,667
2,000,000 Merrill Lynch & Co., Inc., 5.74%,
1/30/98 1,980,492
1,700,000 WCP Funding, Inc., 5.55%,
12/1/97 (Acquired 10/20/97,
Cost $1,688,993)(3) 1,700,000
----------------------
11,931,015
----------------------
SOVEREIGN GOVERNMENTS &
AGENCIES -- 1.2%
2,000,000 Kingdom of Sweden, 5.50%,
12/5/97 1,998,778
----------------------
TOTAL COMMERCIAL PAPER -- 14.2% 23,625,448
----------------------
(Cost $23,627,011)
TEMPORARY CASH INVESTMENTS--4.1%
Repurchase Agreement, Merrill Lynch & Co. Inc.,
(U.S. Treasury obligations), in a joint trading
account at 5.70%, dated 11/28/97, due
12/1/97 (Delivery value $6,803,230) 6,800,000
----------------------
(Cost $6,800,000)
TOTAL INVESTMENT SECURITIES -- 100.0% $166,278,503
=======================
(Cost $159,525,505)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- ----------------------------------------------------------------------------
279,278 CHF 1/28/98 $ 198,492 $1,366
1,031,596 DEM 1/28/98 589,083 3,938
1,746,563 FRF 1/28/98 298,078 2,349
289,304 GBP 1/28/98 485,938 (819)
74,370,751 JPY 1/28/98 593,846 (4,922)
368,498 NLG 1/28/98 186,783 1,232
------------ ----------
$2,352,220 $3,144
============ ===========
(Value on Settlement Date $2,355,364)
See Notes to Financial Statements
18 STRATEGIC ALLOCATION: CONSERVATIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: CONSERVATIVE
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
AUD = Australian Dollar
BEF = Belgian Franc
CAD = Canadian Dollar
CHF = Swiss Franc
DKK = Danish Krone
DEM = German Mark
ESP = Spanish Peseta
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
FRF = French Franc
GBP = British Pound
GNMA = Government National Mortgage Association
ITL = Italian Lira
JPY = Japanese Yen
MTN = Medium Term Note
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
SEK = Swedish Krona
(1) Non-income producing.
(2) Industry is less than 0.05% of total investment securities.
(3) 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 November 30, 1997, was
$5,673,690, which represented 3.5% of net assets.
(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 purchase.
</TABLE>
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: CONSERVATIVE 19
STRATEGIC ALLOCATION: MODERATE
TOTAL RETURNS AS OF NOVEMBER 30, 1997(1)
6 MONTHS 1 YEAR LIFE OF
FUND
- -------------------------------------------------------------------------------
INVESTOR CLASS (inception 2/15/96)
Strategic Allocation: Moderate ...... 8.61% 13.02% 12.93%
S&P 500 ............................. 13.60% 28.56% 26.42%
Lehman Aggregate Bond Index ......... 6.55% 7.55% 7.63%(2)
Three-Month U.S. Treasury Bill ...... 2.55% 5.17% 5.15%(2)
- --------------------------------------------------------------------------------
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Moderate ...... 8.47% 12.72% 14.13%
S&P 500 ............................. 13.60% 28.56% 33.97%
Lehman Aggregate Bond Index ......... 6.55% 7.55% 10.05%
Three-Month U.S. Treasury Bill ...... 2.55% 5.17% 5.16%
(1) Returns for periods less than one year are not annualized.
(2) Return from 2/29/96, the date nearest the class's inception for which data
are available.
See pages 68, 72 and 73 for more information about returns, share classes, and
the comparative indices.
[line graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND (Investor Class)
$10,000 investment made 2/29/96*
Value on 11/30/97
Strategic: Lehman 3-Month
Moderate S&P 500 Aggregate T-Bill
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
6/30/97 $11,851 $14,258 $10,801 $10,691
7/31/97 $12,414 $15,367 $11,092 $10,736
8/31/97 $12,143 $14,484 $10,998 $10,783
9/30/97 $12,711 $15,319 $11,160 $10,827
10/31/97 $12,396 $14,791 $11,322 $10,871
11/30/97 $12,522 $15,450 $11,374 $10,919
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 the other
class will vary due to differences in fee structures (see the Total Returns
table above).
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.
* 2/29/96 is the date closest to Investor Class inception for which comparable
performance data exist. The class's actual inception date is 2/15/96.
[pie chart]
ASSET ALLOCATION AS OF NOVEMBER 30, 1997
Percent of Fund Investments
U.S. Stocks 45%
Foreign Stocks 12%
U.S. Bonds 23%
Foreign Bonds 7%
Money Market
Securities 13%
See page 72 for the fund's neutral asset mix.
20 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
MANAGEMENT Q & A
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
American Century Strategic Allocation funds management team.
HOW DID THE FUND PERFORM?
For the fiscal year ended November 30, 1997, the fund's Investor Class
shares posted a total return of 13.02%, compared with the 13.42% return of the
fund's benchmark. The benchmark is composed of several market indexes, each
representing a specific asset type (e.g., domestic stocks), that are weighted to
match the fund's neutral asset mix. (See the Total Returns table on the previous
page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
It was the fund's U.S. stock holdings. Our stocks underperformed the broader
market overall, and we also underweighted domestic stocks for much of the fiscal
year.
WAS THIS A SIGNIFICANT ADJUSTMENT TO THE FUND'S ASSET MIX?
Not really. The fund's strategic approach dictates that we maintain a
relatively stable asset mix. Within this structure, we typically make some minor
adjustments in a narrow range around the fund's neutral mix of 60% stocks, 30%
bonds, and 10% cash.
In early 1997, we underweighted U.S. stocks--not by much, just a percent or
two below what we consider neutral--and overweighted foreign stocks. Volatility
in the domestic stock market was increasing, and we felt there were better
values in overseas markets.
Foreign stocks, especially those in Europe, performed well during the first
half of the year, so we took some profits in July and brought our foreign stock
allocation back to neutral.
Immediately following the dramatic U.S. stock market declines in late
October, we boosted our domestic stock allocation closer to neutral to take
advantage of what we felt were attractive buying opportunities. By the end of
the period, our only overweighted position was in cash (money market
securities).
ALTHOUGH THE FUND'S BOND ALLOCATION DIDN'T CHANGE MUCH DURING THE YEAR, THE
COMPOSITION OF ITS U.S. BOND HOLDINGS DID. CAN YOU EXPLAIN THESE CHANGES?
The benchmark index for the domestic bond portion of the fund's portfolio is
the Lehman Aggregate Bond Index, and our adjustments reflected an effort to
match the composition of the index.
Toward this end, we nearly doubled the fund's corporate bond holdings and
cut back on its Treasury securities (see the chart on page 23). We made most of
these adjustments toward the end of the fiscal year, when corporate bonds became
more attractive compared with Treasury securities.
Corporate bonds typically offer higher yields than Treasury securities, so
these changes should enhance the fund's ability to meet one of its goals, which
is regular income. They should also increase the price volatility of the fund's
bond component slightly.
HOW DID THE FINANCIAL MELTDOWN IN SOUTHEAST ASIA AFFECT THE FUND?
It had little effect on the fund, for two reasons. First, the foreign
component of the fund is typically around 20%, and Southeast Asian securities
make up an even smaller subset of this component. As a result, the price
declines of securities in this region had a limited impact on the fund's
performance.
Second, we underweighted our investments in the Far East because our
analysis of growth potential at individual companies gave us early warning of
the troubles ahead. Most foreign stock and bond indexes allocate about 30% to
the Asia/Pacific region, but we
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 21
STRATEGIC ALLOCATION: MODERATE
devoted less than 10% of the fund's foreign holdings to this area. And the
majority of this was in Hong Kong, the largest, most stable market in the
region. Hong Kong's markets held up best among Southeast Asian countries during
the turmoil.
WITH REGARD TO THE FUND'S FOREIGN HOLDINGS, DID YOU DO ANY CURRENCY HEDGING?
Yes. We hedged around 25-35% of the fund's foreign holdings throughout the
fiscal year. With the dollar strengthening against most major foreign
currencies, gains earned on investments denominated in these currencies
translated into fewer dollars. We felt that our hedging strategy would provide a
suitable balance between offsetting currency losses and retaining the fund's
exposure to non-dollar-denominated investments.
WHAT ARE YOUR PLANS FOR THE FUND'S ASSET ALLOCATION STRUCTURE GOING FORWARD?
For the time being, we will likely continue its current positioning,
maintaining a roughly neutral asset mix. However, one change we may make in the
coming months is to cut back on our U.S. stock holdings.
Between 1994 and 1996, stock market volatility in the U.S. was relatively
low compared with historical norms. But in 1997, we've seen more volatility than
normal, especially during the last half of the year. As a result, we feel the
need to be more selective in our domestic stock portion.
We may look to underweight domestic stocks and overweight cash in early
1998, but we hesitate to underweight more than a percent or two because
FUND'S U.S. STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 321
Dividend Yield 1.75%
Price/Earnings Ratio 25.3
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
Dow Chemical Co. 1.8% 0.8%
Ameritech Corp. 1.7% 0.8%
IBM Corp. 1.5% 0.7%
Merck & Co., Inc. 1.5% 0.7%
First Union Corp. 1.5% 0.7%
FUND'S FOREIGN STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 189
Dividend Yield 1.49%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 3.3% 0.4%
British Aerospace PLC UK 2.0% 0.2%
Credito Italiano Italy 1.7% 0.2%
Axa-UAP France 1.5% 0.2%
Newcourt Credit Group Inc. Canada 1.4% 0.2%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 81%
Americas
(excluding U.S.) 9%
Asia/Pacific 9%
South Africa 1%
22 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
economic conditions remain favorable for U.S. stocks. Within the fund's U.S.
stock component, we also plan to emphasize stocks we feel are undervalued.
WHAT ABOUT THE U.S. BOND MARKET?
U.S. bonds, especially Treasury securities, have rallied dramatically in the
last six months, primarily because of low inflation in the U.S. and demand from
foreign investors seeking a "safe haven" from global market volatility. The
problems in Southeast Asia could help bonds going forward--they could lead to
slower economic growth in the U.S. and more safe-haven demand from abroad.
The one potentially negative factor also comes from Asia--some countries in
the region, especially Japan, may be selling Treasurys to bring cash back home
and rebuild their currencies.
IN THE FUND'S SEMIANNUAL REPORT IN MAY, YOU TALKED FAVORABLY ABOUT EUROPEAN
STOCK MARKETS. DO YOU STILL LIKE THEM?
From a long-term perspective, we still like the markets in this region. We
believe that corporate restructuring, increased privatization and a greater
focus on the customer will boost productivity and corporate profits--as well as
stock prices--in Europe. However, economic difficulties stemming from both the
Southeast Asian crisis and the move toward European economic and monetary union
may weigh these stocks down in the short term.
FUND'S U.S. BONDS AS OF NOVEMBER 30, 1997
Number of Securities 87
Weighted Average Maturity 12.5 years
Average Duration 4.5 years
[pie chart]
Percent of Fund's U.S. Bonds
Corporate Bonds 36%
U.S. Treasury Notes 30%
Mortgage-Backed
Securities 24%
U.S. Treasury Bonds 5%
Asset-Backed Securities 5%
FUND'S FOREIGN BONDS AS OF NOVEMBER 30, 1997
Number of Securities 9
Weighted Average Maturity 5.7 years
Average Duration 4.8 years
[pie chart]
Percent of Fund's Foreign Bonds
Europe 93%
Americas
(excluding U.S.) 7%
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 23
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
COMMON STOCKS
<S> <C> <C>
AEROSPACE & DEFENSE -- 1.8%
5,200 Anaren Microwave, Inc.(1) $ 104,650
3,200 Boeing Co. 170,000
18,800 British Aerospace PLC ORD 513,101
8,700 Cobham PLC ORD 116,960
3,000 General Dynamics Corp. 259,875
11,400 Litton Industries, Inc.(1) 574,275
4,200 Lockheed Martin Corp. 409,763
7,500 Raytheon Co. 419,531
17,700 United Technologies Corp. 1,326,394
----------------------
3,894,549
----------------------
AGRICULTURE -- 0.2%
16,800 AgriBioTech, Inc. 166,950
1,900 Pioneer Hi-Bred International, Inc. 194,038
----------------------
360,988
----------------------
AIRLINES -- 0.1%
600 AMR Corp.(1) 72,712
1,100 Continental Airlines, Inc.(1) 50,119
2,000 KLM Royal Dutch Air Lines
NV ORD 71,950
3,000 Ryanair Holdings plc ADR(1) 79,687
----------------------
274,468
----------------------
AUTOMOBILES & AUTO PARTS -- 1.4%
1,400 Bertrand Faure SA ORD 95,337
54,900 Britax International plc ORD 114,510
4,100 Dura Automotive Systems, Inc.(1) 106,856
27,200 Ford Motor Co. 1,169,600
8,200 General Motors Corp. 500,200
105 Georg Fischer AG ORD 144,310
100 Porsche AG ORD 155,373
18,200 Superior Industries International, Inc. 473,200
3,400 Tower Automotive, Inc.(1) 134,725
----------------------
2,894,111
----------------------
BANKING -- 5.2%
9,000 Amalgamated Banks of South
Africa ORD 55,387
7,000 Banc One Corp. 359,625
3,204 Banca Popolare di Bergamo
Credito Varesino SpA ORD(1) 51,281
Shares Value
- -------------------------------------------------------------------------------------------
15,200 Banca Popolare di Brescia ORD(1) $ 114,381
4,300 Bank of Nova Scotia ORD 186,635
9,100 BankAmerica Corp. 664,300
2,000 Bankers Trust New York Corp. 237,125
3,800 Bayerische Hypotheken-und
Wechsel-Bank AG ORD 164,843
6,500 Chase Manhattan Corp. 706,062
4,400 Citicorp 527,725
2,400 Credit Suisse Group ORD 350,887
159,600 Credito Italiano ORD 436,979
3,800 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 215,481
29,300 First Union Corp. 1,428,375
16,400 First Virginia Banks, Inc. 784,125
4,300 Hansabank Ltd. ORD 32,746
4,400 HSBC Holdings plc ORD 106,154
500 Jyske Bank A/S ORD 52,824
44,000 Long-Term Credit Bank of Japan,
Ltd. (The) ORD 74,123
15,700 Mercantile Bancorporation Inc. 816,400
40,900 Merita OY Ltd. Cl A ORD 207,133
1,300 Morgan (J.P.) & Co. 148,444
16,600 NationsBank Corp. 997,037
9,400 Norwest Corp. 351,913
7,400 PNC Bank Corp. 398,213
4,920 Security Bank Corp. ORD(1) 2,534
10,200 Skandinaviska Enskilda
Banken ORD 120,210
1,800 Societe Generale ORD 236,613
10,400 Standard Chartered plc ORD 115,487
1,600 Sydbank A/S ORD 85,782
200 Union Bank of Switzerland ORD 254,540
8,100 Wachovia Corp. 623,700
----------------------
10,907,064
----------------------
BIOTECHNOLOGY -- 0.3%
1,700 Agouron Pharmaceuticals, Inc.(1) 65,078
8,200 Centocor, Inc.(1) 356,956
1,800 PAREXEL International Corp.(1) 61,875
3,600 PathoGenesis Corp.(1) 128,250
----------------------
612,159
----------------------
BROADCASTING & MEDIA -- 0.5%
5,600 CBS Corporation 168,000
3,500 Clear Channel Communications, Inc.(1) 237,125
See Notes to Financial Statements
24 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
6,100 Flextech plc ORD (Acquired
6/26/97 through 10/27/97,
Cost $61,424)(1)(2) $ 57,950
7,200 Grupo Radio Centro S.A. de C.V.
ADR 107,100
1,041 Havas Advertising SA ORD 129,611
3,500 Heftel Broadcasting Corp.(1) 259,875
4,200 Jacor Communications, Inc.(1) 183,225
----------------------
1,142,886
----------------------
BUILDING & HOME IMPROVEMENTS -- 0.2%
52,800 Pilkington plc ORD 114,143
11,100 Premark International, Inc. 289,987
3,500 Royal Group Technologies Ltd.
ORD(1) 84,314
----------------------
488,444
----------------------
BUSINESS SERVICES & SUPPLIES -- 1.3%
1,400 AccuStaff, Inc.(1) 41,387
20,000 Bracknell Corp. ORD(1) 58,292
3,400 CGI Group, Inc. ORD(1) 95,516
6,800 Corrections Corp. of America(1) 235,450
2,600 DIS Deutscher Industrie Service
AG ORD(1) 103,204
1,100 Fugro N.V. ORD 37,635
4,200 Goode Durrant plc ORD 34,970
6,100 Hall, Kinion & Associates, Inc.(1) 108,275
13,800 Hays plc ORD 170,140
12,600 Kelly Services, Inc. 364,613
4,400 Lason, Inc.(1) 123,200
5,500 NCO Group, Inc.(1) 210,375
3,500 Olsten Corp. 52,063
9,337 Parity plc ORD 98,716
2,300 Quintiles Transnational Corp.(1) 179,256
3,900 Randstad Holdings N.V. ORD 144,815
7,315 Robert Walters plc ORD(1) 50,220
10,000 Select Appointments Holdings
plc ORD 97,956
2,700 Stork N.V. ORD 98,898
6,600 U.S. Filter Corp.(1) 207,075
3,000 Unique International NV ORD 64,604
900 VA Technologie AG ORD 135,549
----------------------
2,712,209
----------------------
Shares Value
- -------------------------------------------------------------------------------------------
CHEMICALS & RESINS -- 2.0%
1,600 Compagnie Francaise d'Etudes et
de Construction Technip ORD $ 165,873
4,000 Dainippon Ink & Chemicals Inc.
ORD 14,104
3,000 Desc S.A. de C.V. 112,687
17,200 Dow Chemical Co. 1,698,500
2,400 du Pont (E.I.) de Nemours & Co. 145,350
16,000 Great Lakes Chemical Corp. 718,000
8,200 Lubrizol Corp. 319,800
7,700 Nalco Chemical Co. 298,856
7,300 Praxair, Inc. 320,744
4,700 Rhone-Poulenc ORD 211,302
700 Union Carbide Corp. 30,888
2,900 VEBA AG ORD 172,339
----------------------
4,208,443
----------------------
COMMUNICATIONS EQUIPMENT -- 1.0%
4,100 Boston Technology, Inc.(1) 88,150
15,100 Cable & Wireless plc ORD 137,203
300 Comverse Technology, Inc.(1) 10,116
2,800 Ericsson (L.M.) Telephone Co. ADR 113,137
1,100,000 Ericsson Telecomunicacoes S.A.
ORD 38,177
7,300 Lucent Technologies Inc. 584,913
3,600 Motorola, Inc. 226,350
2,800 Newbridge Networks Corp.(1) 117,950
1,200 Nokia Corp. Cl A ADR 99,750
1,600 Northern Telecom Ltd. ORD 143,835
4,000 Orckit Communications Ltd.(1) 82,375
8,800 Scientific-Atlanta, Inc. 176,000
5,900 Tekelec(1) 223,463
3,900 U S WEST Communications, Inc. 176,231
----------------------
2,217,650
----------------------
COMMUNICATIONS SERVICES -- 3.3%
8,000 Airtouch Communications, Inc.(1) 314,000
1,072 Alcatel Alsthom Compagnie
Generale ORD 134,379
4,000 Aliant Communications, Inc. 121,250
20,800 Ameritech Corp. 1,602,900
9,300 Bell Atlantic Corp. 830,025
10,200 BellSouth Corp. 558,450
5,700 France Telecom S.A. ADR(1) 206,625
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 25
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
16,600 Frontier Corp. $ 406,700
26,700 GTE Corp. 1,350,019
2 NTT Data Corp. ORD 97,159
3,300 Portugal Telecom SA ORD 151,998
7,100 SBC Communications Inc. 516,969
900 Telecel-Comunicacaoes Pessoais,
SA ORD(1) 82,408
1,300 Vimpel-Communications ADR(1) 39,650
16,000 Worldcom, Inc.(1) 512,500
----------------------
6,925,032
----------------------
COMPUTER PERIPHERALS -- 0.4%
2,700 Adaptec, Inc.(1) 133,566
3,100 Cisco Systems Inc.(1) 267,278
7,200 EMC Corp. (Mass.)(1) 218,250
1,900 Quantum Corp.(1) 50,409
5,200 SCI Systems, Inc.(1) 238,225
----------------------
907,728
----------------------
COMPUTER SOFTWARE & SERVICES -- 2.1%
1,300 Adobe Systems Inc. 54,519
2,100 Advantage Learning Systems, Inc.(1) 48,694
4,700 Cadence Design Systems, Inc.(1) 118,675
2,240 Cap Gemini SA ORD 190,863
2,700 CBT Group Plc ADR(1) 191,194
3,000 Check Point Software Technologies
Ltd.(1) 135,562
2,200 Crystal Systems Solutions(1) 43,037
5,500 Dassault Systemes S.A. ADR 144,375
13,600 First Data Corp. 385,050
2,300 Formula Systems (1985) Ltd.
ORD(1) 76,028
1,000 Fuji Soft ABC, Inc. ORD 34,946
6,600 Geac Computer Corp. Ltd. ORD(1) 167,335
6,300 Getronics N.V. ORD 216,498
1,300 HBO & Co. 58,256
5,900 JBA Holdings Plc ORD 97,652
5,500 JDA Software Group, Inc.(1) 169,297
5,500 JetForm Corp.(1) 84,562
4,600 McAfee Associates, Inc.(1) 210,162
4,500 Microsoft Corp.(1) 636,609
11,134 Misys plc ORD 314,030
5,800 Omtool Ltd.(1) 60,175
4,275 Oracle Systems Corp.(1) 142,277
Shares Value
- -------------------------------------------------------------------------------------------
3,700 Ordina Beheer N.V. ORD(1) $ 55,849
10,100 Oshap Technologies, Ltd.(1) 88,059
5,700 QuadraMed Corp.(1) 149,269
5,800 Sage Group plc (The) ORD 74,594
500 Shared Medical Systems Corp. 32,000
5,700 SPR Inc.(1) 91,200
3,700 Symantec Corp.(1) 92,616
3,000 Technomatix Technologies Ltd.
ADR(1) 97,688
1,400 TT Tieto OY ORD 148,368
1,850 Veritas Software Corp.(1) 80,880
1,000 Zoran Corporation(1) 17,063
----------------------
4,507,382
----------------------
COMPUTER SYSTEMS -- 1.3%
12,300 Compaq Computer Corp.(1) 767,981
800 Dell Computer Corp.(1) 67,325
4,300 Digital Equipment Corp.(1) 211,775
16,200 Dimension Data Holdings
Ltd. ORD(1) 70,022
13,500 International Business Machines
Corp. 1,479,094
1,000 OPTIMUS S.A. ORD(1) 25,202
1,100 Stratus Computer, Inc.(1) 35,819
3,600 Sun Microsystems, Inc.(1) 129,487
----------------------
2,786,705
----------------------
CONSTRUCTION & PROPERTY
DEVELOPMENT -- 0.3%
7,700 Fluor Corp. 276,719
874 Grupo Acciona SA ORD(1) 154,763
10,000 Hutchison Whampoa Limited ORD 66,621
4,086 Nagron Nationaal Grondbezit N.V.
ORD 96,625
----------------------
594,728
----------------------
CONSUMER PRODUCTS -- 1.2%
6,100 Avon Products, Inc. 352,656
2,100 Colgate-Palmolive Co. 140,306
2,000 Electrolux AB Cl B ORD 157,482
3,100 Gillette Company 286,169
13,700 Helen of Troy Ltd.(1) 192,656
15,900 National Service Industries 744,319
5,400 Procter & Gamble Co. (The) 412,088
See Notes to Financial Statements
26 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
8,000 Shiseido Co., Ltd. ORD $ 108,443
3,300 Stride Rite Corp. (The) 39,394
2,900 Whirlpool Corp. 158,956
----------------------
2,592,469
----------------------
CONTROL & MEASUREMENT -- 0.5%
5,300 Aehr Test Systems(1) 49,522
5,500 Beckman Instruments, Inc. 215,188
1,500 Coherent, Inc.(1) 56,344
9,700 Emerson Electric Co. 533,500
1,300 Keyence Corporation ORD 189,461
4,900 Molecular Dynamics, Inc.(1) 99,531
----------------------
1,143,546
----------------------
DIVERSIFIED COMPANIES -- 1.1%
5,614 Asko Oyj Cl A ORD(1) 107,408
22,000 Beijing Enterprises Holdings
Limited ORD(1) 57,915
7,800 Bodycote International plc ORD 125,477
600 Fiskars Oy AB Cl A ORD 64,430
4,900 General Electric Co. (U.S.) 361,375
39,600 General Electric Company plc ORD 257,824
262,000 Guangzhou Investments Company
Ltd. ORD 51,178
2,500 Hexagon AB ORD 71,229
9,798 Siebe plc ORD 178,220
17,500 Tyco International Ltd. 686,875
4,700 Unilever N.V. 272,894
----------------------
2,234,825
----------------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 2.2%
100 ABB AG ORD 133,020
9,100 AMP, Inc. 395,281
3,800 ANADIGICS, Inc.(1) 125,400
1,600 Burr-Brown Corp.(1) 48,100
2,000 Draka Holding N.V. ORD 89,057
8,000 Fujikura Ltd. ORD 57,606
3,800 General Signal Corp. 155,087
3,100 Intel Corp. 240,734
6,000 Jabil Circuit, Inc.(1) 288,750
2,400 KLA-Tencor Corporation(1) 92,850
2,400 Leitch Technology Corp ORD(1) 63,209
2,100 Linear Technology Corp. 135,056
4,300 Microchip Technology Inc.(1) 150,097
Shares Value
- -------------------------------------------------------------------------------------------
21,000 Minebea Company Ltd. ORD $ 233,653
1,600 Nintendo Co., Ltd. ORD 165,485
1,500 Phillips Electronics N.V. 100,500
3,000 Raychem Corp. 283,687
5,400 REMEC, Inc.(1) 124,875
600 Sanmina Corp.(1) 40,950
3,000 Shindengen Electric Manufacturing
ORD 23,154
1,400 Siemens AG ORD 82,206
6,800 Sipex Corp.(1) 215,050
600 SMART Modular Technologies, Inc.(1) 37,200
6,500 Solectron Corp.(1) 236,844
3,500 Sony Corp. ORD 298,923
7,600 Texas Instruments Inc. 374,300
14,100 Vari-L Co., Inc.(1) 139,238
8,500 Vitesse Semiconductor Corp.(1) 379,313
----------------------
4,709,625
----------------------
ENERGY (PRODUCTION & MARKETING) -- 3.7%
6,900 Amoco Corp. 621,000
9,200 Atlantic Richfield Co. 749,800
10,400 British Petroleum Co. plc ORD 142,273
29,755 British-Borneo Petroleum
Syndicate plc ORD 222,873
13,600 Burlington Resources Inc. 605,200
300 Cairn Energy plc ORD(1) 2,384
182,900 Centrais Eletricas Brasileiras S/A
ORD 85,242
10,000 Chevron Corp. 801,875
1,400 Elf Aquitaine SA ORD 162,452
4,100 Energy Ventures, Inc.(1) 210,894
17,500 Exxon Corp. 1,067,500
9,900 Murphy Oil Corp. 544,500
4,100 NICOR Inc. 165,025
4,700 Philips Petroleum Co. 227,656
3,400 Remington Energy Ltd. ORD(1) 56,832
3,700 Talisman Energy, Inc. ORD(1) 108,751
7,300 Texaco Inc. 412,450
5,000 USX-Marathon Group 171,250
7,500 Ultramar Diamond Shamrock Corp. 228,281
19,800 Unocal Corp. 788,287
24,100 Woodside Petroleum Limited ORD 172,943
6,600 YPF Sociedad Anonima ADR 221,513
----------------------
7,768,981
----------------------
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 27
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
ENERGY (SERVICES) -- 1.2%
2,700 Berkley Petroleum Corp. ORD(1) $ 24,936
500 BJ Services Co.(1) 35,906
2,300 Canadian Fracmaster Ltd. ORD 33,518
1,500 Companie Generale de
Geophysique SA ADR(1) 32,437
2,061 Det Sondenfjelds-Norske
Dampskibsselskab Cl A ORD(1) 40,410
4,200 Diamond Offshore Drilling, Inc. 209,475
11,600 Expro International Group plc ORD 115,294
1,900 Global Marine Inc.(1) 49,994
2,300 Hvide Marine, Inc.(1) 65,119
2,000 IHC Caland N.V. ORD 106,566
10,600 Input/Output, Inc.(1) 274,275
2,500 Key Energy Group, Inc.(1) 60,781
1,200 Lukoil Holding ADR 91,500
400 Marine Drilling Companies, Inc.(1) 9,113
3,000 Noble Drilling Corp.(1) 90,188
500 Petroleum Geo-Services ASA ORD(1) 32,191
1,300 Rowan Companies, Inc.(1) 44,200
3,400 Smedvig ASA Cl A ORD 90,775
275 Smedvig ASA Cl B ORD 6,960
3,200 Smith International, Inc.(1) 204,800
12,400 Tidewater Inc. 695,175
2,800 Transocean Offshore 132,825
4,700 Trico Marine Services, Inc.(1) 131,306
----------------------
2,577,744
----------------------
ENVIRONMENTAL SERVICES -- 0.7%
3,400 American Disposal Services, Inc.(1) 121,550
6,100 Superior Services Inc.(1) 143,350
4,000 Tomra Systems ASA ORD 102,901
7,275 USA Waste Services, Inc.(1) 240,530
4,600 Waste Industries, Inc.(1) 92,862
31,700 WMX Technologies, Inc. 780,613
----------------------
1,481,806
----------------------
FINANCIAL SERVICES -- 3.5%
15,700 Amvescap Plc ORD 113,487
23,000 Banco Ambrosiano Veneto S.p.A.
ORD 75,355
23,000 Banco Ambrosiano Veneto S.p.A.
Rights for Bonds ORD(1) 12,115
Shares Value
- -------------------------------------------------------------------------------------------
23,000 Banco Ambrosiano Veneto S.p.A.
Rights for Stock ORD(1) $ 83,609
3,700 Bayerische Vereinsbank AG ORD 219,776
3,200 Bear Stearns Companies Inc. 132,800
5,000 Close Brothers Group plc ORD 41,589
19,000 Corporacion Financiera Reunida,
S.A. ORD(1) 100,677
4,100 Deutsche Bank AG ORD 262,949
2,550 Edwards (A.G.), Inc. 86,381
6,600 Equitable Companies Inc. 314,737
10,400 Fannie Mae 549,250
2,100 Green Tree Financial Corp. 64,313
36,800 Grupo Financiero Banamex Accival,
SA de CV Cl B ORD(1) 80,827
8,811 ING Groep N.V. ORD 358,203
1,200 Investec Holdings Limited ORD 47,224
5,700 Investor's Group, Inc. ORD 156,927
170 Julius Baer Holding AG ORD 277,154
5,780 Kempen & Company NV ORD 228,292
2,600 Lehman Brothers Holdings, Inc. 131,463
23,400 Lloyds TSB Group plc ORD 266,762
7,500 Merrill Lynch & Co., Inc. 526,406
21,600 Morgan Stanley, Dean Witter,
Discover & Co. 1,173,150
12,000 Newcourt Credit Group Inc. ORD
(Acquired 2/15/96 through
11/18/97, Cost $310,846)(2) 378,832
770 Newcourt Credit Group, Inc.
Subscription Receipts ORD(1) 24,065
3,600 OM Gruppen AB ORD 135,673
12,000 Peregrine Investments Holdings
Limited ORD 11,798
3,800 Promise Co., Ltd. ORD 209,912
900 SLM Holding Corp. 116,213
6,300 Skandia Forsakrings AB ORD 332,073
13,149 Travelers Group, Inc. 664,025
200 Vontobel Holding AG Cl B ORD 151,462
----------------------
7,327,499
----------------------
FOOD & BEVERAGE -- 1.6%
5,600 American Italian Pasta Co. Cl A(1) 132,300
29,267 Archer-Daniels-Midland Co. 625,582
800 Coca-Cola Company (The) 50,000
800 Hershey Foods Corp. 49,100
See Notes to Financial Statements
28 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
31,800 IBP, Inc. $ 725,437
12,500 J.D. Wetherspoon plc ORD 65,023
1,500 Lance, Inc. 38,203
163 Nestle S.A. ORD 239,797
8,200 Northland Cranberries, Inc. 115,056
1,000 OY Hartwall AB ORD 83,281
3,400 Panamerican Beverages Inc. Cl A 116,450
1,200 Raisio Group plc ORD 137,976
2,300 Richfood Holdings, Inc. 62,819
6,300 Smithfield Foods, Inc.(1) 222,469
5,400 Smucker (J.M.) Co. 133,650
13,500 Universal Foods Corp. 560,250
-----------------------
3,357,393
-----------------------
FURNITURE & FURNISHINGS -- 0.1%
2,800 Ethan Allen Interiors Inc. 107,800
1,300 Miller (Herman), Inc. 65,813
-----------------------
173,613
-----------------------
HEALTHCARE -- 0.7%
10,400 Columbia/HCA Healthcare Corp. 306,800
6,300 Concentra Managed Care, Inc.(1) 213,609
1,650 Health Management
Associates, Inc.(1) 40,425
7,100 Humana Inc.(1) 157,531
2,000 Lincare Holdings Inc.(1) 112,500
9,150 Quorum Health Group, Inc.(1) 220,744
1,500 Tenet Healthcare Corp.(1) 47,531
1,400 United HealthCare Corp. 72,888
4,500 Wellpoint Health Networks Inc.(1) 207,000
-----------------------
1,379,028
-----------------------
INDUSTRIAL EQUIPMENT &
MACHINERY -- 1.0%
22,000 Ashtead Group plc ORD 63,536
8,300 Caterpillar Inc. 397,881
9,300 Cooper Industries, Inc. 480,113
1,600 Dover Corp. 107,300
7,200 Dresser Industries, Inc. 269,100
8,100 Ingersoll-Rand Co. 331,088
550 Mannesmann AG ORD 256,053
3,500 Pfeiffer Vacuum Technology AG
ADR(1) 103,250
4,600 Powerscreen International plc ORD 51,158
-----------------------
2,059,479
-----------------------
Shares Value
- -------------------------------------------------------------------------------------------
INSURANCE -- 3.0%
9,300 Aetna Life and Casualty Co. $ 700,987
8,200 Allstate Corp. 704,175
1,800 American International Group, Inc. 181,463
4,474 Assurantieconcern Stad Rotterdam
ORD 230,059
5,304 Axa-UAP ORD 384,909
7,900 Chubb Corp. (The) 560,406
400 CIGNA Corp. 66,900
5,000 CNA Financial Corp.(1) 612,500
5,400 Companhia de Seguros Mundial
Confianca, SA ORD(1) 90,350
15,600 Conseco Inc. 726,375
4,000 Gallagher (Arthur J.) & Co. 143,000
1,700 General Re Corp. 337,450
3,100 ITT Hartford Group, Inc. 259,625
2,245 Liberty Life Association of Africa
Ltd. ORD 56,835
1,400 Orion Capital Corp. 63,088
4,400 Pohjola Insurance Group Cl B ORD 165,061
11,300 SAFECO Corp. 554,406
6,500 Sampo Insurance Company
Ltd. ORD 204,826
1,300 Selective Insurance Group, Inc. 65,894
1,900 St. Paul Companies, Inc. 152,000
3,200 UNUM Corp. 151,800
-----------------------
6,412,109
-----------------------
LEISURE -- 0.7%
1,846 Accor SA ORD 348,980
9,300 Corporacion Interamericana de
Entretenimiento S.A. ORD(1) 63,634
1,400 Doubletree Corp.(1) 61,512
10,300 Eastman Kodak Co. 624,438
1,500 HFS, Inc.(1) 102,938
2,600 Jackpot Enterprises, Inc.(1) 31,525
52,700 Ladbroke Group plc ORD 239,424
-----------------------
1,472,451
-----------------------
MACHINERY & EQUIPMENT -- 0.4%
4,100 Applied Materials, Inc.(1) 135,172
4,000 ATS Automation Tooling Systems,
Inc. ORD(1) 132,879
5,300 BT Industries AB ORD(1) 101,586
4,000 Rental Service Corp.(1) 100,500
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 29
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
360 Rieter Holdings Ltd. ORD $ 157,016
1,500 Swisslog Holding AG ORD 114,911
3,400 Veeco Instruments Inc.(1) 135,044
----------------------
877,108
----------------------
MEDICAL EQUIPMENT & SUPPLIES -- 0.7%
5,900 AmeriSource Health Corp.(1) 382,025
1,000 Becton, Dickinson and Co. 51,562
5,400 Cyberonics, Inc.(1) 61,425
1,900 Guidant Corp. 122,075
6,600 Hillenbrand Industries, Inc. 294,112
509 LVL Medical ORD(1) 52,424
1,500 Ortivus AB Cl B ORD 53,811
3,700 Sabratek Corp.(1) 95,506
5,300 Spectra-Physics AB ORD 134,877
6,000 Terumo Corporation ORD 94,025
1,700 US Surgical Corp. 44,838
----------------------
1,386,680
----------------------
METALS & MINING -- 0.6%
5,800 Aalberts Industries N.V. ORD(1) 147,371
8,700 Arch Coal Inc. 228,919
14,200 Homestake Mining Co. 149,100
4,500 Johnson Matthey PLC ORD 41,686
2,400 Kaynar Technologies Inc.(1) 63,900
3,900 Parker-Hannifin Corp. 173,550
1,200 Phelps Dodge Corp. 79,500
8,000 Reynolds Metals Co. 455,500
----------------------
1,339,526
----------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.4%
5,000 Kronos Inc.(1) 155,000
8,100 Xerox Corp. 629,269
----------------------
784,269
----------------------
PACKAGING & CONTAINERS -- 0.1%
3,400 Crown Cork & Seal Co., Inc. 165,962
----------------------
PAPER & FOREST PRODUCTS -- 0.5%
14,100 Chesapeake Corp. 482,925
3,500 Pope & Talbot, Inc. 57,750
5,200 Rayonier, Inc. 254,150
7,200 Westvaco Corp. 234,900
----------------------
1,029,725
----------------------
Shares Value
- -------------------------------------------------------------------------------------------
PHARMACEUTICALS -- 3.3%
9,300 Allergan, Inc. $ 315,037
8,500 Bristol-Myers Squibb Co. 795,812
500 Christian Hansen Holding A/S
Cl B ORD 56,965
3,600 Dura Pharmaceuticals, Inc.(1) 157,500
5,900 Glaxo Wellcome plc ADR 269,556
10,600 Lilly (Eli) & Co. 668,463
20,800 Mallinckrodt Inc. 769,600
1,200 McKesson Corp. 134,250
600 Medicis Pharmaceutical Corp.(1) 25,875
15,400 Merck & Co., Inc. 1,456,263
546 Novartis AG ORD 872,160
2,720 Novo Nordisk A/S Cl B ORD 332,977
1,000 Richter Gedeon Rt. GDR (Acquired
6/24/97, Cost $87,250)(2) 94,432
31 Roche Holding AG ORD 277,372
7,000 Takeda Chemical Inds. ORD 204,584
3,400 Warner-Lambert Co. 475,575
3,500 Zeneca Group plc ORD 111,721
----------------------
7,018,142
----------------------
PRINTING & PUBLISHING -- 0.7%
15,700 Banta Corp. 396,425
5,600 Deluxe Corp. 197,750
15,300 Mondadori (Arnoldo) Editore SpA
ORD 121,333
22,600 Pearson plc ORD 314,895
1,800 Sondagsavisen A/S ORD(1) 80,421
12,500 VNU Tijdschriftengroep Nederland
ORD 299,371
3,300 Wallace Computer Services, Inc. 114,881
----------------------
1,525,076
----------------------
RAILROAD -- 0.4%
3,300 Canadian National Railway
Company ORD 170,348
11,900 CSX Corp. 622,519
6,300 Railtrack Group PLC ORD 105,869
----------------------
898,736
----------------------
REAL ESTATE -- 0.1%
7,800 Cambridge Shopping Centres Ltd.
ORD (Acquired 8/7/97, Cost
$82,342)(2) 82,993
7,000 Castellum AB ORD(1) 65,726
----------------------
148,719
----------------------
See Notes to Financial Statements
30 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
RESTAURANTS -- 0.5%
6,500 CKE Restaurants, Inc. $ 244,156
11,700 Compass Group PLC ORD 139,507
1,000 Fine Host Corp.(1) 29,656
4,000 Logan's Roadhouse, Inc.(1) 71,625
3,200 McDonald's Corp. 155,200
9,000 PizzaExpress plc ORD 127,605
5,300 Rainforest Cafe, Inc.(1) 190,137
----------------------
957,886
----------------------
RETAIL (APPAREL) -- 0.5%
2,800 Hennes & Mauritz AB Cl B ORD 129,457
3,500 Jones Apparel Group, Inc.(1) 170,625
7,700 Ross Stores, Inc. 302,225
5,500 Shoe Carnival, Inc.(1) 50,531
9,300 Stage Stores, Inc.(1) 391,181
2,300 TJX Companies, Inc. (The) 79,350
----------------------
1,123,369
----------------------
RETAIL (FOOD & DRUG) -- 1.1%
7,300 Albertson's, Inc. 323,937
1,700 Circle K Japan Co., Ltd. ORD 85,383
3,400 CVS Corp. 225,675
35,300 Giant Food Inc. Cl A 1,191,375
11,814 Koninklijke Ahold NV ORD 315,040
5,100 Metro Cash & Carry Limited ORD 4,776
6,900 Universal Corp. 272,981
----------------------
2,419,167
----------------------
RETAIL (GENERAL MERCHANDISE) -- 1.6%
8,625 Consolidated Stores Corp.(1) 419,391
20,100 Dillard's Inc. Cl A 734,906
3,000 Ellerine Holdings Limited ORD 20,871
12,950 Family Dollar Stores, Inc. 358,553
3,200 Federated Department Stores, Inc.
(NEW)(1) 145,800
6,200 Fred's, Inc. 151,900
200 Galeries Lafayette ORD 86,731
4,200 Kohl's Corp.(1) 303,975
26,300 Next Plc ORD 328,694
7,200 Penney (J.C.) Company, Inc. 462,600
500 Pinault-Printemps-Redoute SA
ORD 255,789
----------------------
3,269,210
----------------------
Shares Value
- -------------------------------------------------------------------------------------------
RETAIL (SPECIALTY) -- 0.4%
7,400 Action Performance Cos. Inc.(1) $ 213,213
2,800 Fastenal Company 149,100
5,100 Home Depot, Inc. 285,281
1,500 Micro Warehouse, Inc.(1) 22,031
5,000 Party City Corp.(1) 143,125
----------------------
812,750
----------------------
STEEL -- 0.1%
11,100 Bethlehem Steel Corporation(1) 113,775
1,100 USX-U.S. Steel Group 34,444
1,500 Vallourec SA ORD 90,636
----------------------
238,855
----------------------
TEXTILES & APPAREL -- 0.4%
4,300 Dexter Corp. (The) 171,194
19,000 Fruit of the Loom, Inc.(1) 442,937
1,700 Nautica Enterprises, Inc.(1) 47,759
2,100 Polo Ralph Lauren Corp.(1) 56,700
1,500 Timberland Co. (The)(1) 116,813
----------------------
835,403
----------------------
TOBACCO -- 0.6%
30,000 Philip Morris Companies Inc. 1,305,000
----------------------
TRANSPORTATION -- 0.4%
4,300 AirNet Systems Inc.(1) 87,075
10,600 Allied Holdings, Inc.(1) 208,687
800 Finnlines OY ORD 31,812
5,000 Internatio-Muller NV ORD 153,711
3,600 Smit Internationale NV ORD(1) 102,340
4,600 XTRA Corp. 242,650
----------------------
826,275
----------------------
UTILITIES -- 1.8%
900 Black Hills Corp. 28,631
2,000 Columbia Gas System, Inc. (The) 145,500
191,600 Companhia de Saneamento Basico
do Estado de Sao Paulo ORD 44,562
27,900 Entergy Corp. 725,400
22,300 Florida Progress Corp. 790,256
4,000 FPL Group, Inc. 223,750
5,900 NIPSCO Industries, Inc. 276,194
2,900 Pacific Enterprises 102,587
18,000 Texas Utilities Co. 720,000
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 31
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Shares/Principal Amount Value
- -------------------------------------------------------------------------------------------
2,420 Unified Energy Systems GDR(1) $ 55,358
18,100 Union Electric Co. 720,606
----------------------
3,832,844
----------------------
TOTAL COMMON STOCKS -- 57.2% 120,919,816
----------------------
(Cost $109,871,054)
PREFERRED STOCKS
CHEMICALS & RESINS -- 0.1%
3,440 Henkel KGaA ORD 211,452
----------------------
COMPUTER SOFTWARE & SERVICES -- 0.2%
1,100 SAP AG ORD 338,701
----------------------
CONSUMER PRODUCTS -- 0.1%
170 Wella Aktiengesellschaft ORD 122,427
----------------------
ENERGY (PRODUCTION & MARKETING)(3)
424,211 Petroleo Brasileiro S/A ORD 92,162
----------------------
FINANCIAL SERVICES -- 0.1%
1,140 Marschollek, Lautenschlaeger und
Partner AG ORD 281,849
----------------------
TOTAL PREFERRED STOCKS -- 0.5% 1,046,591
----------------------
(Cost $776,794)
U.S. TREASURY SECURITIES
$ 1,550,000 U.S. Treasury Notes, 5.00%,
2/15/99 1,536,438
3,275,000 U.S. Treasury Notes, 6.625%,
7/31/01 3,353,803
3,100,000 U.S. Treasury Notes, 7.50%,
5/15/02 3,293,750
500,000 U.S. Treasury Notes, 5.875%,
9/30/02 500,000
6,075,000 U.S. Treasury Notes, 5.75%,
8/15/03 6,037,031
100,000 U.S. Treasury Notes, 5.875%,
11/15/05 99,656
2,075,000 U.S. Treasury Bonds, 7.25%,
5/15/16 2,331,781
----------------------
TOTAL U.S. TREASURY SECURITIES -- 8.1% 17,152,459
----------------------
(Cost $16,638,711)
Principal Amount Value
- -------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES(4)
$ 700,000 FHLMC, 7.09%, 11/24/06 $ 700,554
113,394 FHLMC Gold Pool #C00465,
8.00%, 6/1/26 117,351
436,209 FHLMC Gold Pool #D72306,
8.00%, 6/1/26 451,428
167,875 FHLMC Gold Pool #D72431,
8.00%, 6/1/26 173,732
380,262 FHLMC Gold Pool #D72499,
8.00%, 7/1/26 393,529
700,000 FNMA, 7.00%, 2/20/07 718,074
900,000 FNMA MTN, 7.49%, 5/22/07 921,960
934,411 FNMA Pool #373899, 6.50%,
3/1/12 932,232
194,812 FNMA Pool #125477, 6.50%,
4/1/12 194,358
899,271 FNMA Pool #369085, 6.50%,
4/1/12 897,174
63,565 FNMA Pool #377181, 6.50%,
4/1/12 63,416
973,081 FNMA Pool #377379, 6.50%,
4/1/12 970,813
235,475 FNMA Pool #341078, 7.00%,
5/1/26 236,393
404,000 FNMA Pool #250576, 7.00%,
6/1/26 378,571
969,524 FNMA Pool #373510, 7.50%,
3/1/27 990,086
538,806 GNMA Pool #397233, 9.50%,
2/20/25 578,845
398,194 GNMA Pool #392995, 8.75%,
3/15/25 425,610
302,286 GNMA Pool #001991, 9.00%,
4/20/25 319,072
283,635 GNMA Pool #416856, 7.50%,
10/15/25 289,795
163,773 GNMA Pool #421254, 7.50%,
11/15/25 167,330
324,010 GNMA Pool #416761, 7.50%,
6/15/26 330,937
1,000,000 GNMA Pool #456569, 7.50%,
11/15/27 1,021,109
----------------------
TOTAL MORTGAGE-BACKED
SECURITIES -- 5.3% 11,272,369
----------------------
(Cost $11,030,839)
See Notes to Financial Statements
32 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
WHEN-ISSUED -- 0.2%
$ 300,000 FHLMC, 6.50%, 12/15/12,
settlement 12/15/97 $ 299,437
--------------------
(Cost $299,438)
ASSET-BACKED SECURITIES(4)
400,000 BankAmerica Manufactured
Housing Contract, Series
1997-2, Class A5, 6.39%,
12/10/12 400,500
500,000 CIT RV Trust, Series 1997-A,
Class A6, 6.35%, 4/15/11 498,750
500,000 Capital Equipment Receivables
Trust, Series 1997-1, Class A1,
5.79%, 12/3/98 500,000
400,000 Money Store (The) Home Equity
Trust, Series 1995-C, Class A9,
6.375%, 9/15/11 399,912
281,543 TEXTRON, Series 1997-A, Class
A1, 6.05%, 3/16/09 (Acquired
9/18/97, Cost $281,170)(2) 281,566
300,000 United Companies Financial Corp.,
Series 1997-C, Class A7,
6.85%, 1/15/29 302,520
----------------------
TOTAL ASSET-BACKED SECURITIES -- 1.1% 2,383,248
----------------------
(Cost $2,379,951)
CORPORATE BONDS
AEROSPACE & DEFENSE -- 0.3%
400,000 Lockheed Martin Corp., 6.85%,
5/15/01 406,000
200,000 Lockheed Martin Corp., 7.25%,
5/15/06 210,500
----------------------
616,500
----------------------
BANKING -- 0.9%
500,000 Bay View Capital Corp., 9.125%,
8/15/07 513,750
400,000 Citicorp, 7.125%, 5/15/06 413,500
400,000 Santander Financial Issuances Ltd.,
7.00%, 4/1/06 409,000
650,000 U.S. Bancorp (Del.), 7.625%,
5/1/05 689,812
----------------------
2,026,062
----------------------
Principal Amount Value
- -------------------------------------------------------------------------------------------
BROADCASTING & MEDIA -- 0.1%
$ 250,000 Fox Kids Worldwide Inc., 9.25%,
11/1/07 $ 239,375
----------------------
CHEMICALS & RESINS -- 0.1%
250,000 Texas Petrochemical Corp.,
11.125%, 7/1/01 275,000
----------------------
COMMUNICATIONS SERVICES -- 0.5%
250,000 360 Communications Co., 7.125%,
3/1/03 254,375
100,000 Tele-Communications Inc., 8.25%,
1/15/03 105,500
250,000 Teleport Communications Group
Inc., 7.86%, 7/1/07(5) 198,750
400,000 WorldCom, Inc., 7.55%, 4/1/04 417,000
----------------------
975,625
----------------------
COMPUTER SOFTWARE & SERVICES -- 0.1%
250,000 Unisys Corp., 12.00%, 4/15/03 283,125
----------------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 0.1%
250,000 DII Group Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(2) 248,750
----------------------
ENERGY (PRODUCTION & MARKETING) -- 1.3%
400,000 Enron Corp., 6.625%, 11/15/05 399,500
750,000 Oryx Energy Co., 8.375%,
7/15/04 809,063
300,000 Seagull Energy Corp., 7.50%,
9/15/27 307,125
500,000 Stone Energy Corp., 8.75%,
9/15/07 (Acquired 9/16/97,
Cost $496,415)(2) 501,250
200,000 Triton Energy Ltd., 8.75%,
4/15/02 209,000
500,000 United Meridian Corp., 10.375%,
10/15/05 542,500
----------------------
2,768,438
----------------------
ENERGY (SERVICES) -- 0.3%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 542,500
----------------------
FINANCIAL SERVICES -- 1.0%
400,000 Advanta Corp., MTN, Series B,
7.00%, 5/1/01 398,500
400,000 Comdisco Inc., 7.75%, 9/1/99 410,500
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 33
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
$ 400,000 Ford Motor Credit Co., 6.125%,
1/9/06 $ 389,500
200,000 Merrill Lynch & Co. Inc., 8.00%,
2/1/02 212,500
250,000 Metris Companies Inc., 10.00%,
11/1/04 (Acquired 11/4/97,
Cost $250,000)(2) 254,375
500,000 Wharf International Finance Ltd.,
7.625%, 3/13/07 (Acquired
3/6/97, Cost $496,045)(2) 496,250
----------------------
2,161,625
----------------------
FOOD & BEVERAGE -- 0.2%
250,000 Friendly Ice Cream, 10.50%,
12/1/07 252,500
125,000 RJR Nabisco Holdings Corp.,
8.75%, 4/15/04 133,438
----------------------
385,938
----------------------
HEALTHCARE -- 0.2%
500,000 Vencor Inc., 8.625%, 7/15/07
(Acquired 10/21/97, Cost
$509,375)(2) 493,750
----------------------
INSURANCE -- 0.2%
400,000 Aetna Services Inc., 6.75%,
8/15/01 407,500
----------------------
LEISURE -- 0.3%
100,000 Paramount Communications, Inc.,
7.50%, 1/15/02 101,750
100,000 Time Warner Inc., 8.11%,
8/15/06 107,875
350,000 Time Warner Inc., 6.85%,
1/15/26 359,187
----------------------
568,812
----------------------
METALS & MINING -- 0.4%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 99,500
400,000 Barrick Gold Corp., 7.50%,
5/1/07 423,000
250,000 Kaiser Aluminum & Chemical,
12.75%, 2/1/98 268,125
----------------------
790,625
----------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.2%
350,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $364,037)(2) 380,187
----------------------
Principal Amount Value
- -------------------------------------------------------------------------------------------
PAPER & FOREST PRODUCTS -- 0.1%
$ 150,000 Domtar, Inc., 8.75%, 8/1/06 $ 157,500
----------------------
RAILROAD -- 0.2%
450,000 Norfolk Southern Corp.,
7.90%, 5/15/97 504,000
----------------------
REAL ESTATE -- 0.2%
300,000 Spieker Properties, Inc.,
6.80%, 12/15/01 303,750
----------------------
RESTAURANTS -- 0.3%
500,000 Apple South Inc., 9.75%,
6/1/06 531,250
----------------------
RETAIL (GENERAL MERCHANDISE) -- 0.1%
150,000 Federated Department
Stores, 8.50%, 6/15/03 162,938
----------------------
STEEL -- 0.1%
250,000 Armco Inc., 9.00%, 9/15/07
(Acquired 9/9/97,
Cost $248,700)(2) 248,750
----------------------
TEXTILES & APPAREL -- 0.1%
250,000 Nine West Group Inc., 8.375%,
8/15/05 255,625
----------------------
TOBACCO -- 0.3%
450,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 453,938
220,000 Philip Morris Companies Inc.,
7.75%, 5/1/99 224,400
----------------------
678,338
----------------------
TRANSPORTATION -- 0.1%
250,000 Kitty Hawk Inc., 9.95%, 11/15/04
(Acquired 11/14/97, Cost
$250,000)(2) 252,500
----------------------
UTILITIES -- 0.6%
500,000 AES Corp., 8.50%, 11/1/07 496,250
400,000 CalEnergy Co. Inc., 7.63%,
10/15/07 404,000
400,000 Pacific Gas and Electric Company,
6.25%, 3/1/04 399,500
----------------------
1,299,750
----------------------
TOTAL CORPORATE BONDS -- 8.3% 17,558,213
----------------------
(Cost $17,199,549)
See Notes to Financial Statements
34 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: MODERATE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
SOVEREIGN GOVERNMENTS & AGENCIES
ESP 55,000,000 Bonos Y Oblig Del Estado,
10.50%, 10/30/03 $ 461,776
DEM 3,200,000 Bundesobligation, 5.875%,
5/15/00 1,871,732
4,750,000 Deutschland Republic, 6.00%,
9/15/03 2,806,635
FRF 2,000,000 France O.A.T., 6.75%,
10/25/03 367,557
CAD 1,300,000 Government of Canada,
7.25%, 6/1/03 993,454
FRF 4,000,000 Government of France, 8.50%,
4/25/03 786,679
JPY 430,000,000 Republic of Italy, 3.50%,
6/20/01 3,661,949
ITL 2,300,000,000 Republic of Italy, 6.75%,
2/1/07 1,413,902
GBP 975,000 United Kingdom Treasury,
8.00%, 6/10/03 1,739,303
----------------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES -- 6.7% 14,102,987
----------------------
(Cost $14,717,720)
COMMERCIAL PAPER(6)
BANKING -- 4.0%
$ 2,500,000 Bankers Trust New York Corp.,
5.60%, 4/16/98 2,446,695
1,000,000 Cibinong International Finance B.V.,
5.57%, 12/22/97 996,751
2,000,000 Generale Bank, Inc., 5.55%,
1/22/98 1,983,966
2,000,000 IMI Funding Corp., 5.51%,
1/23/98 1,983,776
1,000,000 Societe Generale, 5.39%, 1/5/98 994,604
----------------------
8,405,792
----------------------
COMPUTER SYSTEMS -- 0.4%
1,000,000 Hitachi Credit America Corp.,
5.56%, 3/5/98 985,043
----------------------
FINANCIAL SERVICES -- 1.6%
435,000 Corporate Receivables Corporation,
5.65%, 1/16/98 431,860
110,000 Hitachi Credit America Corp.,
5.60%, 12/23/97 109,624
Principal Amount Value
- -------------------------------------------------------------------------------------------
$ 900,000 Hitachi Credit America Corp.,
5.72%, 1/23/98 $ 892,421
2,000,000 Merrill Lynch & Co., Inc., 5.74%,
1/30/98 1,980,492
----------------------
3,414,397
----------------------
INSURANCE -- 2.6%
5,507,000 SAFECO Credit Company, 5.55%,
12/3/97 (Acquired 10/14/97,
Cost $5,505,302)(2) 5,505,302
----------------------
RETAIL (FOOD & DRUG) -- 1.2%
2,500,000 Southland Corporation, 5.60%,
1/21/98 2,480,167
----------------------
TOTAL COMMERCIAL PAPER -- 9.8% 20,790,701
----------------------
(Cost $20,791,930)
CERTIFICATES OF DEPOSIT -- 1.0%
2,000,000 Societe Generale, 5.63%,
12/31/97 1,999,982
----------------------
(Cost $1,999,982)
TEMPORARY CASH INVESTMENTS -- 1.8%
Repurchase Agreement, Merrill Lynch & Co.
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.70%, dated 11/28/97,
due 12/1/97 (Delivery value $3,801,805) 3,800,000
----------------------
(Cost $3,800,000)
TOTAL INVESTMENT SECURITIES -- 100.0% $211,325,803
=======================
(Cost $199,505,968)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- -------------------------------------------------------------------------
572,983 CHF 1/28/98 $ 407,237 $ 2,802
1,916,162 DEM 1/28/98 1,094,206 7,315
3,563,370 FRF 1/28/98 608,145 4,792
628,249 GBP 1/28/98 1,055,257 (1,778)
154,539,608 JPY 1/28/98 1,233,990 (10,229)
937,318 NLG 1/28/98 475,104 3,134
----------- -----------
$4,873,939 $ 6,036
=========== ===========
(Value on Settlement Date $4,879,975)
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: MODERATE 35
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
MTN = Medium Term Note
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
(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 November 30, 1997, was
$9,276,887, which represented 4.4% of net assets.
(3) Industry is less than 0.05% of total investment securities.
(4) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(5) Step-coupon security. Yield to maturity at purchase is indicated. These
securities become interest bearing at a predetermined rate and future date
and are purchased at a substantial discount from their value at maturity.
(6) The rates for commercial paper are the yield to maturity at purchase.
</TABLE>
See Notes to Financial Statements
36 STRATEGIC ALLOCATION: MODERATE AMERICAN CENTURY INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
TOTAL RETURNS AS OF NOVEMBER 30, 1997(1)
6 MONTHS 1 YEAR LIFE OF
FUND
- -------------------------------------------------------------------------------
INVESTOR CLASS (inception 2/15/96)
Strategic Allocation: Aggressive ..... 8.89% 13.84% 13.79%
S&P 500 .............................. 13.60% 28.56% 26.42%
Lehman Aggregate Bond Index .......... 6.55% 7.55% 7.63%(2)
Three-Month U.S. Treasury Bill ....... 2.55% 5.17% 5.15%(2)
- -------------------------------------------------------------------------------
ADVISOR CLASS (inception 10/2/96)
Strategic Allocation: Aggressive ..... 8.54% 13.43% 14.38%
S&P 500 .............................. 13.60% 28.56% 33.97%
Lehman Aggregate Bond Index .......... 6.55% 7.55% 10.05%
Three-Month U.S. Treasury Bill ....... 2.55% 5.17% 5.16%
(1) Returns for periods less than one year are not annualized.
(2) Return from 2/29/96, the date nearest the class's inception for which data
are available.
See pages 68, 72 and 73 for more information about returns, share classes, and
the comparative indices.
[line graph - data below]
GROWTH OF $10,000 OVER LIFE OF FUND (Investor Class)
$10,000 investment made 2/29/96*
Value on 11/30/97
Strategic: Lehman 3-Month
Aggressive S&P 500 Aggregate T-Bill
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
6/30/97 $12,063 $14,258 $10,801 $10,691
7/31/97 $12,774 $15,367 $11,092 $10,736
8/31/97 $12,408 $14,484 $10,998 $10,783
9/30/97 $13,078 $15,319 $11,160 $10,827
10/31/97 $12,571 $14,791 $11,322 $10,871
11/30/97 $12,692 $15,450 $11,374 $10,919
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 the other
class will vary due to differences in fee structures (see the Total Returns
table above).
The line representing the fund's total return includes operating expenses (such
as transaction costs and management fees) that reduce returns, while the
indices' total return lines do not.
* 2/29/96 is the date closest to Investor Class inception for which comparable
performance data exist. The class's actual inception date is 2/15/96.
[pie chart]
ASSET ALLOCATION AS OF NOVEMBER 30, 1997
Percent of Fund Investments
U.S. Stocks 55%
Foreign Stocks 17%
U.S. Bonds 13%
Foreign Bonds 7%
Money Market
Securities 8%
See page 72 for the fund's neutral asset mix.
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 37
STRATEGIC ALLOCATION: AGGRESSIVE
MANAGEMENT Q & A
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
American Century Strategic Allocation funds management team.
HOW DID THE FUND PERFORM?
For the fiscal year ended November 30, 1997, the fund's Investor Class
shares posted a total return of 13.84%, compared with the 15.23% return of the
fund's benchmark. The benchmark is composed of several market indexes, each
representing a specific asset type (e.g., domestic stocks), that are weighted to
match the fund's neutral asset mix. (See the Total Returns table on the previous
page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
It was the fund's U.S. stock holdings. Our stocks underperformed the broader
market overall, and we also underweighted domestic stocks for much of the fiscal
year.
WAS THIS A SIGNIFICANT ADJUSTMENT TO THE FUND'S ASSET MIX?
Not really. The fund's strategic approach dictates that we maintain a
relatively stable asset mix. Within this structure, we typically make some minor
adjustments in a narrow range around the fund's neutral mix of 75% stocks, 20%
bonds, and 5% cash.
In early 1997, we underweighted U.S. stocks--not by much, just a percent or
two below what we consider neutral--and overweighted foreign stocks. Volatility
in the domestic stock market was increasing, and we felt there were better
values in overseas markets.
Foreign stocks, especially those in Europe, performed well during the first
half of the year, so we took some profits in July and brought our foreign stock
allocation back to neutral.
Immediately following the dramatic U.S. stock market declines in late
October, we boosted our domestic stock allocation closer to neutral to take
advantage of what we felt were attractive buying opportunities. By the end of
the period, our only overweighted position was in cash (money market
securities).
ALTHOUGH THE FUND'S BOND ALLOCATION DIDN'T CHANGE MUCH DURING THE YEAR, THE
COMPOSITION OF ITS U.S. BOND HOLDINGS DID. CAN YOU EXPLAIN THESE CHANGES?
The benchmark index for the domestic bond portion of the fund's portfolio is
the Lehman Aggregate Bond Index, and our adjustments reflected an effort to
match the composition of the index.
Toward this end, we nearly doubled the fund's corporate bond holdings and
cut back on its Treasury securities (see the chart on page 40). We made most of
these adjustments toward the end of the fiscal year, when corporate bonds became
more attractive compared with Treasury securities.
Corporate bonds typically provide higher yields than Treasury securities,
which should enhance the fund's income stream. They should also increase the
volatility of the fund's bond component slightly.
HOW DID THE FINANCIAL MELTDOWN IN SOUTHEAST ASIA AFFECT THE FUND?
It had little effect on the fund, for two reasons. First, the foreign
component of the fund is typically around 25%, and Southeast Asian securities
make up an even smaller subset of this component. As a result, the price
declines of securities in this region had a limited impact on the fund's
performance.
Second, we underweighted our investments in the Far East because our
analysis of growth potential at individual companies gave us early warning of
the troubles ahead. Most foreign stock and bond indexes allocate about 30% to
the Asia/Pacific region, but we
38 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
devoted less than 10% of the fund's foreign holdings to this area. And the
majority of this was in Hong Kong, the largest, most stable market in the
region. Hong Kong's markets held up best among Southeast Asian countries during
the turmoil.
WITH REGARD TO THE FUND'S FOREIGN HOLDINGS, DID YOU DO ANY CURRENCY HEDGING?
Yes. We hedged around 25-35% of the fund's foreign holdings throughout the
fiscal year. With the dollar strengthening against most major foreign
currencies, gains earned on investments denominated in these currencies
translated into fewer dollars. We felt that our hedging strategy would provide a
suitable balance between offsetting currency losses and retaining the fund's
exposure to non-dollar-denominated investments.
WHAT ARE YOUR PLANS FOR THE FUND'S ASSET ALLOCATION STRUCTURE GOING FORWARD?
For the time being, we will likely continue its current positioning,
maintaining a roughly neutral asset mix. However, one change we may make in the
coming months is to cut back on our U.S. stock holdings.
Between 1994 and 1996, stock market volatility in the U.S. was relatively
low compared with historical norms. But in 1997, we've seen more volatility than
FUND'S U.S. STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 326
Dividend Yield 1.60%
Price/Earnings Ratio 27.1
% of Fund's % of
U.S. Stocks Fund
Top 5 U.S. Stocks
IBM Corp. 1.6% 0.9%
Bell Atlantic Corp. 1.6% 0.9%
First Union Corp. 1.3% 0.7%
Merck & Co., Inc. 1.3% 0.7%
Bristol-Myers Squibb Co. 1.2% 0.7%
FUND'S FOREIGN STOCKS AS OF NOVEMBER 30, 1997
Number of Companies 187
Dividend Yield 1.47%
% of Fund's % of
Country Foreign Stocks Fund
Top 5 Foreign Stocks
Novartis AG Switzerland 3.5% 0.6%
British Aerospace PLC UK 2.0% 0.3%
Newcourt Credit Group Inc. Canada 1.8% 0.3%
Credito Italiano Italy 1.6% 0.3%
Marschollek,
Lautenschlaeger und
Partner AG Germany 1.5% 0.3%
[pie chart]
Percent of Fund's Foreign Stocks
Europe 79%
Americas
(excluding U.S.) 10%
Asia/Pacific 10%
South Africa 1%
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 39
STRATEGIC ALLOCATION: AGGRESSIVE
normal, especially during the last half of the year. As a result, we feel the
need to be more selective in our domestic stock portion.
We may look to underweight domestic stocks and overweight cash in early
1998, but we hesitate to underweight more than a percent or two because economic
conditions remain favorable for U.S. stocks. Within the fund's U.S. stock
component, we also plan to emphasize stocks we feel are undervalued.
IN THE FUND'S SEMIANNUAL REPORT IN MAY, YOU TALKED FAVORABLY ABOUT EUROPEAN
STOCK MARKETS. DO YOU STILL LIKE THEM?
From a long-term perspective, we still like the markets in this region. We
believe that corporate restructuring, increased privatization and a greater
focus on the customer will boost productivity and corporate profits--as well as
stock prices--in Europe. However, economic difficulties stemming from both the
Southeast Asian crisis and the move toward European economic and monetary union
may weigh these stocks down in the short term.
WHAT ABOUT THE U.S. BOND MARKET?
U.S. bonds, especially Treasury securities, have rallied dramatically in the
last six months, primarily because of low inflation in the U.S. and demand from
foreign investors seeking a "safe haven" from global market volatility. The
problems in Southeast Asia could help bonds going forward--they could lead to
slower economic growth in the U.S. and more safe-haven demand from abroad.
The one potentially negative factor also comes from Asia--some countries in
the region, especially Japan, may be selling Treasurys to bring cash back home
and rebuild their currencies.
FUND'S U.S. BONDS AS OF NOVEMBER 30, 1997
Number of Securities 55
Weighted Average Maturity 12.7 years
Average Duration 4.6 years
[pie chart]
Percent of Fund's U.S. Bonds
Corporate Bonds 51%
U.S. Treasury Notes 21%
Mortgage-Backed
Securities 20%
Asset-Backed Securities 6%
U.S. Treasury Bonds 2%
FUND'S FOREIGN BONDS AS OF NOVEMBER 30, 1997
Number of Securities 17
Weighted Average Maturity 5.7 years
Average Duration 4.8 years
[pie chart]
Percent of Fund's Foreign Bonds
Europe 63%
Americas
(excluding U.S.) 37%
40 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
COMMON STOCKS & RIGHTS
<S> <C> <C>
AEROSPACE & DEFENSE -- 1.9%
5,500 Anaren Microwave, Inc.(1) $ 110,688
1,800 Boeing Co. 95,625
14,700 British Aerospace PLC ORD 401,202
4,100 Cobham PLC ORD 55,119
2,300 General Dynamics Corp. 199,238
6,300 Litton Industries, Inc.(1) 317,363
2,300 Lockheed Martin Corp. 224,394
4,200 Raytheon Co. 234,938
8,500 United Technologies Corp. 636,969
---------------------
2,275,536
---------------------
AGRICULTURE -- 0.3%
17,800 AgriBioTech, Inc.(1) 176,887
1,900 Pioneer Hi-Bred International, Inc. 194,038
---------------------
370,925
---------------------
AIRLINES -- 0.1%
400 AMR Corp.(1) 48,475
1,400 KLM Royal Dutch Air Lines
NV ORD 50,365
2,000 Ryanair Holdings plc ADR(1) 53,125
---------------------
151,965
---------------------
AUTOMOBILES & AUTO PARTS -- 1.4%
1,200 Bertrand Faure SA ORD 81,717
39,500 Britax International plc ORD 82,389
4,200 Dura Automotive Systems, Inc.(1) 109,462
12,700 Ford Motor Co. 546,100
2,800 General Motors Corp. 170,800
50 Georg Fischer AG ORD 68,719
100 Porsche AG ORD 155,373
10,200 Superior Industries International, Inc. 265,200
3,600 Tower Automotive, Inc.(1) 142,650
---------------------
1,622,410
---------------------
BANKING -- 6.0%
7,700 Amalgamated Banks of South
Africa ORD 47,387
7,200 Banc One Corp. 369,900
2,698 Banca Popolare di Bergamo
Credito Varesino SpA ORD(1) 43,182
11,500 Banca Popolare di Brescia ORD(1) 86,538
Shares Value
- -------------------------------------------------------------------------------------------
3,100 Bank of Nova Scotia ORD $ 134,551
3,400 BankAmerica Corp. 248,200
200 Bankers Trust New York Corp. 23,712
2,900 Bayerische Hypotheken-und
Wechsel-Bank AG ORD 125,801
4,100 Chase Manhattan Corp. 445,362
3,500 Citicorp 419,781
1,800 Credit Suisse Group ORD 263,165
118,700 Credito Italiano ORD 324,997
2,700 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 153,105
200 First Chicago NBD Corp. 15,650
17,400 First Union Corp. 848,250
9,100 First Virginia Banks, Inc. 435,094
5,000 HSBC Holdings plc ORD 120,629
7,000 Hansabank Ltd. ORD 53,307
300 Jyske Bank A/S ORD 31,694
40,000 Long-Term Credit Bank of Japan,
Ltd. (The) ORD 67,385
8,750 Mercantile Bancorporation Inc. 455,000
29,700 Merita OY Ltd. Cl A ORD 150,412
1,000 Morgan (J.P.) & Co. 114,187
9,700 NationsBank Corp. 582,606
10,200 Norwest Corp. 381,863
4,200 PNC Bank Corp. 226,013
6,590 Security Bank Corp. ORD(1) 3,394
6,800 Skandinaviska Enskilda Banken
ORD 80,140
1,400 Societe Generale ORD 184,033
6,800 Standard Chartered plc ORD 75,511
1,100 Sydbank A/S ORD 58,975
200 Union Bank of Switzerland ORD 254,540
4,500 Wachovia Corp. 346,500
---------------------
7,170,864
---------------------
BIOTECHNOLOGY -- 0.5%
1,600 Agouron Pharmaceuticals, Inc.(1) 61,250
7,300 Centocor, Inc.(1) 317,778
2,200 PAREXEL International Corp.(1) 75,625
3,700 PathoGenesis Corp.(1) 131,813
---------------------
586,466
---------------------
BROADCASTING & MEDIA -- 0.9%
5,900 CBS Corporation 177,000
3,600 Clear Channel Communications,
Inc.(1) 243,900
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 41
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
3,700 Flextech plc ORD (Acquired
6/26/97 through 10/27/97,
Cost $37,079)(1)(2) $ 35,150
5,100 Grupo Radio Centro S.A. de C.V.
ADR 75,863
802 Havas Advertising SA ORD 99,854
3,800 Heftel Broadcasting Corp.(1) 282,150
4,500 Jacor Communications, Inc.(1) 196,313
---------------------
1,110,230
---------------------
BUILDING & HOME IMPROVEMENTS -- 0.3%
30,500 Pilkington plc ORD 65,935
8,200 Premark International, Inc. 214,225
2,500 Royal Group Technologies Ltd.
ORD(1) 60,224
---------------------
340,384
---------------------
BUSINESS SERVICES & SUPPLIES -- 1.9%
900 AccuStaff, Inc.(1) 26,606
14,600 Bracknell Corp. ORD(1) 42,554
3,000 CGI Group, Inc. ORD(1) 84,279
7,400 Corrections Corp. of America(1) 256,225
2,200 DIS Deutscher Industrie Service
AG ORD(1) 87,326
1,100 Fugro N.V. ORD 37,635
4,200 Goode Durrant plc ORD 34,970
6,500 Hall, Kinion & Associates, Inc.(1) 115,375
9,700 Hays plc ORD 119,591
4,600 Kelly Services, Inc. 133,113
4,600 Lason, Inc.(1) 128,800
5,700 NCO Group, Inc.(1) 218,025
1,300 Olsten Corp. 19,337
6,075 Parity plc ORD 64,228
2,100 Quintiles Transnational Corp.(1) 163,669
3,250 Randstad Holdings N.V. ORD 120,679
5,448 Robert Walters plc ORD(1) 37,403
8,700 Select Appointments Holdings plc
ORD 85,222
1,800 Stork N.V. ORD 65,932
7,200 U.S. Filter Corp.(1) 225,900
2,000 Unique International NV ORD 43,069
700 VA Technologie AG ORD 105,427
---------------------
2,215,365
---------------------
Shares Value
- -------------------------------------------------------------------------------------------
CHEMICALS & RESINS -- 1.9%
1,100 Compagnie Francaise d'Etudes et
de Construction Technip ORD $ 114,038
2,600 Desc S.A. de C.V. 97,662
7,700 Dow Chemical Co. 760,375
2,400 du Pont (E.I.) de Nemours & Co. 145,350
8,900 Great Lakes Chemical Corp. 399,388
3,000 Lubrizol Corp. 117,000
4,400 Nalco Chemical Co. 170,775
4,100 Praxair, Inc. 180,144
3,400 Rhone-Poulenc ORD 152,857
2,400 VEBA AG ORD 142,625
---------------------
2,280,214
---------------------
COMMUNICATIONS EQUIPMENT -- 1.3%
3,900 Boston Technology, Inc.(1) 83,850
11,200 Cable & Wireless plc ORD 101,766
600 Comverse Technology, Inc.(1) 20,231
2,200 Ericsson (L.M.) Telephone Co. ADR 88,894
638,800 Ericsson Telecomunicacoes
S.A. ORD 22,171
4,800 Lucent Technologies Inc. 384,600
2,000 Motorola, Inc. 125,750
2,100 Newbridge Networks Corp.(1) 88,462
900 Nokia Corp. Cl A ADR 74,812
1,200 Northern Telecom Ltd. ORD 107,877
2,500 Orckit Communications Ltd.(1) 51,484
9,600 Scientific-Atlanta, Inc. 192,000
6,300 Tekelec(1) 238,613
---------------------
1,580,510
---------------------
COMMUNICATIONS SERVICES -- 4.1%
8,300 Airtouch Communications, Inc.(1) 325,775
690 Alcatel Alsthom Compagnie
Generale ORD 86,494
9,700 Ameritech Corp. 747,506
11,800 Bell Atlantic Corp. 1,053,150
4,700 BellSouth Corp. 257,325
4,200 France Telecom S.A. ADR(1) 152,250
9,300 Frontier Corp. 227,850
12,900 GTE Corp. 652,256
2 NTT Data Corp. ORD 97,160
1,800 Portugal Telecom SA ORD 82,908
7,400 SBC Communications Inc. 538,812
800 Telecel-Comunicacaoes Pessoais,
SA ORD(1) 73,252
See Notes to Financial Statements
42 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
1,000 Vimpel-Communications ADR(1) $ 30,500
16,800 Worldcom, Inc.(1) 538,125
---------------------
4,863,363
---------------------
COMPUTER PERIPHERALS -- 0.8%
1,700 Adaptec, Inc.(1) 84,097
3,500 Cisco Systems Inc.(1) 301,766
8,200 EMC Corp. (Mass.)(1) 248,563
2,700 Quantum Corp.(1) 71,634
4,900 SCI Systems, Inc.(1) 224,481
100 3Com Corp.(1) 3,622
---------------------
934,163
---------------------
COMPUTER SOFTWARE & SERVICES -- 2.9%
1,000 Adobe Systems Inc. 41,937
2,400 Advantage Learning Systems, Inc.(1) 55,650
2,000 CBT Group Plc ADR(1) 141,625
1,000 Cadence Design Systems, Inc.(1) 25,250
1,385 Cap Gemini SA ORD 118,011
2,100 Check Point Software
Technologies Ltd.(1) 94,894
2,000 Crystal Systems Solutions(1) 39,125
4,000 Dassault Systemes S.A. ADR 105,000
9,300 First Data Corp. 263,306
1,700 Formula Systems (1985) Ltd.
ORD(1) 56,194
1,000 Fuji Soft ABC, Inc. ORD 34,946
6,400 Geac Computer Corp. Ltd. ORD(1) 162,264
4,700 Getronics N.V. ORD 161,514
2,800 HBO & Co. 125,475
4,900 JBA Holdings Plc ORD 81,101
5,500 JDA Software Group, Inc.(1) 169,297
4,100 JetForm Corp.(1) 63,037
1,800 McAfee Associates, Inc. 82,237
2,700 Microsoft Corp.(1) 381,966
9,029 Misys plc ORD 254,660
6,100 Omtool Ltd.(1) 63,288
4,950 Oracle Systems Corp.(1) 164,742
4,120 Ordina Beheer N.V. ORD(1) 62,189
8,700 Oshap Technologies, Ltd.(1) 75,853
6,400 QuadraMed Corp.(1) 167,600
8,200 Sage Group plc (The) ORD 105,460
700 Shared Medical Systems Corp. 44,800
5,800 SPR Inc.(1) 92,800
Shares Value
- -------------------------------------------------------------------------------------------
1,300 Symantec Corp.(1) $ 32,541
3,000 Technomatix Technologies Ltd. ADR(1) 97,688
700 TT Tieto OY ORD 74,184
1,650 Veritas Software Corp.(1) 72,136
---------------------
3,510,770
---------------------
COMPUTER SYSTEMS -- 1.7%
9,100 Compaq Computer Corp.(1) 568,181
600 Dell Computer Corp.(1) 50,494
4,800 Digital Equipment Corp.(1) 236,400
12,100 Dimension Data Holdings Ltd. ORD(1) 52,300
9,700 International Business Machines
Corp. 1,062,756
1,000 OPTIMUS S.A. ORD(1) 25,202
---------------------
1,995,333
---------------------
CONSTRUCTION & PROPERTY
DEVELOPMENT -- 0.4%
4,600 Fluor Corp. 165,312
668 Grupo Acciona SA ORD(1) 118,285
7,000 Hutchison Whampoa Limited ORD 46,635
4,086 Nagron Nationaal Grondbezit N.V.
ORD 96,625
---------------------
426,857
---------------------
CONSUMER PRODUCTS -- 1.7%
6,600 Avon Products, Inc. 381,563
2,400 Colgate-Palmolive Co. 160,350
1,700 Electrolux AB Cl B ORD 133,860
3,300 Gillette Company 304,631
13,700 Helen of Troy Ltd.(1) 192,656
6,400 National Service Industries 299,600
4,300 Procter & Gamble Co. (The) 328,144
9,000 Shiseido Co., Ltd. ORD 121,998
1,600 Whirlpool Corp. 87,700
---------------------
2,010,502
---------------------
CONTROL & MEASUREMENT -- 0.6%
5,800 Aehr Test Systems(1) 54,194
2,200 Beckman Instruments, Inc. 86,075
1,600 Coherent, Inc.(1) 60,100
4,300 Emerson Electric Co. 236,500
1,000 Fluke Corp. 23,750
900 Keyence Corporation ORD 131,165
4,700 Molecular Dynamics, Inc.(1) 95,469
---------------------
687,253
---------------------
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 43
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
DIVERSIFIED COMPANIES -- 1.6%
4,401 Asko Oyj Cl A ORD(1) $ 84,200
20,000 Beijing Enterprises Holdings
Limited ORD(1) 52,650
5,900 Bodycote International plc ORD 94,912
400 Fiskars Oy AB Cl A ORD 42,953
5,100 General Electric Co. (U.S.) 376,125
28,900 General Electric Company plc ORD 188,160
196,000 Guangzhou Investments Company
Ltd. ORD 38,286
2,200 Hexagon AB ORD 62,682
7,374 Siebe plc ORD 134,129
17,400 Tyco International Ltd. 682,950
3,200 Unilever N.V. 185,800
---------------------
1,942,847
---------------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 3.3%
100 ABB AG ORD 133,020
5,100 AMP, Inc. 221,531
3,900 ANADIGICS, Inc.(1) 128,700
400 Analog Devices, Inc.(1) 12,550
1,800 Burr-Brown Corp.(1) 54,112
1,500 Draka Holding N.V. ORD 66,792
8,000 Fujikura Ltd. ORD 57,606
2,200 General Signal Corp. 89,787
4,300 Intel Corp. 333,922
6,400 Jabil Circuit, Inc.(1) 308,000
800 KLA-Tencor Corporation(1) 30,950
200 LSI Logic Corp.(1) 4,650
1,800 Leitch Technology Corp ORD(1) 47,407
2,300 Linear Technology Corp. 147,919
4,700 Microchip Technology Inc.(1) 164,059
15,000 Minebea Company Ltd. ORD 166,895
300 National Semiconductor Corp.(1) 9,938
1,000 Nintendo Co., Ltd. ORD 103,428
1,000 Phillips Electronics N.V. 67,000
1,200 Raychem Corp. 113,475
5,600 REMEC, Inc.(1) 129,500
400 Sanmina Corp.(1) 27,300
3,000 Shindengen Electric Manufacturing
ORD 23,154
1,400 Siemens AG ORD 82,206
6,800 Sipex Corp.(1) 215,050
Shares Value
- -------------------------------------------------------------------------------------------
300 SMART Modular Technologies, Inc.(1) $ 18,600
7,100 Solectron Corp.(1) 258,706
2,400 Sony Corp. ORD 204,976
5,600 Texas Instruments Inc. 275,800
14,900 Vari-L Co., Inc.(1) 147,138
7,500 Vitesse Semiconductor Corp.(1) 334,688
---------------------
3,978,859
---------------------
ENERGY (PRODUCTION & MARKETING) -- 3.7%
3,900 Amoco Corp. 351,000
4,100 Atlantic Richfield Co. 334,150
20,813 British-Borneo Petroleum
Syndicate plc ORD 155,895
6,600 British Petroleum Co. plc ORD 90,289
7,600 Burlington Resources Inc. 338,200
300 Cairn Energy plc ORD(1) 2,384
128,100 Centrais Eletricas Brasileiras S/A
ORD 59,702
5,300 Chevron Corp. 424,994
1,000 Elf Aquitaine SA ORD 116,037
4,600 EVI, Inc.(1) 236,612
9,300 Exxon Corp. 567,300
5,500 Murphy Oil Corp. 302,500
1,000 NICOR Inc. 40,250
1,500 Philips Petroleum Co. 72,656
2,900 Remington Energy Ltd. ORD(1) 48,474
2,900 Talisman Energy, Inc. ORD(1) 85,237
5,300 Texaco Inc. 299,450
4,200 Ultramar Diamond Shamrock Corp. 127,838
11,000 Unocal Corp. 437,938
16,400 Woodside Petroleum Limited ORD 117,687
4,800 YPF Sociedad Anonima ADR 161,100
---------------------
4,369,693
---------------------
ENERGY (SERVICES) -- 1.9%
300 AO Tatneft ADR 37,950
300 BJ Services Co.(1) 21,544
7,400 Berkley Petroleum Corp. ORD(1) 68,343
2,600 Canadian Fracmaster Ltd. ORD 37,890
3,000 Companie Generale de
Geophysique SA ADR(1) 64,875
1,563 Det Sondenfjelds-Norske
Dampskibsselskab Cl A ORD(1) 30,645
4,800 Diamond Offshore Drilling, Inc. 239,400
8,300 Expro International Group plc ORD 82,495
See Notes to Financial Statements
44 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
1,500 Global Marine Inc.(1) $ 39,469
2,700 Hvide Marine, Inc.(1) 76,444
1,300 IHC Caland N.V. ORD 69,268
11,400 Input/Output, Inc.(1) 294,975
2,600 Key Energy Group, Inc.(1) 63,213
800 Lukoil Holding ADR 61,000
800 Marine Drilling Companies, Inc.(1) 18,225
2,100 Noble Drilling Corp.(1) 63,131
300 Petroleum Geo-Services ASA ORD(1) 19,315
1,000 Rowan Companies, Inc.(1) 34,000
500 Schoeller-Bleckmann Oilfield
Equipment AG ORD(1) 55,603
1,500 Smedvig ASA Cl A ORD 40,048
400 Smedvig ASA Cl B ORD 10,123
3,300 Smith International, Inc.(1) 211,200
7,200 Tidewater Inc. 403,650
1,800 Transocean Offshore 85,387
5,000 Trico Marine Services, Inc.(1) 139,687
---------------------
2,267,880
---------------------
ENVIRONMENTAL SERVICES -- 0.9%
3,600 American Disposal Services, Inc.(1) 128,700
6,200 Superior Services Inc.(1) 145,700
1,600 Tomra Systems ASA ORD 41,160
7,590 USA Waste Services, Inc.(1) 250,944
17,700 WMX Technologies, Inc. 435,863
5,200 Waste Industries, Inc.(1) 104,975
---------------------
1,107,342
---------------------
FINANCIAL SERVICES -- 4.0%
12,600 Amvescap Plc ORD 91,079
17,900 Banco Ambrosiano Veneto S.p.A.
ORD 58,646
17,900 Banco Ambrosiano Veneto S.p.A.
Rights for Bonds ORD(1) 9,429
17,900 Banco Ambrosiano Veneto S.p.A.
Rights for Stock ORD(1) 65,070
2,700 Bayerische Vereinsbank AG ORD 160,377
2,000 Bear Stearns Companies Inc. 83,000
5,700 Close Brothers Group plc ORD 47,412
23,400 Corp. Financiera Reunida, S.A. ORD 123,992
2,800 Deutsche Bank AG ORD 179,575
2,600 Equitable Companies Inc. 123,987
10,900 Fannie Mae 575,656
Shares Value
- -------------------------------------------------------------------------------------------
1,200 Green Tree Financial Corp. $ 36,750
25,400 Grupo Financiero Banamex Accival,
SA de CV Cl B ORD(1) 55,788
6,388 ING Groep N.V. ORD 259,698
1,000 Investec Holdings Limited ORD 39,354
4,600 Investor's Group, Inc. ORD 126,643
110 Julius Baer Holding AG ORD 179,335
4,522 Kempen & Company NV ORD 178,605
1,900 Lehman Brothers Holdings, Inc. 96,069
13,600 Lloyds TSB Group plc ORD 155,041
2,800 Merrill Lynch & Co., Inc. 196,525
8,270 Morgan Stanley, Dean Witter,
Discover & Co. 449,164
11,080 Newcourt Credit Group Inc. ORD
(Acquired 2/15/96 through
11/18/97, Cost $274,902)(2) 349,788
420 Newcourt Credit Group, Inc.
Subscription Receipts ORD(1) 13,126
2,700 OM Gruppen AB ORD 101,755
11,000 Peregrine Investments Holdings
Limited ORD 10,815
2,900 Promise Co., Ltd. ORD 160,196
400 SLM Holding Corp. 51,650
3,400 Skandia Forsakrings AB ORD 179,214
11,250 Travelers Group, Inc. 568,125
100 Vontobel Holding AG Cl B ORD 75,731
---------------------
4,801,595
---------------------
FOOD & BEVERAGE -- 1.9%
6,600 American Italian Pasta Co. Cl A(1) 155,925
16,377 Archer-Daniels-Midland Co. 350,058
700 Coca-Cola Company (The) 43,750
700 Hershey Foods Corp. 42,962
17,800 IBP, Inc. 406,063
14,500 J.D. Wetherspoon plc ORD 75,426
300 Lancaster Colony Corp. 15,047
160 Nestle S.A. ORD 235,383
8,100 Northland Cranberries, Inc. 113,653
700 OY Hartwall AB ORD 58,297
2,700 Panamerican Beverages Inc. Cl A 92,475
800 Raisio Group plc ORD 91,984
1,800 Richfood Holdings, Inc. 49,163
1,900 Smithfield Foods, Inc.(1) 67,094
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 45
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
5,600 Smucker (J.M.) Co. $ 138,600
7,600 Universal Foods Corp. 315,400
---------------------
2,251,280
---------------------
FURNITURE & FURNISHINGS -- 0.1%
600 Ethan Allen Interiors Inc. 23,100
800 Miller (Herman), Inc. 40,500
---------------------
63,600
---------------------
HEALTHCARE -- 0.8%
5,800 Columbia/HCA Healthcare Corp. 171,100
7,000 Concentra Managed Care, Inc.(1) 237,344
1,650 Health Management Associates,
Inc.(1) 40,425
3,900 Humana Inc.(1) 86,531
1,000 Lincare Holdings Inc.(1) 56,250
10,050 Quorum Health Group, Inc.(1) 242,456
1,100 Tenet Healthcare Corp.(1) 34,856
600 United HealthCare Corp. 31,238
2,400 Wellpoint Health Networks Inc.(1) 110,400
---------------------
1,010,600
---------------------
INDUSTRIAL EQUIPMENT &
MACHINERY -- 1.0%
44,000 Ashtead Group plc ORD 127,073
3,100 Caterpillar Inc. 148,606
5,200 Cooper Industries, Inc. 268,450
3,000 Dresser Industries, Inc. 112,125
4,500 Ingersoll-Rand Co. 183,937
400 Mannesmann AG ORD 186,221
2,800 Pfeiffer Vacuum Technology AG
ADR(1) 82,600
3,600 Powerscreen International plc ORD 40,037
---------------------
1,149,049
---------------------
INSURANCE -- 3.6%
4,300 Aetna Life and Casualty Co. 324,112
8,500 Allstate Corp. 729,937
2,000 American International Group, Inc. 201,625
100 Argonaut Group, Inc. 3,300
2,343 Assurantieconcern Stad Rotterdam
ORD 120,480
3,641 Axa-UAP ORD 264,226
300 CIGNA Corp. 50,175
2,800 CNA Financial Corp.(1) 343,000
4,400 Chubb Corp. (The) 312,125
Shares Value
- -------------------------------------------------------------------------------------------
3,900 Companhia de Seguros Mundial
Confianca, SA ORD(1) $ 65,252
13,900 Conseco Inc. 647,219
1,400 Gallagher (Arthur J.) & Co. 50,050
800 General Re Corp. 158,800
600 ITT Hartford Group, Inc. 50,250
2,474 Liberty Life Association of Africa
Ltd. ORD 62,633
1,300 Lincoln National Corp. 92,787
4,700 Pohjola Insurance Group Cl B ORD 176,316
6,400 SAFECO Corp. 314,000
3,600 Sampo Insurance Company Ltd.
ORD 113,442
600 Selective Insurance Group, Inc. 30,413
1,100 St. Paul Companies, Inc. 88,000
1,800 UNUM Corp. 85,387
---------------------
4,283,529
---------------------
LEISURE -- 0.8%
1,290 Accor SA ORD 243,870
9,100 Corporacion Interamericana de
Entretenimiento S.A. ORD(1) 62,266
800 Doubletree Corp.(1) 35,150
5,800 Eastman Kodak Co. 351,625
1,500 HFS, Inc.(1) 102,938
39,300 Ladbroke Group plc ORD 178,545
---------------------
974,394
---------------------
MACHINERY & EQUIPMENT -- 0.6%
5,000 ATS Automation Tooling Systems,
Inc. ORD(1) 166,099
1,300 Applied Materials, Inc.(1) 42,859
3,900 BT Industries AB ORD(1) 74,752
4,500 Rental Service Corp.(1) 113,063
220 Rieter Holdings Ltd. ORD 95,954
1,000 Swisslog Holding AG ORD 76,608
300 Timken Co. 10,631
3,300 Veeco Instruments Inc.(1) 131,072
---------------------
711,038
---------------------
MEDICAL EQUIPMENT & SUPPLIES -- 1.0%
6,400 AmeriSource Health Corp.(1) 414,400
4,800 Cyberonics, Inc.(1) 54,600
1,500 Datascope Corp.(1) 38,062
1,900 Guidant Corp. 122,075
4,000 Hillenbrand Industries, Inc. 178,250
See Notes to Financial Statements
46 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
437 LVL Medical ORD(1) $ 45,008
1,400 Ortivus AB Cl B ORD 50,223
3,900 Sabratek Corp.(1) 100,669
4,600 Spectra-Physics AB ORD 117,063
5,000 Terumo Corporation ORD 78,355
1,400 US Surgical Corp. 36,925
----------------------
1,235,630
----------------------
METALS & MINING -- 0.6%
3,700 Aalberts Industries N.V. ORD(1) 94,013
4,900 Arch Coal Inc. 128,931
7,900 Homestake Mining Co. 82,950
3,200 Johnson Matthey PLC ORD 29,644
2,600 Kaynar Technologies Inc.(1) 69,225
700 Parker-Hannifin Corp. 31,150
4,500 Reynolds Metals Co. 256,219
700 Zeigler Coal Holding Co. 11,112
100 Zurn Industries, Inc. 3,425
----------------------
706,669
----------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.7%
5,700 Kronos Inc.(1) 176,700
8,700 Xerox Corp. 675,881
----------------------
852,581
----------------------
PACKAGING & CONTAINERS -- 0.1%
1,900 Crown Cork & Seal Co., Inc. 92,744
----------------------
PAPER & FOREST PRODUCTS -- 0.5%
7,900 Chesapeake Corp. 270,575
800 Pope & Talbot, Inc. 13,200
2,700 Rayonier, Inc. 131,963
4,000 Westvaco Corp. 130,500
----------------------
546,238
----------------------
PERSONAL SERVICES(3)
300 CUC International Inc.(1) 8,625
----------------------
PHARMACEUTICALS -- 4.5%
5,100 Allergan, Inc. 172,762
8,300 Bristol-Myers Squibb Co. 777,087
300 Christian Hansen Holding
A/S Cl B ORD 34,179
2,600 Dura Pharmaceuticals, Inc.(1) 113,750
4,100 Glaxo Wellcome plc ADR 187,319
11,200 Lilly (Eli) & Co. 706,300
Shares Value
- -------------------------------------------------------------------------------------------
11,600 Mallinckrodt Inc. $ 429,200
1,400 McKesson Corp. 156,625
500 Medicis Pharmaceutical Corp.(1) 21,562
8,700 Merck & Co., Inc. 822,694
440 Novartis AG ORD 702,840
1,841 Novo Nordisk A/S Cl B ORD 225,372
1,000 Richter Gedeon Rt. GDR
(Acquired 6/24/97, Cost
$87,250)(2) 94,432
24 Roche Holding AG ORD 214,739
5,000 Takeda Chemical Inds. ORD 146,131
3,600 Warner-Lambert Co. 503,550
2,300 Zeneca Group plc ORD 73,416
----------------------
5,381,958
----------------------
PRINTING & PUBLISHING -- 0.8%
8,800 Banta Corp. 222,200
2,800 Deluxe Corp. 98,875
1,300 Meredith Corp. 45,338
11,500 Mondadori (Arnoldo) Editore SpA
ORD 91,198
18,700 Pearson plc ORD 260,555
1,500 Sondagsavisen A/S ORD(1) 67,017
9,000 VNU Tijdschriftengroep Nederland
ORD 215,547
----------------------
1,000,730
----------------------
RAILROAD -- 0.5%
6,900 CSX Corp. 360,956
2,400 Canadian National Railway
Company ORD 123,889
4,200 Railtrack Group PLC ORD 70,579
----------------------
555,424
----------------------
REAL ESTATE -- 0.1%
6,700 Cambridge Shopping Centres Ltd.
ORD (Acquired 8/7/97, Cost
$70,730)(2) 71,289
5,100 Castellum AB ORD(1) 47,886
----------------------
119,175
----------------------
RESTAURANTS -- 0.7%
7,100 CKE Restaurants, Inc. 266,694
9,500 Compass Group PLC ORD 113,274
1,400 Fine Host Corp.(1) 41,519
4,100 Logan's Roadhouse, Inc.(1) 73,416
1,800 McDonald's Corp. 87,300
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 47
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares Value
- -------------------------------------------------------------------------------------------
3,500 PizzaExpress plc ORD $ 49,624
5,300 Rainforest Cafe, Inc.(1) 190,137
---------------------
821,964
---------------------
RETAIL (APPAREL) -- 1.0%
1,080 Burlington Coat Factory
Warehouse Corp. 20,182
2,000 Hennes & Mauritz AB Cl B ORD 92,469
3,600 Jones Apparel Group, Inc.(1) 175,500
1,000 Liz Claiborne, Inc. 50,250
8,200 Ross Stores, Inc. 321,850
7,500 Shoe Carnival, Inc.(1) 68,906
9,800 Stage Stores, Inc.(1) 412,213
1,200 TJX Companies, Inc. (The) 41,400
---------------------
1,182,770
---------------------
RETAIL (FOOD & DRUG) -- 1.3%
4,100 Albertson's, Inc. 181,937
3,600 CVS Corp. 238,950
1,200 Circle K Japan Co., Ltd. ORD 60,270
19,700 Giant Food Inc. Cl A 664,875
8,841 Koninklijke Ahold NV ORD 235,760
4,300 Metro Cash & Carry Limited ORD 4,027
3,000 Universal Corp. 118,688
---------------------
1,504,507
---------------------
RETAIL (GENERAL MERCHANDISE) -- 2.2%
9,000 Consolidated Stores Corp.(1) 437,625
14,300 Dillard's Inc. Cl A 522,844
2,500 Ellerine Holdings Limited ORD 17,392
15,350 Family Dollar Stores, Inc. 425,003
700 Federated Department Stores, Inc.
(NEW)(1) 31,894
6,500 Fred's, Inc. 159,250
4,100 Kohl's Corp.(1) 296,737
20,600 Next Plc ORD 257,456
4,000 Penney (J.C.) Company, Inc. 257,000
300 Pinault-Printemps-Redoute SA
ORD 153,473
2,100 Trade House GUM ADR (Acquired
8/15/97 through 9/10/97,
Cost $19,163)(2) 16,538
---------------------
2,575,212
---------------------
RETAIL (SPECIALTY) -- 0.8%
7,800 Action Performance Cos. Inc.(1) $ 224,737
2,800 Fastenal Company 149,100
3,800 Hasbro, Inc. 110,437
5,400 Home Depot, Inc. 302,063
5,100 Party City Corp.(1) 145,988
---------------------
932,325
---------------------
STEEL -- 0.1%
5,400 Bethlehem Steel Corporation(1) 55,350
500 LTV Corp. 5,562
1,300 Vallourec SA ORD 78,551
---------------------
139,463
---------------------
TEXTILES & APPAREL -- 0.4%
3,300 Dexter Corp. (The) 131,381
10,600 Fruit of the Loom, Inc.(1) 247,113
1,100 Polo Ralph Lauren Corp.(1) 29,700
1,600 Timberland Co. (The)(1) 124,600
---------------------
532,794
---------------------
TOBACCO -- 0.7%
17,100 Philip Morris Companies Inc. 743,850
1,400 RJR Nabisco, Inc. 51,013
---------------------
794,863
---------------------
TRANSPORTATION -- 0.6%
5,100 AirNet Systems Inc.(1) 103,275
11,200 Allied Holdings, Inc.(1) 220,500
600 Finnlines OY ORD 23,859
4,000 Internatio-Muller NV ORD 122,969
2,600 Smit Internationale NV ORD(1) 73,912
2,500 XTRA Corp. 131,875
---------------------
676,390
---------------------
UTILITIES -- 1.8%
2,600 Black Hills Corp. 82,713
400 Columbia Gas System, Inc. (The) 29,100
169,514 Companhia de Saneamento Basico
do Estado de Sao Paulo ORD 39,425
17,800 Entergy Corp. 462,800
12,500 Florida Progress Corp. 442,969
900 General Public Utilities Corp. 35,550
3,500 NIPSCO Industries, Inc. 163,844
300 Pacific Enterprises 10,613
10,100 Texas Utilities Co. 404,000
See Notes to Financial Statements
48 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Shares/Principal Amount Value
- -------------------------------------------------------------------------------------------
1,861 Unified Energy Systems GDR(1) $ 42,570
10,100 Union Electric Co. 402,106
----------------------
2,115,690
----------------------
TOTAL COMMON STOCKS & RIGHTS -- 71.3% 84,820,568
----------------------
(Cost $75,401,231)
PREFERRED STOCKS
CHEMICALS & RESINS -- 0.2%
3,238 Henkel KGaA ORD 199,035
----------------------
COMPUTER SOFTWARE & SERVICES -- 0.1%
600 SAP AG ORD 184,746
----------------------
CONSUMER PRODUCTS -- 0.1%
110 Wella Aktiengesellschaft ORD 79,217
----------------------
ENERGY (PRODUCTION & MARKETING) -- 0.1%
296,669 Petroleo Brasileiro S/A ORD 64,453
----------------------
FINANCIAL SERVICES -- 0.2%
1,229 Marschollek, Lautenschlaeger und
Partner AG ORD 303,853
----------------------
TOTAL PREFERRED STOCKS -- 0.7% 831,304
----------------------
(Cost $596,256)
U.S. TREASURY SECURITIES
$ 675,000 U.S. Treasury Notes, 6.375%,
3/31/01 685,125
190,000 U.S. Treasury Notes, 6.625%,
7/31/01 194,572
775,000 U.S. Treasury Notes, 7.50%,
5/15/02 823,437
925,000 U.S. Treasury Notes, 5.75%,
8/15/03 919,219
400,000 U.S. Treasury Notes, 5.875%,
11/15/05 398,625
250,000 U.S. Treasury Notes, 6.625%,
5/15/07 262,656
225,000 U.S. Treasury Bonds, 6.75%,
8/15/26 243,984
----------------------
TOTAL U.S. TREASURY SECURITIES -- 3.0% 3,527,618
----------------------
(Cost $3,426,000)
Principal Amount Value
- -------------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES(4)
$ 100,000 FHLMC, 7.09%, 11/24/06 $ 100,079
200,000 FNMA, 7.00%, 2/20/07 205,164
400,000 FNMA MTN, 7.49%, 5/22/07 409,760
391,465 FNMA Pool #377181, 6.50%,
4/1/12 390,552
94,275 FNMA Pool #250576, 7.00%,
6/1/26 94,643
969,524 FNMA Pool #373510, 7.50%,
3/1/27 990,086
214,716 GNMA Pool #397233, 9.50%,
2/20/25 230,672
159,278 GNMA Pool #392995, 8.75%,
3/15/25 170,244
141,818 GNMA Pool #416856, 7.50%,
10/15/25 144,898
145,900 GNMA Pool #372335, 7.50%,
4/15/26 149,019
141,395 GNMA Pool #402682, 7.50%,
6/15/26 144,418
----------------------
TOTAL MORTGAGE-BACKED
SECURITIES -- 2.5% 3,029,535
----------------------
(Cost $2,966,468)
ASSET-BACKED SECURITIES(4)
100,000 BankAmerica Manufactured
Housing Contract, Series
1997-2, Class A5, 6.39%,
12/10/12 100,125
100,000 CIT RV Trust, Series 1997-A, Class
A6, 6.35%, 4/15/11 99,750
500,000 Capital Equipment Receivables
Trust, Series 1997-1, Class A1,
5.79%, 12/3/98 500,000
100,000 TEXTRON, Series 1997-A, Class
A1, 6.05%, 3/16/09 (Acquired
9/18/97, Cost $93,274)(2) 93,855
100,000 United Companies Financial Corp.,
Series 1997-C, Class A7,
6.85%, 1/15/29 100,840
----------------------
TOTAL ASSET-BACKED SECURITIES -- 0.8% 894,570
----------------------
(Cost $893,630)
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 49
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
CORPORATE BONDS
AEROSPACE & DEFENSE -- 0.3%
$ 300,000 Lockheed Martin Corp., 7.25%,
5/15/06 $ 315,750
---------------------
AIRLINES -- 0.1%
150,000 United Air Lines, 9.00%,
12/15/03 166,312
---------------------
BANKING -- 0.8%
500,000 Bay View Capital Corp., 9.125%,
8/15/07 513,750
300,000 Citicorp, 7.125%, 5/15/06 310,125
100,000 Santander Financial Issuances Ltd.,
7.00%, 4/1/06 102,250
---------------------
926,125
---------------------
COMMUNICATIONS SERVICES -- 0.5%
150,000 360 Communications Co., 7.125%,
3/1/03 152,625
100,000 Tele-Communications Inc., 8.25%,
1/15/03 105,500
250,000 Teleport Communications Group
Inc., 7.86%, 7/1/07(5) 198,750
100,000 WorldCom, Inc., 7.55%, 4/1/04 104,250
---------------------
561,125
---------------------
ELECTRICAL & ELECTRONIC
COMPONENTS -- 0.5%
350,000 Anixter International Inc., 8.00%,
9/15/03 368,375
250,000 DII Group Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(2) 248,750
---------------------
617,125
---------------------
ENERGY (PRODUCTION & MARKETING) -- 1.5%
100,000 Enron Corp., 6.625%, 11/15/05 99,875
525,000 Oryx Energy Co., 8.375%,
7/15/04 566,344
100,000 Seagull Energy Corp., 7.50%,
9/15/27 102,375
250,000 Stone Energy Corp., 8.75%,
9/15/07 (Acquired 9/16/97,
Cost $248,208)(2) 250,625
Principal Amount Value
- -------------------------------------------------------------------------------------------
$ 200,000 Triton Energy Ltd., 8.75%,
4/15/02 $ 209,000
500,000 United Meridian Corp., 10.375%,
10/15/05 542,500
---------------------
1,770,719
---------------------
ENERGY (SERVICES) -- 0.4%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 542,500
---------------------
FINANCIAL SERVICES -- 0.6%
100,000 Advanta Corp., MTN, Series B,
7.00%, 5/1/01 99,625
100,000 General Motors Acceptance Corp.,
8.50%, 2/4/02 107,875
500,000 Wharf International Finance Ltd.,
7.625%, 3/13/07 (Acquired
3/6/97, Cost $496,045)(2) 496,250
---------------------
703,750
---------------------
HEALTHCARE -- 0.4%
500,000 Tenet Healthcare Corp., 7.875%,
1/15/03 513,750
---------------------
INSURANCE -- 0.1%
100,000 Aetna Services Inc., 6.75%,
8/15/01 101,875
---------------------
LEISURE -- 0.4%
125,000 Time Warner Inc., 8.11%, 8/15/06 134,844
350,000 Time Warner Inc., 6.85%, 1/15/26 359,187
---------------------
494,031
---------------------
OFFICE EQUIPMENT & SUPPLIES -- 0.1%
100,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $104,024)(2) 108,625
---------------------
REAL ESTATE -- 0.2%
275,000 Spieker Properties, Inc., 6.80%,
12/15/01 278,438
---------------------
RETAIL (GENERAL MERCHANDISE) -- 0.2%
200,000 Federated Department Stores,
8.50%, 6/15/03 217,250
---------------------
TEXTILES & APPAREL -- 0.2%
250,000 Worldtex Inc., 9.625%, 12/15/07
(Acquired 11/20/97, Cost
$250,000)(2) 252,812
---------------------
See Notes to Financial Statements
50 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
TOBACCO -- 0.3%
$ 300,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 $ 302,625
-----------------------
UTILITIES -- 0.1%
100,000 Pacific Gas and Electric Company,
6.25%, 3/1/04 99,875
-----------------------
TOTAL CORPORATE BONDS -- 6.7% 7,972,687
-----------------------
(Cost $7,765,109)
SOVEREIGN GOVERNMENTS & AGENCIES
$ 500,000 Argentine Discount Notes, VRN,
6.875%, 5/28/98, resets
semi-annually off the 6-month
LIBOR plus 0.8125% with no
caps 407,812
250,000 Brazil NMB L, VRN, 6.75%, 4/15/98, resets
semi-annually off the 6-month LIBOR plus
0.875% with no caps 197,500
DEM 1,300,000 Bundesobligation, 5.875%,
5/15/00 760,391
2,000,000 Deutschland Republic, 6.00%,
9/15/03 1,181,741
FRF 1,500,000 France O.A.T., 6.75%, 10/25/03 275,668
CAD 800,000 Government of Canada, 7.25%,
6/01/03 611,357
FRF 1,500,000 Government of France, 8.50%,
4/25/03 295,004
$ 100,000 Quebec Province, 8.80%,
4/15/03 110,500
250,000 Republic of Argentina, 6.69%, 3/31/98, resets
semi-annually off the 6-month LIBOR plus
0.8125% with no caps 212,400
250,000 Republic of Brazil EI, VRN, 6.69%, 4/15/98,
resets semi-annually off the 6-month LIBOR plus
0.8125% with no caps 207,944
JPY 160,000,000 Republic of Italy, 3.50%,
6/20/01 1,362,586
ITL 1,000,000,000 Republic of Italy, 6.75%,
2/1/07 614,740
Principal Amount Value
- -------------------------------------------------------------------------------------------
GBP 350,000 United Kingdom Treasury,
8.00%, 6/10/03 $ 624,365
$ 250,000 United Mexican States,
8.50%, 9/15/02 250,625
518,000 United Mexican States
Recoverable Rights, 0%,
6/30/03 0
500,000 United Mexican States, VRN, 6.62%, 5/4/98,
semi-annually off the 6-month LIBOR plus
0.8125% with no caps 456,250
678,570 Venezuela FLIRB, VRN, 6.75%, 3/31/98, resets
semi-annually off the 6-month LIBOR plus
0.875% with no caps 598,838
----------------------
TOTAL SOVEREIGN GOVERNMENTS &
AGENCIES -- 6.9% 8,167,721
-----------------------
(Cost $8,454,110)
COMMERCIAL PAPER(6)
BANKING -- 3.2%
1,000,000 Cibinong International Finance B.V.,
5.57%, 12/22/97 996,751
2,000,000 Generale Bank, Inc., 5.55%,
1/22/98 1,983,966
900,000 IMI Funding Corp., 5.51%,
1/23/98 892,699
-------------------------
3,873,416
-------------------------
FINANCIAL SERVICES -- 0.6%
700,000 Ford Motor Credit Co., 5.63%,
1/6/98 696,059
-------------------------
RETAIL (FOOD & DRUG) -- 1.7%
2,000,000 Southland Corporation, 5.53%,
12/12/97 1,996,621
-------------------------
TOTAL COMMERCIAL PAPER -- 5.5% 6,566,096
-------------------------
(Cost $6,566,096)
See Notes to Financial Statements
ANNUAL REPORT STRATEGIC ALLOCATION: AGGRESSIVE 51
SCHEDULE OF INVESTMENTS
STRATEGIC ALLOCATION: AGGRESSIVE
NOVEMBER 30, 1997
Principal Amount Value
- -------------------------------------------------------------------------------------------
WHEN-ISSUED--0.1%
$ 100,000 FHLMC, 6.50%, 12/15/12,
settlement 12/15/97 $ 99,813
----------------------
(Cost $99,812)
TEMPORARY CASH INVESTMENTS--2.5%
Repurchase Agreement, Merrill Lynch & Co.
Inc., (U.S. Treasury obligations), in a joint
trading account at 5.70%, dated 11/28/97,
due 12/1/97 (Delivery value $3,001,425) 3,000,000
----------------------
(Cost $3,000,000)
TOTAL INVESTMENT SECURITIES -- 100.0% $118,909,912
=======================
(Cost $109,168,712)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- --------------------------------------------------------------------------
431,137 CHF 1/28/98 $ 306,423 $2,108
1,044,139 DEM 1/28/98 596,245 3,986
2,300,806 FRF 1/28/98 392,669 3,094
414,879 GBP 1/28/98 696,864 (1,174)
79,001,415 JPY 1/28/98 630,822 (5,229)
682,340 NLG 1/28/98 345,862 2,282
------------- --------------
$2,968,885 $5,067
============= ==============
(Value on Settlement Date $2,973,952)
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
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
LIBOR = London Interbank Offered Rate
MTN = Medium Term Note
NLG = Netherlands Guilder
ORD = Foreign Ordinary Share
VRN = Variable Rate Note. Interest reset date is indicated and used in
calculating the weighted average portfolio maturity. Rate shown is
effective November 30, 1997.
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.
(1) Non-income producing.
(2) Security was purchased under Rule 144A of the Securities Act of 1933 and,
unless registered under the Act or exempted from registration, may only be
sold to qualified institutional investors. The aggregate value of
restricted securities at November 30, 1997, was $2,018,114, which
represented 1.7% of the net assets.
(3) Industry is less than 0.05% of total investment securities.
(4) Final maturity indicated. Expected remaining maturity used for purposes of
calculating the weighted average portfolio maturity.
(5) Step-coupon security. Yield to maturity at purchase is indicated. These
securities become interest bearing at a predetermined rate and future date
and are purchased at a substantial discount from their value at maturity.
(6) The rates for commercial paper are the yield to maturity at purchase.
</TABLE>
See Notes to Financial Statements
52 STRATEGIC ALLOCATION: AGGRESSIVE AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
NOVEMBER 30, 1997 CONSERVATIVE MODERATE AGGRESSIVE
ASSETS
<S> <C> <C> <C>
Investment securities, at value
(identified cost of $159,525,505,
$199,505,968 and $109,168,712,
respectively) (Note 3) .............. $166,278,503 $211,325,803 $118,909,912
Foreign currency holdings, at value
(identified cost of $9,617, $20,107
and $24,128, respectively) .......... 9,578 19,958 23,949
Cash .................................. 77,470 398,443 216,266
Receivable for investments sold ....... 982,420 1,699,194 1,085,492
Receivable for forward foreign
currency exchange contracts ......... 8,885 18,043 11,470
Dividends and interest receivable ..... 1,167,793 1,171,893 507,280
------------ ------------ ------------
168,524,649 214,633,334 120,754,369
------------ ------------ ------------
LIABILITIES
Disbursements in excess of
demand deposit cash ................. 3,850,984 42,920 115,360
Payable for forward foreign
currency exchange contracts ......... 5,741 12,007 6,403
Payable for investments purchased ..... 3,515,893 4,338,256 2,859,262
Payable for capital shares redeemed ... 32,717 93,258 65,355
Accrued management fees (Note 2) ...... 131,153 185,747 112,833
Distribution fees payable (Note 2) .... 867 1,754 1,645
Service fees payable (Note 2) ......... 867 1,754 1,645
Other liabilities ..................... 632 289 222
------------ ------------ ------------
7,538,854 4,675,985 3,162,725
------------ ------------ ------------
Net assets ............................ $160,985,795 $209,957,349 $117,591,644
============ ============ ============
NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) $145,806,246 $190,638,783 $102,897,383
Undistributed net investment income ... 1,196,127 1,264,693 1,580,834
Accumulated undistributed net realized
gain from investment and foreign
currency transactions ............... 7,226,850 6,225,881 3,365,487
Net unrealized appreciation on
investments and translation
of assets and liabilities in
foreign currencies (Note 3) ......... 6,756,572 11,827,992 9,747,940
------------ ------------ ------------
$160,985,795 $209,957,349 $117,591,644
============ ============ ============
Investor Class, $0.01 Par Value
Net assets ............................ $156,732,674 $201,383,992 $109,496,510
Shares outstanding .................... 28,257,401 33,678,240 17,527,824
Net asset value per share ............. $ 5.55 $ 5.98 $ 6.25
Advisor Class, $0.01 Par Value
Net assets ............................ $ 4,253,121 $ 8,573,357 $ 8,095,134
Shares outstanding .................... 765,500 1,434,843 1,298,802
Net asset value per share ............. $ 5.56 $ 5.98 $ 6.23
</TABLE>
See Notes to Financial Statements
ANNUAL REPORT STATEMENTS OF ASSETS AND LIABILITIES 53
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
YEAR ENDED NOVEMBER 30, 1997 CONSERVATIVE MODERATE AGGRESSIVE
INVESTMENT INCOME
Income:
<S> <C> <C> <C>
Interest .......................... $ 3,013,038 $ 3,777,271 $ 1,623,289
Dividends (net of foreign taxes
withheld of $12,005, $43,958,
and $35,793, respectively) ...... 539,913 1,295,486 895,216
------------ ------------ ------------
3,552,951 5,072,757 2,518,505
------------ ------------ ------------
Expenses (Note 2):
Management fees ................... 792,805 1,565,328 1,072,780
Distribution fees - Advisor Class . 10,165 19,544 16,202
Shareholder services
fees - Advisor Class ............ 10,165 19,544 16,202
Directors' fees and expenses ...... 2,029 1,172 755
------------ ------------ ------------
815,164 1,605,588 1,105,939
------------ ------------ ------------
Net investment income ............. 2,737,787 3,467,169 1,412,566
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND
FOREIGN CURRENCY (NOTE 3)
Net realized gain on:
Investments ....................... 8,230,549 6,360,828 3,679,975
Foreign currency transactions ..... 75,790 342,109 232,394
------------ ------------ ------------
8,306,339 6,702,937 3,912,369
------------ ------------ ------------
Change in net unrealized
appreciation on:
Investments ....................... (2,091,828) 7,936,474 6,697,018
Translation of assets and
liabilities in foreign currencies (3,613) (8,675) (6,466)
------------ ------------ ------------
(2,095,441) 7,927,799 6,690,552
------------ ------------ ------------
Net realized and unrealized
gain on investments and
foreign currency ................ 6,210,898 14,630,736 10,602,921
------------ ------------ ------------
Net Increase in Net Assets
Resulting from Operations ......... $ 8,948,685 $ 18,097,905 $ 12,015,487
============ ============ ============
</TABLE>
See Notes to Financial Statements
54 STATEMENTS OF OPERATIONS AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
YEAR ENDED NOVEMBER 30, 1997 CONSERVATIVE MODERATE AGGRESSIVE
AND PERIOD ENDED NOVEMBER 30, 1996
Increase in Net Assets 1997 1996(1) 1997 1996(1) 1997 1996(1)
- ---------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income ............ $ 2,737,787 $ 439,906 $ 3,467,169 $ 675,244 $ 1,412,566 $ 312,027
Net realized gain (loss) on
investments and
foreign currency
transactions ................... 8,306,339 60,039 6,702,937 (5,837) 3,912,369 (315,887)
Change in net unrealized
appreciation on investments
and translation of assets and
liabilites in foreign currencies (2,095,441) 1,392,058 7,927,799 3,900,193 6,690,552 3,057,388
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations ...... 8,948,685 1,892,003 18,097,905 4,569,600 12,015,487 3,053,528
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS
From net investment income:
Investor Class ................. (1,635,899) (233,977) (2,707,084) (397,443) (334,675) --
Advisor Class .................. (118,709) -- (152,937) -- (40,079) --
From net realized gain from
investment transactions:
Investor Class ................. (1,061,595) -- (80,982) -- -- --
Advisor Class .................. (70,914) -- (10,493) -- -- --
------------- ------------- ------------- ------------- ------------- -------------
Decrease in net assets
from distributions ............. (2,887,117) (233,977) (2,951,496) (397,443) (374,754) --
------------- ------------- ------------- ------------- ------------- -------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)
Net increase in net assets from
capital share transactions ..... 117,841,280 35,424,921 129,408,618 61,230,165 53,802,871 49,094,512
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets ....... 123,902,848 37,082,947 144,555,027 65,402,322 65,443,604 52,148,040
Net Assets
Beginning of period .............. 37,082,947 -- 65,402,322 -- 52,148,040 --
------------- ------------- ------------- ------------- ------------- -------------
End of period .................... $ 160,985,795 $ 37,082,947 $ 209,957,349 $ 65,402,322 $ 117,591,644 $ 52,148,040
============= ============= ============= ============= ============= =============
Undistributed net
investment income .............. $ 1,196,127 $ 192,595 $ 1,264,693 $ 266,895 $ 1,580,834 $ 301,109
============= ============= ============= ============= ============= =============
</TABLE>
- ----------
(1) February 15, 1996 (inception) through November 30, 1996.
See Notes to Financial Statements
ANNUAL REPORT STATEMENTS OF CHANGES IN NET ASSETS 55
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION--American Century Strategic Asset Allocations, Inc. (the
Corporation) (formerly Twentieth Century Strategic Asset Allocations, Inc.) is
registered under the Investment Company Act of 1940 as an open-end diversified
management investment company. American Century Strategic Allocation:
Conservative (Strategic Allocation: Conservative), American Century Strategic
Allocation: Moderate (Strategic Allocation: Moderate) and American Century
Strategic Allocation: Aggressive (Strategic Allocation: Aggressive) (the Funds)
are three of the funds currently issued by the Corporation. 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 Fund. The Funds are
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 net assets of the class to
which such shares belong, and have identical voting, dividend, liquidation and
other rights and the same terms and conditions, except for class specific
expenses and exclusive rights to vote on matters affecting only individual
classes. 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 accretion of discounts and amortization of 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 collateral, represented by securities, received
in a
56 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
repurchase transaction be transferred to the custodian in a manner sufficient to
enable the Funds to obtain those securities in the event of a default under the
repurchase agreement. ACIM monitors, on a daily basis, the 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, 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.
On December 19, 1997, Strategic Allocation: Conservative, Strategic
Allocation: Moderate and Strategic Allocation: Aggressive declared and paid a
distribution from net investment income to shareholders of record on that date
of $0.0560, $0.0451 and $0.0892 for the Investor Class, respectively, and
$0.0541, $0.0450 and $0.0738 for the Advisor Class, respectively. Also, on
December 19, 1997, the Funds declared and paid a distribution from net realized
gain on investments to shareholders of record on that date of $0.2581, $0.1951
and $0.2085 for both classes, respectively.
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.
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>
The Board of Directors has adopted the Advisor Class Master Distribution and
Shareholder Services Plan (the Plan), pursuant to Rule 12b-1 of the Investment
Company Act of 1940. The Plan provides that the Funds will pay ACIM an annual
distribution fee equal to 0.25% and service fee equal to 0.25%. The fees are
computed daily and paid monthly based
ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 57
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
on the Advisor Class's average daily closing net assets during the previous
month. The distribution fee provides compensation for distribution expenses
incurred by financial intermediaries in connection with distributing shares of
the Advisor Class including, but not limited to, payments to brokers, dealers,
and financial institutions that have entered into sales agreements with respect
to shares of the Funds. The service fee provides compensation for shareholder
and administrative services rendered by ACIM, its affiliates or independent
third party providers. Fees incurred under the Plan during the period ended
November 30, 1997, were $20,330 in Strategic Allocation: Conservative, $39,088
in Strategic Allocation: Moderate and $32,404 in Strategic Allocation:
Aggressive.
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 transfer agent, American Century Services Corporation, and the
registered broker-dealer, American Century Investment Services, Inc.
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 1997 were as follows:
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
PURCHASES
Investment Securities
other than
U.S. Government &
Agency Obligations ........ $88,235,256 $223,686,988 $149,646,073
U.S. Government &
Agency Obligations ........ 19,408,491 35,193,391 9,250,576
PROCEEDS FROM SALES
Investment Securities
other than
U.S. Government
& Agency Obligations ...... $68,505,883 $128,994,156 $102,022,014
U.S. Government &
Agency Obligations ........ 11,197,928 18,588,588 7,106,026
On November 30, 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 STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Appreciation ................ $8,541,009 $14,706,536 $11,593,413
Depreciation ................ (2,195,525) (3,690,785) (2,517,929)
------------- ------------ ------------
Net ......................... $6,345,484 $11,015,751 $9,075,484
============= ============ ============
Federal Tax Cost ............$159,933,019 $200,310,052 $109,834,428
============= ============ ============
58 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
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. 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
Year ended November 30, 1997
<S> <C> <C> <C> <C> <C> <C>
Sold ............................ 15,110,838 $80,391,536 32,728,841 $184,160,266 15,672,301 $90,016,196
Issued in acquisition (Note 5) .. 15,634,044 84,083,213 - - - -
Issued in reinvestment of
distributions ................. 493,328 2,628,610 492,287 2,759,037 61,577 333,753
Redemptions ..................... (9,277,253) (49,311,307) (10,218,993) (57,762,540) (6,568,831) (38,102,524
----------- ------------ ------------ ------------ ---------- -----------
Net increase .................... 21,960,957 $117,792,052 23,002,135 $129,156,763 9,165,047 $52,247,425
=========== ============ ============ ============ ========== ===========
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
Year ended November 30, 1997
Sold ............................ 502,309 $2,650,382 941,573 $5,242,310 937,541 $5,585,021
Issued in reinvestment of
distributions ................. 35,677 189,621 29,539 163,429 7,395 40,079
Redeemed ........................ (528,140) (2,790,775) (933,292) (5,153,884) (707,493) (4,069,654)
----------- ------------ ------------ ------------ ---------- -----------
Net increase .................... 9,846 $49,228 37,820 $251,855 237,443 $1,555,446
=========== ============ ============ ============ ========== ===========
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
=========== ============ ============ ============ ========== ===========
</TABLE>
- ----------
(1) Inception of the Funds.
(2) Commencement of sale of the Advisor Class.
ANNUAL REPORT NOTES TO FINANCIAL STATEMENTS 59
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
5. REORGANIZATION PLAN
On August 29, 1997, Strategic Allocation: Conservative acquired all of the
net assets of the American Century Capital Manager Fund (Capital Manager),
pursuant to a plan of reorganization approved by the acquired fund's
shareholders on July 30, 1997. Strategic Allocation: Conservative is the
surviving fund for the purposes of maintaining the financial statements and
performance history in the post- reorganization.
The acquisition was accomplished by a tax-free exchange of 15,634,044
Investor Class shares of Strategic Allocation: Conservative for 6,911,352 shares
of Capital Manager, outstanding on August 29, 1997. The net assets of Strategic
Allocation: Conservative and Capital Manager immediately before the acquisitions
were $69,616,379 and $84,083,213, respectively. Capital Manager's net assets,
including unrealized appreciation of $7,459,955, were combined with that of
Strategic Allocation: Conservative. Immediately after the acquisition, the
combined net assets of Strategic Allocation: Conservative were $153,699,592.
60 NOTES TO FINANCIAL STATEMENTS AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: CONSERVATIVE
For a Share Outstanding Throughout the Year Ended November 30, 1997 (except as noted)
Investor Class Advisor Class
1997 1996(1) 1997 1996(2)
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(3) .... 0.19 0.13 0.17 0.03
Net Realized and
Unrealized Gain on
Investment Transactions ..... 0.36 0.22 0.38 0.14
------------- ------------ ----------- -----------
Total From Investment
Operations .................. 0.55 0.35 0.55 0.17
------------- ------------ ----------- -----------
Distributions
From Net
Investment Income ........... (0.17) (0.09) (0.16) --
From Net Realized Gain
on Investment Transactions .. (0.09) -- (0.09) --
------------- ------------ ----------- -----------
Total Distributions ......... (0.26) (0.09) (0.25) --
------------- ------------ ----------- -----------
Net Asset Value, End of Period $ 5.55 $ 5.26 $ 5.56 $ 5.26
============= ============ =========== ===========
Total Return(4) ............. 10.87% 7.02% 10.77% 3.34%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......... 1.00% 1.01%(5) 1.25% 1.25%(5)
Ratio of Net Investment Income
to Average Net Assets ......... 3.48% 3.67%(5) 3.23% 3.25%(5)
Portfolio Turnover Rate ....... 124%(6) 44% 124% 44%
Average Commission Paid per
Share of Equity Security Traded $ 0.0322 $ 0.0271 $ 0.0322 $ 0.0271
Net Assets, End
of Period (in thousands) ...... $ 156,733 $ 33,110 $ 4,253 $ 3,973
</TABLE>
- ----------
(1) February 15, 1996 (inception) through November 30, 1996.
(2) October 2, 1996 (commencement of sale of the Advisor Class) through
November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are
not annualized.
(5) Annualized.
(6) Purchases, sales, and the market value of securities for the American
Century Capital Manager Fund prior to the merger were excluded from the
portfolio turnover calculation. See note 5 in Notes to Financial
Statements.
See Notes to Financial Statements
ANNUAL REPORT FINANCIAL HIGHLIGHTS 61
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: MODERATE
For a Share Outstanding Throughout the Year Ended November 30, 1997
(except as noted)
Investor Class Advisor Class
1997 1996(1) 1997 1996(2)
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(3) ...... 0.14 0.10 0.12 0.02
Net Realized and
Unrealized Gain on
Investment Transactions ....... 0.56 0.39 0.56 0.16
------------- ------------ ----------- -----------
Total From Investment
Operations .................... 0.70 0.49 0.68 0.18
------------- ------------ ----------- -----------
Distributions
From Net Investment Income .... (0.13) (0.07) (0.11) --
From Net Realized Gain
on Investment Transactions .... (0.01) -- (0.01) --
------------- ------------ ----------- -----------
Total Distributions ........... (0.14) (0.07) (0.12) --
------------- ------------ ----------- -----------
Net Asset Value, End of Period .. $ 5.98 $ 5.42 $ 5.98 $ 5.42
============= ============ =========== ===========
Total Return(4) ............... 13.02% 9.91% 12.72% 3.44%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ........... 1.10% 1.10%(5) 1.35% 1.35%(5)
Ratio of Net Investment Income to
Average Net Assets ............ 2.43% 2.52%(5) 2.18% 2.10%(5)
Portfolio Turnover Rate ......... 119% 78% 119% 78%
Average Commission Paid per
Share of Equity Security Traded . $ 0.0102 $ 0.0186 $ 0.0102 $ 0.0186
Net Assets, End
of Period (in thousands) ........ $ 201,384 $ 57,836 $ 8,573 $ 7,566
</TABLE>
- ----------
(1) February 15, 1996 (inception) through November 30, 1996.
(2) October 2, 1996 (commencement of sale of the Advisor Class) through
November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are
not annualized.
(5) Annualized.
See Notes to Financial Statements
62 FINANCIAL HIGHLIGHTS AMERICAN CENTURY INVESTMENTS
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
STRATEGIC ALLOCATION: AGGRESSIVE
For a Share Outstanding Throughout the Year Ended November 30, 1997
(except as noted)
Investor Class Advisor Class
1997 1996(1) 1997 1996(2)
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(3) .... 0.09 0.07 0.07 0.01
Net Realized and Unrealized
Gain on Investment
Transactions ................ 0.67 0.46 0.67 0.15
------------- ------------ ----------- -----------
Total From Investment
Operations .................. 0.76 0.53 0.74 0.16
------------- ------------ ----------- -----------
Distributions
From Net Investment Income .. (0.04) -- (0.04) --
------------- ------------ ----------- -----------
Net Asset Value, End of Period $ 6.25 $ 5.53 $ 6.23 $ 5.53
============= ============ =========== ===========
Total Return(4) ............. 13.84% 10.60% 13.43% 2.98%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ......... 1.20% 1.20%(5) 1.45% 1.45%(5)
Ratio of Net Investment Income
to Average Net Assets ......... 1.58% 1.72%(5) 1.33% 1.31%(5)
Portfolio Turnover Rate ....... 135% 64% 135% 64%
Average Commission Paid per
Share of Equity Security Traded $ 0.0091 $ 0.0202 $ 0.0091 $ 0.0202
Net Assets, End
of Period (in thousands) ...... $ 109,497 $ 46,276 $ 8,095 $ 5,872
</TABLE>
- ----------
(1) February 15, 1996 (inception) through November 30, 1996.
(2) October 2, 1996 (commencement of sale of the Advisor Class) through
November 30, 1996.
(3) Computed using average shares outstanding throughout the period.
(4) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are
not annualized.
(5) Annualized.
See Notes to Financial Statements
ANNUAL REPORT FINANCIAL HIGHLIGHTS 63
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders,
American Century Strategic Assets Allocations, Inc:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of American Century Strategic
Allocation: Conservative, American Century Strategic Allocation: Moderate and
American Century Stategic Allocation: Aggressive (the "Funds"), comprising
American Century Strategic Asset Allocations, Inc. (formerly Twentieth Century
Strategic Asset Allocations, Inc.), as of November 30, 1997, and the related
statements of operations and changes in net assets for the year then ended, and
the financial highlights for the year then ended. These financial statements and
the financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits. The financial statements and the
financial highlights of the Funds for the period February 15, 1996 (inception)
through November 30, 1996 were audited by other auditors whose report, dated
January 3, 1997, expressed an unqualified opinion on those statements and
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at November
30, 1997 by correspondence with the custodian, brokers and, when replies were
not received, other alternate auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of American Century
Strategic Allocation: Conservative, American Century Strategic Allocation:
Moderate and American Century Stategic Allocation: Aggressive as of November 30,
1997, the results of their operations, the changes in their net assets, and the
financial highlights for the year then ended in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
January 13, 1998
64 INDEPENDENT AUDITORS' REPORT AMERICAN CENTURY INVESTMENTS
PROXY VOTING RESULTS
An annual meeting of shareholders was held on July 30, 1997, to vote on the
following proposals. All of the proposals received the required majority of
votes and were adopted.
A summary of voting results is listed below each proposal.
PROPOSAL 1:
To elect a Board of Directors of nine members to hold office for the ensuing
year or until their successors are elected and qualified.
CONSERVATIVE MODERATE AGGRESSIVE
James E. Stowers, Jr.
For: 8,979,620 18,263,703 12,703,622
Withheld: 10,929 262,632 78,875
James E. Stowers III
For: 8,979,620 18,263,135 12,703,843
Withheld: 10,929 263,200 78,654
Thomas A. Brown
For: 8,979,620 18,264,107 12,705,026
Withheld: 10,929 262,228 77,471
Robert W. Doering, M.D.
For: 8,975,654 18,263,102 12,698,471
Withheld: 14,895 263,233 84,026
D.D. (Del) Hock
For: 8,979,329 18,264,633 12,681,582
Withheld: 11,220 261,702 100,915
Linsley L. Lundgaard
For: 8,979,620 18,261,016 12,696,871
Withheld: 10,929 265,319 85,626
Donald H. Pratt
For: 8,979,620 18,265,456 12,705,984
Withheld: 10,929 260,879 76,513
Lloyd T. Silver, Jr.
For: 8,979,620 18,263,102 12,700,021
Withheld: 10,929 263,233 82,476
M. Jeannine Strandjord
For: 8,979,620 18,264,107 12,702,889
Withheld: 10,929 262,228 79,608
PROPOSAL 2:
To vote on approval of a Management Agreement with American Century
Investment Management, Inc.
CONSERVATIVE
INVESTOR ADVISOR
For: 8,150,057 738,198
Against: 9,902 0
Abstain: 10,962 0
Broker Non-Vote: 81,430 -
MODERATE
INVESTOR ADVISOR
For: 16,945,860 1,344,041
Against: 53,718 0
Abstain: 172,911 0
Broker Non-Vote: 9,805 -
AGRESSIVE
INVESTOR ADVISOR
For: 11,532,434 1,038,354
Against: 75,836 0
Abstain: 57,393 0
Broker Non-Vote 78,480 -
ANNUAL REPORT PROXY VOTING RESULTS 65
PROXY VOTING RESULTS
PROPOSAL 3:
To vote on the selection by the Board of Directors of Deloitte & Touche LLP
as independent auditors for the Corporation.
<TABLE>
CONSERVATIVE MODERATE AGGRESSIVE
<S> <C> <C> <C>
For: 8,965,213 18,471,175 12,660,052
Against: 14,374 48,357 68,665
Abstain: 10,962 6,803 53,780
PROPOSAL 4:
To vote on the adoption of standardized investment limitations.
* Eliminate the fundamental investment limitation concerning diversification of
investments.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,564 14,162,575 8,444,490
Against: 2,202,900 4,171,052 4,188,352
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning the issuance of senior
securities.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,685,438 14,140,904 8,419,954
Against: 2,212,026 4,192,723 4,211,254
Abstain: 11,655 182,903 72,809
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning borrowing.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,695,248 14,156,050 8,435,122
Against: 2,202,216 4,177,577 4,197,720
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning lending.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,695,248 14,155,885 8,435,030
Against: 2,202,216 4,177,742 4,197,812
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning concentration of
investments in a particular industry.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,564 14,166,589 8,447,413
Against: 2,202,900 4,167,038 4,185,429
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Eliminate the fundamental investment limitation regarding investments in
illiquid securities.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,562 14,160,908 8,442,150
Against: 2,202,902 4,172,719 4,190,692
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning investments in real
estate.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,562 14,176,281 8,455,729
Against: 2,202,902 4,157,346 4,177,113
Abstain: 11,655 182,903 71,175
Broker
Non-Vote: 81,430 9,805 78,480
66 PROXY VOTING RESULTS AMERICAN CENTURY INVESTMENTS
PROXY VOTING RESULTS
* Amend the fundamental investment limitation concerning underwriting.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,564 14,169,526 8,449,351
Against: 2,202,900 4,162,179 4,179,595
Abstain: 11,655 184,825 75,071
Broker
Non-Vote: 81,430 9,805 78,480
* Amend the fundamental investment limitation concerning commodities.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,562 14,161,719 8,444,870
Against: 2,202,902 4,170,172 4,187,972
Abstain: 11,655 184,639 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Eliminate the fundamental limitation concerning short sales.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,681,662 14,132,888 8,415,389
Against: 2,215,802 4,199,003 4,217,453
Abstain: 11,655 184,639 71,175
Broker
Non-Vote: 81,430 9,805 78,480
* Eliminate the fundamental investment limitation concerning margin purchases
of securities.
CONSERVATIVE MODERATE AGGRESSIVE
For: 6,694,704 14,158,737 8,442,184
Against: 2,202,760 4,173,154 4,190,658
Abstain: 11,655 184,639 71,175
Broker
Non-Vote: 81,430 9,805 78,480
</TABLE>
The following proposal was voted on by the shareholders of the Benham
Capital Manager Fund. See Note 5 in the Notes to Finanical Statements.
PROPOSAL 1:
To vote on the approval of a plan of reorganization.
For: 4,314,070
Against: 319,184
Abstain: 77,113
ANNUAL REPORT PROXY VOTING RESULTS 67
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.
Now more share purchases are made by investors through financial
intermediaries (who ordinarily are compensated for the additional services they
provide). In September 1996, American Century began to offer two classes of
shares for 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 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 also 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 is 0.25% higher than the total expense ratio
of the Investor Class.
Both classes of shares represent a pro rata interest in the funds and
generally have the same rights and preferences.
IMPORTANT NOTICE FOR ALL IRA AND 403(B) SHAREHOLDERS
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
Conversions/ Redemptions 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.
SHARE CLASS AND RETIREMENT
68 ACCOUNT INFORMATION AMERICAN CENTURY INVESTMENTS
NOTES
ANNUAL REPORT NOTES 69
NOTES
70 NOTES AMERICAN CENTURY INVESTMENTS
NOTES
ANNUAL REPORT NOTES 71
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 provide a small amount of income and help
cushion the share price volatility of the stock portion.
COMPARATIVE INDICES
The indices listed below are used in the report to serve 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(reg.tm)) 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.
THE FUNDS' NEUTRAL ASSET MIXES*
CON MOD AGG
Stocks 40% 60% 75%
Bonds 45% 30% 20%
Cash (money market securities) 15% 10% 5%
INVESTMENT TEAM LEADERS
Lead Managers Jeff Tyler
Brian Howell
* 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.
72 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 61-63.
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 ASSET-BACKED SECURITIES--debt securities that represent ownership in a pool of
receivables, such as credit card debt, auto loans or mortgages.
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).
ANNUAL REPORT GLOSSARY 73
[american century logo]
American
Century(reg.sm)
P.O. BOX 419200
KANSAS CITY, MISSOURI
64141-6200
INVESTOR SERVICES:
1-800-345-2021 OR 816-531-5575
AUTOMATED INFORMATION LINE:
1-800-345-8765
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 OR 816-444-3485
FAX: 816-340-7962
INTERNET: WWW.AMERICANCENTURY.COM
AMERICAN CENTURY STRATEGIC ASSET ALLOCATIONS, INC.
INVESTMENT MANAGER
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
(c) 1998 AMERICAN CENTURY SERVICES CORPORATION FUNDS DISTRIBUTOR, INC.
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