[front cover] NOVEMBER 30, 1998
ANNUAL REPORT
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AMERICAN CENTURY
[graphic of glasses]
AMERICAN CENTURY GROUP
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STRATEGIC ALLOCATION:
CONSERVATIVE
MODERATE
AGGRESSIVE
[american century logo(reg.sm)]
American
Century
[inside front cover]
AMERICAN CENTURY BROKERAGE
- --------------------------------------------------------------------------------
We're pleased to introduce American Century's new brokerage service, which
offers a wide range of investment options and features:
* FundChoice Service--Invest in over 8,000 no-load and load mutual funds
from hundreds of different fund companies, many with no transaction fees
* Buy individual stocks and bonds
* 24-hour Internet and automated phone trades are just $24.95 for up to
1,000 shares of stock, and 2 cents per share thereafter
* Strong research capability
* Build and track model portfolios
* Get news, quotes and charts
* Check free Standard & Poor's stock reports
* Access Wall Street on Demand(tm), a research service with more than
500,000 reports on industry trends, corporate earnings, and mutual fund
analysis
* Track your brokerage account on one easy-to-read statement
* Unlimited check writing and a Gold MasterCard(reg.tm) ATM/debit card with
an American Century Brokerage Access AccountSM (minimum $10,000)
To talk with a Brokerage Associate, call 1-888-345-2071.
WHAT'S NEW . . .
AMERICAN CENTURY CATALOG OF TOOLS & SERVICES lists all the free educational
materials available to investors.
We now have FOUR-PAGE PROFILES of many of our funds. The profiles follow a
standard SEC format and are intended to allow investors to compare funds
easily. You can request a profile or the full prospectus. Full prospectuses
contain more detailed fund information and you will continue to receive one
after investing.
In 1999, we will provide SIMPLIFIED PROSPECTUSES that highlight important
information about our funds, including fees and expenses. More detailed data
will be in the Statement of Additional Information.
To order any of these materials, please call 1-800-345-2021.
[left margin]
AMERICAN CENTURY GROUP
STRATEGIC ALLOCATION: CONSERVATIVE
(TWSCX)
- ----------------------------------
AMERICAN CENTURY GROUP
STRATEGIC ALLOCATION: MODERATE
(TWSMX)
- ----------------------------------
AMERICAN CENTURY GROUP
STRATEGIC ALLOCATION: AGGRESSIVE
(TWSAX)
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Our Message to You
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/photo of James E. Stowers III and James E. Stowers, Jr./
James E. Stowers III, seated, with James E. Stowers, Jr.
The year ended November 30, 1998, was an eventful one in the global
financial markets. Weakening economic and financial conditions, brought on by
problems in Asia, Russia, and Latin America, led to significant stock market
volatility and a dramatic decline in interest rates. Volatility was so rampant
that the Federal Reserve (the U.S. central bank) cut interest rates three times
to help stabilize markets worldwide.
The third quarter of 1998 served as a good example of the markets'
extremes. Several major U.S. stock indices hit record highs in mid-July before
plunging 20-25% in the following six weeks. In the bond market, high demand for
the safety of Treasury bonds pushed yields down to their lowest levels ever, but
demand for corporate bonds thinned to the point where trading was all but
impossible. (Lead manager Jeff Tyler provides more details about the markets on
pages 3 and 4.)
This type of investment environment particularly demonstrates the benefits
of well-diversified investment portfolios like the Strategic Asset Allocation
funds, which tend to provide greater stability than a portfolio of stocks. For
example, when the major U.S. stock indices fell 20-25% between mid-July and the
end of August, the Strategic Allocation funds declined just 7-16%. Similarly,
when stocks bounced back by 15-20% over the next three months, the Strategic
Allocation funds rose 7-10%.
As eventful as the past year was, the coming year promises to be an equally
exciting time for diversified investors. Europe begins a new era as 11 nations
unite under a single economy and currency; emerging markets around the globe
attempt to start the healing process after financial catastrophe; and the U.S.
economic expansion enters its ninth year, approaching the record for the longest
expansion since World War II.
Another situation we've been watching closely is preparation of the world's
computer systems for the year 2000. At American Century, we're devoting
substantial resources to this endeavor. Throughout 1999, our technology team
will be extensively testing our systems, including those involved with fund
performance and dividend payments.
Thank you for your continued investment with American Century.
Sincerely,
/s/James E. Stowers, Jr. /s/James E. Stowers III
James E. Stowers, Jr. James E. Stowers III
Chairman of the Board and Founder Chief Executive Officer
[right margin]
Table of Contents
Report Highlights ............. 2
Market Perspective ............ 3
STRATEGIC ALLOCATION: CONSERVATIVE
Performance Information ....... 5
Management Q&A ................ 6
Schedule of Investments ....... 9
STRATEGIC ALLOCATION: MODERATE
Performance Information ....... 20
Management Q&A ................ 21
Schedule of Investments ....... 24
STRATEGIC ALLOCATION: AGGRESSIVE
Performance Information ....... 38
Management Q&A ................ 39
Schedule of Investments ....... 42
FINANCIAL STATEMENTS
Statements of Assets and
Liabilities ................... 55
Statements of Operations ...... 56
Statements of Changes
in Net Assets ................. 57
Notes to Financial
Statements .................... 58
Financial Highlights .......... 63
Independent Auditors'
Report ........................ 69
OTHER INFORMATION
Share Class and Retirement
Account Information ........... 70
Background Information
Investment Philosophy
and Policies ............... 71
Comparative Indices ........ 71
Neutral Asset Mixes ........ 71
Investment Team
Leaders .................... 71
Glossary ...................... 72
www.americancentury.com 1
Report Highlights
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MARKET PERSPECTIVE
* A volatile year in the U.S. stock market ended with healthy returns for
large-company stocks and subdued performance for smaller-company stocks.
* European stocks benefited from favorable economic conditions and corporate
restructuring, while Asian and Latin American markets struggled amid
financial crises.
* A sharp decline in U.S. interest rates and heavy demand for Treasury bonds
led to generally strong U.S. bond returns.
* Foreign bond markets performed very well as global economic growth slowed.
STRATEGIC ALLOCATION: CONSERVATIVE
* For the fiscal year ended November 30, 1998, the fund's return trailed that
of its benchmark index (a mix of eight market indices), mainly because of an
underweighting in Treasury bonds.
* The main adjustment we made to the Strategic Conservative portfolio was to
shift to a more defensive stance. This involved:
* reducing our stock holdings and increasing our cash position
* focusing our U.S. equity portion on large-cap growth stocks
* shifting our corporate bond holdings into industries less affected by
economic downturns
* Going forward, we expect to maintain the fund's current neutral position,
with a modest overweighting in foreign stocks and a corresponding
underweighting in foreign bonds.
STRATEGIC ALLOCATION: MODERATE
* For the fiscal year ended November 30, 1998, the fund's return trailed that
of its benchmark index (a mix of 10 market indices), mainly because of our
U.S. stock selection.
* The main adjustment we made to the Strategic Moderate portfolio was to shift
to a more defensive stance. This involved:
* reducing our stock holdings and increasing our cash position
* focusing our U.S. equity portion on large-cap growth stocks
* shifting our corporate bond holdings into industries less affected by
economic downturns
* Going forward, we expect to maintain the fund's current neutral position,
with a modest overweighting in foreign stocks and a corresponding
underweighting in foreign bonds.
STRATEGIC ALLOCATION: AGGRESSIVE
* For the fiscal year ended November 30, 1998, the fund's return trailed that
of its benchmark index (a mix of 11 market indexes), mainly because of our
U.S. stock selection.
* The main adjustment we made to the Strategic Aggressive portfolio was to
shift to a more defensive stance. This involved:
* reducing our stock holdings and increasing our cash position
* focusing our U.S. equity portion on large-cap growth stocks
* shifting our corporate bond holdings into industries less affected by
economic downturns
* Going forward, we expect to maintain the fund's current neutral position,
with a modest overweighting in foreign stocks and a corresponding
underweighting in foreign bonds.
[left margin]
CONSERVATIVE(1)
(TWSCX)
TOTAL RETURNS: AS OF 11/30/98
6 Months 1.90%(2)
1 Year 9.43%
NET ASSETS: $181.0 million
INCEPTION DATE: 2/15/96
MODERATE(1)
(TWSMX)
TOTAL RETURNS: AS OF 11/30/98
6 Months -0.35%(2)
1 Year 10.32%
NET ASSETS: $261.7 million
INCEPTION DATE: 2/15/96
AGGRESSIVE(1)
(TWSAX)
TOTAL RETURNS: AS OF 11/30/98
6 Months -2.39%(2)
1 Year 9.93%
NET ASSETS: $145.1 million
INCEPTION DATE: 2/15/96
(1) Investor Class.
(2) Not annualized.
See Total Returns on pages 5, 20, and 38. Investment terms are defined in the
Glossary on page 72.
2 1-800-345-2021
Market Perspective with Jeff Tyler
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/photo of Jeff Tyler/
Jeff Tyler, senior vice president and lead manager of the Strategic Asset
Allocation funds
U.S. STOCKS
Volatility was the watchword in the U.S. stock market during the year ended
November 30, 1998. After steamrolling to all-time highs in the first half of the
year, the stock market entered one of its most volatile periods since the end of
World War II. A series of financial crises in Asia, Russia, and Latin America
wreaked havoc on market psychology, and wide day-to-day swings became common.
Between mid-July and the end of August, the S&P 500 (a stock index
representing the largest U.S. companies) fell almost 20%. Then the index
rebounded by 22% over the next three months.
Despite the volatility, the S&P 500 racked up a healthy return overall (see
the table at right), continuing a decade-long trend of above-average returns.
However, index performance was deceptive--the robust returns of a handful of
large, blue-chip companies masked price declines in the rest of the market. The
vast majority of the 9,000 stocks traded in the U.S. began to decline
earlier--and fell further-- than the major market indices.
In particular, small-company stocks repeatedly lagged the shares of larger
companies, rising less when stocks moved higher and falling further when prices
declined. Despite better values and faster earnings growth than most
large-company stocks, small-company stocks were ignored as investors favored the
shares of large, seasoned, well-known companies that they could buy or sell at a
moment's notice.
U.S. equity returns varied widely by industry. Financial services stocks,
many of which suffered sizable overseas losses, were among the primary
casualties when the market went into a tailspin in August. Energy stocks also
struggled as oil prices declined. On the positive side, substantial merger
activity and domestic business expansion helped telecommunications stocks post
huge returns. In addition, a number of large technology companies like Microsoft
and Dell Computer benefited from strong demand in the U.S. and Europe, which
more than made up for weak sales in Asia.
FOREIGN STOCKS
Although foreign stock returns were generally favorable over the past year,
rapidly changing financial conditions produced significant volatility and
regional performance disparities (see the table at right).
European stock markets performed the best, with returns in individual
countries ranging from 20% to 40%. Several factors favored European stocks--low
interest rates helped fuel economic expansion; impending economic and monetary
union lent stability to the markets; and corporate restructuring led to greater
profit growth.
In Asia, stock returns were generally weak. Japan's economy continued its
downward spiral, although the country took encouraging steps toward banking
reform and tax relief. Most Southeast Asian markets remained stagnant amid
[right margin]
"(U.S. STOCK) INDEX PERFORMANCE WAS DECEPTIVE--THE ROBUST RETURNS OF A HANDFUL
OF LARGE, BLUE-CHIP COMPANIES MASKED PRICE DECLINES IN THE REST OF THE MARKET."
U.S. STOCK MARKET PERFORMANCE
FOR THE YEAR ENDED NOVEMBER 30, 1998
S&P 500 23.66%
S&P MIDCAP 400 10.37%
S&P SMALLCAP 600 -5.38%
FOREIGN STOCK MARKET PERFORMANCE
(IN U.S. DOLLARS)
FOR THE YEAR ENDED NOVEMBER 30, 1998
MORGAN STANLEY EAFE(reg.tm) INDEX 16.45%
Morgan Stanley Europe Index 27.65%
Morgan Stanley Asia Pacific Index -5.48%
Morgan Stanley Latin American Index -28.03%
MORGAN STANLEY EAFE(reg.tm) INDEX
(IN LOCAL CURRENCIES) 14.44%
Source: Bloomberg Financial Markets
Indices are defined on page 71.
www.americancentury.com 3
Market Perspective with Jeff Tyler
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(Continued)
unsolved economic and financial problems. However, there were a couple of
exceptions--Thailand and South Korea made some economic progress, and their
stock markets rebounded accordingly.
Latin American stock markets suffered substantial losses. Weak economies,
rising debt levels, and currency crises all combined to drag stocks
significantly lower.
U.S. BONDS
U.S. interest rates fell sharply during the one-year period, leading to
strong bond market returns. Deteriorating global economic conditions were the
main reason behind the decline in rates. In the U.S., the Federal Reserve
lowered short-term interest rates three times between late September and
mid-November--its first rate cuts in three years--to combat slower economic
growth and add stability to the markets.
Treasury bonds benefited the most from this environment. As global economic
problems disrupted financial markets worldwide, investors flocked to the safety
and liquidity of U.S. Treasury bonds. This "flight to quality" sent Treasury
yields down to levels not seen in nearly three decades--the 30-year Treasury
bond yield dipped to an all-time low of 4.71% in early October.
Demand in the corporate bond market was a different story as investors fled
bonds riskier than Treasurys. Falling stock prices and concerns that the global
economic problems would hurt profits also contributed to the lack of demand for
corporate debt.
Because of these factors, corporate bond yields did not experience the
dramatic declines that Treasury yields did. As a result, the difference in yield
between corporates and Treasurys widened significantly, especially in the third
quarter of 1998. Since bond prices move in the opposite direction of yields,
Treasurys experienced sizable price gains, while corporate bond prices were
relatively steady.
In the mortgage-backed securities market, the sharp decline in interest
rates produced a negative byproduct--many homeowners took the opportunity to
refinance their mortgages. Increased refinancing activity limits the price
appreciation of mortgage-backed securities when interest rates fall rapidly.
FOREIGN BONDS
Interest rates declined around the globe as the world's economic engine
downshifted in 1998. As a result, overseas bond markets produced very strong
returns, in many cases exceeding U.S. bond market performance (see the tables at
left).
Europe's central banks cut short-term interest rates several times in 1998
to encourage economic activity, and bond yields fell across the board. In Japan,
bond yields rose during the past year--demand virtually disappeared, while the
government's debt issuance continued to expand. Despite the rising yields,
Japanese bonds provided solid returns for U.S. investors because the dollar
weakened against the Japanese yen, producing sizable currency gains.
[left margin]
"U.S. INTEREST RATES FELL SHARPLY DURING THE ONE-YEAR PERIOD, LEADING TO STRONG
BOND MARKET RETURNS."
U.S. BOND MARKET PERFORMANCE
FOR THE YEAR ENDED NOVEMBER 30, 1998
LEHMAN AGGREGATE BOND INDEX 9.45%
Lehman Treasury Bond Index 10.97%
Lehman Corporate Bond Index 9.40%
Lehman Mortgage-Backed
Securities Index 7.48%
FOREIGN BOND MARKET PERFORMANCE
(IN U.S. DOLLARS)
FOR THE YEAR ENDED NOVEMBER 30, 1998
SALOMON NON-U.S. WORLD GOVERNMENT
BOND INDEX 13.41%
Salomon European Government
Bond Index 16.15%
Salomon Japan Government
Bond Index 9.94%
SALOMON NON-U.S. WORLD GOVERNMENT
BOND INDEX (IN LOCAL CURRENCIES) 10.73%
Source: Bloomberg Financial Markets
Indices are defined on page 71.
4 1-800-345-2021
Strategic Conservative--Performance
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TOTAL RETURNS AS OF NOVEMBER 30, 1998
<TABLE>
<CAPTION>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
STRATEGIC LEHMAN THREE-MONTH STRATEGIC LEHMAN THREE-MONTH
ALLOCATION: AGGREGATE U.S. ALLOCATION: AGGREGATE U.S.
CONSERVATIVE S&P 500 BOND INDEX TREASURY BILL CONSERVATIVE S&P 500 BOND INDEX TREASURY BILL
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) 1.90% 7.50% 5.15% 1.97% 1.64% 7.50% 5.15% 1.97%
1 YEAR 9.43% 23.66% 9.45% 4.56% 9.06% 23.66% 9.45% 4.56%
- -------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
LIFE OF FUND 9.81% 25.37% 8.29%(2) 4.94%(2) 10.81% 29.01% 9.03%(3) 4.88%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 10/31/96, the date nearest the class's inception for which data are
available.
See pages 70-72 for more information about share classes, returns, and the
comparative indices.
[mountain chart - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/98
S&P 500 $18,812
Strategic Conservative $13,010
Lehman Aggregate $12,448
3-Month T-Bill $11,416
Strategic Lehman 3-Month
S&P 500 Conservative Aggregate T-Bill
DATE VALUE VALUE VALUE VALUE
2/29/96* $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,044 $9,930 $10,041
4/30/96 $10,244 $10,145 $9,874 $10,082
5/31/96 $10,508 $10,186 $9,855 $10,125
6/30/96 $10,548 $10,222 $9,987 $10,167
7/31/96 $10,081 $10,038 $10,014 $10,211
8/31/96 $10,294 $10,160 $9,997 $10,254
9/30/96 $10,873 $10,441 $10,171 $10,297
10/31/96 $11,173 $10,585 $10,396 $10,339
11/30/96 $12,016 $10,831 $10,574 $10,382
12/31/96 $11,778 $10,772 $10,476 $10,425
1/31/97 $12,513 $10,876 $10,508 $10,469
2/28/97 $12,612 $10,814 $10,535 $10,513
3/31/97 $12,095 $10,636 $10,418 $10,558
4/30/97 $12,816 $10,761 $10,574 $10,603
5/31/97 $13,599 $11,117 $10,674 $10,648
6/30/97 $14,204 $11,384 $10,801 $10,691
7/31/97 $15,333 $11,828 $11,093 $10,736
8/31/97 $14,475 $11,640 $10,999 $10,783
9/30/97 $15,267 $12,051 $11,160 $10,827
10/31/97 $14,757 $11,899 $11,322 $10,871
11/30/97 $15,440 $12,008 $11,374 $10,919
12/31/97 $15,705 $12,154 $11,489 $10,966
1/31/98 $15,878 $12,200 $11,636 $11,012
2/28/98 $17,023 $12,567 $11,627 $11,058
3/31/98 $17,895 $12,872 $11,666 $11,105
4/30/98 $18,077 $12,918 $11,727 $11,150
5/31/98 $17,766 $12,895 $11,839 $11,197
6/30/98 $18,487 $13,031 $11,939 $11,243
7/31/98 $18,291 $12,961 $11,964 $11,289
8/31/98 $15,648 $12,284 $12,159 $11,335
9/30/98 $16,651 $12,646 $12,444 $11,378
10/31/98 $18,004 $12,881 $12,378 $11,416
11/30/98 $18,812 $13,010 $12,448 $11,416
$10,000 investment made 2/28/96
The chart at left shows the growth of a $10,000 investment over the life of the
fund, while the chart below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month Treasury Bill indices are provided
for comparison in each chart. Strategic Conservative's returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the returns of the indices do not. These charts are based on Investor
Class shares only; performance for other classes will vary due to differences in
fee structures (see Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.
[bar chart - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDED NOVEMBER 30)
Strategic Lehman 3-Month
S&P 500 Conservative Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
11/30/96* 20.18% 8.32% 5.75% 3.82%
11/30/97 28.56% 10.87% 7.55% 5.17%
11/30/98 23.66% 9.43% 9.45% 4.56%
* From 2/29/96 (the date nearest the class's inception for which index data are
available).
www.americancentury.com 5
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC CONSERVATIVE PERFORM DURING THE YEAR ENDED NOVEMBER 30, 1998?
For the fiscal year, Strategic Conservative's Investor Class shares posted
a total return of 9.43%, compared with the 12.02% return of the fund's
benchmark.* (See the previous page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
An emphasis on corporate bonds over Treasury bonds in the U.S. bond portion
of the portfolio was one reason for the underperformance. Treasurys were the
best-performing bond sector by far.
Strategic Conservative's U.S. stock holdings, especially among
smaller-company stocks, also hurt its return relative to the benchmark. Although
we made favorable asset allocation decisions, our security selection suffered in
a market where a few stocks were rewarded and the rest were left behind.
HOW DID THE FUND'S ASSET MIX CHANGE DURING THE FISCAL YEAR?
In the first half of the year, we maintained a fairly neutral asset mix.
The only adjustments we made involved rebalancing when performance caused the
mix to stray from our neutral position of 45% bonds, 40% stocks, and 15% cash.
In June, however, we shifted to a more defensive stance designed to reduce
the share-price volatility of the portfolio.
WHAT DOES "DEFENSIVE" MEAN FOR THE STRATEGIC CONSERVATIVE PORTFOLIO?
With regard to the asset mix, it meant that we reduced our U.S. stock
holdings and increased our cash position. But it also involved some other
changes to the domestic stock portion of the portfolio. We sold some of the
fund's small-company (known as small-cap) stocks, as well as a few
value-oriented stocks (those we judged to be relatively inexpensive). This
changed the focus of the U.S. equity portion toward large-cap growth stocks.
We stayed with our defensive structure until October, when we began
shifting money back into the stock market. The good news is that we were
underweighted in stocks when the market took a dive in the third quarter; the
bad news is that we waited a little too long to get back to a neutral position
in stocks and didn't benefit fully from the rebound.
Nonetheless, the defensive strategy proved to be profitable and helped
lower the portfolio's share-price volatility.
DID YOU ALSO MAKE THE FUND'S BOND HOLDINGS MORE DEFENSIVE?
Yes and no. In anticipation of a global economic slowdown, we made a
somewhat aggressive move by extending duration in both our domestic and foreign
bonds. (Duration measures a bond portfolio's sensitivity to changes in
* The fund's benchmark consists of eight different market indices--four U.S.
stock indices, one foreign stock index, one U.S. bond index, one foreign bond
index, and one money market index--that are weighted to match the fund's
neutral asset mix.
[left margin]
"IN JUNE, WE SHIFTED TO A MORE DEFENSIVE STANCE DESIGNED TO REDUCE THE
SHARE-PRICE VOLATILITY OF THE PORTFOLIO."
[pie chart - data below]
ASSET ALLOCATION
(AS OF NOVEMBER 30, 1998)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 33%
U.S. Bonds 42%
Money Market
Securities 13%
Foreign Stocks 7%
Foreign Bonds 5%
See page 71 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on page 72.
6 1-800-345-2021
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
(Continued)
interest rates. The longer the portfolio's duration, the more price volatility
you get when interest rates change.)
As interest rates fell around the globe, our longer duration helped the
fund earn more price gains on its bond holdings. This was especially true for
U.S. Treasury bonds, whose yields reached record lows during the year.
But we also shifted to a more defensive position in corporate bonds, which
make up more than a quarter of the fund's U.S. bond holdings. We avoided the
bonds of companies that had direct exposure to the most turbulent emerging
markets. We also reduced our holdings in industries that are sensitive to slower
economic growth, such as financial services.
Instead, we bought the bonds of companies that do most of their business
domestically and are in industries that are less affected by economic downturns.
Examples include companies in the telecommunications, cable television, and
utilities industries.
IN THE PORTFOLIO'S FOREIGN SECURITIES, YOU INCREASED YOUR EXPOSURE TO ASIA. ARE
YOU SEEING SOME OPPORTUNITIES THERE?
Southeast Asia still has a long way to go to solve its financial problems,
and the region's recovery will depend in large part on whether Japan can
jump-start its economy. That said, when Asia does bounce back, we expect it to
happen quickly and dramatically, and we want to have some exposure to the region
when it happens.
As a result, we've been selectively adding Asian stocks to the portfolio
recently. Overall, though, we continued to focus our foreign stock and bond
holdings in Europe because that's where we think the best opportunities are.
LOOKING AHEAD, WHAT ARE YOUR PLANS FOR STRATEGIC CONSERVATIVE'S ASSET ALLOCATION
STRUCTURE?
We plan to maintain our current neutral asset mix of 45% bonds, 40% stocks,
and 15% cash. We'll also stay somewhat defensive in our positioning within each
asset class because we're expecting fairly modest returns for both stocks and
bonds in the coming year.
Right now, we think stocks have better return potential than bonds, but not
enough to make any significant changes within the portfolio.
WHY DO YOU FAVOR STOCKS?
We don't want to overstate our enthusiasm for stocks--the major market
indices are at record highs, and we expect earnings growth to be slower going
forward. However, economic conditions remain reasonably favorable for stocks,
and investor demand for equities is still strong. We think this will be enough
for stocks to produce moderately positive results in 1999.
Small-cap stocks appear to be extremely undervalued compared with the rest
of the market. Historically, investors have been willing to pay a higher price
for small-cap stocks, relative to their earnings, than they have for the stocks
of larger companies.
[right margin]
FUND'S U.S. STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 370
DIVIDEND YIELD 1.78%
PRICE/EARNINGS RATIO 28.5
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
BANKAMERICA CORP. 2.3% 0.8%
BELLSOUTH CORP. 1.8% 0.6%
MICROSOFT CORP. 1.6% 0.5%
SBC COMMUNICATIONS INC. 1.5% 0.5%
MERCANTILE
BANCORPORATION INC. 1.4% 0.5%
FUND'S FOREIGN STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 133
DIVIDEND YIELD 1.29%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
MANNESMANN AG GERMANY 2.5% 0.2%
NOVARTIS AG SWITZERLAND 2.1% 0.2%
VIVENDI FRANCE 1.8% 0.1%
AXA-UAP FRANCE 1.8% 0.1%
PINAULT-PRINTEMPS-
REDOUTE SA FRANCE 1.8% 0.1%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 82%
Asia/Pacific 14%
Americas
(excluding U.S.) 4%
www.americancentury.com 7
Strategic Conservative--Q&A
- --------------------------------------------------------------------------------
(Continued)
For example, the price/earnings ratio of the Russell 2000 (an index of
small-cap stocks) has typically been 1.5 times that of the S&P 500 (a large-cap
stock index). Currently, though, the price/ earnings ratio of the Russell 2000
is lower than that of the S&P 500.
We'd like to overweight small-cap stocks in the Strategic Conservative
portfolio, but we're not ready to pull the trigger yet. Large-cap stocks are
still riding a wave of momentum, and we believe that earnings growth needs to
begin expanding again before small-caps can outperform.
WHAT ABOUT THE OUTLOOK FOR BONDS?
We'll likely remain cautious in this part of the portfolio because we think
interest rates will be higher a year from now. The Federal Reserve successfully
stabilized the global financial markets with its three interest rate cuts in
late 1998, but now we expect the Fed to take a "wait and see" approach to
interest rate policy. In fact, we wouldn't be surprised if the Fed is done
cutting interest rates for a while.
In addition, flight-to-quality demand for U.S. Treasury bonds waned in late
1998. As a result, we could see the yield difference between Treasurys and
corporate bonds narrow. If that happens, we'll likely shift to a more defensive
position by selling some of our corporate bonds and buying government bonds.
HOW WILL YOU POSITION THE FUND'S FOREIGN HOLDINGS?
We favor stocks over bonds in overseas markets as well, so much so that
we're overweighted in foreign stocks and underweighted in foreign bonds. We
still really like the investment opportunities in Europe, especially in stocks.
WILL EUROPEAN ECONOMIC AND MONETARY UNION (EMU) HAVE A SIGNIFICANT EFFECT ON
YOUR MANAGEMENT OF THE FUND'S FOREIGN HOLDINGS?
Not really. The changes were widely anticipated, and the implementation of
EMU has gone smoothly so far. We've been looking at the "Euro 11" countries as a
single bond market since their yields converged about a year ago. The stock
markets have retained some of their individual characteristics, but the
perceived risk in each country's market is much more equal than it has been
historically.
Certainly, though, EMU will create winners and losers among European
stocks. Companies that are more efficient, flexible, and aggressive will take
the most advantage of the open economic environment, while slow-moving,
inefficient companies that have relied on regional barriers to competition will
struggle. This definitely creates opportunities for us as investors.
[left margin]
"WE THINK STOCKS HAVE BETTER RETURN POTENTIAL THAN BONDS, BUT NOT ENOUGH TO MAKE
ANY SIGNIFICANT CHANGES WITHIN THE PORTFOLIO."
FUND'S U.S. BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 100
WEIGHTED AVERAGE MATURITY 7.8 YEARS
AVERAGE DURATION 4.8 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 29%
Mortgage-Backed 24%
U.S. Treasury 24%
Asset-Backed 10%
U.S. Govt. Agency 13%
FUND'S FOREIGN BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 9
WEIGHTED AVERAGE MATURITY 8.8 YEARS
AVERAGE DURATION 6.7 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 77%
Asia/Pacific 15%
Americas
(excluding U.S.) 8%
8 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS-40.2%
AEROSPACE & DEFENSE--1.3%
200 Alliant Techsystems Inc.(1) $ 15,238
800 Aviation Sales Co.(1) 29,600
1,700 BE Aerospace, Inc.(1) 40,322
9,100 Boeing Co. 369,688
8,100 Bombardier Inc. Cl B ORD 105,445
8,574 British Aerospace PLC ORD 73,722
2,800 Cordant Technologies Inc. 112,525
900 EG&G, Inc. 25,144
2,300 General Dynamics Corp. 133,544
2,000 Goodrich (B.F.) Company (The) 75,875
1,100 Gulfstream Aerospace Corp(1) 56,513
1,200 Litton Industries, Inc.(1) 73,425
3,000 Lockheed Martin Corp. 311,250
600 Newport News Shipbuilding Inc. 16,875
1,500 Nichols Research Corp.(1) 31,875
600 Northrop Grumman Corp. 48,750
1,300 Raytheon Co. Cl A 71,094
5,200 Raytheon Co. Cl B 287,950
600 Triumph Group, Inc.(1) 20,175
5,700 United Technologies Corp. 610,969
--------------
2,509,979
--------------
AIRLINES(2)
900 AMR Corp.(1) 59,344
200 Delta Air Lines Inc. 10,738
700 Midway Airlines Corp.(1) 9,056
--------------
79,138
--------------
AUTOMOBILES & AUTO PARTS--1.3%
800 Arvin Industries, Inc. 33,600
1,600 Coachmen Industries, Inc. 36,000
30,100 Cooper Tire and Rubber Company 588,831
1,808 DaimlerChrysler AG (1) 165,771
1,175 DaimlerChrysler AG ORD 110,485
1,200 Dura Automotive Systems, Inc.(1) 34,725
2,600 Fleetwood Enterprises, Inc. 87,588
10,400 Ford Motor Co. 574,600
7,000 Fuji Heavy Industries Ltd. ORD 34,959
1,000 Honda Motor Co., Ltd. ORD 35,893
19,000 Superior Industries International,
Inc. 494,000
1,400 Tower Automotive, Inc.(1) 31,850
2,290 Volkswagen AG ORD 186,536
--------------
2,414,838
--------------
BANKING--4.2%
14,200 Australia & New Zealand Banking
Group Ltd. ORD 93,642
2,300 Banc One Corp. 118,019
39,400 Banca di Roma ORD(1) 68,210
2,900 Bank of Boston Corp. 120,713
Shares Value
- --------------------------------------------------------------------------------
5,000 Bank of Tokyo-Mitsubishi, Ltd.
(The) ORD $ 54,407
22,000 BankAmerica Corp. 1,434,082
5,400 Chase Manhattan Corp. 342,563
6,700 Citigroup Inc. 336,256
4,600 Corporacion Bancaria de Espana
SA ORD 107,207
7,000 Dai-Ichi Kangyo Bank Ltd. ORD 46,612
2,000 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 165,275
1,600 Fifth Third Bancorp 106,350
5,100 First Union Corp. 309,825
13,300 First Virginia Banks, Inc. 596,838
1,800 Imperial Bancorp(1) 27,900
6,400 Mellon Bank Corp. 402,800
20,300 Mercantile Bancorporation Inc. 894,469
800 Northern Trust Corp. 64,650
1,200 Old Kent Financial Corp. 51,563
7,500 PNC Bank Corp. 386,719
1,200 Providian Financial Corp. 110,175
9,900 Regions Financial Corp. 383,934
800 Societe Generale Cl A ORD 126,157
1,300 SouthTrust Corp. 47,856
10,000 Standard Chartered plc ORD 106,283
700 UBS AG ORD 210,692
7,700 Wachovia Corp. 672,306
10,000 Wells Fargo & Co. 360,000
1,700 Zions Bancorporation 86,009
--------------
7,831,512
--------------
BIOTECHNOLOGY--0.2%
1,000 Amgen Inc.(1) 75,188
1,900 Centocor, Inc.(1) 77,128
2,600 Genzyme Corp. 109,281
334 Genzyme Molecular Oncology(1) 1,159
1,600 IDEC Pharmaceuticals Corp.(1) 53,900
1,300 PathoGenesis Corp.(1) 62,563
--------------
379,219
--------------
BROADCASTING & MEDIA--0.2%
3,600 CBS Corporation 107,325
3,900 Clear Channel Communications,
Inc.(1) 182,325
5,900 Mediaset SpA ORD 41,666
300 Metro Networks, Inc.(1) 11,588
500 Societe Television Francaise
1 ORD 87,560
--------------
430,464
--------------
BUILDING & HOME IMPROVEMENTS--0.1%
2,900 Lafarge Corp. 107,481
1,100 Lone Star Industries, Inc. 83,256
--------------
190,737
--------------
See Notes to Financial Statements
www.americancentury.com 9
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
BUSINESS SERVICES & SUPPLIES--0.7%
800 ABM Industries Inc. $ 26,650
1,500 Acxiom Corp.(1) 35,719
1,800 Administaff, Inc.(1) 48,713
363 Altran Technologies SA ORD 84,396
600 Billing Concepts Corp.(1) 7,556
6,200 Capita Group Plc ORD 58,528
1,600 CKS Group, Inc.(1) 54,000
5,400 Compass Group PLC ORD 56,947
1,400 CSG Systems International, Inc.(1) 88,113
1,400 Gartner Group, Inc. Cl A(1) 30,275
3,400 HA-LO Industries, Inc.(1) 108,588
6,200 Hays plc ORD 52,389
2,200 International Telecommunication
Data Systems, Inc.(1) 55,069
700 Kendle International Inc.(1) 15,750
1,800 Kroll-O'Gara Company(1) 55,575
2,230 Nova Corp.(1) 70,942
1,000 PAREXEL International Corp.(1) 26,094
1,500 Pharmaceutical Product
Development, Inc.(1) 43,031
1,000 Professional Detailing, Inc.(1) 23,313
1,500 Quintiles Transnational Corp.(1) 75,000
2,700 Spring Group PLC ORD 6,461
1,200 Stork N.V. ORD 30,593
1,100 Superior Consultant Holdings
Corp.(1) 40,425
1,400 Sykes Enterprises, Inc.(1) 28,350
1,700 True North Communications Inc. 47,813
2,400 Vedior NV ORD (Acquired
1/27/97-11/10/98, Cost
$54,130)(3) 48,999
13,200 WPP Group plc ORD 72,761
--------------
1,292,050
--------------
CHEMICALS & RESINS--0.8%
4,000 Air Products and Chemicals, Inc. 152,500
4,500 Dow Chemical Co. 438,188
1,700 du Pont (E.I.) de Nemours & Co. 99,875
1,900 IMC Global Inc. 43,463
8,700 Lubrizol Corp. 235,988
16,200 Morton International, Inc. 476,888
--------------
1,446,902
--------------
COMMUNICATIONS EQUIPMENT--1.1%
13,300 Andrew Corp.(1) 215,294
1,700 ANTEC Corp.(1) 31,556
2,300 Ascend Communications, Inc.(1) 129,159
1,400 Comverse Technology, Inc.(1) 80,544
3,900 Ericsson (L.M.) Telephone Co.
ADR 107,616
4,000 Harris Corp. 151,750
3,700 Lucent Technologies Inc. 318,431
Shares Value
- --------------------------------------------------------------------------------
5,300 Motorola, Inc. $ 328,600
2,000 Nokia Corp. Cl A ADR 196,000
2,200 Northern Telecom Ltd. 102,713
500 Plantronics, Inc.(1) 32,875
2,800 Polycom, Inc.(1) 49,875
10,500 Scientific-Atlanta, Inc. 203,438
300 Superior TeleCom Inc. 13,050
1,600 Tekelec(1) 24,800
800 Terayon Communication
Systems, Inc.(1) 24,550
--------------
2,010,251
--------------
COMMUNICATIONS SERVICES--3.4%
6,600 AirTouch Communications, Inc.(1) 377,438
5,000 Ameritech Corp. 270,625
8,800 AT&T Corp. 548,350
1,300 Bell Atlantic Corp. 72,313
12,400 BellSouth Corp. 1,081,900
10,300 British Telecommunications
plc ORD 141,173
17,600 Cable & Wireless
Communications plc ORD(1) 156,849
28,089 Cable & Wireless Optus
Limited ORD(1) 52,521
1,500 Century Telephone Enterprises,
Inc. 85,500
14,703 COLT Telecom Group plc ORD(1) 192,180
2,300 Crown Castle International Corp.(1) 30,906
7,900 Energis plc ORD(1) 142,764
900 Europolitan Holdings AB ORD 82,830
900 Global TeleSystems Group, Inc.(1) 39,066
2,000 GTE Corp. 124,000
3,600 International FiberCom, Inc.(1) 28,913
5,800 MCI WorldCom, Inc.(1) 342,019
1,500 NetCom Systems AB Cl B ORD(1) 57,951
11 Nippon Telegraph & Telephone
ORD 82,180
19 NTT Data Corp. ORD 83,008
8,100 Orange plc ORD(1) 82,881
19,300 SBC Communications Inc. 925,194
2,147 Sonera Group Oyj ORD(1) 30,841
2,000 Sprint Corp. 145,500
1,000 Sprint PCS(1) 16,000
249 Swisscom AG ORD(1) 83,868
1,700 Tele Danmark A/S ORD 190,047
26,600 Telecom Italia Mobile (TIM)
SpA ORD 112,075
21,300 Telecom Italia SpA ORD 172,698
4,236 Telefonica de Espana ORD 199,210
4,500 Teleglobe Inc. ORD 122,594
2,100 U S WEST Communications Group 130,725
12,400 Vodafone Group plc ORD 183,156
--------------
6,387,275
--------------
See Notes to Financial Statements
10 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
COMPUTER PERIPHERALS--0.5%
5,150 Cisco Systems Inc.(1) $ 388,342
4,100 EMC Corp. (Mass.)(1) 297,250
1,500 Lexmark International Group,
Inc. Cl A(1) 114,563
1,100 Proxim, Inc.(1) 25,025
3,400 Quantum Corp.(1) 75,331
3,000 Seagate Technology, Inc.(1) 88,500
300 Xylan Corp.(1) 5,466
--------------
994,477
--------------
COMPUTER SOFTWARE & SERVICES--2.2%
600 Advantage Learning Systems,
Inc.(1) 33,375
600 America Online Inc. 52,538
1,000 AnswerThink Consulting
Group, Inc.(1) 19,469
2,100 At Home Corp. Series A(1) 122,194
300 Atos SA ORD(1) 64,416
1,100 Autodesk, Inc. 40,081
2,200 Automatic Data Processing, Inc. 169,400
1,300 Cap Gemini N.V. ORD 92,962
1,223 Cap Gemini SA ORD 179,087
300 CIBER, Inc.(1) 6,769
2,200 CMG plc ORD 54,534
3,300 Comdisco, Inc. 60,225
1,000 Compuware Corp.(1) 62,313
500 Concord Communications, Inc.(1) 22,141
600 Deltek Systems, Inc.(1) 10,706
1,200 Electronic Data Systems Corp. 46,800
1,100 Equant NV New York Shares(1) 62,081
1,200 Excite, Inc.(1) 58,538
23,200 First Data Corp. 619,150
1,900 Geac Computer Corp. Ltd. ORD(1) 49,840
2,900 Getronics N.V. ORD 126,915
5,900 GTECH Holdings Corp.(1) 147,869
3,100 HBO & Co. 77,209
200 IMS Health Inc. 13,275
700 Inktomi Corp.(1) 93,647
2,100 International Integration Inc.(1) 31,697
400 Keane, Inc.(1) 11,500
9,000 Logica plc ORD 65,354
8,000 Microsoft Corp.(1) 976,250
10,755 Misys plc ORD 75,790
600 Network Associates Inc.(1) 30,544
6,700 Novell, Inc.(1) 110,759
4,700 Oracle Systems Corp.(1) 161,122
1,600 Project Software & Development,
Inc.(1) 48,100
300 QRS Corp.(1) 12,544
600 QuadraMed Corp.(1) 14,363
400 Sapient Corp.(1) 18,475
2,900 Sterling Software, Inc.(1) 74,675
Shares Value
- --------------------------------------------------------------------------------
700 Synopsys, Inc.(1) $ 33,119
5,700 Unisys Corp.(1) 162,450
500 Wind River Systems, Inc.(1) 23,313
--------------
4,135,589
--------------
COMPUTER SYSTEMS--0.6%
5,800 Apple Computer, Inc.(1) 185,419
2,600 Compaq Computer Corp. 84,500
4,100 Dell Computer Corp.(1) 249,203
7,000 Fujitsu Ltd. ORD 80,832
1,200 Hewlett-Packard Co. 75,300
1,900 International Business Machines
Corp. 313,500
1,300 Sun Microsystems, Inc.(1) 96,200
--------------
1,084,954
--------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.2%
1,100 Assa Abloy AB Cl B ORD 43,986
3,400 CRH plc ORD 51,118
2,800 D.R. Horton, Inc. 52,850
7,000 Daiwa House Industry Co.,
Ltd. ORD 74,181
1,200 Insituform Technologies, Inc.
Cl A(1) 15,675
600 Lafarge SA ORD 56,602
800 Southdown, Inc. 46,600
--------------
341,012
--------------
CONSUMER PRODUCTS--0.5%
700 Chattem, Inc.(1) 29,794
2,900 Helen of Troy Ltd.(1) 48,394
8,000 Kao Corporation ORD 151,366
1,800 NBTY, Inc.(1) 10,997
2,400 Procter & Gamble Co. (The) 210,300
2,300 Rayovac Corporation(1) 53,188
800 Twinlab Corp.(1) 13,275
5,900 Whirlpool Corp. 330,400
--------------
847,714
--------------
DIVERSIFIED COMPANIES--0.9%
10,300 BBA Group plc ORD 56,775
1,600 Brambles Industries Limited ORD 39,159
7,700 General Electric Co. (U.S.) 696,850
500 GP Strategies Corp.(1) 7,188
4,000 Nikon Corporation ORD 38,329
5,800 Tyco International Ltd. 381,713
1,700 Unilever N.V. New York Shares 131,431
1,100 Vivendi ORD 248,970
--------------
1,600,415
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.8%
3,600 Advanced Micro Devices, Inc.(1) 99,675
900 Advantest Corp. ORD 60,076
1,400 Aeroflex Inc.(1) 19,163
See Notes to Financial Statements
www.americancentury.com 11
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
700 Altera Corp.(1) $ 34,366
2,300 Arrow Electronics, Inc.(1) 50,025
1,400 DII Group, Inc.(1) 29,181
1,000 Electronics for Imaging, Inc.(1) 26,844
8,000 Fujikura Ltd. ORD 44,630
5,700 Intel Corp. 613,284
1,000 Murata Manufacturing Co., Ltd.
ORD 39,141
2,600 Pinnacle Systems, Inc.(1) 87,263
500 Siemens AG ORD 34,826
1,000 Sony Corp. ORD 73,166
700 STMicroelectronics N.V. New
York Shares(1) 46,988
1,600 Texas Instruments Inc. 122,200
3,000 Tokyo Electron Ltd. ORD 112,063
1,500 Uniphase Corp.(1) 81,188
--------------
1,574,079
--------------
ENERGY (PRODUCTION & MARKETING)--2.9%
6,300 Amoco Corp. 371,306
17,800 Apache Corp. 409,400
9,100 Atlantic Richfield Co. 605,150
20,900 Burlington Resources Inc. 744,563
2,800 Chevron Corp. 234,150
1,200 Elf Aquitaine SA ORD 149,741
500 Enron Corp. 26,281
11,400 Exxon Corp. 855,713
11,300 Murphy Oil Corp. 450,588
1,200 NICOR Inc. 50,475
39,700 Seagull Energy Corp.(1) 325,044
5,300 Sunoco, Inc. 179,533
5,400 Texaco Inc. 310,838
5,100 Ultramar Diamond Shamrock Corp. 131,325
13,700 Unocal Corp. 464,088
6,800 Woodside Petroleum Limited ORD 34,560
--------------
5,342,755
--------------
ENERGY (SERVICES)--0.4%
37,600 Baker Hughes Inc. 688,550
3,000 Tidewater Inc. 69,188
900 Transocean Offshore 22,219
--------------
779,957
--------------
ENVIRONMENTAL SERVICES--0.4%
400 Allied Waste Industries, Inc.(1) 8,175
19,300 Browning-Ferris Industries, Inc. 569,350
6,000 Rentokil Initial PLC ORD 38,618
3,982 Waste Management, Inc. 170,728
--------------
786,871
--------------
FINANCIAL SERVICES--1.8%
12,600 AMP Limited ORD (Acquired
6/18/98-11/6/98, Cost
$156,386)(1)(3) 163,011
Shares Value
- --------------------------------------------------------------------------------
14,700 Amvescap Plc ORD $ 119,724
20,500 Banca Intesa S.p.A. ORD 114,534
7,044 Bank of Ireland ORD 145,895
600 Bayerische Vereinsbank AG ORD 51,991
23,700 CIT Group Holdings, Inc.
(The) Cl A 665,081
500 Credit Suisse Group ORD 85,997
1,600 Dresdner Bank AG ORD 71,776
2,100 Equitable Companies Inc. 116,025
6,500 Fannie Mae 472,875
1,500 Federal Home Loan Mortgage
Corporation 90,750
1,500 FINOVA Group Inc. 79,219
3,336 ING Groep N.V. ORD 191,227
72 Julius Baer Holding AG ORD 233,739
10,600 Lloyds TSB Group plc ORD 147,385
4,100 Morgan Stanley Dean Witter,
Discover & Co. 285,975
3,450 Newcourt Credit Group Inc. ORD
(Acquired 9/23/98-11/6/98,
Cost $97,962)(3) 122,354
4,000 Nomura Securities Co., Ltd. ORD 38,881
2,612 Provident Financial plc ORD 39,228
11,500 Skandia Forsakrings AB ORD 163,427
1,000 UniCapital Corp.(1) 8,250
--------------
3,407,344
--------------
FOOD & BEVERAGE--1.8%
1,900 American Italian Pasta Co. Cl A(1) 47,975
44,849 Archer-Daniels-Midland Co. 824,100
7,200 Coca-Cola Beverages plc ORD(1) 15,091
4,100 Coca-Cola Enterprises, Inc. 155,031
2,900 ConAgra, Inc. 91,169
1,500 Coors (Adolph) Co. Cl B 74,672
10,700 Diageo plc ORD 119,903
900 General Mills, Inc. 67,950
600 Groupe Danone ORD 175,297
1,800 Hain Food Group, Inc. (The)(1) 36,900
2,000 Heineken NV ORD 101,662
1,200 Hershey Foods Corp. 80,700
3,100 Hormel Foods Corp. 91,644
8,600 Interstate Bakeries Corp. 225,750
2,700 Kerry Group Plc Cl A ORD 37,621
5,000 Kirin Brewery Company, Ltd. ORD 51,890
3,800 Nabisco Holdings Corp. Cl A 151,525
70 Nestle S.A. ORD 145,478
400 Performance Food Group Co.(1) 9,738
2,600 Quaker Oats Co. (The) 159,575
1,500 Suiza Foods Corp.(1) 71,063
32,400 Tyson Foods, Inc. Cl A 670,275
500 U.S. Foodservice, Inc.(1) 22,969
--------------
3,427,978
--------------
See Notes to Financial Statements
12 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
FURNITURE & FURNISHINGS--0.1%
1,700 CompX International Inc.(1) $ 42,606
1,100 Miller (Herman), Inc. 23,547
1,900 Newell Co. 84,075
1,000 O'Sullivan Industries Holdings,
Inc.(1) 10,063
--------------
160,291
--------------
HEALTHCARE--1.2%
5,800 Aetna Inc. 448,413
7,700 Beckman Coulter Inc. 371,525
2,550 Cardinal Health, Inc. 174,994
24,300 Columbia/HCA Healthcare Corp. 598,388
600 Gehe AG ORD 38,426
3,800 Health Management
Associates, Inc.(1) 82,413
1,400 PacifiCare Health Systems,
Inc. Cl B(1) 105,656
2,200 Province Healthcare Co.(1) 70,125
5,000 Tenet Healthcare Corp.(1) 147,813
3,700 Total Renal Care Holdings, Inc.(1) 98,281
2,000 Trigon Healthcare, Inc.(1) 74,125
--------------
2,210,159
--------------
INDUSTRIAL(2)
16,700 Siebe plc ORD 60,083
--------------
INDUSTRIAL EQUIPMENT &
MACHINERY--0.3%
1,400 Caterpillar Inc. 69,213
4,800 Ingersoll-Rand Co. 224,700
3,070 Mannesmann AG ORD 332,524
--------------
626,437
--------------
INSURANCE--2.1%
283 Allianz AG ORD 101,981
6,200 Allstate Corp. 252,650
1,300 American International Group, Inc. 122,200
1,433 ASR Verzekeringsgroep N.V. ORD 116,650
3,700 Assicurazioni Generali ORD 138,254
1,855 Axa-UAP ORD 239,964
8,800 Chubb Corp. (The) 616,550
13,800 CNA Financial Corp.(1) 589,950
2,600 Conseco Inc. 86,125
2,900 Fidelity National Financial, Inc. 95,156
3,300 First American Financial
Corp. (The) 101,063
2,500 Gallagher (Arthur J.) & Co. 115,938
3,100 LandAmerica Financial Group, Inc. 190,069
3,000 Lincoln National Corp. 251,063
2,800 Mediolanum SpA ORD 16,853
800 Orion Capital Corp. 28,900
700 Reinsurance Group of
America, Inc. 45,850
Shares Value
- --------------------------------------------------------------------------------
13,800 SAFECO Corp. $ 592,969
1,600 Sampo Insurance Company Ltd.
ORD 54,974
17 Schweizerische
Rueckversicherungs-
Gesellschaft ORD 42,981
500 Transatlantic Holdings, Inc. 38,000
--------------
3,838,140
--------------
LEISURE--0.2%
175 Accor SA ORD 38,500
800 Anchor Gaming(1) 40,900
3,100 Eastman Kodak Co. 224,944
4,000 Olympus Optical Co., Ltd. ORD 43,786
400 Viacom, Inc. Cl B(1) 26,625
--------------
374,755
--------------
MACHINERY & EQUIPMENT--0.5%
12,600 Cooper Industries, Inc. 618,975
2,300 Deere & Co. 80,356
300 Hanover Compressor Company(1) 6,788
1,900 Premark International, Inc. 63,769
600 Sidel SA ORD 45,514
3,000 Sundstrand Corp. 162,000
--------------
977,402
--------------
MEDICAL EQUIPMENT & SUPPLIES--0.4%
200 ADAC Laboratories(1) 5,206
1,800 Arterial Vascular Engineering,
Inc.(1) 88,031
2,600 CONMED Corp.(1) 70,850
1,700 Guidant Corp. 145,881
1,300 Haemonetics Corp.(1) 29,331
2,300 Hillenbrand Industries, Inc. 130,669
2,100 Medtronic, Inc. 142,144
4,800 PSS World Medical, Inc.(1) 99,750
4,000 Terumo Corporation ORD 88,838
--------------
800,700
--------------
METALS & MINING--0.2%
3,800 Aluminum Co. of America 281,675
--------------
OFFICE EQUIPMENT & SUPPLIES(2)
1,200 Kronos Inc.(1) 51,600
--------------
PACKAGING & CONTAINERS--0.3%
15,800 Tenneco Inc. 562,875
--------------
PAPER & FOREST PRODUCTS--0.5%
3,400 Rayonier, Inc. 144,500
6,500 Union Camp Corp. 420,469
14,500 Westvaco Corp. 407,813
--------------
972,782
--------------
PERSONAL SERVICES(2)
1,300 Block (H & R), Inc. 58,419
--------------
See Notes to Financial Statements
www.americancentury.com 13
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
PHARMACEUTICALS--2.4%
3,300 American Home Products Corp. $ 175,725
1,600 Barr Laboratories, Inc.(1) 67,600
2,700 Bergen Brunswig Corp. Cl A 168,075
4,600 Bristol-Myers Squibb Co. 563,788
1,000 ChiRex Inc.(1) 18,188
1,400 Elan Corp., plc ADR(1) 95,375
2,800 Forest Laboratories, Inc.(1) 130,550
2,000 Genentech, Inc.(1) 140,125
2,300 Glaxo Wellcome plc ORD 72,766
2,400 Herbalife International, Inc. 28,350
3,000 Johnson & Johnson 243,750
2,000 Lilly (Eli) & Co. 179,375
300 Medicis Pharmaceutical
Corp. Cl A(1) 18,900
900 Merck & Co., Inc. 139,388
3,200 Mylan Laboratories Inc. 106,200
2,100 Nature's Sunshine Products, Inc. 32,616
154 Novartis AG ORD 289,150
4,600 Pfizer, Inc. 513,475
3,200 Pharmacia & Upjohn Inc. 166,600
1,500 Roberts Pharmaceutical Corp.(1) 36,750
5 Roche Holding AG ORD 58,765
6,000 Schering-Plough Corp. 638,250
5,000 Takeda Chemical Inds. ORD 168,501
18 UCB SA ORD 100,578
3,100 Warner-Lambert Co. 234,050
4,300 Zeneca Group plc ORD 178,832
--------------
4,565,722
--------------
PRINTING & PUBLISHING--0.5%
5,700 Banta Corp. 151,050
600 Consolidated Graphics, Inc.(1) 34,538
7,900 Deluxe Corp. 274,525
1,200 Mail-Well, Inc.(1) 15,525
8,600 Mondadori (Arnoldo) Editore
SpA ORD 108,141
1,100 Petersen Companies, Inc.
(The) Cl A(1) 26,331
2,000 Toppan Forms Co., Ltd. ORD 31,264
4,000 VNU N.V. ORD 137,574
450 Wolters Kluwer NV ORD 85,866
--------------
864,814
--------------
RAILROAD--0.4%
16,100 CSX Corp. 671,169
--------------
RESTAURANTS--0.1%
4,700 CKE Restaurants, Inc. 114,856
1,700 PJ America, Inc.(1) 33,256
8,000 TelePizza, S.A. ORD(1) 68,808
--------------
216,920
--------------
Shares Value
- --------------------------------------------------------------------------------
RETAIL (APPAREL)--0.2%
1,300 Chico's FAS, Inc.(1) $ 28,519
1,200 Children's Place Retail Stores,
Inc. (The)(1) 22,275
2,150 DM Management Co.(1) 31,444
2,200 Hennes & Mauritz AB Cl B ORD 162,682
1,600 Payless ShoeSource, Inc.(1) 78,000
--------------
322,920
--------------
RETAIL (FOOD & DRUG)--0.4%
3,200 CVS Corp. 158,000
5,048 Koninklijke Ahold NV ORD 175,203
900 Ruddick Corp. 17,606
4,500 Safeway Inc.(1) 237,656
10,500 Somerfield plc ORD 78,932
3,700 Universal Corp. 130,194
--------------
797,591
--------------
RETAIL (GENERAL MERCHANDISE)--1.4%
450 99 Cents Only Stores(1) 19,350
100 Carrefour SA ORD 70,840
15,100 Dillard's Inc. Cl A 519,063
1,700 Douglas Holding AG ORD 106,366
2,850 Fred's, Inc. 40,078
1,200 ITI Technologies, Inc.(1) 31,838
4,000 JUSCO Co., Ltd. ORD 76,170
3,700 Kmart Corp.(1) 56,425
1,200 Metro AG ORD 74,905
1,300 Neiman-Marcus Group, Inc.(1) 34,856
12,200 Penney (J.C.) Company, Inc. 671,000
1,400 Pinault-Printemps-Redoute
SA ORD 239,009
8,400 Wal-Mart Stores, Inc. 632,625
--------------
2,572,525
--------------
RETAIL (SPECIALTY)--0.4%
800 Action Performance Cos. Inc.(1) 29,175
1,600 CSK Auto Corp.(1) 44,600
800 Guitar Center, Inc.(1) 18,350
4,900 Home Depot, Inc. 243,775
1,200 Starbucks Corp.(1) 55,425
1,500 Tech Data Corp.(1) 60,281
7,500 Toys 'R' Us, Inc.(1) 148,125
1,400 Tractor Supply Co.(1) 36,138
1,300 Wilmar Industries, Inc.(1) 23,034
900 Zale Corp.(1) 25,763
--------------
684,666
--------------
STEEL(2)
200 Bethlehem Steel Corporation(1) 1,650
--------------
TEXTILES & APPAREL--0.2%
2,600 Dexter Corp. (The) 83,363
10,100 Fruit of the Loom, Inc.(1) 148,975
See Notes to Financial Statements
14 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
1,100 Polymer Group, Inc.(1) $ 11,688
900 Quiksilver, Inc.(1) 21,825
1,400 Tarrant Apparel Group(1) 45,763
700 VF Corp. 34,344
--------------
345,958
--------------
TOBACCO--0.3%
7,600 Imperial Tobacco Group plc ORD 81,778
4,900 Philip Morris Companies Inc. 274,094
4,400 UST Inc. 152,900
--------------
508,772
--------------
TRANSPORTATION--0.1%
2,000 Allied Holdings, Inc.(1) 30,500
900 Atlas Air, Inc.(1) 41,625
800 Avis Rent A Car, Inc.(1) 16,850
22,300 Stagecoach Holdings plc ORD 83,542
--------------
172,517
--------------
UTILITIES--1.7%
10,700 AGL Resources Inc. 230,719
11,100 Ameren Corp. 457,181
1,600 BEC Energy 66,000
900 Berliner Kraft-und
Licht-Aktiengesellschaft ORD 49,830
1,600 Central & South West Corp. 44,000
1,200 Columbia Energy Group 68,100
1,300 Duke Energy Corp. 81,331
1,100 Energy East Corp. 58,369
7,400 Florida Progress Corp. 316,350
3,600 FPL Group, Inc. 220,500
800 Houston Industries Inc. 25,300
1,100 IPALCO Enterprises, Inc. 55,138
800 KN Energy, Inc. 35,000
3,000 LG&E Energy Corp. 84,000
3,800 Minnesota Power & Light Co. 158,888
1,100 National Fuel Gas Co. 50,531
1,100 New Century Energies, Inc. 52,869
32,400 PacifiCorp 607,500
2,800 Potomac Electric Power Co. 72,975
2,800 PP&L Resources, Inc. 76,475
4,300 Sempra Energy 107,769
4,300 Southern Co. 126,850
3,300 Texas Utilities Co. 147,056
2,400 Wisconsin Energy Corp. 74,250
--------------
3,266,981
--------------
TOTAL COMMON STOCKS 75,263,033
--------------
(Cost $66,373,257)
Principal Amount Value
- --------------------------------------------------------------------------------
U.S. TREASURY SECURITIES--10.1%
$2,400,000 U.S. Treasury Notes, 7.75%,
11/30/99 $ 2,471,208
4,000,000 U.S. Treasury Notes, 6.625%,
7/31/01 4,199,680
1,200,000 U.S. Treasury Notes, 5.75%,
8/15/03 1,254,612
3,350,000 U.S. Treasury Notes, 6.625%,
5/15/07 3,763,290
2,050,000 U.S. Treasury Bonds, 8.75%,
5/15/17 2,879,205
3,900,000 U.S. Treasury Bonds, 6.125%,
11/15/27 4,404,933
--------------
TOTAL U.S. TREASURY SECURITIES 18,972,928
--------------
(Cost $18,151,245)
U.S. GOVERNMENT AGENCY SECURITIES--5.4%
1,350,000 FHLMC, 7.93%, 1/20/05 1,542,902
500,000 FNMA, 5.25%, 1/15/03 504,945
3,800,000 FNMA, 5.75%, 6/15/05 3,944,324
1,500,000 FNMA, 7.69%, 9/13/06 1,603,065
2,500,000 FNMA MTN, 6.23%, 7/21/08 2,557,200
--------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 10,152,436
--------------
(Cost $9,750,323)
SOVEREIGN GOVERNMENTS & AGENCIES--4.6%
$ 350,000 British Columbia Province of,
5.375%, 10/29/08 349,318
DEM 650,000 Deutschland Republic,
4.75%, 7/4/28 379,069
DEM 3,200,000 Deutschland Republic,
6.00%, 9/15/03 2,090,582
FRF 11,500,000 France O.A.T., 6.50%,
10/25/06 2,377,196
CAD 500,000 Government of Canada,
6.00%, 6/1/08 350,219
JPY 140,000,000 Japan Global, 2.90%,
12/20/05 1,284,892
DKK 1,900,000 Kingdom of Denmark,
8.00%, 3/15/06 362,595
GBP 200,000 U.K. Treasury Bonds, 7.50%,
12/7/06 389,813
GBP 400,000 U.K. Treasury Bonds, 9.00%,
8/6/12 938,719
--------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES 8,522,403
--------------
(Cost $8,408,161)
See Notes to Financial Statements
www.americancentury.com 15
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES(4)--10.3%
$ 506,642 FHLMC Pool #E68523, 6.50%,
12/1/12 $ 515,650
40,699 FNMA Pool #343829, 6.50%,
4/1/11 41,359
684,335 FNMA Pool #341477, 6.50%,
5/1/11 695,439
202,469 FNMA Pool #346400, 6.50%,
5/1/11 205,754
432,040 FNMA Pool #346779, 6.50%,
5/1/11 439,049
190,733 FNMA Pool #369034, 6.50%,
2/1/12 193,795
387,978 FNMA Pool #377181, 6.50%,
4/1/12 394,207
741,122 FNMA Pool #378039, 6.50%,
5/1/12 753,020
79,740 FNMA Pool #250576, 7.00%,
6/1/26 81,524
708,355 FNMA Pool #373510, 7.50%,
3/1/27 728,962
324,194 GNMA Pool #351417, 7.00%,
1/15/24 332,454
136,449 GNMA Pool #361446, 8.00%,
7/15/24 142,116
181,139 GNMA Pool #377238, 8.50%,
7/20/24 192,099
188,591 GNMA Pool #355903, 8.00%,
9/15/24 196,425
664,583 GNMA Pool #404303, 8.25%,
10/15/24 706,883
116,335 GNMA Pool #392995, 8.75%,
3/15/25 123,980
140,249 GNMA Pool #372335, 7.50%,
4/15/26 145,064
164,704 GNMA Pool #001991, 9.00%,
4/20/25 174,892
412,898 GNMA Pool #009297, 8.25%,
7/20/25 435,534
445,474 GNMA Pool #412177, 7.00%,
9/15/25 456,753
425,889 GNMA Pool #416856, 7.50%,
10/15/25 440,556
247,250 GNMA Pool #425081, 7.50%,
2/15/26 255,739
22,173 GNMA Pool #417549, 6.00%,
4/15/26 22,013
218,694 GNMA Pool #402680, 8.00%,
5/15/26 227,735
326,368 GNMA Pool #417068, 8.00%,
5/15/26 339,860
63,400 GNMA Pool #402682, 7.50%,
6/15/26 65,576
216,186 GNMA Pool #422006, 7.50%,
5/15/26 223,609
Principal Amount Value
- --------------------------------------------------------------------------------
$ 838,470 GNMA Pool #431942, 8.25%,
7/15/26 $ 892,124
191,362 GNMA Pool #002273, 9.00%,
8/20/26 203,074
825,959 GNMA Pool #456569, 7.50%,
11/15/27 854,564
1,339,078 GNMA Pool #457351, 7.00%,
12/15/27 1,372,501
546,914 GNMA Pool #404525, 6.50%,
2/15/28 553,208
539,534 GNMA Pool #436196, 6.50%,
2/15/28 545,743
55,530 GNMA Pool #463081, 6.50%,
2/15/28 56,169
401,750 GNMA Pool #256771, 6.50%,
3/15/28 406,373
405,081 GNMA Pool #461658, 6.50%,
3/15/28 409,743
402,198 GNMA Pool #462615, 6.50%,
3/15/28 406,827
3,459,583 GNMA Pool #466804, 6.50%,
4/15/28 3,499,400
53,786 GNMA Pool #474216, 6.50%,
4/15/28 54,405
508,615 GNMA Pool #433786, 6.00%,
5/15/28 504,773
458,790 GNMA Pool #481773, 6.00%,
7/15/28 455,325
494,514 GNMA Pool #473140, 6.00%,
10/15/28 490,778
--------------
TOTAL MORTGAGE-BACKED SECURITIES 19,235,054
--------------
(Cost $18,744,118)
ASSET-BACKED SECURITIES(4)--4.1%
600,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 607,065
1,659,082 First Union-Lehman Brothers
Commercial Mortgage,
Series 1998 C2, Class A1 SEQ,
6.28%, 6/18/07 1,700,401
600,000 Money Store (The) Home Equity
Trust, Series 1995 C, Class A9
SEQ, 6.375%, 9/15/11 602,115
500,000 Money Store (The) Home Equity
Trust, Series 1997 C,
Class AF6 SEQ, 6.67%,
2/15/25 510,998
970,803 Morgan Stanley Capital I,
Series 1998 WF1, Class A1
SEQ, 6.25%, 7/15/07 994,068
965,283 Mortgage Capital Funding, Inc.,
Series 1998 MC1, Class A1
SEQ, 6.42%, 6/18/07 994,535
700,000 Nationslink Funding Corp.,
Series 1998-2, Cl A1 SEQ,
6.00%, 11/20/07 708,453
See Notes to Financial Statements
16 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
$ 323,363 Textron Financial Corp. Receivables Trust
Series 1997 A, Class A, 6.05%,
3/16/09 (Acquired 9/18/97,
Cost $322,935)(3) $ 324,707
600,000 United Companies Financial Corp.,
Home Equity Loan,
Series 1997 C, Class A7,
6.85%, 1/15/29 618,407
600,000 United Companies Financial Corp.,
Home Equity Loan,
Series 1998 B, Class A4 SEQ,
6.22%, 11/15/20 603,087
--------------
TOTAL ASSET-BACKED SECURITIES 7,663,836
--------------
(Cost $7,534,174)
CORPORATE BONDS--12.4%
AEROSPACE & DEFENSE--0.6%
200,000 Lockheed Martin Corp., 6.85%,
5/15/01 206,888
800,000 Lockheed Martin Corp., 7.25%,
5/15/06 865,320
--------------
1,072,208
--------------
BANKING--3.6%
1,500,000 American Express Centurion Bank,
VRN, 5.22%, 8/18/99 resets
monthly off the 1-month LIBOR
minus 0.055% with no caps 1,500,000
550,000 Citigroup Inc., 7.125%, 5/15/06 590,805
500,000 First Bank System Inc., 7.625%,
5/1/05 550,205
1,000,000 HSBC America Capital, 8.38%,
5/15/27 1,017,420
2,000,000 KeyBank N.A., VRN, 5.01%,
12/1/98 resets daily off the
Federal Funds rate plus 0.03%
with no caps 1,998,800
1,000,000 NationsBank Corporation,
6.125%, 7/15/04 1,037,100
--------------
6,694,330
--------------
COMMUNICATIONS SERVICES--2.3%
1,500,000 Cable & Wireless Communications,
6.625%, 3/6/05 1,507,020
400,000 Cincinnati Bell Inc., 6.30%,
12/1/28 407,064
600,000 GTE Corp., 7.51%, 4/1/09 683,826
600,000 MCI WorldCom, Inc., 7.55%,
4/1/04 651,750
500,000 MCI WorldCom, Inc., 6.40%,
8/15/05 520,060
500,000 U S West Capital Funding Inc.,
6.125%, 7/15/02 512,885
--------------
4,282,605
--------------
Principal Amount Value
- --------------------------------------------------------------------------------
ENERGY (PRODUCTION & MARKETING)--0.6%
$ 500,000 Enron Corp., 6.75%, 7/1/05 $ 512,740
600,000 Enron Corp., 6.625%, 11/15/05 621,720
--------------
1,134,460
--------------
ENERGY (SERVICES)--0.2%
350,000 Petroleum Geo-Services ASA,
6.625%, 3/30/08 348,635
--------------
FINANCIAL SERVICES--2.0%
600,000 Comdisco Inc., 7.75%, 9/1/99 610,122
600,000 Ford Motor Credit Co., 6.25%,
11/8/00 610,194
900,000 Ford Motor Credit Co., 6.55%,
9/10/02 931,680
200,000 Ford Motor Credit Co., 6.125%,
1/9/06 203,958
800,000 Lehman Brothers Holdings Inc.
MTN, Series 1998 E, 6.00%,
2/26/01 795,640
500,000 Toyota Motor Credit Corp.,
5.625%, 11/13/03 505,670
--------------
3,657,264
--------------
METALS & MINING--0.2%
100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 100,962
300,000 Barrick Gold Corp., 7.50%,
5/1/07 323,610
--------------
424,572
--------------
OFFICE EQUIPMENT & SUPPLIES--0.3%
550,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $572,132)(3) 612,040
--------------
PRINTING & PUBLISHING--0.3%
500,000 News America Holdings Inc.,
9.125%, 10/15/99 516,840
--------------
RAILROAD--0.1%
200,000 Norfolk Southern Corp., 7.90%,
5/15/97 230,940
--------------
REAL ESTATE--0.3%
500,000 Simon DeBartolo Group Inc.,
6.625%, 6/15/03 (Acquired
6/17/98, Cost $498,840)(3) 493,755
--------------
RETAIL (APPAREL)--0.5%
1,000,000 Saks Holdings, Inc., 7.25%,
12/1/04 1,004,800
--------------
RETAIL (GENERAL MERCHANDISE)--0.4%
800,000 Sears Roebuck Acceptance Corp.,
6.00%, 3/20/03 821,192
--------------
See Notes to Financial Statements
www.americancentury.com 17
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
TOBACCO--0.1%
$ 250,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 $ 263,245
--------------
UTILITIES--0.9%
300,000 CalEnergy Co. Inc., 7.63%,
10/15/07 315,729
300,000 Citizens Utilities Co., 7.60%,
6/1/06 334,374
700,000 Georgia Power Co., 5.50%,
12/1/05 702,814
250,000 Virginia Electric & Power, 8.00%,
3/1/04 280,768
--------------
1,633,685
--------------
TOTAL CORPORATE BONDS 23,190,571
--------------
(Cost $22,624,919)
COMMERCIAL PAPER(5)--8.6%
BANKS--1.1%
2,000,000 IMI Funding Corp. (USA), 5.45%,
2/5/99 1,981,130
--------------
CREDIT CARD & TRADE RECEIVABLES--1.0%
2,000,000 Dakota Certificates (Citibank),
5.35%, 2/19/99 (Acquired
11/16/98, Cost $1,971,764)(3) 1,977,296
--------------
EDUCATION--1.8%
1,500,000 Leland Stanford University, 4.95%,
4/8/99 1,473,188
2,000,000 Yale University, 5.05%, 2/16/99 1,978,114
--------------
3,451,302
--------------
FINANCIAL SERVICES--3.6%
2,000,000 Chrysler Financial Corp., 5.18%,
1/8/99 1,988,994
1,500,000 Falcon Asset Securities Corp.,
5.29%, 12/4/98 (Acquired
10/7/98, Cost $1,487,216)(3) 1,499,226
1,700,000 General Motors Acceptance Corp.,
5.17%, 1/22/99 1,687,286
1,500,000 Receivables Capital Corp., 5.40%,
1/19/99 (Acquired 11/23/98,
Cost $1,487,175)(3) 1,489,416
--------------
6,664,922
--------------
Principal Amount Value
- --------------------------------------------------------------------------------
INDUSTRIAL--1.1%
$2,000,000 Siebe plc, 5.22%, 1/15/99 $ 1,987,018
--------------
TOTAL COMMERCIAL PAPER 16,061,668
--------------
(Cost $16,059,870)
CERTIFICATES OF DEPOSIT--1.6%
3,000,000 National Westminster Bank PLC,
5.65%, 3/3/99 3,002,598
--------------
(Cost $2,998,562)
BANK NOTES--0.3%
500,000 General Motors Acceptance Corp.
MTN, 7.375%, 4/15/99 503,545
--------------
(Cost $502,870)
TEMPORARY CASH INVESTMENTS--2.4%
Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 5.18%, dated 11/30/98,
due 12/1/98 (Delivery value $4,500,648) 4,500,000
--------------
(Cost $4,500,000)
TOTAL INVESTMENT SECURITIES--100.0% $187,068,072
==============
(Cost $175,647,499)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- ------------------------------------------------------------------------------
171,717 CHF 12/30/98 $ 123,465 $(1,092)
660,316 DEM 12/30/98 390,387 (3,023)
2,435,189 FRF 12/30/98 429,332 (2,932)
253,564 GBP 12/30/98 418,019 1,995
68,619,600 JPY 12/30/98 559,878 10,706
247,434 NLG 12/30/98 129,787 (1,016)
------------ ------------
$2,050,868 $ 4,638
============ ============
(Value on Settlement Date $2,055,506)
See Notes to Financial Statements
18 1-800-345-2021
Conservative--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
DKK = Danish Krone
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
FRF = French Franc
GBP = British Pound
GNMA = Government National Mortgage Association
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, 1998.
resets = The frequency with which a 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) 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 or is a private placement and, unless registered under the Act or
exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at November 30,
1998,was $6,730,804, which represented 3.6% 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.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
www.americancentury.com 19
Strategic Moderate--Performance
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF NOVEMBER 30, 1998
<TABLE>
<CAPTION>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
STRATEGIC LEHMAN THREE-MONTH STRATEGIC LEHMAN THREE-MONTH
ALLOCATION: AGGREGATE U.S. ALLOCATION: AGGREGATE U.S.
MODERATE S&P 500 BOND INDEX TREASURY BILL MODERATE S&P 500 BOND INDEX TREASURY BILL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) -0.35% 7.50% 5.15% 1.97% -0.33% 7.50% 5.15% 1.97%
1 YEAR 10.32% 23.66% 9.45% 4.56% 10.07% 23.66% 9.45% 4.56%
- ---------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
LIFE OF FUND 11.96% 25.37% 8.29%(2) 4.94%(2) 12.23% 29.01% 9.03%(3) 4.88%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 10/31/96, the date nearest the class's inception for which data are
available.
See pages 70-72 for more information about share classes, returns, and the
comparative indices.
[mountain chart - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/98
S&P 500 $18,812
Strategic Moderate $13,649
Lehman Aggregate $12,448
3-Month T-Bill $11,416
Strategic Lehman 3-Month
S&P 500 Moderate Aggregate T-Bill
DATE VALUE VALUE VALUE VALUE
2/29/96* $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,071 $9,930 $10,041
4/30/96 $10,244 $10,314 $9,874 $10,082
5/31/96 $10,508 $10,394 $9,855 $10,125
6/30/96 $10,548 $10,411 $9,987 $10,167
7/31/96 $10,081 $10,085 $10,014 $10,211
8/31/96 $10,294 $10,309 $9,997 $10,254
9/30/96 $10,873 $10,650 $10,171 $10,297
10/31/96 $11,173 $10,773 $10,396 $10,339
11/30/96 $12,016 $11,080 $10,574 $10,382
12/31/96 $11,778 $11,019 $10,476 $10,425
1/31/97 $12,513 $11,204 $10,508 $10,469
2/28/97 $12,612 $11,121 $10,535 $10,513
3/31/97 $12,095 $10,824 $10,418 $10,558
4/30/97 $12,816 $10,989 $10,574 $10,603
5/31/97 $13,599 $11,529 $10,674 $10,648
6/30/97 $14,204 $11,851 $10,801 $10,691
7/31/97 $15,333 $12,414 $11,093 $10,736
8/31/97 $14,475 $12,143 $10,999 $10,783
9/30/97 $15,267 $12,711 $11,160 $10,827
10/31/97 $14,757 $12,397 $11,322 $10,871
11/30/97 $15,440 $12,523 $11,374 $10,919
12/31/97 $15,705 $12,699 $11,489 $10,966
1/31/98 $15,878 $12,742 $11,636 $11,012
2/28/98 $17,023 $13,353 $11,627 $11,058
3/31/98 $17,895 $13,819 $11,666 $11,105
4/30/98 $18,077 $13,928 $11,727 $11,150
5/31/98 $17,766 $13,862 $11,839 $11,197
6/30/98 $18,487 $14,084 $11,939 $11,243
7/31/98 $18,291 $13,974 $11,964 $11,289
8/31/98 $15,648 $12,717 $12,159 $11,335
9/30/98 $16,651 $13,015 $12,444 $11,378
10/31/98 $18,004 $13,393 $12,378 $11,416
11/30/98 $18,812 $13,649 $12,448 $11,416
$10,000 investment made 2/28/96
The chart at left shows the growth of a $10,000 investment over the life of the
fund, while the chart below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month Treasury Bill indices are provided
for comparison in each chart. Strategic Moderate's returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the returns of the indices do not. These charts are based on Investor
Class shares only; performance for other classes will vary due to differences in
fee structures (see Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.
[bar chart - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDED NOVEMBER 30)
Strategic Lehman 3-Month
S&P 500 Moderate Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
11/30/96* 20.18% 10.80% 5.75% 3.82%
11/30/97 28.56% 13.02% 7.55% 5.17%
11/30/98 23.66% 10.32% 9.45% 4.56%
* From 2/29/96 (the date nearest the class's inception for which index data are
available).
20 1-800-345-2021
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC MODERATE PERFORM DURING THE YEAR ENDED NOVEMBER 30, 1998?
For the fiscal year, Strategic Moderate's Investor Class shares posted a
total return of 10.32%, compared with the 11.69% return of the fund's
benchmark.* (See the previous page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
Our U.S. stock holdings, especially among smaller-company stocks, were one
reason for the underperformance. Although we made favorable asset allocation
decisions, our security selection suffered in a market where a few stocks were
rewarded and the rest were left behind.
An emphasis on corporate bonds over Treasury bonds in the U.S. bond portion
of the portfolio also hurt Strategic Moderate's return relative to the
benchmark. Treasurys were the best-performing bond sector by far.
HOW DID THE FUND'S ASSET MIX CHANGE DURING THE FISCAL YEAR?
In the first half of the year, we maintained a fairly neutral asset mix.
The only adjustments we made involved rebalancing when performance caused the
mix to stray from our neutral position of 60% stocks, 30% bonds, and 10% cash.
In June, however, we shifted to a more defensive stance designed to reduce
the share-price volatility of the portfolio.
WHAT DOES "DEFENSIVE" MEAN FOR THE STRATEGIC MODERATE PORTFOLIO?
With regard to the asset mix, it meant that we reduced our U.S. stock
holdings and increased our cash position. But it also involved some other
changes to the domestic stock portion of the portfolio. We sold some of the
fund's small-company (known as small-cap) stocks, as well as a few
value-oriented stocks (those we judged to be relatively inexpensive). This
changed the focus of the U.S. equity portion toward large-cap growth stocks.
We stayed with our defensive structure until October, when we began
shifting money back into the stock market. The good news is that we were
underweighted in stocks when the market took a dive in the third quarter; the
bad news is that we waited a little too long to get back to a neutral position
in stocks and didn't benefit fully from the rebound.
Nonetheless, the defensive strategy proved to be profitable and helped
lower the portfolio's share-price volatility.
DID YOU ALSO MAKE THE FUND'S BOND HOLDINGS MORE DEFENSIVE?
Yes and no. In anticipation of a global economic slowdown, we made a
somewhat aggressive move by extending duration in both our domestic and foreign
bonds. (Duration measures a
* The fund's benchmark consists of 10 different market indices--four U.S. stock
indices, two foreign stock indices, two U.S. bond indices, one foreign bond
index, and one money market index--that are weighted to match the fund's
neutral asset mix.
[right margin]
"IN JUNE, WE SHIFTED TO A MORE DEFENSIVE STANCE DESIGNED TO REDUCE THE
SHARE-PRICE VOLATILITY OF THE PORTFOLIO."
[pie chart - data below]
ASSET ALLOCATION
(AS OF NOVEMBER 30, 1998)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 45%
U.S. Bonds 25%
Money Market
Securities 10%
Foreign Stocks 14%
Foreign Bonds 6%
See page 71 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on page 72.
www.americancentury.com 21
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
(Continued)
bond portfolio's sensitivity to changes in interest rates. The longer the
portfolio's duration, the more price volatility you get when interest rates
change.)
As interest rates fell around the globe, our longer duration helped the
fund earn more price gains on its bond holdings. This was especially true for
U.S. Treasury bonds, whose yields reached record lows during the year.
But we also shifted to a more defensive position in corporate bonds, which
make up more than 40% of the fund's U.S. bond holdings. We avoided the bonds of
companies that had direct exposure to the most turbulent emerging markets. We
also reduced our holdings in industries that are sensitive to slower economic
growth, such as financial services.
Instead, we bought the bonds of companies that do most of their business
domestically and are in industries that are less affected by economic downturns.
Examples include companies in the telecommunications, cable television, and
utilities industries.
IN THE PORTFOLIO'S FOREIGN SECURITIES, YOU INCREASED YOUR EXPOSURE TO ASIA. ARE
YOU SEEING SOME OPPORTUNITIES THERE?
Southeast Asia still has a long way to go to solve its financial problems,
and the region's recovery will depend in large part on whether Japan can
jump-start its economy. That said, when Asia does bounce back, we expect it to
happen quickly and dramatically, and we want to have some exposure to the region
when it happens.
As a result, we've been selectively adding Asian stocks to the portfolio
recently. Overall, though, we continued to focus our foreign stock and bond
holdings in Europe because that's where we think the best opportunities are.
LOOKING AHEAD, WHAT ARE YOUR PLANS FOR STRATEGIC MODERATE'S ASSET ALLOCATION
STRUCTURE?
We plan to maintain our current neutral asset mix of 60% stocks, 30% bonds,
and 10% cash. We'll also stay somewhat defensive in our positioning within each
asset class because we're expecting fairly modest returns for both stocks and
bonds in the coming year.
Right now, we think stocks have better return potential than bonds, but not
enough to make any significant changes within the portfolio.
WHY DO YOU FAVOR STOCKS?
We don't want to overstate our enthusiasm for stocks--the major market
indices are at record highs, and we expect earnings growth to be slower going
forward. However, economic conditions remain reasonably favorable for stocks,
and investor demand for equities is still strong. We think this will be enough
for stocks to produce moderately positive results in 1999.
[left margin]
FUND'S U.S. STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 377
DIVIDEND YIELD 1.55%
PRICE/EARNINGS RATIO 32.2
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
MICROSOFT CORP. 2.1% 0.9%
BELLSOUTH CORP. 1.8% 0.8%
BANKAMERICA CORP. 1.7% 0.8%
GENERAL ELECTRIC CO. (U.S.) 1.5% 0.7%
WAL-MART STORES, INC. 1.4% 0.6%
FUND'S FOREIGN STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 295
DIVIDEND YIELD 1.30%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
NOVARTIS AG SWITZERLAND 1.8% 0.2%
MANNESMANN AG GERMANY 1.7% 0.2%
MARSCHOLLEK,
LAUTENSCHLAEGER
UND PARTNER AG GERMANY 1.5% 0.2%
VIVENDI FRANCE 1.4% 0.2%
AXA-UAP FRANCE 1.2% 0.2%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 81%
Asia/Pacific 13%
Americas
(excluding U.S.) 6%
22 1-800-345-2021
Strategic Moderate--Q&A
- --------------------------------------------------------------------------------
(Continued)
Small-cap stocks appear to be extremely undervalued compared with the rest
of the market. Historically, investors have been willing to pay a higher price
for small-cap stocks, relative to their earnings, than they have for the stocks
of larger companies.
For example, the price/earnings ratio of the Russell 2000 (an index of
small-cap stocks) has typically been 1.5 times that of the S&P 500 (a large-cap
stock index). Currently, though, the price/ earnings ratio of the Russell 2000
is lower than that of the S&P 500.
We'd like to overweight small-cap stocks in the Strategic Moderate
portfolio, but we're not ready to pull the trigger yet. Large-cap stocks are
still riding a wave of momentum, and we believe that earnings growth needs to
begin expanding again before small-caps can outperform.
WHAT ABOUT THE OUTLOOK FOR BONDS?
We'll likely remain cautious in this part of the portfolio because we think
interest rates will be higher a year from now. The Federal Reserve successfully
stabilized the global financial markets with its three interest rate cuts in
late 1998, but now we expect the Fed to take a "wait and see" approach to
interest rate policy. In fact, we wouldn't be surprised if the Fed is done
cutting interest rates for a while.
In addition, flight-to-quality demand for U.S. Treasury bonds waned in late
1998. As a result, we could see the yield difference between Treasurys and
corporate bonds narrow. If that happens, we'll likely shift to a more defensive
position by selling some of our corporate bonds and buying government bonds.
HOW WILL YOU POSITION THE FUND'S FOREIGN HOLDINGS?
We favor stocks over bonds in overseas markets as well, so much so that
we're overweighted in foreign stocks and underweighted in foreign bonds. We
still really like the investment opportunities in Europe, especially in stocks.
WILL EUROPEAN ECONOMIC AND MONETARY UNION (EMU) HAVE A SIGNIFICANT EFFECT ON
YOUR MANAGEMENT OF THE FUND'S FOREIGN HOLDINGS?
Not really. The changes were widely anticipated, and the implementation of
EMU has gone smoothly so far. We've been looking at the "Euro 11" countries as a
single bond market since their yields converged about a year ago. The stock
markets have retained some of their individual characteristics, but the
perceived risk in each country's market is much more equal than it has been
historically.
Certainly, though, EMU will create winners and losers among European
stocks. Companies that are more efficient, flexible, and aggressive will take
the most advantage of the open economic environment, while slow-moving,
inefficient companies that have relied on regional barriers to competition will
struggle. This definitely creates opportunities for us as investors.
"WE THINK STOCKS HAVE BETTER RETURN POTENTIAL THAN BONDS, BUT NOT ENOUGH TO MAKE
ANY SIGNIFICANT CHANGES WITHIN THE PORTFOLIO."
[right margin]
FUND'S U.S. BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 131
WEIGHTED AVERAGE MATURITY 8.2 YEARS
AVERAGE DURATION 4.7 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 43%
Mortgage-Backed 21%
U.S. Treasury 21%
Asset-Backed 8%
U.S. Govt. Agency 7%
FUND'S FOREIGN BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 8
WEIGHTED AVERAGE MATURITY 8.8 YEARS
AVERAGE DURATION 6.7 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 81%
Asia/Pacific 15%
Americas
(excluding U.S.) 4%
www.americancentury.com 23
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS--58.6%
AEROSPACE & DEFENSE--1.9%
400 Alliant Techsystems Inc.(1) $ 30,475
1,700 Aviation Sales Co.(1) 62,900
4,100 BE Aerospace, Inc.(1) 97,247
12,300 Boeing Co. 499,688
16,200 Bombardier Inc. Cl B ORD 210,891
17,456 British Aerospace PLC ORD 150,092
1,000 Cie des Signaux SA ORD 79,552
3,900 Cobham PLC ORD 54,709
8,100 Cordant Technologies Inc. 325,519
3,500 EG&G, Inc. 97,781
2,700 General Dynamics Corp. 156,769
6,200 Goodrich (B.F.) Company (The) 235,213
3,500 Gulfstream Aerospace Corp.(1) 179,813
2,800 Litton Industries, Inc.(1) 171,325
4,000 Lockheed Martin Corp. 415,000
1,400 Newport News Shipbuilding Inc. 39,375
3,600 Nichols Research Corp.(1) 76,500
1,500 Northrop Grumman Corp. 121,875
2,900 Raytheon Co. Cl A 158,594
7,000 Raytheon Co. Cl B 387,625
1,100 Triumph Group, Inc.(1) 36,988
13,800 United Technologies Corp. 1,479,188
--------------
5,067,119
--------------
AIRLINES--0.1%
2,000 AMR Corp.(1) 131,875
600 Delta Air Lines Inc. 32,213
2,900 Midway Airlines Corp.(1) 37,519
--------------
201,607
--------------
AUTOMOBILES & AUTO PARTS--1.7%
2,300 Arvin Industries, Inc. 96,600
3,800 Coachmen Industries, Inc. 85,500
40,100 Cooper Tire and Rubber Company 784,456
4,489 DaimlerChrysler AG(1) 411,585
2,375 DaimlerChrysler AG ORD 223,320
2,800 Dura Automotive Systems, Inc.(1) 81,025
7,500 Fleetwood Enterprises, Inc. 252,656
24,200 Ford Motor Co. 1,337,050
14,000 Fuji Heavy Industries Ltd. ORD 69,918
2,000 Honda Motor Co., Ltd. ORD 71,785
11,200 Kwik-Fit Holdings plc ORD 99,998
50 Porsche AG ORD 111,265
25,600 Superior Industries International,
Inc. 665,600
3,400 Tower Automotive, Inc.(1) 77,350
4,675 Volkswagen AG ORD 380,810
--------------
4,748,918
--------------
Shares Value
- --------------------------------------------------------------------------------
BANKING--5.5%
48,500 Anglo Irish Bank Corp. plc ORD $ 123,265
28,500 Australia & New Zealand Banking
Group Ltd. ORD 187,943
7,700 Banc One Corp. 395,106
79,400 Banca di Roma ORD(1) 137,459
27,100 Banca Nazionale del Lavoro
ORD(1) 76,229
6,066 Banca Popolare Commercio
e Industria ORD 124,899
4,382 Banca Popolare di Brescia ORD 101,846
2,765 Banco Espirito Santo e Comercial
de Lisboa, SA ORD 85,789
7,278 Banco Mello, S.A. ORD 87,947
6,500 Bank of Boston Corp. 270,563
10,000 Bank of Tokyo-Mitsubishi, Ltd.
(The) ORD 108,815
1,505 Bank Rozwoju Eksportu S.A. ORD 34,126
45 Bank Sarasin & Cie Cl B ORD 82,879
32,176 BankAmerica Corp. 2,097,434
14,500 Chase Manhattan Corp. 919,844
17,300 Citigroup Inc. 868,244
9,300 Argentaria SA ORD 216,744
15,000 Dai-Ichi Kangyo Bank Ltd. ORD 99,882
4,000 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 330,549
4,200 Fifth Third Bancorp 279,169
15,400 First Union Corp. 935,550
18,200 First Virginia Banks, Inc. 816,725
8,600 Housing & Commercial Bank,
Korea ORD 58,737
5,000 Imperial Bancorp(1) 77,500
8,400 Mellon Bank Corp. 528,675
27,700 Mercantile Bancorporation Inc. 1,220,531
4,800 Metropolitan Bank & Trust Co.
ORD 33,807
373 National Bank of Greece S.A.
ORD 66,760
2,100 Northern Trust Corp. 169,706
2,400 Old Kent Financial Corp. 103,125
1,300 Piraeus Bank S.A. ORD 61,971
10,000 PNC Bank Corp. 515,625
2,800 Providian Financial Corp. 257,075
13,200 Regions Financial Corp. 511,913
1,600 Societe Generale Cl A ORD 252,314
3,300 SouthTrust Corp. 121,481
20,200 Standard Chartered plc ORD 214,691
1,300 UBS AG ORD 391,286
1,467 Van der Moolen Holding N.V.
ORD 99,758
10,100 Wachovia Corp. 881,856
See Notes to Financial Statements
24 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
19,600 Wells Fargo & Co. $ 705,600
18,500 Wing Hang Bank Ltd. ORD 51,372
5,100 Zions Bancorporation 258,028
--------------
14,962,818
--------------
BIOTECHNOLOGY--0.4%
3,000 Amgen Inc.(1) 225,563
4,600 Centocor, Inc.(1) 186,731
8,000 Genzyme Corp. 336,250
940 Genzyme Molecular Oncology(1) 3,261
3,800 IDEC Pharmaceuticals Corp.(1) 128,013
3,300 PathoGenesis Corp.(1) 158,813
1,400 QIAGEN N.V.(1) 85,400
--------------
1,124,031
--------------
BROADCASTING & MEDIA--0.5%
7,900 BEC World Public Co., Ltd. ORD 49,389
9,100 CBS Corporation 271,294
10,000 Clear Channel
Communications, Inc.(1) 467,500
1,264 Havas Advertising SA ORD 219,128
11,900 Mediaset SpA ORD 84,038
700 Metro Networks, Inc.(1) 27,038
900 Societe Television
Francaise 1 ORD 157,609
--------------
1,275,996
--------------
BUILDING & HOME IMPROVEMENTS--0.2%
8,300 Lafarge Corp. 307,619
2,700 Lone Star Industries, Inc. 204,356
--------------
511,975
--------------
BUSINESS SERVICES & SUPPLIES--1.5%
1,900 ABM Industries Inc. 63,294
3,500 Acxiom Corp.(1) 83,344
4,300 Administaff, Inc.(1) 116,369
3,007 Admiral plc ORD 48,509
725 Altran Technologies SA ORD 168,560
5,200 Athlon Groep N.V. ORD 142,369
2,500 Billing Concepts Corp.(1) 31,484
12,400 Capita Group Plc ORD 117,056
13,600 CGI Group, Inc. ORD(1) 232,953
4,000 CKS Group, Inc.(1) 135,000
10,800 Compass Group PLC ORD 113,894
126 Creyf's NV ORD 50,083
3,300 CSG Systems International, Inc.(1) 207,694
1,000 DIS Deutscher Industrie
Service AG ORD 44,860
4,400 Gartner Group, Inc. Cl A(1) 95,150
8,100 HA-LO Industries, Inc.(1) 258,694
12,400 Hays plc ORD 104,777
5,400 International Telecommunication
Data Systems, Inc.(1) 135,169
Shares Value
- --------------------------------------------------------------------------------
1,100 Kendle International Inc.(1) $ 24,750
4,400 Kroll-O'Gara Company(1) 135,850
5,200 Nova Corp.(1) 165,425
2,400 PAREXEL International Corp.(1) 62,625
8,037 Parity plc ORD 64,330
3,600 Pharmaceutical Product
Development, Inc.(1) 103,275
2,300 Professional Detailing, Inc.(1) 53,619
200 PubliGroupe S.A. ORD 56,758
3,500 Quintiles Transnational Corp.(1) 175,000
4,900 Select Appointments Holdings
plc ORD 50,865
85,000 Singapore Technologies
Engineering Ltd. ORD 92,840
400 Sixt AG ORD 93,262
4,900 Spring Group PLC ORD 11,726
2,400 Stork N.V. ORD 61,186
3,100 Superior Consultant
Holdings Corp.(1) 113,925
3,300 Sykes Enterprises, Inc.(1) 66,825
3,000 Toyo Information Systems Co.,
Ltd. ORD 53,595
4,900 Triad Group PLC ORD 34,773
6,400 True North Communications Inc. 180,000
5,600 Unique International NV ORD 142,180
4,800 Vedior NV ORD (Acquired
8/8/97-11/10/98,
Cost $108,191)(2) 97,998
26,500 WPP Group plc ORD 146,072
--------------
4,136,138
--------------
CHEMICALS & RESINS--0.9%
5,200 Air Products and Chemicals, Inc. 198,250
9,600 Dow Chemical Co. 934,800
3,500 du Pont (E.I.) de Nemours & Co. 205,625
4,200 IMC Global Inc. 96,075
11,700 Lubrizol Corp. 317,363
21,800 Morton International, Inc. 641,738
2,000 Sony Chemicals Corp. ORD 72,110
--------------
2,465,961
--------------
COMMUNICATIONS EQUIPMENT--1.4%
17,700 Andrew Corp.(1) 286,519
4,200 ANTEC Corp.(1) 77,963
6,300 Ascend Communications, Inc.(1) 353,784
3,900 Comverse Technology, Inc.(1) 224,372
7,900 Ericsson (L.M.) Telephone
Co. ADR 217,991
5,600 Harris Corp. 212,450
9,100 Lucent Technologies Inc. 783,169
7,200 Motorola, Inc. 446,400
4,000 Nokia Corp. Cl A ADR 392,000
4,400 Northern Telecom Ltd. 205,425
1,300 Plantronics, Inc.(1) 85,475
See Notes to Financial Statements
www.americancentury.com 25
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
6,800 Polycom, Inc.(1) $ 121,125
1,300 Radiotronica SA ORD(1) 94,950
14,000 Scientific-Atlanta, Inc. 271,250
700 Superior TeleCom Inc. 30,450
5,700 Tandberg ASA ORD 43,453
3,900 Tekelec(1) 60,450
1,700 Terayon Communication
Systems, Inc.(1) 52,169
--------------
3,959,395
--------------
COMMUNICATIONS SERVICES--5.5%
9,600 Advanced Info Service Public Co.
Limited ORD(1) 55,768
17,200 AirTouch Communications, Inc.(1) 983,625
4,100 Amdocs Ltd.(1) 63,038
12,600 Ameritech Corp. 681,975
21,600 AT&T Corp. 1,345,950
24,900 BellSouth Corp. 2,172,525
20,700 British Telecommunications
plc ORD 283,717
35,400 Cable & Wireless Communications
plc ORD(1) 315,481
56,193 Cable & Wireless Optus
Limited ORD(1) 105,070
1,500 Cellular Communications
International, Inc.(1) 93,844
3,400 Century Telephone Enterprises, Inc. 193,800
1,900 China Telecom (Hong Kong)
Limited ADR(1) 75,169
29,605 COLT Telecom Group plc ORD(1) 386,960
5,200 Companhia de
Telecomunicaciones de Chile
S.A. ADR 120,575
5,600 Crown Castle International Corp.(1) 75,250
25,000 Datacraft Asia Limited ORD 41,000
15,900 Energis plc ORD(1) 287,334
5,700 Esat Telecom Group plc ADR(1) 200,925
1,800 Europolitan Holdings AB ORD 165,660
2,700 Global TeleSystems Group, Inc.(1) 117,197
8,200 GTE Corp. 508,400
4,333 Hellenic Telecommunication
Organization SA (OTE) ORD 108,199
8,600 International FiberCom, Inc.(1) 69,069
14,000 MCI WorldCom, Inc.(1) 825,563
200 Mobistar SA ORD(1) 9,522
3,100 NetCom Systems AB Cl B ORD(1) 119,766
21 Nippon Telegraph &
Telephone ORD 156,888
40 NTT Data Corp. ORD 174,753
400 Omnicom SA ORD(1) 42,522
16,400 Orange plc ORD(1) 167,808
1,869 Panafon SA ORD(1) 33,524
33,100 SBC Communications Inc. 1,586,731
8,000 SK Telecom Co. Ltd. ADR 82,500
Shares Value
- --------------------------------------------------------------------------------
4,353 Sonera Group Oyj ORD(1) $ 62,530
5,100 Sprint Corp. 371,025
2,550 Sprint PCS(1) 40,800
200 STET Hellas Telecommunications
S.A. ADR(1) 6,963
539 Swisscom AG ORD(1) 181,547
3,500 Tele Danmark A/S ORD 391,274
907 Telecel-Comunicacaoes Pessoais,
SA ORD 177,449
53,400 Telecom Italia Mobile (TIM)
SpA ORD 224,993
43,000 Telecom Italia SpA ORD 348,638
8,618 Telefonica de Espana ORD 405,286
9,100 Teleglobe Inc. ORD 247,912
603 Telinfo NV ORD 71,560
1,813 Total Access Communication
Public Co. Limited ORD(1) 4,061
5,700 U S WEST Communications Group 354,825
4,900 Viatel, Inc.(1) 72,888
24,900 Vodafone Group plc ORD 367,789
--------------
14,979,648
--------------
COMPUTER PERIPHERALS--1.0%
3,800 Architel Systems Corp. ORD(1) 44,633
12,375 Cisco Systems Inc.(1) 933,152
11,100 EMC Corp. (Mass.)(1) 804,750
3,700 Lexmark International Group,
Inc. Cl A(1) 282,588
2,300 Proxim, Inc.(1) 52,325
7,600 Psion plc ORD 59,264
8,200 Quantum Corp.(1) 181,681
7,200 Seagate Technology, Inc.(1) 212,400
1,700 Xylan Corp.(1) 30,972
--------------
2,601,765
--------------
COMPUTER SOFTWARE & SERVICES--3.6%
1,400 Advantage Learning Systems,
Inc.(1) 77,875
2,200 America Online Inc. 192,638
2,200 AnswerThink Consulting Group,
Inc.(1) 42,831
5,100 At Home Corp. Series A(1) 296,756
700 Atos SA ORD(1) 150,304
2,900 Autodesk, Inc. 105,669
5,700 Automatic Data Processing, Inc. 438,900
2,500 Cap Gemini N.V. ORD 178,772
2,326 Cap Gemini SA ORD 340,602
1,100 CIBER, Inc.(1) 24,819
4,500 CMG plc ORD 111,547
7,900 Comdisco, Inc. 144,175
3,000 Compuware Corp.(1) 186,938
1,000 Concord Communications, Inc.(1) 44,281
1,700 Deltek Systems, Inc.(1) 30,334
2,100 Equant NV New York Shares(1) 118,519
See Notes to Financial Statements
26 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
3,400 Excite, Inc.(1) $ 165,856
31,400 First Data Corp. 837,988
1,000 Fuji Soft ABC, Inc. ORD 41,009
3,800 Geac Computer Corp. Ltd. ORD(1) 99,680
5,800 Getronics N.V. ORD 253,831
7,900 GTECH Holdings Corp.(1) 197,994
8,200 HBO & Co. 204,231
1,700 Inktomi Corp.(1) 227,428
5,100 International Integration Inc.(1) 76,978
152 Jet Multimedia ORD 24,532
2,400 Keane, Inc.(1) 69,000
18,100 Logica plc ORD 131,434
3,500 London Bridge Software Holdings
plc ORD 68,448
9,830 Mandator AB ORD 82,849
21,300 Microsoft Corp.(1) 2,599,266
21,595 Misys plc ORD 152,180
1,900 Network Associates Inc.(1) 96,722
16,500 Novell, Inc.(1) 272,766
10,600 Oracle Systems Corp.(1) 363,381
2,348 Ordina N.V. ORD(1) 64,654
3,800 Project Software & Development,
Inc.(1) 114,238
300 QRS Corp.(1) 12,544
1,900 QuadraMed Corp.(1) 45,481
3,800 Sage Group plc (The) ORD 90,934
1,000 Sapient Corp.(1) 46,188
1,018 Sigma AB Cl B ORD(1) 35,447
701 Simac Techniek N.V. ORD 89,870
8,300 Sterling Software, Inc.(1) 213,725
1,000 Sumisho Computer Systems
Corp. ORD 21,073
2,200 Synopsys, Inc.(1) 104,088
2,600 Technomatix Technologies Ltd.(1) 35,831
15,500 Unisys Corp.(1) 441,750
3,442 Unit 4 ORD(1) 94,057
1,000 Wind River Systems, Inc.(1) 46,625
--------------
9,907,038
--------------
COMPUTER SYSTEMS--1.0%
15,300 Apple Computer, Inc.(1) 489,122
6,600 Compaq Computer Corp. 214,500
10,800 Dell Computer Corp.(1) 656,438
14,000 Fujitsu Ltd. ORD 161,663
3,100 Hewlett--Packard Co. 194,525
4,000 International Business
Machines Corp. 660,000
3,900 Sun Microsystems, Inc.(1) 288,600
--------------
2,664,848
--------------
CONSTRUCTION & PROPERTY
DEVELOPMENT--0.4%
2,200 Assa Abloy AB Cl B ORD 87,973
Shares Value
- --------------------------------------------------------------------------------
2,300 Brisa-Auto Estradas de Portugal,
S.A. ORD $ 124,407
2,100 Centex Corp. 74,944
6,900 CRH plc ORD 103,739
9,000 D.R. Horton, Inc. 169,875
13,000 Daiwa House Industry Co.,
Ltd. ORD 137,764
2,400 Grupo Acciona SA ORD 121,357
2,700 Insituform Technologies, Inc. Cl A(1) 35,269
4,644 Jarvis plc ORD 50,661
1,300 Lafarge SA ORD 122,637
2,100 Southdown, Inc. 122,325
--------------
1,150,951
--------------
CONSUMER PRODUCTS--0.7%
1,600 Chattem, Inc.(1) 68,100
8,400 Helen of Troy Ltd.(1) 140,175
17,000 Kao Corporation ORD 321,653
5,500 NBTY, Inc.(1) 33,602
6,200 Procter & Gamble Co. (The) 543,275
5,600 Rayovac Corporation(1) 129,500
2,300 Twinlab Corp.(1) 38,166
9,600 Whirlpool Corp. 537,600
--------------
1,812,071
--------------
CONTROL & MEASUREMENT(3)
1,000 Orbotech Ltd.(1) 38,625
--------------
DIVERSIFIED COMPANIES--1.6%
2,869 Asko Oyj Cl A ORD 45,445
20,600 BBA Group plc ORD 113,551
7,350 Bodycote International plc ORD 107,958
3,200 Brambles Industries Limited ORD 78,318
4,900 DCC plc ORD 41,684
20,700 General Electric Co. (U.S.) 1,873,350
1,200 GP Strategies Corp.(1) 17,250
9,000 Nikon Corporation ORD 86,240
16,700 Tyco International Ltd. 1,099,069
3,700 Unilever N.V. New York Shares 286,056
2,300 Vivendi ORD 520,574
--------------
4,269,495
--------------
EDUCATION(3)
900 Benesse Corporation ORD 45,093
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS--1.6%
8,800 Advanced Micro Devices, Inc.(1) 243,650
1,800 Advantest Corp. ORD 120,151
3,300 Aeroflex Inc.(1) 45,169
1,600 Altera Corp.(1) 78,550
5,400 Arrow Electronics, Inc.(1) 117,450
6,100 Celestica Inc.(1) 123,906
600 Dae Duck Electronics Co. ORD 48,154
3,300 DII Group, Inc.(1) 68,784
See Notes to Financial Statements
www.americancentury.com 27
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
700 Draka Holding N.V. ORD $ 20,154
2,400 Electronics for Imaging, Inc.(1) 64,425
12,133 Elektrim Spolka Akcyjna S.A.
ORD 102,037
16,000 Fujikura Ltd. ORD 89,261
3,000 Hosiden Corporation ORD 52,012
14,000 Intel Corp. 1,506,313
30 Kudelski SA ORD(1) 85,997
1,500 Leitch Technology Corp ORD(1) 34,307
2,000 Murata Manufacturing Co., Ltd.
ORD 78,282
15,000 Natsteel Electronics Ltd. ORD 32,403
94 Phoenix Mecano AG ORD 59,617
7,400 Pinnacle Systems, Inc.(1) 248,363
159 Sartorius AG ORD 38,010
1,000 Siemens AG ORD 69,651
2,600 Softbank S.A. GDR 57,460
2,100 Sony Corp. ORD 153,648
1,200 STMicroelectronics N.V.
New York Shares(1) 80,550
5,000 Texas Instruments Inc. 381,875
6,000 Tokyo Electron Ltd. ORD 224,126
4,500 Uniphase Corp.(1) 243,563
--------------
4,467,868
--------------
ENERGY(3)
200 ISIS ORD 14,467
--------------
ENERGY (PRODUCTION & MARKETING)--3.0%
11,500 Amoco Corp. 677,781
23,300 Apache Corp. 535,900
12,300 Atlantic Richfield Co. 817,950
6,000 Berkley Petroleum Corp. ORD(1) 40,326
28,200 Burlington Resources Inc. 1,004,625
12,500 Canadian 88 Energy Corp. ORD(1) 41,599
3,700 Chevron Corp. 309,413
2,400 Elf Aquitaine SA ORD 299,483
18,000 Exxon Corp. 1,351,125
15,100 Murphy Oil Corp. 602,113
2,900 NICOR Inc. 121,981
53,500 Seagull Energy Corp.(1) 438,031
13,400 Sunoco, Inc. 453,925
7,200 Texaco Inc. 414,450
7,500 Ultramar Diamond Shamrock Corp. 193,125
18,100 Unocal Corp. 613,138
7,300 Williams Companies, Inc. (The) 210,331
13,600 Woodside Petroleum Limited ORD 69,120
--------------
8,194,416
--------------
ENERGY (SERVICES)--0.4%
50,700 Baker Hughes Inc. 928,444
100 Bouygues Offshore S.A. ADR 1,213
900 IHC Caland N.V. ORD 38,163
Shares Value
- --------------------------------------------------------------------------------
7,200 Tidewater Inc. $ 166,050
3,100 Transocean Offshore 76,531
--------------
1,210,401
--------------
ENTERTAINMENT(3)
1,200 Endemol Entertainment Holding
NV ORD 38,634
--------------
ENVIRONMENTAL SERVICES--0.5%
2,700 Allied Waste Industries, Inc.(1) 55,181
26,000 Browning-Ferris Industries, Inc. 767,000
12,100 Rentokil Initial PLC ORD 77,880
7,880 Waste Management, Inc. 337,855
--------------
1,237,916
--------------
FINANCIAL SERVICES--2.9%
600 Aeon Credit Service Ltd. ORD 34,009
25,300 AMP Limited ORD (Acquired
6/18/98-11/6/98, Cost
$313,990)(1)(2) 327,316
29,500 Amvescap Plc ORD 240,262
1,000 Azkoyen SA ORD 35,028
100 Banca del Gottardo Cl B ORD 82,915
41,000 Banca Intesa S.p.A. ORD 229,067
14,109 Bank of Ireland ORD 292,224
1,400 Bayerische Vereinsbank AG ORD 121,312
32,000 CIT Group Holdings, Inc. (The)
Cl A 898,000
3,500 Close Brothers Group plc ORD 32,491
17,100 Corporacion Financiera Reunida,
S.A. ORD(1) 229,510
1,000 Credit Suisse Group ORD 171,994
3,300 Dresdner Bank AG ORD 148,039
5,400 Equitable Companies Inc. 298,350
17,000 Fannie Mae 1,236,750
5,100 Federal Home Loan Mortgage
Corporation 308,550
3,500 FINOVA Group Inc. 184,844
700 GFI Informatique ORD(1) 75,399
12,300 Industrial Finance Corporation of
Thailand (The) ORD 5,359
6,725 ING Groep N.V. ORD 385,493
145 Julius Baer Holding AG ORD 470,725
2,918 Kempen & Company NV ORD 163,295
21,400 Lloyds TSB Group plc ORD 297,550
10,900 Morgan Stanley Dean Witter,
Discover & Co. 760,275
1,500 Mycal Card Inc. ORD(1) 36,542
51,700 National Finance and Securities
Public Co., Ltd. Cl F ORD(1) 17,162
7,040 Newcourt Credit Group Inc. ORD
(Acquired 11/18/97-10/29/98,
Cost $203,131)(2) 249,673
8,000 Nomura Securities Co., Ltd. ORD 77,762
5,224 Provident Financial plc ORD 78,455
See Notes to Financial Statements
28 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
23,200 Skandia Forsakrings AB ORD $ 329,695
5,906 Tas Groep NV ORD(1) 26,898
6,000 UniCapital Corp.(1) 49,500
100 Vontobel Holding AG Cl B ORD 168,410
--------------
8,062,854
--------------
FOOD & BEVERAGE--2.4%
5,100 American Italian Pasta Co. Cl A(1) 128,775
61,165 Archer-Daniels-Midland Co. 1,123,907
14,300 Coca-Cola Beverages plc ORD(1) 29,972
10,900 Coca-Cola Enterprises, Inc. 412,156
7,500 ConAgra, Inc. 235,781
3,700 Coors (Adolph) Co. Cl B 184,191
21,600 Diageo plc ORD 242,047
2,000 General Mills, Inc. 151,000
1,200 Groupe Danone ORD 350,593
8,600 Grupo Continental, S.A. ORD 19,887
4,500 Hain Food Group, Inc. (The)(1) 92,250
4,100 Heineken NV ORD 208,407
3,200 Hershey Foods Corp. 215,200
3,100 Hormel Foods Corp. 91,644
17,000 Interstate Bakeries Corp. 446,250
21,400 J.D. Wetherspoon plc ORD 73,284
5,400 Kerry Group Plc Cl A ORD 75,242
11,000 Kirin Brewery Company, Ltd. ORD 114,158
5,100 Nabisco Holdings Corp. Cl A 203,363
142 Nestle S.A. ORD 295,113
20,000 Ng Fung Hong Limited ORD 17,824
2,200 PepsiCo, Inc. 85,113
1,600 Performance Food Group Co.(1) 38,950
7,600 Quaker Oats Co. (The) 466,450
36 South African Breweries Ltd. ORD 609
3,900 Suiza Foods Corp.(1) 184,763
43,700 Tyson Foods, Inc. Cl A 904,044
2,100 U.S. Foodservice, Inc.(1) 96,469
--------------
6,487,442
--------------
FURNITURE & FURNISHINGS--0.2%
4,000 CompX International Inc.(1) 100,250
6,100 Dorel Industries Inc. Cl B ORD(1) 92,545
3,600 Miller (Herman), Inc. 77,063
4,800 Newell Co. 212,400
2,800 O'Sullivan Industries Holdings,
Inc.(1) 28,175
--------------
510,433
--------------
HEALTHCARE--1.4%
7,700 Aetna Inc. 595,306
10,300 Beckman Coulter Inc. 496,975
6,750 Cardinal Health, Inc. 463,219
32,700 Columbia/HCA Healthcare Corp. 805,238
1,200 Gehe AG ORD 76,853
Shares Value
- --------------------------------------------------------------------------------
9,100 Health Management
Associates, Inc.(1) $ 197,356
3,700 PacifiCare Health Systems,
Inc. Cl B(1) 279,234
5,400 Province Healthcare Co.(1) 172,125
6,700 Tenet Healthcare Corp.(1) 198,069
9,200 Total Renal Care Holdings, Inc.(1) 244,375
4,800 Trigon Healthcare, Inc.(1) 177,900
1,000 Yoshitomi Pharmaceutical
Industries, Ltd. ORD 9,745
--------------
3,716,395
--------------
HOTELS(3)
900 Sol Melia, SA ORD 35,146
--------------
INDUSTRIAL(3)
33,500 Siebe plc ORD 120,525
--------------
INDUSTRIAL EQUIPMENT &
MACHINERY--0.4%
3,300 Caterpillar Inc. 163,144
8,500 Ingersoll-Rand Co. 397,906
6,140 Mannesmann AG ORD 665,047
--------------
1,226,097
--------------
INSURANCE--2.7%
520 Allianz AG ORD 187,386
14,600 Allstate Corp. 594,950
3,500 American International Group, Inc. 329,000
2,993 ASR Verzekeringsgroep N.V. ORD 243,639
7,400 Assicurazioni Generali ORD 276,508
3,675 Axa-UAP ORD 475,400
11,900 Chubb Corp. (The) 833,744
18,600 CNA Financial Corp.(1) 795,150
4,100 Companhia de Seguros Mundial
Confianca, SA ORD(1) 134,241
7,700 Conseco Inc. 255,063
2,470 Ethniki General Insurance
Co. ORD 69,931
8,100 Fidelity National Financial, Inc. 265,781
9,000 First American Financial Corp.
(The) 275,625
6,100 Gallagher (Arthur J.) & Co. 282,888
4,000 Kingsway Financial
Services ORD(1) 30,016
7,800 LandAmerica Financial Group, Inc. 478,238
6,900 Lincoln National Corp. 577,444
5,600 Mediolanum SpA ORD 33,707
1,000 Pohjola Insurance Group Cl B
ORD 46,782
68,100 Premafin Finanziaria S.p.A. ORD(1) 58,238
18,400 Reinsurance Australia
Corporation Ltd. ORD 41,562
1,500 Reinsurance Group of America,
Inc. 98,250
18,800 SAFECO Corp. 807,813
See Notes to Financial Statements
www.americancentury.com 29
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
3,100 Sampo Insurance Company Ltd.
ORD $ 106,513
35 Schweizerische
Rueckversicherungs-Gesellschaft
ORD 88,491
1,300 Transatlantic Holdings, Inc. 98,800
--------------
7,485,160
--------------
LEISURE--0.4%
365 Accor SA ORD 80,300
1,900 Anchor Gaming(1) 97,138
28,600 Ciga Spa ORD(1) 25,038
21,000 Corporacion Interamericana de
Entretenimiento S.A. Cl B
ORD(1) 48,141
5,800 Eastman Kodak Co. 420,863
100 Moevenpick Holding AG Bearer
ORD 51,598
8,000 Olympus Optical Co., Ltd. ORD 87,572
1,900 Samsung Electronics ORD 101,557
1,700 Scandic Hotels AB ORD 59,403
--------------
971,610
--------------
MACHINERY & EQUIPMENT--0.8%
4,000 ATS Automation Tooling Systems,
Inc. ORD(1) 47,504
16,800 Cooper Industries, Inc. 825,300
7,800 Deere & Co. 272,513
200 Georg Fischer AG ORD 68,224
800 Hanover Compressor Company(1) 18,100
10,500 Premark International, Inc. 352,406
1,200 Sidel SA ORD 91,027
8,700 Sundstrand Corp. 469,800
900 Swisslog Holding AG ORD 87,072
1,000 UNION TOOL CO. ORD 44,257
--------------
2,276,203
--------------
MEDICAL EQUIPMENT & SUPPLIES--0.7%
700 ADAC Laboratories(1) 18,222
4,800 Arterial Vascular Engineering,
Inc.(1) 234,750
6,200 CONMED Corp.(1) 168,950
4,400 Guidant Corp. 377,575
3,000 Haemonetics Corp.(1) 67,688
6,300 Hillenbrand Industries, Inc. 357,919
5,600 Medtronic, Inc. 379,050
12,000 PSS World Medical, Inc.(1) 249,375
8,000 Terumo Corporation ORD 177,677
--------------
2,031,206
--------------
METALS & MINING--0.2%
5,055 Aalberts Industries N.V. ORD 119,346
5,000 Aluminum Co. of America 370,625
9,500 Johnson Matthey PLC ORD 64,673
--------------
554,644
--------------
Shares Value
- --------------------------------------------------------------------------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
3,400 Kronos Inc.(1) $ 146,200
1,000 Strafor-Facom SA ORD 68,200
--------------
214,400
--------------
PACKAGING & CONTAINERS--0.3%
21,600 Tenneco Inc. 769,500
--------------
PAPER & FOREST PRODUCTS--0.5%
600 Chesapeake Corp. 20,813
4,600 Rayonier, Inc. 195,500
8,800 Union Camp Corp. 569,250
19,300 Westvaco Corp. 542,813
--------------
1,328,376
--------------
PHARMACEUTICALS--4.2%
8,600 American Home Products Corp. 457,950
3,800 Barr Laboratories, Inc.(1) 160,550
7,300 Bergen Brunswig Corp. Cl A 454,425
12,400 Bristol-Myers Squibb Co. 1,519,775
2,400 ChiRex Inc.(1) 43,650
2,900 Elan Corp., plc ADR(1) 197,563
8,700 Forest Laboratories, Inc.(1) 405,638
6,400 Genentech, Inc.(1) 448,400
4,600 Glaxo Wellcome plc ORD 145,531
6,000 Herbalife International, Inc. 70,875
3,700 Johnson & Johnson 300,625
5,500 Lilly (Eli) & Co. 493,281
13,600 London International Group
plc ORD 42,982
700 Medicis Pharmaceutical Corp.
Cl A(1) 44,100
2,200 Merck & Co., Inc. 340,725
8,100 Mylan Laboratories Inc. 268,819
6,200 Nature's Sunshine Products, Inc. 96,294
359 Novartis AG ORD 674,058
11,700 Pfizer, Inc. 1,306,013
8,300 Pharmacia & Upjohn Inc. 432,119
3,700 Pliva d.d. GDR 57,813
4,300 Roberts Pharmaceutical Corp.(1) 105,350
11 Roche Holding AG ORD 129,282
15,800 Schering-Plough Corp. 1,680,725
90,300 SkyePharma plc ORD(1) 122,202
9,000 Takeda Chemical Inds. ORD 303,301
36 UCB SA ORD 201,155
7,600 Warner-Lambert Co. 573,800
8,600 Zeneca Group plc ORD 357,664
--------------
11,434,665
--------------
PRINTING & PUBLISHING--0.7%
7,900 Banta Corp. 209,350
1,500 Consolidated Graphics, Inc.(1) 86,344
16,600 Deluxe Corp. 576,850
1,200 Elanders AB Cl B ORD 22,738
See Notes to Financial Statements
30 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
11,800 Gruppo Editoriale L'Espresso ORD $ 98,451
2,100 Mail-Well, Inc.(1) 27,169
17,400 Mondadori (Arnoldo) Editore
SpA ORD 218,796
2,700 Petersen Companies, Inc. (The)
Cl A(1) 64,631
13,750 Singapore Press Holdings
Ltd. ORD 146,010
4,000 Toppan Forms Co., Ltd. ORD 62,528
8,200 VNU N.V. ORD 282,026
900 Wolters Kluwer NV ORD 171,731
--------------
1,966,624
--------------
RAILROAD--0.3%
21,400 CSX Corp. 892,113
--------------
REAL ESTATE--0.1%
11,700 Cheung Kong (Holdings) Ltd.
ORD 84,246
18,300 City Developments Limited ORD 87,169
30,000 Keppel Land Ltd. ORD 35,498
9,000 Singapore Land Limited ORD 21,517
--------------
228,430
--------------
RESTAURANTS--0.2%
13,600 CKE Restaurants, Inc. 332,350
6,900 PizzaExpress plc ORD 97,362
4,000 PJ America, Inc.(1) 78,250
15,200 TelePizza, S.A. ORD(1) 130,735
--------------
638,697
--------------
RETAIL (APPAREL)--0.3%
2,500 Chico's FAS, Inc.(1) 54,844
2,900 Children's Place Retail Stores,
Inc. (The)(1) 53,831
5,200 DM Management Co.(1) 76,050
4,500 Hennes & Mauritz AB Cl B ORD 332,759
2,600 Liz Claiborne, Inc. 88,075
3,600 Payless ShoeSource, Inc.(1) 175,500
--------------
781,059
--------------
RETAIL (FOOD & DRUG)--0.7%
8,900 CVS Corp. 439,438
10,173 Koninklijke Ahold NV ORD 353,079
2,100 Ruddick Corp. 41,081
11,000 Safeway Inc.(1) 580,938
21,900 Somerfield plc ORD 164,630
7,800 Universal Corp. 274,463
--------------
1,853,629
--------------
RETAIL (GENERAL MERCHANDISE)--1.9%
1,000 99 Cents Only Stores(1) 43,000
200 Carrefour SA ORD 141,680
20,400 Dillard's Inc. Cl A 701,250
3,400 Douglas Holding AG ORD 212,732
Shares Value
- --------------------------------------------------------------------------------
25,500 Electronics Boutique plc ORD $ 35,771
3,000 Federated Department
Stores, Inc.(1) 125,063
6,400 Fred's, Inc. 90,000
200 Galeries Lafayette ORD 228,097
6,700 Grupo Elektra, S.A. de C.V. GDR 35,594
2,000 Homac Corp. ORD 32,807
2,600 ITI Technologies, Inc.(1) 68,981
8,000 JUSCO Co., Ltd. ORD 152,341
4,100 Keiyo Company Ltd. ORD 20,143
9,300 Kmart Corp.(1) 141,825
2,520 Metro AG ORD 157,300
16,200 Penney (J.C.) Company, Inc. 891,000
2,700 Pinault-Printemps-Redoute
SA ORD 460,945
300 Ryohin Keikaku Company
Limited ORD 34,106
23,100 Wal-Mart Stores, Inc. 1,739,719
--------------
5,312,354
--------------
RETAIL (SPECIALTY)--0.5%
1,700 Action Performance Cos. Inc.(1) 61,997
4,000 CSK Auto Corp.(1) 111,500
1,700 Guitar Center, Inc.(1) 38,994
11,300 Home Depot, Inc. 562,175
2,600 Starbucks Corp.(1) 120,088
3,700 Tech Data Corp.(1) 148,694
10,000 Toys 'R' Us, Inc.(1) 197,500
3,500 Tractor Supply Co.(1) 90,344
2,800 Wilmar Industries, Inc.(1) 49,613
2,800 Zale Corp.(1) 80,150
--------------
1,461,055
--------------
STEEL(3)
600 Bethlehem Steel Corporation(1) 4,950
400 Nucor Corp. 16,800
--------------
21,750
--------------
TEXTILES & APPAREL--0.3%
4,300 Dexter Corp. (The) 137,869
13,600 Fruit of the Loom, Inc.(1) 200,600
2,500 Polymer Group, Inc.(1) 26,563
1,600 Quiksilver, Inc.(1) 38,800
3,500 Tarrant Apparel Group(1) 114,406
1,000 Tommy Hilfiger Corp.(1) 60,500
3,100 VF Corp. 152,094
4,500 WS Atkins plc ORD 39,064
--------------
769,896
--------------
TOBACCO--0.4%
15,400 Imperial Tobacco Group plc ORD 165,708
14,700 Philip Morris Companies Inc. 822,281
6,300 UST Inc. 218,925
--------------
1,206,914
--------------
See Notes to Financial Statements
www.americancentury.com 31
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
TRANSPORTATION--0.2%
4,900 Allied Holdings, Inc.(1) $ 74,725
2,200 Atlas Air, Inc.(1) 101,750
1,600 Avis Rent A Car, Inc.(1) 33,700
6,300 Go-Ahead Group PLC (The) ORD 70,701
4,011 Internatio-Muller NV ORD 91,968
44,800 Stagecoach Holdings plc ORD 167,834
--------------
540,678
--------------
UTILITIES--2.4%
14,500 AGL Resources Inc. 312,656
15,300 Ameren Corp. 630,169
3,600 Baltimore Gas & Electric Co. 110,475
1,900 Berliner Kraft-und
Licht-Aktiengesellschaft ORD 105,197
50,000 Centrais Eletricas de Santa
Catarina S.A. ORD 31,627
3,700 Central & South West Corp. 101,750
79,600 Cogeneration Public Co., Ltd.
(The) ORD(1) 61,654
2,800 Columbia Energy Group 158,900
898,000 Companhia de Saneamento
Basico do Estado de Sao Paulo
ORD 98,657
3,600 Duke Energy Corp. 225,225
9,900 Florida Progress Corp. 423,225
6,800 FPL Group, Inc. 416,500
4,600 Houston Industries Inc. 145,475
2,700 IPALCO Enterprises, Inc. 135,338
2,600 KN Energy, Inc. 113,750
8,100 LG&E Energy Corp. 226,800
12,800 Minnesota Power & Light Co. 535,200
2,700 National Fuel Gas Co. 124,031
2,600 New Century Energies, Inc. 124,963
43,300 PacifiCorp 811,875
7,600 Potomac Electric Power Co. 198,075
7,200 PP&L Resources, Inc. 196,650
5,100 Public Service Co. of New Mexico 99,131
14,400 Sempra Energy 360,900
10,700 Southern Co. 315,650
4,400 Texas Utilities Co. 196,075
3,500 UGI Corp. 85,313
600 Vestas Wind Systems A/S ORD(1) 28,900
6,200 Wisconsin Energy Corp. 191,813
--------------
6,565,974
--------------
TOTAL COMMON STOCKS 160,551,023
--------------
(Cost $140,760,756)
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.5%
COMMUNICATIONS SERVICES--0.1%
4,200,000 Embratel Participacoes
S.A. ORD $ 68,165
8,900,000 Tele Sudeste Celular
Participacoes S.A. ORD 48,148
3,800,000 Telesp Participacoes S.A. ORD 106,583
--------------
222,896
--------------
CONSUMER PRODUCTS(3)
100 Wella Aktiengesellschaft ORD 88,540
--------------
ENERGY (PRODUCTION & MARKETING)(3)
290,000 Petroleo Brasileiro S.A. ORD 41,273
--------------
FINANCIAL SERVICES--0.2%
948 Marschollek, Lautenschlaeger und
Partner AG ORD 570,764
--------------
MACHINERY & EQUIPMENT(3)
1,058 Krones AG ORD 34,035
--------------
RETAIL (SPECIALTY)--0.1%
3,100 Fielmann AG ORD 139,982
--------------
TEXTILES & APPAREL(3)
132 Jil Sander AG ORD 47,606
--------------
UTILITIES--0.1%
3,025,000 Centrais Electricas Brasileiras
S.A. Cl B ORD 85,601
1,830,000 Companhia Paranaense de
Energia-Copel ORD 17,592
--------------
103,193
--------------
TOTAL PREFERRED STOCKS 1,248,289
--------------
(Cost $707,018)
U.S. TREASURY SECURITIES--5.0%
$1,300,000 U.S. Treasury Notes, 7.75%,
11/30/99 1,338,571
3,425,000 U.S. Treasury Notes, 6.625%,
7/31/01 3,595,976
1,625,000 U.S. Treasury Notes, 5.75%,
8/15/03 1,698,954
1,200,000 U.S. Treasury Notes, 6.625%,
5/15/07 1,348,044
1,200,000 U.S. Treasury Bonds, 8.75%,
5/15/17 1,685,388
3,600,000 U.S. Treasury Bonds, 6.125%,
11/15/27 4,066,092
--------------
TOTAL U.S. TREASURY SECURITIES 13,733,025
--------------
(Cost $13,297,166)
See Notes to Financial Statements
32 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES--1.8%
$1,000,000 FFCB MTN, 6.15%, 12/29/00 $ 1,000,830
500,000 FNMA, 5.25%, 1/15/03 504,945
3,300,000 FNMA MTN, 6.23%, 7/21/08 3,375,504
--------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 4,881,279
--------------
(Cost $4,798,310)
SOVEREIGN GOVERNMENTS & AGENCIES--6.5%
$ 200,000 British Columbia Province of,
5.375%, 10/29/08 199,610
DEM 1,700,000 Deutschland Republic,
4.75%, 7/4/98 991,412
DEM 8,400,000 Deutschland Republic,
6.00%, 9/15/03 5,487,779
FRF 20,000,000 France O.A.T., 6.50%,
10/25/06 4,134,253
CAD 1,000,000 Government of Canada,
6.00%, 6/1/08 700,437
JPY 300,000,000 Government of Japan,
2.90%, 12/20/05 2,753,340
DKK 4,100,000 Kingdom of Denmark,
8.00%, 3/15/06 782,441
GBP 400,000 U.K. Treasury Bonds, 7.50%,
12/7/06 779,625
GBP 900,000 U.K. Treasury Bonds, 9.00%,
8/6/12 2,112,118
--------------
TOTAL SOVEREIGN GOVERNMENTS
& AGENCIES 17,941,015
----------------
(Cost $17,620,555)
MORTGAGE-BACKED SECURITIES(4)--5.3%
253,321 FHLMC Pool #E68523, 6.50%,
12/1/12 257,825
68,207 FHLMC Pool #C00465, 8.00%,
6/1/26 70,718
274,280 FHLMC Pool #D72306, 8.00%,
6/1/26 284,375
113,267 FHLMC Pool #D72431, 8.00%,
6/1/26 117,436
231,829 FHLMC Pool #D72499, 8.00%,
7/1/26 240,361
832,349 FNMA Pool #373899, 6.50%,
3/1/12 845,711
167,770 FNMA Pool #125477, 6.50%,
4/1/12 170,463
738,896 FNMA Pool #369085, 6.50%,
4/1/12 750,758
48,294 FNMA Pool #377181, 6.50%,
4/1/12 49,069
660,288 FNMA Pool #377379, 6.50%,
4/1/12 670,888
Principal Amount Value
- --------------------------------------------------------------------------------
$ 189,487 FNMA Pool #341078, 7.00%,
5/1/26 $ 193,727
318,959 FNMA Pool #250576, 7.00%,
6/1/26 326,097
708,355 FNMA Pool #373510, 7.50%,
3/1/27 728,962
433,542 GNMA Pool #397233, 9.50%,
2/20/25 465,659
193,891 GNMA Pool #392995, 8.75%,
3/15/25 206,633
164,704 GNMA Pool #001991, 9.00%,
4/20/25 174,892
232,303 GNMA Pool #416856, 7.50%,
10/15/25 240,303
135,752 GNMA Pool #421254, 7.50%,
11/15/25 140,427
28,033 GNMA Pool #373704, 6.00%,
4/15/26 27,831
29,387 GNMA Pool #421388, 6.00%,
4/15/26 29,175
256,191 GNMA Pool #416761, 7.50%,
6/15/26 264,987
825,959 GNMA Pool #456569, 7.50%,
11/15/27 854,564
956,484 GNMA Pool #457351, 7.00%,
12/15/27 980,358
1,242,081 GNMA Pool #449491, 7.50%,
12/15/27 1,285,098
481,512 GNMA Pool #461623, 6.50%,
1/15/28 487,054
641,471 GNMA Pool #450628, 6.50%,
3/15/28 648,853
1,482,679 GNMA Pool #466804, 6.50%,
4/15/28 1,499,743
459,721 GNMA Pool #454559, 6.00%,
5/15/28 456,248
424,612 GNMA Pool #474782, 6.00%,
5/15/28 421,405
389,506 GNMA Pool #403868, 6.50%,
5/15/28 393,989
60,917 GNMA Pool #403912, 6.50%,
5/15/28 61,618
62,249 GNMA Pool #465798, 6.50%,
5/15/28 62,965
488,169 GNMA Pool #475802, 6.00%,
7/15/28 484,481
500,152 GNMA Pool #438917, 6.00%,
8/15/28 496,374
--------------
TOTAL MORTGAGE-BACKED SECURITIES 14,389,047
--------------
(Cost $14,097,286)
See Notes to Financial Statements
www.americancentury.com 33
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES(4)--2.0%
$1,200,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 $ 1,214,130
1,171,117 First Union-Lehman Brothers
Commercial Mortgage,
Series 1998 C2, Class A1 SEQ,
6.28%, 6/18/07 1,200,283
400,000 Money Store (The) Home Equity
Trust, Series 1995 C,
Class A9 SEQ, 6.375%,
9/15/11 401,410
500,000 Money Store (The) Home Equity
Trust, Series 1997 C,
Class AF4 SEQ, 6.37%,
8/15/17 504,043
300,000 Money Store (The) Home Equity
Trust, Series 1997 C,
Class AF6 SEQ, 6.67%,
2/15/25 306,599
582,482 Morgan Stanley Capital I,
Series 1998 WF1, Class A1
SEQ, 6.25%, 7/15/07 596,441
400,000 Nationslink Funding Corp.,
Series 1998-2, Cl A1 SEQ,
6.00%, 11/20/07 404,830
161,682 Textron Financial Corp.
Receivables Trust,
Series 1997 A, Class A, 6.05%,
3/16/09 (Acquired 9/18/97,
Cost $161,467)(2) 162,353
300,000 United Companies Financial Corp.,
Home Equity Loan,
Series 1997 C, Class A7,
6.85%, 1/15/29 309,203
400,000 United Companies Financial Corp.,
Home Equity Loan,
Series 1998 B, Class A4 SEQ,
6.22%, 11/15/20 402,058
--------------
TOTAL ASSET-BACKED SECURITIES 5,501,350
--------------
(Cost $5,422,561)
CORPORATE BONDS--10.5%
AEROSPACE & DEFENSE--0.2%
400,000 Lockheed Martin Corp., 6.85%,
5/15/01 413,776
200,000 Lockheed Martin Corp., 7.25%,
5/15/06 216,330
--------------
630,106
--------------
AUTOMOBILES & AUTO PARTS--0.1%
250,000 Stanadyne Automotive Corp.,
Series B, 10.25%, 12/15/07
(Acquired 7/22/98, Cost
$258,125)(2) 255,000
--------------
Principal Amount Value
- --------------------------------------------------------------------------------
BANKING--1.9%
$2,000,000 American Express Centurion Bank,
VRN, 5.22%, 12/18/98, resets
monthly off the 1-month LIBOR
minus 0.055% with no caps $ 2,000,000
500,000 Bay View Capital Corp., 9.125%,
8/15/02 466,250
400,000 Citigroup Inc., 7.125%, 5/15/06 429,676
650,000 First Bank System Inc., 7.625%,
5/1/05 715,267
1,000,000 KeyBank N.A., VRN, 5.01%,
12/1/98, resets daily off the
Federal Funds rate plus 0.03%
with no caps 999,400
500,000 NationsBank Corporation, 6.125%,
7/15/04 518,550
--------------
5,129,143
--------------
BROADCASTING & MEDIA--0.1%
250,000 Fox Family Worldwide Inc., 9.25%,
11/1/07 252,500
--------------
COMMUNICATIONS SERVICES--1.3%
250,000 360 Communications Co.,
7.125%, 3/1/03 266,720
1,000,000 Cable & Wireless Communications,
6.625%, 3/6/05 1,004,680
300,000 Cincinnati Bell Inc., 6.30%,
12/1/28 305,298
400,000 GTE Corp., 7.51%, 4/1/09 455,884
300,000 MCI WorldCom, Inc., 6.40%,
8/15/05 312,036
400,000 MCI WorldCom, Inc., 7.55%,
4/1/04 434,500
250,000 Orange plc, 8.00%, 8/1/08 255,000
250,000 Qwest Communications
International Inc., 7.50%,
11/1/08 (Acquired 10/28/98,
Cost $248,310)(2) 255,000
250,000 Qwest Communications
International Inc., Series B,
7.44%, 2/1/08 (Acquired
7/9/98, Cost $183,438)(2)(5) 188,750
100,000 Tele-Communications Inc., 8.25%,
1/15/03 110,192
--------------
3,588,060
--------------
COMPUTER SOFTWARE & SERVICES--0.1%
250,000 Unisys Corp., 12.00%, 4/15/03 281,250
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.2%
250,000 DII Group, Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(2) 245,625
250,000 Trench Electric & Trench Inc.,
10.25%, 12/15/07 230,000
--------------
475,625
--------------
See Notes to Financial Statements
34 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
ENERGY (PRODUCTION & MARKETING)--1.0%
$ 250,000 Belco Oil & Gas Corp., 8.875%,
9/15/07 $ 232,500
400,000 Enron Corp., 6.625%, 11/15/05 414,480
500,000 Ocean Energy, Inc., 9.75%,
10/1/06 533,750
750,000 Oryx Energy Co., 8.375%,
7/15/04 818,145
500,000 Stone Energy Corp., 8.75%,
9/15/07 (Acquired 9/16/97,
Cost $496,415)(2) 505,000
200,000 Triton Energy Ltd., 8.75%,
4/15/02 198,750
--------------
2,702,625
--------------
ENERGY (SERVICES)--0.3%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 530,000
250,000 Petroleum Geo-Services ASA,
6.625%, 3/30/08 249,025
--------------
779,025
--------------
FINANCIAL SERVICES--1.9%
250,000 AMRESCO, INC., Series 1998 A,
9.875%, 3/15/05 185,625
400,000 Comdisco, Inc., 7.75%, 9/1/99 406,748
500,000 Comdisco, Inc., 6.50%, 4/30/99 501,590
400,000 Ford Motor Credit Co., 6.125%,
1/9/06 407,916
600,000 Ford Motor Credit Co., 6.55%,
9/10/02 621,120
1,750,000 General Motors Acceptance Corp.,
7.75%, 1/15/99 1,754,568
250,000 Intertek Finance PLC, Series B,
10.25%, 11/1/06 250,625
500,000 Lehman Brothers Holdings Inc.,
MTN, Series 1998 E, 6.00%,
2/26/01 497,275
500,000 Metris Companies Inc., 10.00%,
11/1/04 495,000
--------------
5,120,467
--------------
HEALTHCARE--0.1%
400,000 Aetna Services, Inc., 6.75%,
8/15/01 411,236
--------------
LEISURE--0.1%
100,000 Paramount Communications, Inc.,
7.50%, 1/15/02 104,572
100,000 Time Warner Inc., 8.11%,
8/15/06 113,638
--------------
218,210
--------------
MACHINERY & EQUIPMENT--0.2%
500,000 United Rentals, Inc., 9.50%,
6/1/08 515,625
--------------
Principal Amount Value
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
$ 100,000 Alcan Aluminium Ltd., 5.875%,
4/1/00 $ 100,962
300,000 Barrick Gold Corp., 7.50%,
5/1/07 323,610
250,000 Kaiser Aluminum & Chemical,
12.75%, 2/1/98 250,000
--------------
674,572
--------------
OFFICE EQUIPMENT & SUPPLIES--0.3%
250,000 Fisher Scientific International
Inc., 7.125%, 12/15/05 230,313
250,000 Fisher Scientific International
Inc., 9.00%, 2/1/08 251,875
350,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $364,084)(2) 389,480
--------------
871,668
--------------
PAPER & FOREST PRODUCTS(3)
150,000 Domtar, Inc. 8.75%, 8/1/06 149,063
--------------
RAILROAD--0.2%
450,000 Norfolk Southern Corp., 7.90%,
5/15/97 519,615
--------------
REAL ESTATE--0.3%
400,000 Simon DeBartolo Group Inc.,
6.625%, 6/15/03 (Acquired
6/17/98, Cost $399,072)(2) 395,004
300,000 Spieker Properties, Inc., 6.80%,
12/15/01 303,333
--------------
698,337
--------------
RESTAURANTS--0.2%
500,000 Apple South Inc., 9.75%, 6/1/06 465,625
--------------
RETAIL (APPAREL)--0.2%
500,000 Saks Holdings, Inc., 7.25%,
12/1/04 502,400
--------------
RETAIL (GENERAL MERCHANDISE)--0.5%
150,000 Federated Department Stores,
8.50%, 6/15/03 165,311
1,300,000 Sears Roebuck Acceptance Corp.,
6.00%, 3/20/03 1,334,437
--------------
1,499,748
--------------
STEEL--0.1%
250,000 Armco Inc., 9.00%, 9/15/07
(Acquired 9/9/97, Cost
$248,700)(2) 263,125
--------------
TOBACCO--0.2%
450,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 473,841
--------------
See Notes to Financial Statements
www.americancentury.com 35
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
TRANSPORTATION--0.2%
$ 250,000 Atlas Air, Inc., 10.75%, 8/1/05 $ 263,125
250,000 Kitty Hawk, Inc., 9.95%,
11/15/04 245,000
--------------
508,125
--------------
UTILITIES--0.6%
500,000 Avon Energy Partners Holdings,
7.05%, 12/11/07 (Acquired
1/20/98, Cost $51]9,810)(2) 524,450
200,000 CalEnergy Co. Inc., 7.63%,
10/15/07 210,486
500,000 Georgia Power Co., 5.50%,
12/1/05 502,010
400,000 PG&E Corp., 6.25%, 3/1/04 413,832
--------------
1,650,778
--------------
TOTAL CORPORATE BONDS 28,635,769
--------------
(Cost $28,270,538)
COMMERCIAL PAPER(6)--6.0%
BANKING--0.7%
2,000,000 IMI Funding Corp. (USA), 5.51%,
2/5/99 1,981,130
--------------
CREDIT CARD & TRADE RECEIVABLES--1.5%
2,000,000 Charta Corp., 5.50%, 1/12/99
(Acquired 11/5/98, Cost
$1,979,222)(2) 1,987,864
2,000,000 Dakota Certificates (Citibank),
5.35%, 2/19/99 (Acquired
11/16/98, Cost $1,971,764)(2) 1,977,296
--------------
3,965,160
--------------
EDUCATION--1.3%
1,500,000 Leland Stanford University, 4.95%,
4/8/99 1,473,188
2,000,000 Yale University, 5.05%, 2/16/99 1,978,114
--------------
3,451,302
--------------
FINANCIAL SERVICES--1.8%
1,700,000 Chrysler Financial Corp., 5.18%,
1/8/99 1,690,645
1,500,000 Falcon Asset Securities Corp.,
5.29%, 12/4/98 (Acquired
10/7/98, Cost $1,487,216)(2) 1,499,226
1,771,000 Receivables Capital Corp., 5.40%,
1/19/99 (Acquired 11/23/98,
Cost $1,755,858)(2) 1,758,504
--------------
4,948,375
--------------
Principal Amount Value
- --------------------------------------------------------------------------------
INDUSTRIAL--0.7%
$2,000,000 Siebe plc, 5.15%, 2/17/99
(Acquired 10/14/98, Cost
$1,963,950)(2) $ 1,977,840
--------------
TOTAL COMMERCIAL PAPER 16,323,807
--------------
(Cost $16,320,893)
CERTIFICATES OF DEPOSIT--0.7%
2,000,000 National Westminster Bank PLC,
5.65%, 3/3/99 2,001,732
--------------
(Cost $1,999,042)
BANK NOTES--0.9%
1,500,000 General Motors Acceptance Corp.
MTN, 7.375%, 4/15/99 1,510,635
1,000,000 Morgan Stanley Dean Witter,
Discovery & Co., 5.625%,
3/1/99 1,000,380
--------------
TOTAL BANK NOTES 2,511,015
--------------
(Cost $2,509,329)
TEMPORARY CASH INVESTMENTS--2.2%
Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 5.18%, dated 11/30/98,
due 12/1/98 (Delivery value $6,100,878) 6,100,000
--------------
(Cost $6,100,000)
TOTAL INVESTMENT SECURITIES--100% $273,817,351
==============
(Cost $251,903,454)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- ------------------------------------------------------------------------------
459,324 CHF 12/30/98 $ 330,256 $(2,920)
1,788,909 DEM 12/30/98 1,057,625 (8,190)
4,933,070 FRF 12/30/98 869,716 (5,940)
608,660 GBP 12/30/98 1,003,420 4,789
151,447,432 JPY 12/30/98 1,235,684 23,629
755,888 NLG 12/30/98 396,489 (3,104)
----------- -----------
$4,893,190 $8,264
=========== ===========
(Value on Settlement Date $4,901,454)
See Notes to Financial Statements
36 1-800-345-2021
Moderate--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
DKK = Danish Krone
FFCB = Federal Farm Credit Bank
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
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, 1998.
resets = The frequency with which a 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 or Section 4(2) of the Securities Act
of 1933 or is a private placement and, unless registered under the Act or
exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at November 30,
1998, was $13,059,504, which represented 4.7% 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.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
www.americancentury.com 37
Strategic Aggressive--Performance
- --------------------------------------------------------------------------------
TOTAL RETURNS AS OF NOVEMBER 30, 1998
<TABLE>
<CAPTION>
INVESTOR CLASS (INCEPTION 2/15/96) ADVISOR CLASS (INCEPTION 10/2/96)
STRATEGIC LEHMAN THREE-MONTH STRATEGIC LEHMAN THREE-MONTH
ALLOCATION: AGGREGATE U.S. ALLOCATION: AGGREGATE U.S.
AGGRESSIVE S&P 500 BOND INDEX TREASURY BILL AGGRESSIVE S&P 500 BOND INDEX TREASURY BILL
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
6 MONTHS(1) -2.39% 7.50% 5.15% 1.97% -2.69% 7.50% 5.15% 1.97%
1 YEAR 9.93% 23.66% 9.45% 4.56% 9.66% 23.66% 9.45% 4.56%
- --------------------------------------------------------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS
LIFE OF FUND 12.36% 25.37% 8.29%(2) 4.94%(2) 12.14% 29.01% 9.03%(3) 4.88%(3)
</TABLE>
(1) Returns for periods less than one year are not annualized.
(2) Since 2/29/96, the date nearest the class's inception for which data are
available.
(3) Since 10/31/96, the date nearest the class's inception for which data are
available.
See pages 70-72 for more information about share classes, returns, and the
comparative indices.
[mountain chart - data below]
GROWTH OF $10,000 OVER LIFE OF FUND
Value on 11/30/98
S&P 500 $18,812
Strategic Aggressive $13,758
Lehman Aggregate $12,448
3-Month T-Bill $11,416
Strategic Lehman 3-Month
S&P 500 Aggressive Aggregate T-Bill
DATE VALUE VALUE VALUE VALUE
2/29/96* $10,000 $10,000 $10,000 $10,000
3/31/96 $10,096 $10,101 $9,930 $10,041
4/30/96 $10,244 $10,423 $9,874 $10,082
5/31/96 $10,508 $10,544 $9,855 $10,125
6/30/96 $10,548 $10,524 $9,987 $10,167
7/31/96 $10,081 $10,081 $10,014 $10,211
8/31/96 $10,294 $10,323 $9,997 $10,254
9/30/96 $10,873 $10,767 $10,171 $10,297
10/31/96 $11,173 $10,848 $10,396 $10,339
11/30/96 $12,016 $11,150 $10,574 $10,382
12/31/96 $11,778 $11,069 $10,476 $10,425
1/31/97 $12,513 $11,353 $10,508 $10,469
2/28/97 $12,612 $11,191 $10,535 $10,513
3/31/97 $12,095 $10,805 $10,418 $10,558
4/30/97 $12,816 $11,008 $10,574 $10,603
5/31/97 $13,599 $11,658 $10,674 $10,648
6/30/97 $14,204 $12,063 $10,801 $10,691
7/31/97 $15,333 $12,774 $11,093 $10,736
8/31/97 $14,475 $12,408 $10,999 $10,783
9/30/97 $15,267 $13,078 $11,160 $10,827
10/31/97 $14,757 $12,571 $11,322 $10,871
11/30/97 $15,440 $12,693 $11,374 $10,919
12/31/97 $15,705 $12,866 $11,489 $10,966
1/31/98 $15,878 $12,908 $11,636 $11,012
2/28/98 $17,023 $13,698 $11,627 $11,058
3/31/98 $17,895 $14,295 $11,666 $11,105
4/30/98 $18,077 $14,444 $11,727 $11,150
5/31/98 $17,766 $14,295 $11,839 $11,197
6/30/98 $18,487 $14,615 $11,939 $11,243
7/31/98 $18,291 $14,466 $11,964 $11,289
8/31/98 $15,648 $12,696 $12,159 $11,335
9/30/98 $16,651 $12,994 $12,444 $11,378
10/31/98 $18,004 $13,420 $12,378 $11,416
11/30/98 $18,812 $13,758 $12,448 $11,416
$10,000 investment made 2/28/96
The chart at left shows the growth of a $10,000 investment over the life of the
fund, while the chart below shows the fund's year-by-year performance. The S&P
500, Lehman Aggregate Bond, and Three-Month Treasury Bill indices are provided
for comparison in each chart. Strategic Aggressive's returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the returns of the indices do not. These charts are based on Investor
Class shares only; performance for other classes will vary due to differences in
fee structures (see Total Returns table above). Past performance does not
guarantee future results. Investment return and principal value will fluctuate,
and redemption value may be more or less than original cost.
[bar chart - data below]
ONE-YEAR RETURNS OVER LIFE OF FUND (PERIODS ENDED NOVEMBER 30)
Strategic Lehman 3-Month
S&P 500 Aggressive Aggregate T-Bill
DATE RETURN RETURN RETURN RETURN
11/30/96* 20.18% 11.49% 5.75% 3.82%
11/30/97 28.56% 13.84% 7.55% 5.17%
11/30/98 23.66% 9.93% 9.45% 4.56%
* From 2/29/96 (the date nearest the class's inception for which index data are
available).
38 1-800-345-2021
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
An interview with Jeff Tyler and Brian Howell, portfolio managers on the
Strategic Asset Allocation funds management team.
HOW DID STRATEGIC AGGRESSIVE PERFORM DURING THE YEAR ENDED NOVEMBER 30, 1998?
For the fiscal year, Strategic Aggressive's Investor Class shares posted a
total return of 9.93%, compared with the 10.92% return of the fund's benchmark.*
(See the previous page for other fund performance comparisons.)
WHY DID THE FUND UNDERPERFORM ITS BENCHMARK?
Our U.S. stock holdings, especially among smaller-company stocks, were one
reason for the underperformance. Although we made favorable asset allocation
decisions, our security selection suffered in a market where a few stocks were
rewarded and the rest were left behind.
An emphasis on corporate bonds over Treasury bonds in the U.S. bond portion
of the portfolio also hurt Strategic Aggressive's return relative to the
benchmark. Treasurys were the best-performing bond sector by far.
HOW DID THE FUND'S ASSET MIX CHANGE DURING THE FISCAL YEAR?
In the first half of the year, we maintained a fairly neutral asset mix.
The only adjustments we made involved rebalancing when performance caused the
mix to stray from our neutral position of 75% stocks, 20% bonds, and 5% cash.
In June, however, we shifted to a more defensive stance designed to reduce
the share-price volatility of the portfolio.
WHAT DOES "DEFENSIVE" MEAN FOR THE STRATEGIC AGGRESSIVE PORTFOLIO?
With regard to the asset mix, it meant that we reduced our U.S. stock
holdings and increased our cash position. But it also involved some other
changes to the domestic stock portion of the portfolio. We sold some of the
fund's small-company (known as small-cap) stocks, as well as a few
value-oriented stocks (those we judged to be relatively inexpensive). This
changed the focus of the U.S. equity portion toward large-cap growth stocks.
We stayed with our defensive structure until October, when we began
shifting money back into the stock market. The good news is that we were
underweighted in stocks when the market took a dive in the third quarter; the
bad news is that we waited a little too long to get back to a neutral position
in stocks and didn't benefit fully from the rebound.
Nonetheless, the defensive strategy proved to be profitable and helped
lower the portfolio's share-price volatility.
DID YOU ALSO MAKE THE FUND'S BOND HOLDINGS MORE DEFENSIVE?
Yes and no. In anticipation of a global economic slowdown, we made a
somewhat aggressive move by extending duration in both our domestic and foreign
bonds. (Duration measures a
* The fund's benchmark consists of 11 different market indices--four U.S. stock
indices, two foreign stock indices, two U.S. bond indices, two foreign bond
indices, and one money market index--that are weighted to match the fund's
neutral asset mix.
[right margin]
"IN JUNE, WE SHIFTED TO A MORE DEFENSIVE STANCE DESIGNED TO REDUCE THE
SHARE-PRICE VOLATILITY OF THE PORTFOLIO."
[pie chart - data below]
ASSET ALLOCATION
(AS OF NOVEMBER 30, 1998)
PERCENT OF FUND INVESTMENTS
U.S. Stocks 57%
U.S. Bonds 14%
Money Market
Securities 6%
Foreign Stocks 18%
Foreign Bonds 5%
See page 71 for the fund's neutral asset mix.
Investment terms are defined in the Glossary on page 72.
www.americancentury.com 39
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
(Continued)
bond portfolio's sensitivity to changes in interest rates. The longer the
portfolio's duration, the more price volatility you get when interest rates
change.)
As interest rates fell around the globe, our longer duration helped the
fund earn more price gains on its bond holdings. This was especially true for
U.S. Treasury bonds, whose yields reached record lows during the year.
But we also shifted to a more defensive position in corporate bonds, which
make up more than 40% of the fund's U.S. bond holdings. We avoided the bonds of
companies that had direct exposure to the most turbulent emerging markets. We
also reduced our holdings in industries that are sensitive to slower economic
growth, such as financial services.
Instead, we bought the bonds of companies that do most of their business
domestically and are in industries that are less affected by economic downturns.
Examples include companies in the telecommunications, cable television, and
utilities industries.
IN THE PORTFOLIO'S FOREIGN SECURITIES, YOU INCREASED YOUR EXPOSURE TO ASIA. ARE
YOU SEEING SOME OPPORTUNITIES THERE?
Southeast Asia still has a long way to go to solve its financial problems,
and the region's recovery will depend in large part on whether Japan can
jump-start its economy. That said, when Asia does bounce back, we expect it to
happen quickly and dramatically, and we want to have some exposure to the region
when it happens.
As a result, we've been selectively adding Asian stocks to the portfolio
recently. Overall, though, we continued to focus our foreign stock and bond
holdings in Europe because that's where we think the best opportunities are.
LOOKING AHEAD, WHAT ARE YOUR PLANS FOR STRATEGIC AGGRESSIVE'S ASSET ALLOCATION
STRUCTURE?
We plan to maintain our current neutral asset mix of 75% stocks, 20% bonds,
and 5% cash. We'll also stay somewhat defensive in our positioning within each
asset class because we're expecting fairly modest returns for both stocks and
bonds in the coming year.
Right now, we think stocks have better return potential than bonds, but not
enough to make any significant changes within the portfolio.
WHY DO YOU FAVOR STOCKS?
We don't want to overstate our enthusiasm for stocks--the major market
indices are at record highs, and we expect earnings growth to be slower going
forward. However, economic conditions remain reasonably favorable for stocks,
and investor demand for equities is still strong. We think this will be enough
for stocks to produce moderately positive results in 1999.
[left margin]
FUND'S U.S. STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 376
DIVIDEND YIELD 1.29%
PRICE/EARNINGS RATIO 35.6
% OF FUND'S % OF
U.S. STOCKS FUND
TOP 5 U.S. STOCKS
MICROSOFT CORP. 2.0% 1.2%
SCHERING-PLOUGH CORP. 1.6% 0.9%
GENERAL ELECTRIC CO. (U.S.) 1.5% 0.8%
INTEL CORP. 1.4% 0.8%
PFIZER, INC. 1.4% 0.8%
FUND'S FOREIGN STOCKS (AS OF NOVEMBER 30, 1998)
NUMBER OF COMPANIES 287
DIVIDEND YIELD 1.29%
% OF FUND'S % OF
COUNTRY FOREIGN STOCKS FUND
TOP 5 FOREIGN STOCKS
MANNESMANN AG GERMANY 1.7% 0.3%
NOVARTIS AG SWITZERLAND 1.5% 0.3%
VIVENDI FRANCE 1.3% 0.2%
PINAULT-PRINTEMPS-
REDOUTE SA FRANCE 1.2% 0.2%
JULIUS BAER HOLDING
AG SWITZERLAND 1.2% 0.2%
[pie chart - data below]
PERCENT OF FUND'S FOREIGN STOCKS
Europe 80%
Asia/Pacific 14%
Americas
(excluding U.S.) 6%
40 1-800-345-2021
Strategic Aggressive--Q&A
- --------------------------------------------------------------------------------
(Continued)
Small-cap stocks appear to be extremely undervalued compared with the rest
of the market. Historically, investors have been willing to pay a higher price
for small-cap stocks, relative to their earnings, than they have for the stocks
of larger companies.
For example, the price/earnings ratio of the Russell 2000 (an index of
small-cap stocks) has typically been 1.5 times that of the S&P 500 (a large-cap
stock index). Currently, though, the price/ earnings ratio of the Russell 2000
is lower than that of the S&P 500.
We'd like to overweight small-cap stocks in the Strategic Aggressive
portfolio, but we're not ready to pull the trigger yet. Large-cap stocks are
still riding a wave of momentum, and we believe that earnings growth needs to
begin expanding again before small-caps can outperform.
WHAT ABOUT THE OUTLOOK FOR BONDS?
We'll likely remain cautious in this part of the portfolio because we think
interest rates will be higher a year from now. The Federal Reserve successfully
stabilized the global financial markets with its three interest rate cuts in
late 1998, but now we expect the Fed to take a "wait and see" approach to
interest rate policy. In fact, we wouldn't be surprised if the Fed is done
cutting interest rates for a while.
In addition, flight-to-quality demand for U.S. Treasury bonds waned in late
1998. As a result, we could see the yield difference between Treasurys and
corporate bonds narrow. If that happens, we'll likely shift to a more defensive
position by selling some of our corporate bonds and buying government bonds.
HOW WILL YOU POSITION THE FUND'S FOREIGN HOLDINGS?
We favor stocks over bonds in overseas markets as well, so much so that
we're overweighted in foreign stocks and underweighted in foreign bonds. We
still really like the investment opportunities in Europe, especially in stocks.
WILL EUROPEAN ECONOMIC AND MONETARY UNION (EMU) HAVE A SIGNIFICANT EFFECT ON
YOUR MANAGEMENT OF THE FUND'S FOREIGN HOLDINGS?
Not really. The changes were widely anticipated, and the implementation of
EMU has gone smoothly so far. We've been looking at the "Euro 11" countries as a
single bond market since their yields converged about a year ago. The stock
markets have retained some of their individual characteristics, but the
perceived risk in each country's market is much more equal than it has been
historically.
Certainly, though, EMU will create winners and losers among European
stocks. Companies that are more efficient, flexible, and aggressive will take
the most advantage of the open economic environment, while slow-moving,
inefficient companies that have relied on regional barriers to competition will
struggle. This definitely creates opportunities for us as investors.
[right margin]
"WE THINK STOCKS HAVE BETTER RETURN POTENTIAL THAN BONDS, BUT NOT ENOUGH TO MAKE
ANY SIGNIFICANT CHANGES WITHIN THE PORTFOLIO."
FUND'S U.S. BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 72
WEIGHTED AVERAGE MATURITY 7.6 YEARS
AVERAGE DURATION 4.8 YEARS
[pie chart - data below]
PERCENT OF FUND'S U.S. BONDS
Corporate 45%
Mortgage-Backed 16%
U.S. Treasury 14%
Other 11%
Asset-Backed 7%
U.S. Govt. Agency 7%
FUND'S FOREIGN BONDS (AS OF NOVEMBER 30, 1998)
NUMBER OF SECURITIES 10
WEIGHTED AVERAGE MATURITY 8.8 YEARS
AVERAGE DURATION 6.6 YEARS
[pie chart - data below]
PERCENT OF FUND'S FOREIGN BONDS
Europe 81%
Asia/Pacific 15%
Americas
(excluding U.S.) 4%
www.americancentury.com 41
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
COMMON STOCKS--74.5%
AEROSPACE & DEFENSE--2.1%
600 Alliant Techsystems Inc.(1) $ 45,713
1,800 Aviation Sales Co.(1) 66,600
4,500 BE Aerospace, Inc.(1) 106,734
6,400 Boeing Co. 260,000
11,400 Bombardier Inc. Cl B ORD 148,405
12,215 British Aerospace PLC ORD 105,029
800 Cie des Signaux SA ORD 63,642
3,200 Cobham PLC ORD 44,890
4,600 Cordant Technologies Inc. 184,863
1,900 EG&G, Inc. 53,081
1,500 General Dynamics Corp. 87,094
3,500 Goodrich (B.F.) Company (The) 132,781
1,300 Gulfstream Aerospace Corp.(1) 66,788
2,700 Litton Industries, Inc.(1) 165,206
2,100 Lockheed Martin Corp. 217,875
1,600 Newport News Shipbuilding Inc. 45,000
4,000 Nichols Research Corp.(1) 85,000
1,300 Northrop Grumman Corp. 105,625
2,600 Raytheon Co. Cl A 142,188
3,800 Raytheon Co. Cl B 210,425
1,400 Triumph Group, Inc.(1) 47,075
8,400 United Technologies Corp. 900,375
--------------
3,284,389
--------------
AIRLINES--0.1%
1,100 AMR Corp.(1) 72,531
400 Delta Air Lines Inc. 21,475
3,200 Midway Airlines Corp.(1) 41,400
200 US Airways Group Inc.(1) 10,400
--------------
145,806
--------------
AUTOMOBILES & AUTO PARTS--1.9%
1,300 Arvin Industries, Inc. 54,600
4,300 Coachmen Industries, Inc. 96,750
21,700 Cooper Tire and Rubber Company 424,506
2,431 DaimlerChrysler AG(1) 222,892
1,650 DaimlerChrysler AG ORD 155,149
2,900 Dura Automotive Systems, Inc.(1) 83,919
4,100 Fleetwood Enterprises, Inc. 138,119
13,300 Ford Motor Co. 734,825
10,000 Fuji Heavy Industries Ltd. ORD 49,941
1,000 Honda Motor Co., Ltd. ORD 35,893
9,400 Kwik-Fit Holdings plc ORD 83,927
50 Porsche AG ORD 111,265
13,900 Superior Industries
International, Inc. 361,400
4,100 Tower Automotive, Inc.(1) 93,275
3,288 Volkswagen AG ORD 267,830
--------------
2,914,291
--------------
Shares Value
- --------------------------------------------------------------------------------
BANKING--6.0%
40,500 Anglo Irish Bank Corp. plc ORD $ 102,932
20,000 Australia & New Zealand Banking
Group Ltd. ORD 131,890
5,088 Banc One Corp. 261,078
55,600 Banca di Roma ORD(1) 96,256
22,600 Banca Nazionale del
Lavoro ORD(1) 63,571
5,060 Banca Popolare Commercio
e Industria ORD 104,185
3,677 Banca Popolare di Brescia ORD 85,461
1,972 Banco Espirito Santo e Comercial
de Lisboa, SA ORD 61,185
6,071 Banco Mello, S.A. ORD 73,361
2,800 Bank of Boston Corp. 116,550
7,000 Bank of Tokyo-Mitsubishi, Ltd.
(The) ORD 76,170
1,620 Bank Rozwoju Eksportu S.A. ORD 36,734
40 Bank Sarasin & Cie Cl B ORD 73,671
18,581 BankAmerica Corp. 1,211,272
8,300 Chase Manhattan Corp. 526,531
9,100 Citigroup Inc. 456,706
6,600 Argenteria SA ORD 153,818
11,000 Dai-Ichi Kangyo Bank Ltd. ORD 73,247
2,800 Deutsche Pfandbrief-und
Hypothekenbank AG ORD 231,384
4,600 Fifth Third Bancorp 305,756
8,200 First Union Corp. 498,150
9,800 First Virginia Banks, Inc. 439,775
7,200 Housing & Commercial Bank,
Korea ORD 49,175
4,600 Mellon Bank Corp. 289,513
15,050 Mercantile Bancorporation Inc. 663,141
4,000 Metropolitan Bank & Trust Co.
ORD 28,173
321 National Bank of Greece S.A.
ORD 57,453
2,100 Northern Trust Corp. 169,706
2,000 Old Kent Financial Corp. 85,938
1,100 Piraeus Bank S.A. ORD 52,437
5,600 PNC Bank Corp. 288,750
2,700 Providian Financial Corp. 247,894
6,900 Regions Financial Corp. 267,591
1,100 Societe Generale Cl A ORD 173,466
4,000 SouthTrust Corp. 147,250
14,100 Standard Chartered plc ORD 149,858
945 UBS AG ORD 284,435
1,228 Van der Moolen Holding N.V. ORD 83,506
5,500 Wachovia Corp. 480,219
8,400 Wells Fargo & Co. 302,400
15,000 Wing Hang Bank Ltd. ORD 41,653
5,100 Zions Bancorporation 258,028
--------------
9,300,269
--------------
See Notes to Financial Statements
42 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
BIOTECHNOLOGY--0.7%
1,800 Amgen Inc.(1) $ 135,338
4,400 Centocor, Inc.(1) 178,613
8,700 Genzyme Corp. 365,672
1,026 Genzyme Molecular Oncology(1) 3,559
4,200 IDEC Pharmaceuticals Corp.(1) 141,488
3,500 PathoGenesis Corp.(1) 168,438
1,200 QIAGEN N.V.(1) 73,200
--------------
1,066,308
--------------
BROADCASTING & MEDIA--0.8%
6,600 BEC World Public Co., Ltd. ORD 41,261
10,200 CBS Corporation 304,088
11,100 Clear Channel Communications,
Inc.(1) 518,925
1,115 Havas Advertising SA ORD 193,297
8,300 Mediaset SpA ORD 58,614
800 Metro Networks, Inc.(1) 30,900
700 Societe Television Francaise 1
ORD 122,584
--------------
1,269,669
--------------
BUILDING & HOME IMPROVEMENTS--0.2%
4,600 Lafarge Corp. 170,488
1,500 Lone Star Industries, Inc. 113,531
--------------
284,019
--------------
BUSINESS SERVICES & SUPPLIES--2.4%
2,200 ABM Industries Inc. 73,288
3,900 Acxiom Corp.(1) 92,869
4,700 Administaff, Inc.(1) 127,194
2,470 Admiral plc ORD 39,846
500 Altran Technologies SA ORD 116,248
4,400 Athlon Groep N.V. ORD 120,466
2,400 Billing Concepts Corp.(1) 30,225
8,700 Capita Group Plc ORD 82,128
11,400 CGI Group, Inc. ORD(1) 195,269
4,300 CKS Group, Inc.(1) 145,125
7,600 Compass Group PLC ORD 80,148
110 Creyf's NV ORD 43,723
3,200 CSG Systems International, Inc.(1) 201,400
800 DIS Deutscher Industrie Service
AG ORD 35,888
2,400 Gartner Group, Inc. Cl A(1) 51,900
8,800 HA-LO Industries, Inc.(1) 281,050
8,800 Hays plc ORD 74,358
5,800 International Telecommunication
Data Systems, Inc.(1) 145,181
1,400 Kendle International Inc.(1) 31,500
4,800 Kroll-O'Gara Company(1) 148,200
5,700 Nova Corp.(1) 181,331
2,700 PAREXEL International Corp.(1) 70,453
6,675 Parity plc ORD 53,428
Shares Value
- --------------------------------------------------------------------------------
3,900 Pharmaceutical Product
Development, Inc.(1) $ 111,881
2,600 Professional Detailing, Inc.(1) 60,613
200 PubliGroupe S.A. ORD 56,758
3,200 Quintiles Transnational Corp.(1) 160,000
4,100 Select Appointments Holdings
plc ORD 42,561
59,000 Singapore Technologies
Engineering Ltd. ORD 64,442
300 Sixt AG ORD 69,947
3,600 Spring Group PLC ORD 8,615
1,800 Stork N.V. ORD 45,889
3,400 Superior Consultant Holdings
Corp.(1) 124,950
3,500 Sykes Enterprises, Inc.(1) 70,875
2,000 Toyo Information Systems Co.,
Ltd. ORD 35,730
4,200 Triad Group PLC ORD 29,805
2,900 True North Communications Inc. 81,563
4,682 Unique International NV ORD 118,873
3,400 Vedior NV ORD (Acquired
1/27/98-11/10/98,
Cost $77,682)(2) 69,415
18,900 WPP Group plc ORD 104,180
--------------
3,677,315
--------------
CHEMICALS & RESINS--0.9%
2,800 Air Products and Chemicals, Inc. 106,750
4,600 Dow Chemical Co. 447,925
2,700 du Pont (E.I.) de Nemours & Co. 158,625
3,700 IMC Global Inc. 84,638
6,300 Lubrizol Corp. 170,888
1,000 Monsanto Co. 45,313
12,100 Morton International, Inc. 356,194
1,000 Sony Chemicals Corp. ORD 36,055
--------------
1,406,388
--------------
COMMUNICATIONS EQUIPMENT--1.8%
9,300 Andrew Corp.(1) 150,544
4,600 ANTEC Corp.(1) 85,388
6,600 Ascend Communications, Inc.(1) 370,631
1,600 Comverse Technology, Inc.(1) 92,050
5,600 Ericsson (L.M.) Telephone Co.
ADR 154,525
2,900 Harris Corp. 110,019
6,400 Lucent Technologies Inc. 550,800
3,900 Motorola, Inc. 241,800
2,800 Nokia Corp. Cl A ADR 274,400
3,100 Northern Telecom Ltd. 144,731
1,400 Plantronics, Inc.(1) 92,050
7,400 Polycom, Inc.(1) 131,813
1,100 Radiotronica SA ORD(1) 80,343
7,300 Scientific-Atlanta, Inc. 141,438
800 Superior TeleCom Inc. 34,800
See Notes to Financial Statements
www.americancentury.com 43
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
4,700 Tandberg ASA ORD $ 35,830
4,300 Tekelec(1) 66,650
1,900 Terayon Communication Systems,
Inc.(1) 58,306
--------------
2,816,118
--------------
COMMUNICATIONS SERVICES--6.8%
7,300 Advanced Info Service Public Co.
Limited ORD(1) 42,407
16,500 AirTouch Communications, Inc.(1) 943,594
3,400 Amdocs Ltd.(1) 52,275
6,000 Ameritech Corp. 324,750
11,500 AT&T Corp. 716,594
1,800 Bell Atlantic Corp. 100,125
13,500 BellSouth Corp. 1,177,835
14,500 British Telecommunications plc
ORD 198,739
24,800 Cable & Wireless Communications
plc ORD(1) 221,015
39,279 Cable & Wireless Optus Limited
ORD(1) 73,444
1,200 Cellular Communications
International, Inc.(1) 75,075
3,100 Century Telephone Enterprises, Inc. 176,700
1,300 China Telecom (Hong Kong)
Limited ADR(1) 51,431
20,771 COLT Telecom Group plc ORD(1) 271,493
3,700 Companhia de Telecomunicaciones
de Chile S.A. ADR 85,794
6,200 Crown Castle International Corp.(1) 83,313
21,000 Datacraft Asia Limited ORD 34,440
11,200 Energis plc ORD(1) 202,399
4,700 Esat Telecom Group plc ADR(1) 165,675
1,300 Europolitan Holdings AB ORD 119,643
2,100 Global TeleSystems Group, Inc.(1) 91,153
3,200 GTE Corp. 198,400
3,000 Hellenic Telecommunication
Organization SA (OTE) ORD 74,913
9,400 International FiberCom, Inc.(1) 75,494
15,600 MCI WorldCom, Inc.(1) 919,913
157 Mobistar SA ORD(1) 7,475
2,300 NetCom Systems AB Cl B ORD(1) 88,859
16 Nippon Telegraph & Telephone
ORD 119,534
27 NTT Data Corp. ORD 117,959
300 Omnicom SA ORD(1) 31,891
11,500 Orange plc ORD(1) 117,670
1,570 Panafon SA ORD(1) 28,161
22,200 SBC Communications Inc. 1,064,244
5,600 SK Telecom Co. Ltd. ADR 57,750
3,041 Sonera Group Oyj ORD(1) 43,683
5,400 Sprint Corp. 392,850
2,700 Sprint PCS(1) 43,200
Shares Value
- --------------------------------------------------------------------------------
100 STET Hellas Telecommunications
S.A. ADR(1) $ 3,481
373 Swisscom AG ORD(1) 125,634
2,500 Tele Danmark A/S ORD 279,481
707 Telecel-Comunicacaoes Pessoais,
SA ORD 138,320
37,400 Telecom Italia Mobile (TIM)
SpA ORD 157,579
30,000 Telecom Italia SpA ORD 243,236
6,045 Telefonica de Espana ORD 284,283
6,400 Teleglobe Inc. ORD 174,356
477 Telinfo NV ORD 56,607
1,511 Total Access Communication
Public Co. Limited ORD(1) 3,385
3,400 U S WEST Communications
Group 211,650
4,100 Viatel, Inc.(1) 60,988
17,400 Vodafone Group plc ORD 257,009
--------------
10,585,899
--------------
COMPUTER PERIPHERALS--1.6%
3,100 Architel Systems Corp. ORD(1) 36,411
10,575 Cisco Systems Inc.(1) 797,421
11,500 EMC Corp. (Mass.)(1) 833,750
3,100 Lexmark International Group,
Inc. Cl A(1) 236,763
2,400 Proxim, Inc.(1) 54,600
6,300 Psion plc ORD 49,127
7,900 Quantum Corp.(1) 175,034
6,900 Seagate Technology, Inc.(1) 203,550
2,300 Xylan Corp.(1) 41,903
--------------
2,428,559
--------------
COMPUTER SOFTWARE & SERVICES--4.9%
1,600 Advantage Learning Systems,
Inc.(1) 89,000
1,000 America Online Inc. 87,563
2,500 AnswerThink Consulting Group,
Inc.(1) 48,672
5,000 At Home Corp. Series A(1) 290,938
500 Atos SA ORD(1) 107,360
1,400 Autodesk, Inc. 51,013
6,200 Automatic Data Processing, Inc. 477,400
1,800 Cap Gemini N.V. ORD 128,716
1,708 Cap Gemini SA ORD 250,107
1,300 CIBER, Inc.(1) 29,331
3,100 CMG plc ORD 76,844
7,400 Comdisco, Inc. 135,050
1,600 Compuware Corp.(1) 99,700
800 Concord Communications, Inc.(1) 35,425
1,700 Deltek Systems, Inc.(1) 30,334
1,500 Equant NV New York Shares(1) 84,656
See Notes to Financial Statements
44 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
3,600 Excite, Inc.(1) $ 175,613
17,000 First Data Corp. 453,688
1,000 Fuji Soft ABC, Inc. ORD 41,009
2,700 Geac Computer Corp. Ltd. ORD(1) 70,825
4,100 Getronics N.V. ORD 179,432
4,100 GTECH Holdings Corp.(1) 102,756
4,700 HBO & Co. 117,059
700 IMS Health Inc. 46,463
1,700 Inktomi Corp.(1) 227,428
5,200 International Integration Inc.(1) 78,488
81 Jet Multimedia ORD 13,073
3,300 Keane, Inc.(1) 94,875
12,700 Logica plc ORD 92,222
2,900 London Bridge Software Holdings
plc ORD 56,714
8,329 Mandator AB ORD 70,198
14,700 Microsoft Corp.(1) 1,793,811
15,045 Misys plc ORD 106,022
1,000 Network Associates Inc.(1) 50,906
15,900 Novell, Inc.(1) 262,847
6,600 Oracle Systems Corp.(1) 226,256
1,984 Ordina N.V. ORD(1) 54,631
4,200 Project Software & Development,
Inc.(1) 126,263
300 QRS Corp.(1) 12,544
2,300 QuadraMed Corp.(1) 55,056
3,200 Sage Group plc (The) ORD 76,576
1,100 Sapient Corp.(1) 50,806
878 Sigma AB Cl B ORD(1) 30,572
515 Simac Techniek N.V. ORD 66,025
1,200 Sterling Commerce, Inc.(1) 43,500
4,300 Sterling Software, Inc.(1) 110,725
1,000 Sumisho Computer Systems
Corp. ORD 21,073
1,200 Synopsys, Inc.(1) 56,775
2,100 Technomatix Technologies Ltd.(1) 28,941
12,500 Unisys Corp.(1) 356,250
2,932 Unit 4 ORD(1) 80,121
1,200 Wind River Systems, Inc.(1) 55,950
--------------
7,507,602
--------------
COMPUTER SYSTEMS--1.4%
10,800 Apple Computer, Inc.(1) 345,263
7,800 Compaq Computer Corp. 253,500
8,300 Dell Computer Corp.(1) 504,484
10,000 Fujitsu Ltd. ORD 115,474
2,000 Hewlett-Packard Co. 125,500
3,800 International Business
Machines Corp. 627,000
1,900 Sun Microsystems, Inc.(1) 140,600
--------------
2,111,821
--------------
Shares Value
- --------------------------------------------------------------------------------
CONSTRUCTION & PROPERTY DEVELOPMENT--0.5%
1,500 Assa Abloy AB Cl B ORD $ 59,982
1,600 Brisa-Auto Estradas de Portugal,
S.A. ORD 86,544
1,200 Centex Corp. 42,825
4,900 CRH plc ORD 73,670
4,300 D.R. Horton, Inc. 81,163
9,000 Daiwa House Industry Co., Ltd.
ORD 95,375
1,800 Grupo Acciona SA ORD 91,018
3,200 Insituform Technologies, Inc. Cl A(1) 41,800
3,845 Jarvis plc ORD 41,944
900 Lafarge SA ORD 84,903
1,200 Southdown, Inc. 69,900
--------------
769,124
--------------
CONSUMER PRODUCTS--1.0%
1,800 Chattem, Inc.(1) 76,613
9,600 Helen of Troy Ltd.(1) 160,200
12,000 Kao Corporation ORD 227,049
4,700 NBTY, Inc.(1) 28,714
6,400 Procter & Gamble Co. (The) 560,800
6,200 Rayovac Corporation(1) 143,375
2,500 Twinlab Corp.(1) 41,484
5,300 Whirlpool Corp. 296,800
--------------
1,535,035
--------------
CONTROL & MEASUREMENT(3)
800 Orbotech Ltd.(1) 30,900
--------------
DIVERSIFIED COMPANIES--2.2%
2,388 Asko Oyj Cl A ORD 37,826
14,200 BBA Group plc ORD 78,273
6,075 Bodycote International plc ORD 89,230
2,200 Brambles Industries Limited ORD 53,843
4,100 DCC plc ORD 34,878
14,500 General Electric Co. (U.S.) 1,312,250
1,500 GP Strategies Corp.(1) 21,563
7,000 Nikon Corporation ORD 67,075
17,400 Tyco International Ltd. 1,145,138
2,700 Unilever N.V. New York Shares 208,744
1,600 Vivendi ORD 362,139
--------------
3,410,959
--------------
EDUCATION(3)
700 Benesse Corporation ORD 35,072
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS--2.6%
8,600 Advanced Micro Devices, Inc.(1) 238,113
1,300 Advantest Corp. ORD 86,776
3,800 Aeroflex Inc.(1) 52,013
1,400 Altera Corp.(1) 68,731
See Notes to Financial Statements
www.americancentury.com 45
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
5,000 Arrow Electronics, Inc.(1) $ 108,750
5,100 Celestica Inc.(1) 103,594
500 Dae Duck Electronics Co. ORD 40,128
3,700 DII Group, Inc.(1) 77,122
600 Draka Holding N.V. ORD 17,275
2,700 Electronics for Imaging, Inc.(1) 72,478
9,278 Elektrim Spolka Akcyjna
S.A. ORD 78,027
11,000 Fujikura Ltd. ORD 61,367
3,000 Hosiden Corporation ORD 52,012
11,700 Intel Corp. 1,258,847
25 Kudelski SA ORD(1) 71,664
1,200 Leitch Technology Corp ORD(1) 27,445
2,000 Murata Manufacturing Co., Ltd.
ORD 78,282
13,000 Natsteel Electronics Ltd. ORD 28,083
94 Phoenix Mecano AG ORD 59,617
8,500 Pinnacle Systems, Inc.(1) 285,281
256 Sartorius AG ORD 61,199
700 Siemens AG ORD 48,756
2,200 Softbank S.A. GDR 48,620
1,500 Sony Corp. ORD 109,749
1,000 STMicroelectronics N.V.
New York Shares(1) 67,125
4,200 Texas Instruments Inc. 320,775
5,000 Tokyo Electron Ltd. ORD 186,772
5,000 Uniphase Corp.(1) 270,625
--------------
3,979,226
--------------
ENERGY(3)
200 ISIS ORD 14,467
--------------
ENERGY (PRODUCTION & MARKETING)--3.2%
9,700 Amoco Corp. 571,694
13,000 Apache Corp. 299,000
6,700 Atlantic Richfield Co. 445,550
5,000 Berkley Petroleum Corp. ORD(1) 33,605
15,300 Burlington Resources Inc. 545,063
10,300 Canadian 88 Energy Corp. ORD(1) 34,277
2,100 Chevron Corp. 175,613
1,700 Elf Aquitaine SA ORD 212,133
900 Enron Corp. 47,306
12,200 Exxon Corp. 915,763
8,300 Murphy Oil Corp. 330,963
2,600 NICOR Inc. 109,363
27,900 Seagull Energy Corp.(1) 228,431
6,900 Sunoco, Inc. 233,738
3,800 Texaco Inc. 218,738
4,100 Ultramar Diamond Shamrock Corp. 105,575
10,000 Unocal Corp. 338,750
9,600 Woodside Petroleum Limited ORD 48,791
--------------
4,894,353
--------------
Shares Value
- --------------------------------------------------------------------------------
ENERGY (SERVICES)--0.4%
27,800 Baker Hughes Inc. $ 509,088
100 Bouygues Offshore S.A. ADR 1,213
800 IHC Caland N.V. ORD 33,922
3,000 Tidewater Inc. 69,188
1,900 Transocean Offshore 46,906
--------------
660,317
--------------
ENTERTAINMENT(3)
1,000 Endemol Entertainment Holding
NV ORD 32,195
--------------
ENVIRONMENTAL SERVICES--0.5%
3,700 Allied Waste Industries, Inc.(1) 75,619
14,000 Browning-Ferris Industries, Inc. 413,000
8,500 Rentokil Initial PLC ORD 54,709
6,812 Waste Management, Inc. 292,065
--------------
835,393
--------------
FINANCIAL SERVICES--3.7%
500 Aeon Credit Service Ltd. ORD 28,341
17,700 AMP Limited ORD (Acquired
6/18/98-11/6/98, Cost
$219,635)(1)(2) 228,992
20,700 Amvescap Plc ORD 168,591
500 Azkoyen SA ORD 17,514
100 Banca del Gottardo Cl B ORD 82,915
29,000 Banca Intesa S.p.A. ORD 162,023
9,672 Bank of Ireland ORD 200,325
1,000 Bayerische Vereinsbank AG ORD 86,651
17,400 CIT Group Holdings, Inc.
(The) Cl A 488,288
2,900 Close Brothers Group plc ORD 26,921
14,200 Corporacion Financiera Reunida,
S.A. ORD(1) 190,588
700 Credit Suisse Group ORD 120,396
2,300 Dresdner Bank AG ORD 103,179
2,600 Equitable Companies Inc. 143,650
14,700 Fannie Mae 1,069,425
3,200 Federal Home Loan Mortgage
Corporation 193,600
3,300 FINOVA Group Inc. 174,281
600 GFI Informatique ORD(1) 64,627
10,300 Industrial Finance Corporation of
Thailand (The) ORD 4,488
4,743 ING Groep N.V. ORD 271,880
100 Julius Baer Holding AG ORD 324,638
2,448 Kempen & Company NV ORD 136,993
15,000 Lloyds TSB Group plc ORD 208,563
5,800 Morgan Stanley Dean Witter,
Discover & Co. 404,550
1,300 Mycal Card Inc. ORD(1) 31,670
43,100 National Finance and Securities
Public Co., Ltd. Cl F ORD(1) 14,307
See Notes to Financial Statements
46 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
4,920 Newcourt Credit Group Inc.
ORD (Acquired
11/18/97-10/29/98,
Cost $138,680)(2) $ 174,487
5,000 Nomura Securities Co., Ltd. ORD 48,601
3,670 Provident Financial plc ORD 55,117
16,500 Skandia Forsakrings AB ORD 234,482
4,882 Tas Groep NV ORD(1) 22,234
8,200 UniCapital Corp.(1) 67,650
100 Vontobel Holding AG Cl B ORD 168,410
--------------
5,718,377
--------------
FOOD & BEVERAGE--2.9%
6,000 American Italian Pasta Co. Cl A(1) 151,500
33,135 Archer-Daniels-Midland Co. 608,856
11,000 Coca-Cola Beverages plc ORD(1) 23,055
11,700 Coca-Cola Enterprises, Inc. 442,406
7,900 ConAgra, Inc. 248,356
3,500 Coors (Adolph) Co. Cl B 174,234
15,100 Diageo plc ORD 169,209
900 Groupe Danone ORD 262,945
7,200 Grupo Continental, S.A. ORD 16,649
4,500 Hain Food Group, Inc. (The)(1) 92,250
2,900 Heineken NV ORD 147,410
3,500 Hershey Foods Corp. 235,375
1,700 Hormel Foods Corp. 50,256
9,100 Interstate Bakeries Corp. 238,875
17,900 J.D. Wetherspoon plc ORD 61,298
3,800 Kerry Group Plc Cl A ORD 52,948
8,000 Kirin Brewery Company, Ltd. ORD 83,024
2,700 Nabisco Holdings Corp. Cl A 107,663
99 Nestle S.A. ORD 205,747
16,000 Ng Fung Hong Limited ORD 14,259
1,300 Performance Food Group Co.(1) 31,647
4,400 Quaker Oats Co. (The) 270,050
29 South African Breweries
Ltd. ORD 491
2,800 Suiza Foods Corp.(1) 132,650
23,600 Tyson Foods, Inc. Cl A 488,225
2,300 U.S. Foodservice, Inc.(1) 105,656
--------------
4,415,034
--------------
FURNITURE & FURNISHINGS--0.3%
3,800 CompX International Inc.(1) 95,238
5,100 Dorel Industries Inc. Cl B ORD(1) 77,374
2,000 Miller (Herman), Inc. 42,813
5,900 Newell Co. 261,075
2,700 O'Sullivan Industries
Holdings, Inc.(1) 27,169
--------------
503,669
--------------
HEALTHCARE--1.7%
4,200 Aetna Inc. 324,713
5,400 Beckman Coulter Inc. 260,550
Shares Value
- --------------------------------------------------------------------------------
7,800 Cardinal Health, Inc. $ 535,275
17,700 Columbia/HCA Healthcare Corp. 435,863
800 Gehe AG ORD 51,235
8,400 Health Management
Associates, Inc.(1) 182,175
2,100 PacifiCare Health Systems,
Inc. Cl B(1) 158,484
5,900 Province Healthcare Co.(1) 188,063
3,600 Tenet Healthcare Corp.(1) 106,425
8,900 Total Renal Care Holdings, Inc.(1) 236,406
4,500 Trigon Healthcare, Inc.(1) 166,781
1,000 Yoshitomi Pharmaceutical
Industries, Ltd. ORD 9,745
--------------
2,655,715
--------------
HOTELS(3)
700 Sol Melia, SA ORD 27,336
--------------
INDUSTRIAL--0.1%
23,500 Siebe plc ORD 84,547
--------------
INDUSTRIAL EQUIPMENT &
MACHINERY--0.5%
1,900 Caterpillar Inc. 93,931
5,900 Ingersoll-Rand Co. 276,194
4,380 Mannesmann AG ORD 474,415
--------------
844,540
--------------
INSURANCE--3.0%
411 Allianz AG ORD 148,107
8,200 Allstate Corp. 334,150
3,100 American International Group, Inc. 291,400
2,057 ASR Verzekeringsgroep N.V. ORD 167,446
5,200 Assicurazioni Generali ORD 194,303
2,505 Axa-UAP ORD 324,048
6,900 Chubb Corp. (The) 483,431
10,000 CNA Financial Corp.(1) 427,500
3,400 Companhia de Seguros Mundial
Confianca, SA ORD(1) 111,321
4,400 Conseco Inc. 145,750
2,070 Ethniki General Insurance Co.
ORD 58,606
4,500 Fidelity National Financial, Inc. 147,656
6,400 First American Financial Corp.
(The) 196,000
3,000 Gallagher (Arthur J.) & Co. 139,125
3,300 Kingsway Financial Services
ORD(1) 24,763
4,500 LandAmerica Financial Group, Inc. 275,906
4,000 Lincoln National Corp. 334,750
3,900 Mediolanum SpA ORD 23,474
800 Pohjola Insurance Group Cl B
ORD 37,426
56,800 Premafin Finanziaria S.p.A. ORD(1) 48,574
See Notes to Financial Statements
www.americancentury.com 47
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
15,350 Reinsurance Australia Corporation
Ltd. ORD $
34,673
1,400 Reinsurance Group of America,
Inc. 91,700
10,100 SAFECO Corp. 433,984
2,200 Sampo Insurance Company Ltd.
ORD 75,590
25 Schweizerische
Rueckversicherungs-Gesellschaft
ORD 63,208
1,300 Transatlantic Holdings, Inc. 98,800
--------------
4,711,691
--------------
LEISURE--0.4%
255 Accor SA ORD 56,100
1,000 Anchor Gaming(1) 51,125
23,400 Ciga Spa ORD(1) 20,485
17,000 Corporacion Interamericana de
Entretenimiento S.A. Cl B ORD(1) 38,971
3,300 Eastman Kodak Co. 239,456
100 Moevenpick Holding AG Bearer
ORD 51,598
6,000 Olympus Optical Co., Ltd. ORD 65,679
1,300 Samsung Electronics ORD 69,486
1,500 Scandic Hotels AB ORD 52,415
--------------
645,315
--------------
MACHINERY & EQUIPMENT--0.9%
3,300 ATS Automation Tooling Systems,
Inc. ORD(1) 39,191
9,200 Cooper Industries, Inc. 451,950
3,800 Deere & Co. 132,763
150 Georg Fischer AG ORD 51,168
1,000 Hanover Compressor Company(1) 22,625
5,800 Premark International, Inc. 194,663
900 Sidel SA ORD 68,271
4,800 Sundstrand Corp. 259,200
600 Swisslog Holding AG ORD 58,048
1,000 UNION TOOL CO. ORD 44,257
--------------
1,322,136
--------------
MEDICAL EQUIPMENT & SUPPLIES--1.2%
600 ADAC Laboratories(1) 15,619
2,600 Arterial Vascular Engineering, Inc.(1) 127,156
6,800 CONMED Corp.(1) 185,300
5,200 Guidant Corp. 446,225
3,400 Haemonetics Corp.(1) 76,713
2,900 Hillenbrand Industries, Inc. 164,756
6,200 Medtronic, Inc. 419,663
11,700 PSS World Medical, Inc.(1) 243,141
1,100 Teleflex Inc. 46,750
5,000 Terumo Corporation ORD 111,048
--------------
1,836,371
--------------
Shares Value
- --------------------------------------------------------------------------------
METALS & MINING--0.2%
4,238 Aalberts Industries N.V. ORD $ 100,057
2,800 Aluminum Co. of America 207,550
7,900 Johnson Matthey PLC ORD 53,781
--------------
361,388
--------------
OFFICE EQUIPMENT & SUPPLIES--0.2%
4,000 Kronos Inc.(1) 172,000
800 Strafor-Facom SA ORD 54,560
--------------
226,560
--------------
PACKAGING & CONTAINERS--0.3%
11,300 Tenneco Inc. 402,563
--------------
PAPER & FOREST PRODUCTS--0.4%
2,500 Rayonier, Inc. 106,250
4,600 Union Camp Corp. 297,563
10,100 Westvaco Corp. 284,063
--------------
687,876
--------------
PHARMACEUTICALS--6.2%
8,400 American Home Products Corp. 447,300
4,100 Barr Laboratories, Inc.(1) 173,225
7,800 Bergen Brunswig Corp. Cl A 485,550
8,400 Bristol-Myers Squibb Co. 1,029,525
2,700 ChiRex Inc.(1) 49,106
2,000 Elan Corp., plc ADR(1) 136,250
9,500 Forest Laboratories, Inc.(1) 442,938
3,700 Genentech, Inc.(1) 259,231
3,200 Glaxo Wellcome plc ORD 101,239
4,800 Johnson & Johnson 390,000
4,500 Lilly (Eli) & Co. 403,594
11,500 London International Group plc
ORD 36,345
600 Medicis Pharmaceutical Corp.
Cl A(1) 37,800
1,300 Merck & Co., Inc. 201,338
8,600 Mylan Laboratories Inc. 285,413
3,000 Nature's Sunshine Products, Inc. 46,594
218 Novartis AG ORD 409,316
11,100 Pfizer, Inc. 1,239,038
8,900 Pharmacia & Upjohn Inc. 463,356
3,100 Pliva d.d. GDR 48,438
5,000 Roberts Pharmaceutical Corp.(1) 122,500
8 Roche Holding AG ORD 94,023
13,400 Schering-Plough Corp. 1,425,425
75,100 SkyePharma plc ORD(1) 101,632
6,000 Takeda Chemical Inds. ORD 202,201
25 UCB SA ORD 139,691
6,800 Warner-Lambert Co. 513,400
6,200 Zeneca Group plc ORD 257,851
--------------
9,542,319
--------------
See Notes to Financial Statements
48 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
PRINTING & PUBLISHING--0.9%
4,100 Banta Corp. $ 108,650
1,600 Consolidated Graphics, Inc.(1) 92,100
11,200 Deluxe Corp. 389,200
1,000 Elanders AB Cl B ORD 18,948
10,100 Gruppo Editoriale L'Espresso ORD 84,267
3,100 Mail-Well, Inc.(1) 40,106
12,200 Mondadori (Arnoldo) Editore SpA
ORD 153,409
3,000 Petersen Companies, Inc. (The)
Cl A(1) 71,813
9,040 Singapore Press Holdings Ltd.
ORD 95,995
3,000 Toppan Forms Co., Ltd. ORD 46,896
5,700 VNU N.V. ORD 196,042
650 Wolters Kluwer NV ORD 124,028
--------------
1,421,454
--------------
RAILROAD--0.3%
11,600 CSX Corp. 483,575
--------------
REAL ESTATE--0.1%
7,800 Cheung Kong (Holdings) Ltd. ORD 56,164
12,800 City Developments Limited ORD 60,971
25,000 Keppel Land Ltd. ORD 29,581
8,000 Singapore Land Limited ORD 19,126
--------------
165,842
--------------
RESTAURANTS--0.4%
12,200 CKE Restaurants, Inc. 298,138
5,800 PizzaExpress plc ORD 81,841
4,500 PJ America, Inc.(1) 88,031
10,600 TelePizza, S.A. ORD(1) 91,170
--------------
559,180
--------------
RETAIL (APPAREL)--0.3%
2,800 Chico's FAS, Inc.(1) 61,425
3,200 Children's Place Retail Stores,
Inc. (The)(1) 59,400
5,600 DM Management Co.(1) 81,900
3,100 Hennes & Mauritz AB Cl B ORD 229,234
2,000 Payless ShoeSource, Inc.(1) 97,500
--------------
529,459
--------------
RETAIL (FOOD & DRUG)--1.0%
8,700 CVS Corp. 429,563
7,128 Koninklijke Ahold NV ORD 247,395
2,500 Ruddick Corp. 48,906
12,000 Safeway Inc.(1) 633,750
16,300 Somerfield plc ORD 122,533
3,700 Universal Corp. 130,194
--------------
1,612,341
--------------
Shares Value
- --------------------------------------------------------------------------------
RETAIL (GENERAL MERCHANDISE)--2.4%
1,200 99 Cents Only Stores(1) $ 51,600
200 Carrefour SA ORD 141,680
11,000 Dillard's Inc. Cl A 378,125
2,500 Douglas Holding AG ORD 156,421
21,300 Electronics Boutique plc ORD 29,880
7,000 Fred's, Inc. 98,438
200 Galeries Lafayette ORD 228,097
5,600 Grupo Elektra, S.A. de C.V. GDR 29,750
2,000 Homac Corp. ORD 32,807
2,800 ITI Technologies, Inc.(1) 74,288
5,000 JUSCO Co., Ltd. ORD 95,213
3,400 Keiyo Company Ltd. ORD 16,704
5,700 Kmart Corp.(1) 86,925
1,800 Metro AG ORD 112,357
300 Meyer (Fred), Inc.(1) 15,263
1,800 Neiman-Marcus Group, Inc.(1) 48,263
8,700 Penney (J.C.) Company, Inc. 478,500
2,000 Pinault-Printemps-Redoute SA
ORD 341,441
200 Ryohin Keikaku Company Limited
ORD 22,737
16,400 Wal-Mart Stores, Inc. 1,235,125
--------------
3,673,614
--------------
RETAIL (SPECIALTY)--0.9%
1,700 Action Performance Cos. Inc.(1) 61,997
4,400 CSK Auto Corp.(1) 122,650
1,400 Guitar Center, Inc.(1) 32,113
11,700 Home Depot, Inc. 582,075
2,300 Starbucks Corp.(1) 106,231
3,500 Tech Data Corp.(1) 140,656
5,300 Toys 'R' Us, Inc.(1) 104,675
3,900 Tractor Supply Co.(1) 100,669
3,300 Wilmar Industries, Inc.(1) 58,472
1,600 Zale Corp.(1) 45,800
--------------
1,355,338
--------------
STEEL(3)
300 Bethlehem Steel Corporation(1) 2,475
--------------
TEXTILES & APPAREL--0.4%
3,300 Dexter Corp. (The) 105,806
7,400 Fruit of the Loom, Inc.(1) 109,150
3,200 Polymer Group, Inc.(1) 34,000
1,700 Quiksilver, Inc.(1) 41,225
3,800 Tarrant Apparel Group(1) 124,213
700 Tommy Hilfiger Corp.(1) 42,350
1,900 VF Corp. 93,219
2,000 Warnaco Group, Inc. (The) Cl A 49,500
3,800 WS Atkins plc ORD 32,987
--------------
632,450
--------------
See Notes to Financial Statements
www.americancentury.com 49
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Shares Value
- --------------------------------------------------------------------------------
TOBACCO--0.7%
1,500 Fortune Brands Pty. Ltd. $ 51,094
10,800 Imperial Tobacco Group plc ORD 116,211
14,800 Philip Morris Companies Inc. 827,875
3,100 UST Inc. 107,725
--------------
1,102,905
--------------
TRANSPORTATION--0.3%
6,200 Allied Holdings, Inc.(1) 94,550
2,400 Atlas Air, Inc.(1) 111,000
1,500 Avis Rent A Car, Inc.(1) 31,594
5,300 Go-Ahead Group PLC (The) ORD 59,479
3,389 Internatio-Muller NV ORD 77,706
31,300 Stagecoach Holdings plc ORD 117,259
--------------
491,588
--------------
UTILITIES--2.8%
7,700 AGL Resources Inc. 166,031
8,000 Ameren Corp. 329,500
1,500 Baltimore Gas & Electric Co. 46,031
1,300 Berliner Kraft-und
Licht-Aktiengesellschaft ORD 71,977
40,000 Centrais Eletricas de Santa
Catarina S.A. ORD 25,302
3,800 Central & South West Corp. 104,500
66,300 Cogeneration Public Co., Ltd.
(The) ORD(1) 51,353
2,500 Columbia Energy Group 141,875
684,700 Companhia de Saneamento Basico
do Estado de Sao Paulo ORD 75,223
700 Conectiv, Inc. 16,100
3,800 Duke Energy Corp. 237,738
2,100 Energy East Corp. 111,431
5,200 Florida Progress Corp. 222,300
4,100 FPL Group, Inc. 251,125
2,900 Houston Industries Inc. 91,713
2,300 IPALCO Enterprises, Inc. 115,288
1,500 KN Energy, Inc. 65,625
7,100 LG&E Energy Corp. 198,800
5,300 Minnesota Power & Light Co. 221,606
2,500 National Fuel Gas Co. 114,844
3,200 New Century Energies, Inc. 153,800
22,700 PacifiCorp 425,625
7,100 Potomac Electric Power Co. 185,044
6,600 PP&L Resources, Inc. 180,263
7,500 Sempra Energy 187,969
6,300 Southern Co. 185,850
2,300 Texas Utilities Co. 102,494
500 Vestas Wind Systems A/S ORD(1) 24,084
6,300 Wisconsin Energy Corp. 194,906
--------------
4,298,397
--------------
TOTAL COMMON STOCKS 115,309,549
--------------
(Cost $99,862,034)
Shares/Principal Amount Value
- --------------------------------------------------------------------------------
PREFERRED STOCKS--0.7%
COMMUNICATIONS SERVICES--0.1%
3,000,000 Embratel Participacoes S.A.
ORD $ 48,689
7,400,000 Tele Sudeste Celular Participacoes
S.A. ORD 40,033
2,600,000 Telesp Participacoes S.A. ORD 72,926
--------------
161,648
--------------
CONSUMER PRODUCTS--0.1%
100 Wella Aktiengesellschaft ORD 88,540
--------------
ENERGY (PRODUCTION & MARKETING)(3)
199,000 Petroleo Brasileiro S.A. ORD 28,322
--------------
FINANCIAL SERVICES--0.4%
910 Marschollek, Lautenschlaeger und
Partner AG ORD 547,885
--------------
MACHINERY & EQUIPMENT(3)
858 Krones AG ORD 27,601
--------------
RETAIL (SPECIALTY)--0.1%
2,200 Fielmann AG ORD 99,342
--------------
TEXTILES & APPAREL(3)
67 Jil Sander AG ORD 24,164
--------------
UTILITIES(3)
2,113,000 Centrais Electricas Brasileiras
S.A. Cl B ORD 59,794
1,520,000 Companhia Paranaense de
Energia-Copel ORD 14,612
--------------
74,406
--------------
TOTAL PREFERRED STOCKS 1,051,908
--------------
(Cost $572,651)
U.S. TREASURY SECURITIES--2.0%
$ 600,000 U.S. Treasury Notes, 7.75%,
11/30/99 617,802
150,000 U.S. Treasury Notes, 6.625%,
7/31/01 157,488
325,000 U.S. Treasury Notes, 5.75%,
8/15/03 339,791
300,000 U.S. Treasury Notes, 6.625%,
5/15/07 337,011
250,000 U.S. Treasury Bonds, 8.75%,
5/15/17 351,123
1,100,000 U.S. Treasury Bonds, 6.125%,
11/15/27 1,242,417
--------------
TOTAL U.S. TREASURY SECURITIES 3,045,632
--------------
(Cost $2,977,010)
See Notes to Financial Statements
50 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES--1.0%
$ 500,000 FHLB, 5.71%, 3/19/03 $ 512,865
1,000,000 FNMA MTN, 6.23%, 7/21/08 1,022,880
--------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES 1,535,745
--------------
(Cost $1,497,675)
SOVEREIGN GOVERNMENTS & AGENCIES--6.2%
$ 500,000 Argentine Discount Notes,
VRN, 6.625%, 5/31/99,
resets semi-annually off the
6-month LIBOR plus
0.8125% with no caps 376,250
DEM 650,000 Deutschland Republic, 4.75%,
7/4/28 379,069
DEM 3,300,000 Deutschland Republic, 6.00%,
9/15/03 2,155,908
FRF 8,500,000 France O.A.T., 6.50%,
10/25/06 1,757,058
CAD 400,000 Government of Canada,
6.00%, 6/1/08 280,175
$ 500,000 Government of Ecuador,
VRN, 6.625%, 2/28/99,
resets semi-annually off
the 6-month LIBOR plus
0.8125% with no caps 275,234
$ 500,000 Government of Poland, VRN,
6.69%, 4/30/99, resets
semi-annually off the
6-month LIBOR plus
0.8125% with no caps 495,938
JPY 120,000,000 Japan Global, 2.90%,
12/20/05 1,101,336
DKK 1,650,000 Kingdom of Denmark, 8.00%,
3/15/06 314,885
$ 100,000 Quebec Province, 8.80%,
4/15/03 112,028
$ 237,500 Republic of Argentina, VRN,
6.19%, 3/31/99, resets
semi-annually off the
6-month LIBOR plus
0.8125% with no caps 205,289
$ 590,135 Republic of Brazil, VRN,
8.00%, 12/15/98 388,383
GBP 175,000 U.K. Treasury Bonds, 7.50%,
12/7/06 341,086
GBP 350,000 U.K. Treasury Bonds, 9.00%,
8/6/12 821,379
$ 250,000 United Mexican States, 8.50%,
9/15/02 251,250
Principal Amount Value
- --------------------------------------------------------------------------------
$ 500,000 United Mexican States, VRN,
6.04%, 1/4/99 resets
semi-annually off the
6-month LIBOR plus
0.8125% with no caps $ 406,875
--------------
TOTAL SOVEREIGN
GOVERNMENTS & AGENCIES 9,662,143
--------------
(Cost $9,592,530)
MORTGAGE-BACKED SECURITIES(4)--2.3%
84,441 FHLMC Pool #E68523, 6.50%,
10/7/03 85,942
297,419 FNMA Pool #377181, 6.50%,
4/1/12 302,193
79,740 FNMA Pool #250576, 7.00%,
6/1/26 81,524
708,355 FNMA Pool #373510, 7.50%,
3/1/27 728,962
172,768 GNMA Pool #397233, 9.50%,
2/20/25 185,567
77,557 GNMA Pool #392995, 8.75%,
3/15/25 82,653
112,199 GNMA Pool #372335, 7.50%,
4/15/25 116,051
116,152 GNMA Pool #416856, 7.50%,
10/15/25 120,152
296,673 GNMA Pool #398509, 6.00%,
3/15/26 294,533
95,100 GNMA Pool #402682, 7.50%,
6/15/26 98,365
286,945 GNMA Pool #457351, 7.00%,
12/15/27 294,107
369,648 GNMA Pool #436194, 6.50%,
2/15/28 373,903
279,594 GNMA Pool #403770, 6.50%,
3/15/28 282,811
593,071 GNMA Pool #466804, 6.50%,
4/15/28 599,897
--------------
TOTAL MORTGAGE-BACKED SECURITIES 3,646,660
--------------
(Cost $3,572,466)
ASSET-BACKED SECURITIES(4)--1.0%
300,000 AMRESCO, INC., Series 1998-2,
Class A4 SEQ, 6.45%, 4/25/27 303,533
300,000 CIT RV Trust, Series 1998 A,
Class A4 SEQ, 6.09%, 2/15/12 305,474
292,779 First Union-Lehman Brothers
Commercial Mortgage,
Series 1998 C2, Class A1 SEQ,
6.28%, 6/18/07 300,071
200,000 Money Store (The) Home Equity
Trust, Series 1997 C,
Class AF6 SEQ, 6.67%, 3/1/03 204,399
See Notes to Financial Statements
www.americancentury.com 51
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
$ 194,161 Morgan Stanley Capital I,
Series 1998 WF1,
Class A1 SEQ, 6.25%, 7/15/07 $ 198,814
100,000 Nationslink Funding Corp.,
Series 1998-2, Cl A1 SEQ,
6.00%, 11/20/07 101,208
53,894 Textron Financial Corp. Receivables
Trust, Series 1997 A, Class A,
6.05%, 3/16/09 (Acquired
9/18/97, Cost $53,822)(2) 54,118
100,000 United Companies Financial Corp.,
Home Equity Loan,
Series 1997 C, Class A7,
6.85%, 1/15/29 103,068
--------------
TOTAL ASSET-BACKED SECURITIES 1,570,685
--------------
(Cost $1,542,479)
CORPORATE BONDS--6.6%
AEROSPACE & DEFENSE--0.2%
300,000 Lockheed Martin Corp., 7.25%,
5/15/06 324,495
--------------
AIRLINES--0.1%
150,000 United Air Lines, 9.00%,
12/15/03 167,918
--------------
BANKING--1.5%
500,000 American Express Centurion Bank,
VRN, 5.22%, 12/18/98, resets
monthly off the 1-month LIBOR
minus 0.055% with no caps 500,000
500,000 Bay View Capital Corp., 9.125%,
8/15/02 466,250
300,000 Citigroup Inc., 7.125%, 5/15/06 322,257
1,000,000 KeyBank N.A., VRN, 5.01%, 12/1/98,
resets daily off the
Federal Funds rate plus 0.03%
with no caps 999,400
--------------
2,287,907
--------------
COMMUNICATIONS SERVICES--0.7%
150,000 360 Communications Co.,
7.125%, 3/1/03 160,032
100,000 Cincinnati Bell Inc., 6.30%,
12/1/28 101,766
100,000 MCI WorldCom, Inc., 6.40%,
8/15/05 104,012
100,000 MCI WorldCom, Inc., 7.55%,
4/1/04 108,625
250,000 Qwest Communications
International Inc., 7.50%,
11/1/08 (Acquired 10/28/98,
Cost $248,310)(2) 255,000
Principal Amount Value
- --------------------------------------------------------------------------------
$ 250,000 Qwest Communications
International Inc., Series B,
7.44%, 2/1/08 (Acquired
7/9/98, Cost $183,438)(2)(5) $ 188,750
100,000 Tele-Communications Inc., 8.25%,
1/15/03 110,192
--------------
1,028,377
--------------
ELECTRICAL & ELECTRONIC
COMPONENTS--0.5%
350,000 Anixter International Inc., 8.00%,
9/15/03 371,529
250,000 DII Group, Inc., 8.50%, 9/15/07
(Acquired 9/17/97, Cost
$250,000)(2) 245,625
250,000 Trench Electric & Trench Inc.,
10.25%, 12/15/07 230,000
--------------
847,154
--------------
ENERGY (PRODUCTION & MARKETING)--1.2%
250,000 Belco Oil & Gas Corp., Series B,
10.50%, 4/1/06 246,563
100,000 Enron Corp., 6.625%, 11/15/05 103,620
500,000 Ocean Energy, Inc., 9.75%,
10/1/06 533,750
525,000 Oryx Energy Co., 8.375%,
7/15/04 572,702
250,000 Stone Energy Corp., 8.75%,
9/15/07 (Acquired 9/16/97,
Cost $248,208)(2) 252,500
200,000 Triton Energy Ltd., 8.75%,
4/15/02 198,750
--------------
1,907,885
--------------
ENERGY (SERVICES)--0.4%
500,000 Cliffs Drilling Company, 10.25%,
5/15/03 530,000
100,000 Petroleum Geo-Services ASA,
6.625%, 3/30/08 99,610
--------------
629,610
--------------
FINANCIAL SERVICES--0.3%
300,000 Comdisco, Inc., 6.50%, 4/30/99 300,954
100,000 General Motors Acceptance Corp.,
8.50%, 2/4/02 108,333
--------------
409,287
--------------
HEALTHCARE--0.4%
100,000 Aetna Services, Inc., 6.75%,
8/15/01 102,809
500,000 Tenet Healthcare Corp., 7.875%,
1/15/03 516,975
--------------
619,784
--------------
LEISURE--0.1%
125,000 Time Warner Inc., 8.11%,
8/15/06 142,048
--------------
See Notes to Financial Statements
52 1-800-345-2021
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
Principal Amount Value
- --------------------------------------------------------------------------------
MACHINERY & EQUIPMENT--0.2%
$ 250,000 United Rentals, Inc., 9.50%,
6/1/08
$ 257,813
--------------
OFFICE EQUIPMENT & SUPPLIES--0.1%
100,000 Xerox Capital Trust, 8.00%,
2/1/27 (Acquired 7/17/97,
Cost $104,024)(2) 111,280
--------------
REAL ESTATE--0.2%
275,000 Spieker Properties, Inc., 6.80%,
12/15/01 278,055
--------------
RETAIL (APPAREL)--0.1%
200,000 Saks Holdings, Inc., 7.25%,
12/1/04 200,960
--------------
RETAIL (GENERAL MERCHANDISE)--0.3%
200,000 Federated Department Stores,
8.50%, 6/15/03 220,414
300,000 Sears Roebuck Acceptance Corp.,
6.00%, 3/20/03 307,947
--------------
528,361
--------------
TOBACCO--0.2%
300,000 Philip Morris Companies Inc.,
6.80%, 12/1/03 315,894
--------------
UTILITIES--0.1%
100,000 PG&E Corp., 6.25%, 3/1/04 103,458
--------------
TOTAL CORPORATE BONDS 10,160,286
--------------
(Cost $9,972,237)
COMMERCIAL PAPER(6)--2.2%
CREDIT CARD & TRADE RECEIVABLES--0.5%
750,000 Dakota Certificates (Citibank),
5.35%, 2/19/99 (Acquired
11/16/98, Cost $739,411)(2) 741,486
--------------
EDUCATION--0.9%
400,000 Leland Stanford University, 4.95%,
4/8/99 392,850
1,000,000 Yale University, 5.05%, 2/16/99 989,057
--------------
1,381,907
--------------
FINANCIAL SERVICES--0.4%
560,000 Falcon Asset Securities Corp.,
5.29%, 12/4/98 (Acquired
10/7/98, Cost $555,227)(2) 559,711
--------------
INDUSTRIAL--0.4%
Principal Amount Value
- --------------------------------------------------------------------------------
$ 700,000 Siebe plc, 5.22%, 2/17/99
(Acquired 10/14/98, Cost
$687,383)(2) $ 692,244
--------------
TOTAL COMMERCIAL PAPER 3,375,348
--------------
(Cost $3,375,184)
CERTIFICATES OF DEPOSIT--0.6%
1,000,000 National Westminster Bank PLC,
5.65%, 3/3/99 1,000,866
--------------
(Cost $999,521)
BANK NOTES--0.9%
405,000 General Motors Acceptance Corp.
MTN, 7.375%, 4/15/99 407,871
1,000,000 Morgan Stanley Dean Witter,
Discovery & Co., 5.625%,
3/1/99 1,000,380
--------------
TOTAL BANK NOTES 1,408,251
--------------
(Cost $1,408,041)
TEMPORARY CASH INVESTMENTS--2.0%
Repurchase Agreement, State Street Boston
Corp., (U.S. Treasury obligations), in a joint
trading account at 5.18%, dated 11/30/98,
due 12/1/98 (Delivery value $3,100,446) 3,100,000
--------------
(Cost $3,100,000)
TOTAL INVESTMENT SECURITIES--100.0% $154,867,073
==============
(Cost $138,471,828)
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Contracts Settlement Unrealized
to Sell Date Value Gain (Loss)
- -----------------------------------------------------------------------------
343,754 CHF 12/30/98 $ 247,160 $(2,185)
951,599 DEM 12/30/98 562,597 (4,357)
2,978,696 FRF 12/30/98 525,154 (3,586)
385,043 GBP 12/30/98 634,771 3,030
86,722,305 JPY 12/30/98 707,581 13,530
566,157 NLG 12/30/98 296,968 (2,325)
----------- ----------
$2,974,231 $4,107
=========== ==========
(Value on Settlement Date $2,978,338)
See Notes to Financial Statements
www.americancentury.com 53
Aggressive--Schedule of Investments
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
NOTES TO SCHEDULE OF INVESTMENTS
ADR = American Depositary Receipt
CAD = Canadian Dollar
CHF = Swiss Franc
DEM = German Mark
DKK = Danish Krone
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
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, 1998.
resets = The frequency with which a 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 or Section 4(2) of the Securities Act
of 1933 or is a private placement and, unless registered under the Act or
exempted from registration, may only be sold to qualified institutional
investors. The aggregate value of restricted securities at November 30,
1998, was $3,573,608, which represented 2.3% 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.
- --------------------------------------------------------------------------------
UNDERSTANDING THE SCHEDULE OF INVESTMENTS--This schedule tells you which
investments your fund owned on the last day of the reporting period.
The schedule includes:
* a list of each investment
* the share amount (stocks) or principal amount (bonds) of each investment
* the market value of each investment
* the percentage of investments in each industry, as applicable
* the percent and dollar breakdown of each investment category
See Notes to Financial Statements
54 1-800-345-2021
Statements of Assets and Liabilities
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
NOVEMBER 30, 1998
<S> <C> <C> <C>
ASSETS
Investment securities, at value
(identified cost of $175,647,499,
$251,903,454 and $138,471,828,
respectively) (Note 3) .................................. $187,068,072 $273,817,351 $154,867,073
Foreign currency holdings, at value
(identified cost of $30,382,
$164,916, and $179,199, respectively) ................... 30,373 13,977 --
Cash ...................................................... 100,614 482,672 347,449
Receivable for investments sold ........................... 257,744 1,017,640 689,680
Receivable for forward foreign
currency exchange contracts ............................. 12,701 28,418 16,560
Dividends and interest receivable ......................... 1,195,408 1,451,886 606,280
------------ ------------ ------------
188,664,912 276,811,944 156,527,042
------------ ------------ ------------
LIABILITIES
Disbursements in excess of
demand deposit cash ..................................... 29,561 267,943 398,021
Payable for investments purchased ......................... 878,593 1,090,265 467,960
Payable for capital shares redeemed ....................... 28,845 213,051 141,394
Payable for forward foreign
currency exchange contracts ............................. 8,063 20,154 12,453
Accrued management fees (Note 2) .......................... 150,954 243,154 149,363
Distribution fees payable (Note 2) ........................ 1,345 2,698 2,068
Service fees payable (Note 2) ............................. 1,345 2,698 2,068
Payable for directors' fees and expenses .................. 198 298 173
------------ ------------ ------------
1,098,904 1,840,261 1,173,500
------------ ------------ ------------
Net assets ................................................ $187,566,008 $274,971,683 $155,353,542
============ ============ ============
NET ASSETS CONSIST OF:
Capital (par value and paid in surplus) ................... $170,519,957 $244,801,771 $134,359,740
Undistributed net investment income ....................... 862,173 1,114,240 1,938,974
Accumulated undistributed net
realized gain from investment
and foreign currency transactions ....................... 4,757,711 7,128,688 2,650,213
Net unrealized appreciation on
investments and translation of assets
and liabilities in foreign currencies
(Note 3) ................................................ 11,426,167 21,926,984 16,404,615
------------ ------------ ------------
$187,566,008 $274,971,683 $155,353,542
============ ============ ============
Investor Class, $0.01 Par Value
Net assets ................................................ $180,970,193 $261,720,675 $145,125,352
Shares outstanding ........................................ 32,372,266 42,070,166 22,193,885
Net asset value per share ................................. $ 5.59 $ 6.22 $ 6.54
Advisor Class, $0.01 Par Value
Net assets ................................................ $ 6,595,815 $ 13,251,008 $ 10,228,190
Shares outstanding ........................................ 1,179,042 2,131,778 1,567,574
Net asset value per share ................................. $ 5.59 $ 6.22 $ 6.52
</TABLE>
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF ASSETS AND LIABILITIES--This statement details
what the fund owns (assets), what it owes (liabilities), and its net assets as
of the last day of the period. If you subtract what the fund owes from what it
owns, you get the fund's net assets. For each class of shares, the net assets
divided by the total number of shares outstanding gives you the price of an
individual share, or the net asset value per share.
NET ASSETS are also broken down by capital (money invested by shareholders); net
investment income not yet paid to shareholders; net gains earned on investment
activity but not yet paid to shareholders or net losses on investment activity
(known as realized gains or losses); and finally, gains or losses on securities
still owned by the fund (known as unrealized appreciation or depreciation). This
breakdown tells you the value of net assets that are performance-related, such
as investment gains or losses, and the value of net assets that are not related
to performance, such as shareholder investments and redemptions.
See Notes to Financial Statements
www.americancentury.com 55
Statements of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STRATEGIC STRATEGIC STRATEGIC
ALLOCATION: ALLOCATION: ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME
Income:
<S> <C> <C> <C>
Interest ............................... $ 6,522,486 $ 6,673,769 $ 2,461,091
Dividends (net of foreign taxes
withheld of $22,677, $65,676,
and $48,413, respectively) ........... 1,129,445 2,155,406 1,336,021
------------ ------------ ------------
7,651,931 8,829,175 3,797,112
------------ ------------ ------------
Expenses (Note 2):
Management fees ........................ 1,745,096 2,753,459 1,672,024
Distribution fees -- Advisor Class ..... 14,302 33,191 24,236
Service fees -- Advisor Class .......... 14,302 33,191 24,236
Directors' fees and expenses ........... 1,759 2,582 1,485
------------ ------------ ------------
1,775,459 2,822,423 1,721,981
------------ ------------ ------------
Net investment income .................. 5,876,472 6,006,752 2,075,131
------------ ------------ ------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY (NOTE 3)
Net realized gain (loss) on:
Investments ............................ 4,884,819 8,091,763 3,436,300
Foreign currency transactions .......... (76,470) (265,029) (103,792)
------------ ------------ ------------
4,808,349 7,826,734 3,332,508
------------ ------------ ------------
Change in net unrealized
appreciation on:
Investments .......................... 4,667,575 10,094,062 6,654,045
Translation of assets and
liabilities in foreign
currencies ........................... 2,020 4,930 2,630
------------ ------------ ------------
4,669,595 10,098,992 6,656,675
------------ ------------ ------------
Net realized and unrealized
gain on investments and
foreign currency ....................... 9,477,944 17,925,726 9,989,183
------------ ------------ ------------
Net Increase in Net Assets
Resulting from Operations .............. $ 15,354,416 $ 23,932,478 $ 12,064,314
============ ============ ============
</TABLE>
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF OPERATIONS--This statement breaks down how each
fund's net assets changed during the period as a result of the fund's
operations. It tells you how much money the fund made or lost after taking into
account income, fees and expenses, and investment gains or losses. It does not
include shareholder transactions and distributions.
Fund OPERATIONS include:
* interest and dividend income
* management fees and other expenses
* gains or losses from selling investments (known as realized gains or losses)
* gains or losses on current fund holdings (known as unrealized appreciation or
depreciation)
See Notes to Financial Statements
56 1-800-345-2021
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30, 1998 AND NOVEMBER 30, 1997
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
1998 1997 1998 1997 1998 1997
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net investment income .......... $ 5,876,472 $ 2,737,787 $ 6,006,752 $ 3,467,169 $ 2,075,131 $ 1,412,566
Net realized gain on
investments and foreign
currency transactions ........ 4,808,349 8,306,339 7,826,734 6,702,937 3,332,508 3,912,369
Change in net unrealized
appreciation on investments
and translation of assets
and liabilites in
foreign currencies ........... 4,669,595 (2,095,441) 10,098,992 7,927,799 6,656,675 6,690,552
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations .... 15,354,416 8,948,685 23,932,478 18,097,905 12,064,314 12,015,487
------------- ------------- ------------- ------------- ------------- -------------
DISTRIBUTIONS TO
SHAREHOLDERS
From net investment income:
Investor Class ............... (5,800,329) (1,635,899) (5,873,919) (2,707,084) (1,584,225) (334,675)
Advisor Class ................ (187,045) (118,709) (276,208) (152,937) (95,179) (40,079)
From net realized gains on
investment transactions:
Investor Class ............... (7,295,786) (1,061,595) (6,635,893) (80,982) (3,703,277) --
Advisor Class ................ (204,754) (70,914) (295,112) (10,493) (268,899) --
------------- ------------- ------------- ------------- ------------- -------------
Decrease in net assets
from distributions ........... (13,487,914) (2,887,117) (13,081,132) (2,951,496) (5,651,580) (374,754)
------------- ------------- ------------- ------------- ------------- -------------
CAPITAL SHARE
TRANSACTIONS (NOTE 4)
Net increase in net assets
from capital share
transactions ................. 24,713,711 117,841,280 54,162,988 129,408,618 31,349,164 53,802,871
------------- ------------- ------------- ------------- ------------- -------------
Net increase in
net assets ..................... 26,580,213 123,902,848 65,014,334 144,555,027 37,761,898 65,443,604
NET ASSETS
Beginning of year .............. 160,985,795 37,082,947 209,957,349 65,402,322 117,591,644 52,148,040
------------- ------------- ------------- ------------- ------------- -------------
End of year .................... $ 187,566,008 $ 160,985,795 $ 274,971,683 $ 209,957,349 $ 155,353,542 $ 117,591,644
============= ============= ============= ============= ============= =============
Undistributed net
investment income .............. $ 862,173 $ 1,196,127 $ 1,114,240 $ 1,264,693 $ 1,938,974 $ 1,580,834
============= ============= ============= ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
UNDERSTANDING THE STATEMENTS OF CHANGES IN NET ASSETS--These statements show how
each fund's net assets changed over the past two reporting periods. It details
how much a fund grew or shrank as a result of:
* operations--a summary of the Statement of Operations from the previous page
for the most recent period
* distributions--income and gains distributed to shareholders
* capital share transactions--shareholders' purchases, reinvestments, and
redemptions
Net assets at the beginning of the period plus the sum of operations,
distributions to shareholders and capital share transactions result in net
assets at the end of the period.
See Notes to Financial Statements
www.americancentury.com 57
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOVEMBER 30, 1998
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION--American Century Strategic Asset Allocations, Inc. (the
Corporation) is registered under the Investment Company Act of 1940 as an
open-end diversified management investment company. 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 each
Fund's 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 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 are in accordance with
generally accepted accounting principles.
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 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 as of the
trade date. Net realized gains and losses are determined on the identified cost
basis, which is also used for federal income tax purposes.
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 translated 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
58 1-800-345-2021
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
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 repurchase transaction be transferred
to the custodian in a manner sufficient to enable the Funds to obtain those
securities in the event of a default under the repurchase agreement. ACIM
monitors, on a daily basis, the securities transferred to ensure the value,
including accrued interest, of the securities under each repurchase agreement is
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 net
investment income and net realized 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 or state
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 those for Strategic Allocation:
Aggressive, which are declared and paid annually. Distributions from net
realized gains are declared and paid annually, usually in December, but the
funds may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code, in all events in a
manner consistent with provisions of the Investment Company Act.
On December 18, 1998, 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 $0.0332, $0.0241 and $0.0788 for the Investor Class, respectively, and
$0.0330, $0.0169 and $0.0631 for the Advisor Class respectively. Also, on
December 18, 1998, the Funds declared and paid a distribution from net realized
gains on investments to shareholders of record on that date of $0.1780, $0.2061
and $0.1641 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 reflect the differing character
of certain income items and net capital gains and losses for financial statement
and tax purposes and may result in reclassification among certain capital
accounts.
ADDITIONAL INFORMATION--Funds Distributor, Inc. (FDI) is the Corporation's
distributor. Certain officers of FDI are also officers of the Corporation.
- --------------------------------------------------------------------------------
2. TRANSACTIONS WITH RELATED PARTIES
The Corporation has entered into Management Agreements with ACIM that
provide 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
AVERAGE NET ASSETS
- --------------------------------------------------------------------------------------------------------------
<S> <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 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 year ended November 30, 1998, were $28,604 in
Strategic Allocation: Conservative, $66,382 in Strategic Allocation: Moderate
and $48,472 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, and
the Corporation's transfer agent, American Century Services Corporation.
www.americancentury.com 59
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 1998, were as follows:
<TABLE>
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
PURCHASES
Investment Securities other
than U.S. Government
<S> <C> <C> <C>
& Agency Obligations .... $ 136,079,945 $ 285,292,079 $ 186,813,061
U.S. Government &
Agency Obligations ...... 48,087,495 31,707,749 8,195,264
PROCEEDS FROM SALES
Investment Securities other
than U.S. Government
& Agency Obligations .... $ 118,555,359 $ 247,533,633 $ 162,460,058
U.S. Government &
Agency Obligations ...... 48,305,261 28,223,314 6,806,940
On November 30, 1998, the composition of unrealized appreciation and
depreciaton of investment securities based on the aggregate cost of investments
for federal income tax purposes was as follows:
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
Appreciation .............. $ 13,057,190 $ 25,358,310 $ 18,623,710
Depreciation .............. (3,064,595) (5,802,003) (3,494,135)
------------- ------------- -------------
Net ....................... $ 9,992,595 $ 19,556,307 $ 15,129,575
============= ============= =============
Federal Tax Cost .......... $ 177,075,477 $ 254,261,044 $ 139,737,498
============= ============= =============
</TABLE>
60 1-800-345-2021
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds were as follows:
<TABLE>
<CAPTION>
STRATEGIC ALLOCATION: STRATEGIC ALLOCATION: STRATEGIC ALLOCATION:
CONSERVATIVE MODERATE AGGRESSIVE
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C>
INVESTOR CLASS
Authorized shares .... 50,000,000 50,000,000 50,000,000
============= ============= =============
Year ended
November 30, 1998
Sold ................. 14,341,532 $ 78,794,970 23,620,687 $ 143,489,927 12,549,015 $ 80,160,388
Issued in reinvestment
of distributions ... 2,221,536 11,843,897 2,116,707 12,429,433 895,817 5,276,602
Redeemed ............. (12,448,203) (68,202,816) (17,345,468) (105,655,521) (8,778,771) (55,922,680)
------------- ------------- ------------- ------------- ------------- -------------
Net increase ......... 4,114,865 $ 22,436,051 8,391,926 $ 50,263,839 4,666,061 $ 29,514,310
============= ============= ============= ============= ============= =============
Year ended
November 30, 1997
Sold ................. 15,110,838 $ 80,391,536 32,728,841 $ 184,160,266 15,672,301 $ 90,016,196
Issued in
acquisition
(Note 6) ........... 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
Redeemed ............. (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
============= ============= ============= ============= ============= =============
ADVISOR CLASS
Authorized shares .... 25,000,000 25,000,000 25,000,000
============= ============= =============
Year ended
November 30, 1998
Sold ................. 733,231 $ 4,045,949 1,851,968 $ 11,078,436 791,693 $ 5,187,411
Issued in
reinvestment
of distributions ... 73,283 391,794 97,244 571,210 61,708 364,076
Redeemed ............. (392,972) (2,160,083) (1,252,277) (7,750,497) (584,629) (3,716,633)
------------- ------------- ------------- ------------- ------------- -------------
Net increase ......... 413,542 $ 2,277,660 696,935 $ 3,899,149 268,772 $ 1,834,854
============= ============= ============= ============= ============= =============
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
============= ============= ============= ============= ============= =============
</TABLE>
- --------------------------------------------------------------------------------
5. BANK LOANS
Effective December 18, 1998, the Funds, along with certain other funds
managed by ACIM, have entered into an unsecured $570,000,000 bank line of credit
agreement with Chase Manhattan. Borrowings under the agreement bear interest at
the Federal Funds rate plus 0.40%.
www.americancentury.com 61
Notes to Financial Statements
- --------------------------------------------------------------------------------
(Continued)
NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
6. REORGANIZATION PLAN
On August 29, 1997, Strategic Allocation: Conservative acquired all of the
net assets of the American Century - Benham 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.
62 1-800-345-2021
Conservative--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
Investor Class
1998 1997 1996(1)
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 5.55 $ 5.26 $ 5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Income(2) ......... 0.18 0.19 0.13
Net Realized and Unrealized
Gain on Investment Transactions .. 0.31 0.36 0.22
----------- ----------- -----------
Total From Investment Operations . 0.49 0.55 0.35
----------- ----------- -----------
Distributions
From Net Investment Income ....... (0.19) (0.17) (0.09)
From Net Realized Gain on
Investment Transactions .......... (0.26) (0.09) --
----------- ----------- -----------
Total Distributions .............. (0.45) (0.26) (0.09)
----------- ----------- -----------
Net Asset Value, End of Period ..... $ 5.59 $ 5.55 $ 5.26
=========== =========== ===========
Total Return(3) .................. 9.43% 10.87% 7.02%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 1.00% 1.00% 1.01%(4)
Ratio of Net Investment Income
to Average Net Assets .............. 3.35% 3.48% 3.67%(4)
Portfolio Turnover Rate ............ 113% 124%(5) 44%
Net Assets, End of Period
(in thousands) ..................... $ 180,970 $ 156,733 $ 33,110
</TABLE>
(1) February 15, 1996 (inception) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
(5) 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 6 in Notes to Financial Statements.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 63
Conservative--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
Advisor Class
1998 1997 1996(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $ 5.56 $ 5.26 $ 5.09
--------- --------- ---------
Income From Investment Operations
Net Investment Income(2) ......... 0.17 0.17 0.03
Net Realized and Unrealized Gain
on Investment Transactions ....... 0.31 0.38 0.14
--------- --------- ---------
Total From Investment Operations . 0.48 0.55 0.17
--------- --------- ---------
Distributions
From Net Investment Income ....... (0.19) (0.16) --
From Net Realized Gain on
Investment Transactions .......... (0.26) (0.09) --
--------- --------- ---------
Total Distributions .............. (0.45) (0.25) --
--------- --------- ---------
Net Asset Value, End of Period ..... $ 5.59 $ 5.56 $ 5.26
========= ========= =========
Total Return(3) .................. 9.06% 10.77% 3.34%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 1.25% 1.25% 1.25%(4)
Ratio of Net Investment Income
to Average Net Assets .............. 3.10% 3.23% 3.25%(4)
Portfolio Turnover Rate ............ 113% 124%(5) 44%
Net Assets, End of Period
(in thousands) ..................... $ 6,596 $ 4,253 $ 3,973
(1) October 2, 1996 (commencement of sale) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
(5) 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 6 in Notes to Financial Statements.
See Notes to Financial Statements
64 1-800-345-2021
Moderate--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
Investor Class
1998 1997 1996(1)
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 5.98 $ 5.42 $ 5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Income(2) ......... 0.15 0.14 0.10
Net Realized and Unrealized Gain
on Investment Transactions ....... 0.45 0.56 0.39
----------- ----------- -----------
Total From Investment Operations . 0.60 0.70 0.49
----------- ----------- -----------
Distributions
From Net Investment Income ....... (0.16) (0.13) (0.07)
From Net Realized Gain on
Investment Transactions .......... (0.20) (0.01) --
----------- ----------- -----------
Total Distributions .............. (0.36) (0.14) (0.07)
----------- ----------- -----------
Net Asset Value, End of Period ..... $ 6.22 $ 5.98 $ 5.42
=========== =========== ===========
Total Return(3) .................. 10.32% 13.02% 9.91%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 1.10% 1.10% 1.10%(4)
Ratio of Net Investment Income
to Average Net Assets .............. 2.38% 2.43% 2.52%(4)
Portfolio Turnover Rate ............ 127% 119% 78%
Net Assets, End of Period
(in thousands) ..................... $ 261,721 $ 201,384 $ 57,836
</TABLE>
(1) February 15, 1996 (inception) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 65
Moderate--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
Advisor Class
1998 1997 1996(1)
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $ 5.98 $ 5.42 $ 5.24
---------- ---------- ----------
Income From Investment Operations
Net Investment Income(2) ......... 0.13 0.12 0.02
Net Realized and Unrealized Gain
on Investment Transactions ....... 0.45 0.56 0.16
---------- ---------- ----------
Total From Investment Operations . 0.58 0.68 0.18
---------- ---------- ----------
Distributions
From Net Investment Income ....... (0.14) (0.11) --
From Net Realized Gain on
Investment Transactions .......... (0.20) (0.01) --
---------- ---------- ----------
Total Distributions .............. (0.34) (0.12) --
---------- ---------- ----------
Net Asset Value, End of Period ..... $ 6.22 $ 5.98 $ 5.42
========== ========== ==========
Total Return(3) .................. 10.07% 12.72% 3.44%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets .............. 1.35% 1.35% 1.35%(4)
Ratio of Net Investment Income
to Average Net Assets .............. 2.13% 2.18% 2.10%(4)
Portfolio Turnover Rate ............ 127% 119% 78%
Net Assets, End of Period
(in thousands) ..................... $ 13,251 $ 8,573 $ 7,566
</TABLE>
(1) October 2, 1996 (commencement of sale) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
See Notes to Financial Statements
66 1-800-345-2021
Aggressive--Financial Highlights
- --------------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
Investor Class
1998 1997 1996(1)
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period . $ 6.25 $ 5.53 $ 5.00
----------- ----------- -----------
Income From Investment Operations
Net Investment Income(2) ........... 0.10 0.09 0.07
Net Realized and Unrealized Gain
on Investment Transactions ......... 0.49 0.67 0.46
----------- ----------- -----------
Total From Investment Operations ... 0.59 0.76 0.53
----------- ----------- -----------
Distributions
From Net Investment Income ......... (0.09) (0.04) --
From Net Realized Gain on
Investment Transactions ............ (0.21) -- --
----------- ----------- -----------
Total Distributions ................ (0.30) (0.04) --
----------- ----------- -----------
Net Asset Value, End of Period ....... $ 6.54 $ 6.25 $ 5.53
=========== =========== ===========
Total Return(3) .................... 9.93% 13.84% 10.60%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................ 1.20% 1.20% 1.20%(4)
Ratio of Net Investment Income
to Average Net Assets ................ 1.49% 1.58% 1.72%(4)
Portfolio Turnover Rate .............. 134% 135% 64%
Net Assets, End of Period
(in thousands) ....................... $ 145,125 $ 109,497 $ 46,276
</TABLE>
(1) February 15, 1996 (inception) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
- --------------------------------------------------------------------------------
UNDERSTANDING THE FINANCIAL HIGHLIGHTS--These statements itemize current period
activity and statistics and provide comparison data for the last five fiscal
years (or less, if the class is not five years old).
On a per-share basis, it includes:
* share price at the beginning of the period
* investment income and capital gains or losses
* income and capital gains distributions paid to shareholders
* share price at the end of the period
It also includes some key statistics for the period:
* total return--the overall percentage return of the fund, assuming reinvestment
of all distributions
* expense ratio--operating expenses as a percentage of average net assets
* net income ratio--net investment income as a percentage of average net assets
* portfolio turnover--the percentage of the portfolio that was replaced during
the period
See Notes to Financial Statements
www.americancentury.com 67
Aggressive--Financial Highlights
- --------------------------------------------------------------------------------
(Continued)
FOR A SHARE OUTSTANDING THROUGHOUT THE YEARS ENDED NOVEMBER 30 (EXCEPT AS NOTED)
<TABLE>
Advisor Class
1998 1997 1996(1)
PER-SHARE DATA
<S> <C> <C> <C>
Net Asset Value, Beginning of Period .... $ 6.23 $ 5.53 $ 5.37
---------- ---------- ----------
Income From Investment Operations
Net Investment Income(2) .............. 0.08 0.07 0.01
Net Realized and Unrealized Gain
on Investment Transactions ............ 0.49 0.67 0.15
---------- ---------- ----------
Total From Investment Operations ...... 0.57 0.74 0.16
---------- ---------- ----------
Distributions
From Net Investment Income ............ (0.07) (0.04) --
From Net Realized Gain on
Investment Transactions ............... (0.21) -- --
---------- ---------- ----------
Total Distributions ................... (0.28) (0.04) --
---------- ---------- ----------
Net Asset Value, End of Period .......... $ 6.52 $ 6.23 $ 5.53
========== ========== ==========
Total Return(3) ....................... 9.66% 13.43% 2.98%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets ................... 1.45% 1.45% 1.45%(4)
Ratio of Net Investment Income
to Average Net Assets ................... 1.24% 1.33% 1.31%(4)
Portfolio Turnover Rate ................. 134% 135% 64%
Net Assets, End of Period
(in thousands) .......................... $ 10,228 $ 8,095 $ 5,872
</TABLE>
(1) October 2, 1996 (commencement of sale) through November 30, 1996.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than one year are not
annualized.
(4) Annualized.
See Notes to Financial Statements
68 1-800-345-2021
Independent Auditors' Report
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders,
American Century Mutual Funds, 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 Strategic Allocation: Aggressive (the "Funds"), comprising
American Century Strategic Asset Allocations, Inc., as of November 30, 1998, and
the related statement of operations for the year then ended, the statements of
changes in net assets for the each of the two years in the period then ended,
and the financial highlights for each of the two years in the period then ended
and for the period February 15, 1996 (inception) through November 30, 1996.
These financial statements and the financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at November
30, 1998 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial positions of American Century
Strategic Allocation: Conservative, American Century Strategic Allocation:
Moderate and American Century Strategic Allocation: Aggressive as of November
30, 1998, the results of their operations for the year then ended, the changes
in their net assets for each of the two years then ended, and the financial
highlights for the respective stated periods in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Kansas City, Missouri
January 15, 1999
www.americancentury.com 69
Share Class and Retirement Account Information
- --------------------------------------------------------------------------------
SHARE CLASSES
Two classes of shares are authorized for sale by the Strategic Asset
Allocation funds: INVESTOR CLASS and ADVISOR CLASS.
INVESTOR CLASS shareholders do not pay any commissions or other fees for
purchase of fund shares directly from American Century. Investors who buy
Investor Class shares through a broker-dealer may be required to pay the
broker-dealer a transaction fee. THE PRICE AND PERFORMANCE OF THE INVESTOR CLASS
SHARES ARE LISTED IN NEWSPAPERS. NO OTHER CLASS IS CURRENTLY LISTED.
ADVISOR CLASS shares are sold through banks, broker-dealers, insurance
companies, and financial advisors. Advisor Class shares are subject to a 0.50%
Rule 12b-1 service and distribution fee. Half of that fee is available to pay
for recordkeeping and administrative services, and half is available to pay for
distribution services provided by the financial intermediary through which the
Advisor Class shares are purchased. The total expense ratio of the Advisor Class
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.
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA and certain
403(b) distributions [not eligible for rollover to an IRA or to another 403(b)]
are subject to federal income tax withholding at the rate of 10% of the total
amount withdrawn, unless you elect not to have withholding apply. If you don't
want us to withhold on this amount, you may send us a written notice not to have
the federal income tax withheld. Your written notice is valid for six months
from the date of receipt at American Century. Even if you plan to roll over the
amount you withdraw to another tax-deferred account, the withholding rate still
applies to the withdrawn amount unless we have received a written notice not to
withhold federal income tax within six months prior to the withdrawal.
When you plan to withdraw, you may make your election by completing our
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.
70 1-800-345-2021
Background Information
- --------------------------------------------------------------------------------
INVESTMENT PHILOSOPHY AND 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 modest amount of income and help
cushion the share price volatility of the stock portion.
The risk designations are relative only to the three Strategic Asset
Allocation funds and do not represent comparisons with any other investment.
The funds invest in both domestic and foreign securities. International
investing involves special risks, such as political instability and currency
fluctuations.
COMPARATIVE INDICES
The indices listed below are used in the report as fund performance
comparisons. They are not investment products available for purchase.
The S&P 500 is composed of 500 large-capitalization stocks traded on
domestic exchanges. It is considered a broad measure of large-company stock
performance.
The S&P MIDCAP 400 is composed of 400 mid-capitalization stocks traded on
domestic exchanges. It is considered a broad measure of mid-sized stock
performance.
The S&P SMALLCAP 600 is composed of 600 small-capitalization stocks traded
on domestic exchanges. It is considered a broad measure of small-company stock
performance.
The LEHMAN AGGREGATE BOND INDEX reflects the combined performance of
several Lehman bond indices, including the TREASURY BOND, CORPORATE BOND, and
MORTGAGE-BACKED SECURITIES indices.
The MORGAN STANLEY EUROPE, AUSTRALASIA, FAR EAST (EAFE(reg.tm)) INDEX is a
widely followed group of stocks from 22 different countries (excluding the
U.S.). Morgan Stanley also maintains representative stock indices from various
regions around the world, including EUROPE, ASIA PACIFIC, and LATIN AMERICA.
The SALOMON BROTHERS NON-U.S. WORLD GOVERNMENT BOND INDEX consists of
government bonds from 16 countries (excluding the U.S.). Salomon also maintains
representative government bond indices from various regions around the world,
including EUROPE and JAPAN.
The THREE-MONTH TREASURY BILL INDEX is derived from secondary market
interest rates as published by the Federal Reserve Bank.
[right margin]
THE FUNDS' NEUTRAL ASSET MIXES*
CON MOD AGG
STOCKS 40% 60% 75%
BONDS 45% 30% 20%
CASH
(MONEY MARKET
SECURITIES) 15% 10% 5%
* 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.
INVESTMENT TEAM LEADERS
PORTFOLIO MANAGERS
JEFF TYLER
BRIAN HOWELL
www.americancentury.com 71
Glossary
- --------------------------------------------------------------------------------
RETURNS
* TOTAL RETURN figures show the overall percentage change in the value of a
hypothetical investment in the fund and assume that all of the fund's
distributions are reinvested.
* AVERAGE ANNUAL RETURNS illustrate the annually compounded returns that would
have produced the fund's cumulative total returns if the fund's performance had
been constant over the entire period. Average annual returns smooth out
variations in a fund's return; they are not the same as fiscal year-by-year
results. For fiscal year-by-year returns, please refer to the "Financial
Highlights" on pages 63-68.
STOCK PORTFOLIO STATISTICS
* NUMBER OF COMPANIES--the number of different companies held by a fund on a
given date.
* DIVIDEND YIELD--a percentage return calculated by dividing a company's annual
cash dividend by the current market value of the company's stock.
* 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
* NUMBER OF SECURITIES--the number of different securities held by a fund on a
given date.
* 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.
* 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
* ASSET-BACKED SECURITIES--debt securities that represent ownership in a pool of
receivables, such as credit card debt, auto loans, or mortgages.
* 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.
* 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.
* 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.
* 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).
* 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).
72 1-800-345-2021
[inside back cover]
AMERICAN CENTURY FUNDS
- -------------------------------------------------------------------------------
BENHAM GROUP(reg.sm)
TAXABLE BOND FUNDS
U.S. TREASURY & GOVERNMENT
Short-Term Treasury
Short-Term Government
GNMA
Intermediate-Term Treasury
Long-Term Treasury
Inflation-Adjusted Treasury
Target Maturities Trust: 2000
Target Maturities Trust: 2005
Target Maturities Trust: 2010
Target Maturities Trust: 2015
Target Maturities Trust: 2020
Target Maturities Trust: 2025
CORPORATE & DIVERSIFIED
Limited-Term Bond
Intermediate-Term Bond
Bond
Premium Bond
High-Yield Bond
INTERNATIONAL
International Bond
TAX-FREE & MUNICIPAL BOND FUNDS
MULTIPLE-STATE
Limited-Term Tax-Free
Intermediate-Term Tax-Free
Long-Term Tax-Free
High-Yield Municipal
SINGLE-STATE
Arizona Intermediate-Term Municipal
California High-Yield Municipal
California Insured Tax-Free
California Intermediate-Term Tax-Free
California Limited-Term Tax-Free
California Long-Term Tax-Free
Florida Intermediate-Term Municipal
MONEY MARKET FUNDS
TAXABLE
Capital Preservation
Government Agency Money Market
Premium Capital Reserve
Premium Government Reserve
Prime Money Market
TAX-FREE & MUNICIPAL
California Municipal Money Market
California Tax-Free Money Market
Florida Municipal Money Market
Tax-Free Money Market
AMERICAN CENTURY(reg.sm) GROUP
ASSET ALLOCATION
Strategic Allocation: Conservative
Strategic Allocation: Moderate
Strategic Allocation: Aggressive
BALANCED
Balanced
CONSERVATIVE EQUITY
Income and Growth
Equity Income
Value
Equity Growth
SPECIALTY
Utilities
Real Estate
Global Natural Resources
Global Gold
SMALL CAP
Small Cap Quantitative
Small Cap Value
TWENTIETH CENTURY GROUP
GROWTH
Select
Heritage Growth
Ultra
AGGRESSIVE GROWTH
Vista
Giftrust
New Opportunities
INTERNATIONAL GROWTH
International Growth
International Discovery
Emerging Markets
GLOBAL
Global Growth
Please call for a prospectus or profile on any American Century fund. These
documents contain important information including charges and expenses, and you
should read them carefully before you invest or send money.
[right margin]
[american century logo(reg.sm)]
American
Century
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.
KANSAS CITY, MISSOURI
THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
FUNDS DISTRIBUTOR, INC.
(c) 1998 AMERICAN CENTURY SERVICES CORPORATION
[recycled logo]
Recycled
[back cover]
American Century Investments BULK RATE
P.O. Box 419200 U.S. POSTAGE PAID
Kansas City, MO 64141-6200 AMERICAN CENTURY
www.americancentury.com COMPANIES
9901 Funds Distributor, Inc.
SH-BKT-15067 (c)1998 American Century Services Corporation
