UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6247
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AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
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(Exact name of registrant as specified in charter)
4500 MAIN STREET, KANSAS CITY, MISSOURI 64111
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(Address of principal executive offices) (Zip code)
CHARLES A. ETHERINGTON, 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111
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(Name and address of agent for service)
Registrant's telephone number, including area code: 816-531-5575
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Date of fiscal year end: 11-30
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Date of reporting period: 11-30-2007
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ITEM 1. REPORTS TO STOCKHOLDERS.
[front cover]
AMERICAN CENTURY INVESTMENTS
Annual Report November 30, 2007
[photo of winter]
International Growth Fund
Global Growth Fund
Emerging Markets Fund
International Value Fund
[american century investments logo and text logo]
OUR MESSAGE TO YOU
[photo of Jonathan Thomas]
JONATHAN THOMAS
President and CEO
American Century Companies, Inc.
To help you monitor your investment, my colleagues and I take pride in
providing you with the annual report for the American Century® International
Growth, Global Growth, Emerging Markets, and International Value funds for the
12 months ended November 30, 2007. I am honored to be addressing you in the
"Our Message" space long devoted to company founder Jim Stowers, Jr. and his
son Jim Stowers III.
Jim Stowers III stepped down from the American Century Companies, Inc. (ACC)
board of directors in July 2007, his final step in a well-planned career
transition to pursue new ventures outside the company. This reflected his
family's support of our company's direction and its leadership team.
The Stowers family remains an integral part of our heritage, leadership, and
financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the
ACC board with Richard Brown, who has been on the board since 1998.
American Century Investments, our clients, and our employees have been my top
priority since I became company president and CEO in March, 2007. We have also
added the executive talents of overall chief investment officer (CIO) Enrique
Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito,
and chief operating officer Barry Fink.
This skilled group, combined with our existing senior management team, has
already had a positive impact on the development and management of the
products and services we take pride in delivering to you. We believe the
ultimate measure of our performance is our clients' success. Therefore, our
focus continues to be on building a long-term relationship with you and on
delivering superior investment performance across our product line.
/s/Jonathan Thomas
[photo of James E. Stowers, Jr.]
JAMES E. STOWERS, JR.
Founder and Co-Chairman of the Board
American Century Companies, Inc.
[photo of Richard Brown]
RICHARD BROWN
Co-Chairman of the Board
American Century Companies, Inc.
TABLE OF CONTENTS
Market Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . 2
International Equity Total Returns . . . . . . . . . . . . . . . . . 2
INTERNATIONAL GROWTH
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 5
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Types of Investments in Portfolio and Investments by Country . . . . 6
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 7
GLOBAL GROWTH
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 12
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Types of Investments in Portfolio and Investments by Country . . . . 13
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 14
EMERGING MARKETS
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 19
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Types of Investments in Portfolio and Investments by Country . . . . 20
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 21
INTERNATIONAL VALUE
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 26
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Types of Investments in Portfolio and Investments by Country . . . . 27
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 28
Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 31
FINANCIAL STATEMENTS
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 35
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 37
Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 38
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 41
Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 54
Report of Independent Registered Public Accounting Firm . . . . . . . 79
OTHER INFORMATION
Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . . 80
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Share Class Information . . . . . . . . . . . . . . . . . . . . . . . 85
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 87
Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 88
The opinions expressed in the Market Perspective and each of the Portfolio
Commentaries reflect those of the portfolio management team as of the date of
the report, and do not necessarily represent the opinions of American Century
or any other person in the American Century organization. Any such opinions
are subject to change at any time based upon market or other conditions and
American Century disclaims any responsibility to update such opinions. These
opinions may not be relied upon as investment advice and, because investment
decisions made by American Century funds are based on numerous factors, may
not be relied upon as an indication of trading intent on behalf of any
American Century fund. Security examples are used for representational
purposes only and are not intended as recommendations to purchase or sell
securities. Performance information for comparative indices and securities is
provided to American Century by third party vendors. To the best of American
Century's knowledge, such information is accurate at the time of printing.
MARKET PERSPECTIVE
[photo of chief investment officer]
By Mark On, Chief Investment Officer, International Equity
INTERNATIONAL STOCKS SHOWED ROBUST GAINS
A strong global economy combined with relatively tame inflation and healthy
labor markets helped promote stellar stock gains for the 12 months ended
November 30, 2007. Among the developed markets, Europe fared well, with the
strongest returns coming from the euro-zone nations. In contrast, performance
was flat in Japan, as weak consumer spending, a challenging political climate,
and slowing demand from the United States pressured Japan's stocks.
Emerging markets remained the world's standout performers, due to optimistic
growth forecasts for developing markets and higher commodity prices.
U.S. CREDIT WOES RATTLED MARKETS
Mounting problems in the U.S. subprime mortgage market led to concerns
regarding global economic growth, generating periodic market volatility and
contributing to a growing desire globally for less-risky assets. In an effort
to soothe frayed nerves, the U.S. Federal Reserve (the Fed), the European
Central Bank, and the Bank of England injected liquidity into their banking
systems.
A mid-September rate cut by the Fed served to strengthen the euro and British
pound, relative to the sagging U.S. dollar. Late in the period, the dollar hit
new record lows against those currencies.
RATES ROSE IN EUROPE AND BRITAIN
Healthy economic growth prompted the European Central Bank and the Bank of
England to raise interest rates three times during the period. Although
inflationary pressures remained at the fore, both banks held off making
additional rate increases given the fallout from the credit-market turmoil.
Optimism surrounding improving economic growth prompted the Bank of Japan to
raise rates in February. Nevertheless, expectations for additional rate hikes
went unfulfilled, as sluggish domestic consumption kept the central bank on
hold.
OPPORTUNITIES ABOUND
Although the outlook for international equities remains somewhat uncertain, we
believe international stocks present significant opportunities for investors.
Combining the higher growth rate of the international markets with our
international team's focus on companies with growth acceleration, we believe
there is a significant opportunity to deliver attractive performance in the
coming year.
International Equity Total Returns
For the 12 months ended November 30, 2007 (in U.S. dollars)
MSCI EM Index 45.57%
MSCI EAFE Growth Index 22.32%
MSCI Europe Index 19.61%
MSCI EAFE Index 17.30%
MSCI World Free Index 12.71%
MSCI EAFE Value Index 12.30%
MSCI Japan Index 2.19%
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2
PERFORMANCE
International Growth
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years 10 years Inception Date
INVESTOR CLASS 23.09% 18.53% 9.47% 11.14% 5/9/91
MSCI EAFE INDEX 17.30% 21.31% 9.00% 8.13%(1) --
MSCI EAFE GROWTH INDEX 22.32% 19.81% 6.83% 6.15%(1) --
Institutional Class 23.36% 18.76% 9.70% 9.63% 11/20/97
Advisor Class 22.87% 18.26% 9.20% 10.18% 10/2/96
A Class
No sales charge* 22.84% -- -- 21.02%
With sales charge* 15.78% -- -- 19.56% 1/31/03
B Class
No sales charge* 21.93% -- -- 20.13%
With sales charge* 17.93% -- -- 19.92% 1/31/03
C Class 21.97% 17.39% -- 7.58% 6/4/01
R Class 22.48% -- -- 19.91%(2) 8/29/03
* Sales charges include initial sales charges and contingent deferred sales
charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial
sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B
Class shares redeemed within six years of purchase are subject to a CDSC that
declines from 5.00% during the first year after purchase to 0.00% the sixth
year after purchase. C Class shares redeemed within 12 months of purchase are
subject to a maximum CDSC of 1.00%. Please see the Share Class Information
pages for more about the applicable sales charges for each share class. The
SEC requires that mutual funds provide performance information net of maximum
sales charges in all cases where charges could be applied.
(1) Since 4/30/91, the date nearest the Investor Class's inception for which
data are available.
(2) Class returns would have been lower if the class had not received partial
reimbursements of its distribution and service fees.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
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3
International Growth
Growth of $10,000 Over 10 Years
$10,000 investment made November 30, 1997
One-Year Returns Over 10 Years
Periods ended November 30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Investor
Class 16.74% 43.22% -2.47% -24.18% -14.54% 13.70% 17.45% 12.09% 27.03% 23.09%
MSCI EAFE
Index 16.45% 21.10% -9.67% -19.13% -12.50% 24.22% 24.19% 13.25% 28.20% 17.30%
MSCI EAFE
Growth Index 17.05% 23.18% -17.66% -23.61% -13.53% 20.63% 19.07% 12.14% 25.29% 22.32%
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
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4
PORTFOLIO COMMENTARY
International Growth
Portfolio Managers: Alex Tedder and Keith Creveling
PERFORMANCE SUMMARY
International Growth gained 23.09%* during the 12 months ended November 30,
2007. The portfolio's benchmark, the MSCI EAFE Index, advanced 17.30%.
Compared to its peers, International Growth outperformed the average return of
20.46%** for the 63 funds in Lipper Inc.'s International Large Cap Growth
Funds category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks. On an absolute basis,
all sectors the portfolio invested in posted positive returns, and all but one
sector (consumer discretionary) showed double-digit gains. Favorable stock
selection in six of 10 sectors accounted for the portfolio's outperformance
relative to the benchmark.
From a country perspective, Japan (the portfolio's largest country weighting),
India (which was not represented in the benchmark), and Germany made the
greatest overall contributions to the portfolio's relative performance. Stock
selection in Japan and Germany was effective, as were an underweight in Japan
and an overweight in Germany. Despite its relatively small weighting, India
had a strong impact on the portfolio's relative return.
The worst country contributors to relative performance included the
Netherlands, South Korea and Sweden. Our investments and an underweight hurt
performance in the Netherlands, while our holdings in Sweden accounted for the
lagging results. Our South Korean holdings posted a negative return for the
reporting period, and the benchmark had no exposure to that market.
FINANCIALS, INDUSTRIALS LED ALL SECTORS
The financials sector, the largest weighting in the portfolio, made the
greatest positive contribution to relative performance. In particular, our
stock selections within the commercial banking and diversified financial
services industries offered strong performance. Our overweight in Deutsche
Boerse AG, the Germany-based owner of several securities exchanges, led to
solid results. In addition, our position in China Merchants Bank, an
emerging-market investment not represented in the benchmark, boosted
performance, as the stock returned 142% during the reporting period.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Deutsche Boerse AG 1.8% 1.2%
Julius Baer Holding AG 1.8% 1.6%
Nintendo Co., Ltd. 1.6% 1.6%
Tesco plc 1.6% 1.6%
National Bank of Greece SA 1.6% 1.6%
BG Group plc 1.6% 1.3%
Nestle SA 1.6% 1.1%
Saipem SpA 1.6% 1.4%
Novo Nordisk AS B Shares 1.5% --
Syngenta AG 1.5% 1.2%
* All fund returns referenced in this commentary are for Investor Class shares.
** The Lipper Inc.'s International Large Cap Growth Funds category average
returns for the five- and 10-year periods as of November 30, 2007, were 18.24%
and 6.91%, respectively.
Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
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5
International Growth
The portfolio's relative performance also benefited from strong stock
selection combined with an overweight in the industrials sector. In
particular, our stocks in the electrical equipment industry performed well,
including Q-Cells AG, the German manufacturer of solar cells, and Vestas Wind
Systems, a Danish supplier of wind power solutions.
Our information technology stocks were also strong contributors, led by
Japan's Nintendo, a videogame manufacturer, which advanced 160% during the
reporting period on strong sales of its Wii gaming system. Nintendo was the
portfolio's top-performing stock for the reporting period.
CONSUMER SECTORS LAGGED
Despite posting a total return of 22.70% for the reporting period, the
portfolio's consumer staples sector was the greatest laggard relative to the
benchmark. Our stock selection and underweight in the food products and
tobacco industries primarily accounted for the shortfall. The consumer
discretionary sector also detracted, primarily due to slumping stocks and an
overweight, with stock selection in the automobile industry detracting the
most in that sector.
OUTLOOK
International Growth seeks companies located throughout the world, excluding
the United States, exhibiting accelerating earnings and revenue growth. Our
analysis indicates the outlook for large-cap growth companies remains
favorable. The portfolio has broad exposure to high-quality growth companies
in numerous markets, and we believe these companies will deliver solid
returns, even during volatile market conditions.
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks 99.6% 100.6%
Foreign Preferred Stocks -- 0.6%
TOTAL EQUITY EXPOSURE 99.6% 101.2%
Temporary Cash Investments 0.4% 0.1%
Other Assets and Liabilities(1) --(2) (1.3)%
(1) Includes securities lending collateral and other assets and liabilities.
(2) Category is less than 0.05% of total net assets.
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Japan 15.0% 17.5%
United Kingdom 13.0% 14.7%
Switzerland 11.4% 12.9%
Germany 9.1% 10.9%
France 8.7% 9.5%
Australia 5.4% 5.0%
Spain 3.9% 2.3%
Canada 3.5% 0.8%
India 3.0% 2.8%
Italy 2.8% 4.6%
Other Countries 23.8% 20.2%
Cash and Equivalents(3) 0.4% (1.2)%
(3) Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
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6
SCHEDULE OF INVESTMENTS
International Growth
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 99.6%
AUSTRALIA -- 5.4%
988,394 BHP Billiton Ltd.(1) $ 37,560
3,539,528 Boart Longyear Group(2) 7,583
886,930 CSL Ltd.(1) 27,402
2,826,960 Oxiana Ltd.(1) 10,022
998,500 QBE Insurance Group Ltd. 28,902
120,704 Rio Tinto Ltd.(1) 15,536
580,410 Westpac Banking Corp. 14,562
----------
141,567
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AUSTRIA -- 0.5%
183,709 Erste Bank der oesterreichischen Sparkassen AG 13,250
----------
BELGIUM -- 2.2%
269,985 KBC Groupe 37,369
511,517 SES SA Fiduciary Depositary Receipt(2) 12,864
28,051 Umicore 6,576
----------
56,809
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BRAZIL -- 1.3%
170,000 Bolsa de Mercadorias e Futuros -- BM&F SA(2) 2,289
1,067,600 Redecard SA 19,392
800,900 Unibanco-Uniao de Bancos Brasileiros SA 11,855
----------
33,536
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CANADA -- 3.5%
187,420 EnCana Corp.(1) 12,229
235,650 Research In Motion Ltd.(2) 26,822
650,570 Rogers Communications Inc. Cl B 27,043
243,159 Shoppers Drug Mart Corp. 13,342
124,620 Suncor Energy Inc. 11,917
----------
91,353
----------
CZECH REPUBLIC -- 1.1%
389,750 CEZ AS 28,807
----------
DENMARK -- 2.5%
320,200 Novo Nordisk AS B Shares 40,484
277,740 Vestas Wind Systems AS(2) 26,263
----------
66,747
----------
FINLAND -- 1.4%
94,080 Metso Oyj(1) 5,103
781,740 Nokia Oyj 30,797
----------
35,900
----------
Shares ($ IN THOUSANDS) Value
FRANCE -- 8.7%
126,139 Accor SA $ 10,694
119,770 ALSTOM Co. 26,900
562,798 AXA SA 22,836
248,798 Groupe Danone(1) 21,956
135,920 L'Oreal SA 18,864
163,073 PPR SA 27,484
119,770 Renault SA 17,462
229,816 Societe Generale(1) 35,214
433,876 Total SA 35,116
169,560 Vinci SA(1) 13,432
----------
229,958
----------
GERMANY -- 9.1%
82,510 Allianz SE 16,990
176,650 BASF AG 24,482
100,590 Continental AG 13,102
257,380 Deutsche Boerse AG(1) 48,235
446,203 Fresenius Medical Care AG & Co. KGaA(1) 24,906
562,047 GEA Group AG(2) 20,366
111,236 K+S AG 22,718
163,430 Linde AG 21,377
129,772 Q-Cells AG(2) 18,124
176,260 SAP AG 8,985
133,560 Siemens AG 20,275
----------
239,560
----------
GREECE -- 1.6%
639,160 National Bank of Greece SA 42,747
----------
HONG KONG -- 1.9%
1,801,600 Esprit Holdings Ltd.(1) 27,195
1,156,800 Hang Seng Bank Ltd.(1) 22,142
----------
49,337
----------
INDIA -- 3.0%
241,880 Bharat Heavy Electricals Ltd. 16,471
1,064,920 Bharti Airtel Ltd.(2) 25,302
325,160 DLF Ltd. 7,762
278,270 Housing Development Finance Corp. Ltd. 19,667
413,400 Tata Consultancy Services Ltd. 10,630
----------
79,832
----------
ITALY -- 2.8%
308,779 ENI SpA 11,034
415,570 Fiat SpA 11,443
338,140 Finmeccanica SpA 10,095
1,014,744 Saipem SpA 40,906
----------
73,478
----------
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7
International Growth
Shares ($ IN THOUSANDS) Value
JAPAN -- 15.0%
380,900 Canon, Inc. $ 20,051
691,000 Daikin Industries Ltd. 35,587
2,030 East Japan Railway Co. 16,789
86,500 Fanuc Ltd. 9,048
265,200 Ibiden Co. Ltd. 20,972
876,000 Isuzu Motors Ltd. 4,058
4,310 Japan Tobacco Inc. 24,405
1,064,500 Kuraray Co. Ltd. 13,091
224,100 Makita Corp. 9,970
3,067,000 Marubeni Corp. 23,541
70,800 Nintendo Co., Ltd. 43,507
1,930,000 Nippon Yusen Kabushiki Kaisha 16,754
8,995 NTT DoCoMo, Inc. 14,275
5,070 Sony Financial Holdings Inc.(2) 19,158
1,611,000 Sumitomo Chemical Co., Ltd. 13,745
761,000 Sumitomo Heavy Industries Ltd. 8,270
2,180,000 Sumitomo Metal Industries Ltd. 9,667
639,000 Sumitomo Realty & Development Co. Ltd. 19,411
372,900 Terumo Corp. 18,833
578,500 Toyota Motor Corp. 32,564
192,330 Yamada Denki Co. Ltd. 22,277
----------
395,973
----------
MALAYSIA -- 0.5%
4,157,100 Bumiputra -- Commerce Holdings Bhd 13,269
----------
MEXICO -- 1.4%
601,332 America Movil, SAB de CV ADR 37,078
----------
NETHERLANDS -- 1.6%
193,000 ASML Holding N.V. 6,699
175,020 CNH Global N.V. 10,734
371,910 Heineken N.V. 24,326
----------
41,759
----------
NORWAY -- 2.0%
412,200 Aker Kvaerner ASA 11,747
947,550 StatoilHydro ASA(1) 30,798
246,510 Yara International ASA 9,368
----------
51,913
----------
PEOPLE'S REPUBLIC OF CHINA -- 1.2%
4,074,000 Agile Property Holdings Ltd. 8,119
5,234,500 China Merchants Bank Co., Ltd. Cl H 24,293
----------
32,412
----------
Shares ($ IN THOUSANDS) Value
SINGAPORE -- 1.6%
2,936,000 Keppel Corp. Ltd. $ 27,328
2,673,000 Oversea-Chinese Banking Corp. 15,765
----------
43,093
----------
SOUTH AFRICA -- 1.0%
215,309 Anglo American plc 14,579
698,990 MTN Group Ltd. 14,080
----------
28,659
----------
SPAIN -- 3.9%
1,197,450 Banco Bilbao Vizcaya Argentaria SA(1) 29,689
799,510 Cintra Concesiones de Infraestructuras de
Transporte SA(1) 12,782
36,225 Cintra Concesiones de Infraestructuras de
Transporte SA Entitlement Shares 578
452,929 Inditex SA 31,458
882,490 Telefonica SA 29,554
----------
104,061
----------
SWITZERLAND -- 11.4%
1,171,625 ABB Ltd. 34,460
297,129 Compagnie Financiere Richemont SA Cl A 20,426
305,880 Holcim Ltd. 32,771
560,230 Julius Baer Holding AG 47,035
86,090 Nestle SA 41,196
444,585 Novartis AG 25,203
162,019 Roche Holding AG 30,794
85,560 Sonova Holding AG 9,161
161,223 Syngenta AG 39,950
393,614 UBS AG 19,800
----------
300,796
----------
TAIWAN (REPUBLIC OF CHINA) -- 1.4%
7,381,000 AU Optronics Corp. 14,428
3,578,760 Hon Hai Precision Industry Co., Ltd. 22,932
----------
37,360
----------
TURKEY -- 0.6%
1,884,390 Turkiye Garanti Bankasi AS 16,562
----------
UNITED KINGDOM -- 13.0%
553,480 Admiral Group plc 11,866
751,390 AMEC plc 11,894
506,491 Barclays plc 5,870
1,990,499 BG Group plc 41,712
159,261 British Sky Broadcasting Group plc 2,049
2,177,296 Burberry Group plc 25,769
773,161 Capita Group plc 11,793
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8
International Growth
Shares ($ IN THOUSANDS) Value
557,850 easyJet plc(2) $ 6,452
319,982 GlaxoSmithKline plc 8,449
312,899 HSBC Holdings plc 5,345
2,377,050 International Power plc 22,810
2,187,567 Man Group plc 25,056
2,318,694 Man Group plc Cl B 3,246
521,091 Reckitt Benckiser Group plc 30,956
601,980 Reed Elsevier plc 7,569
970,040 Scottish and Southern Energy plc 31,696
4,360,609 Tesco plc 42,987
2,232,960 TUI Travel plc(2) 12,636
9,260,930 Vodafone Group plc 34,669
----------
342,824
----------
TOTAL COMMON STOCKS
(Cost $1,912,898) 2,628,640
----------
Temporary Cash Investments -- 0.4%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%,
8/15/23, valued at $9,990), in a joint trading account at 3.05%,
dated 11/30/07, due 12/3/07 (Delivery value $9,803)
(Cost $9,800) 9,800
----------
Temporary Cash Investments -- Securities Lending Collateral(3) -- 5.0%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $75,029) 75,000
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Government Agency obligations in a
pooled account at the lending agent), 4.56%, dated 11/30/07, due
12/3/07 (Delivery value $17,405) 17,398
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery
value $40,015) 40,000
----------
TOTAL TEMPORARY CASH INVESTMENTS --
SECURITIES LENDING COLLATERAL
(Cost $132,398) 132,398
----------
TOTAL INVESTMENT SECURITIES -- 105.0%
(Cost $2,055,096) 2,770,838
----------
OTHER ASSETS AND LIABILITIES -- (5.0)% (132,895)
----------
TOTAL NET ASSETS -- 100.0% $2,637,943
==========
Market Sector Diversification
(as a % of net assets)
Financials 23.0%
Industrials 14.8%
Consumer Discretionary 10.9%
Materials 10.3%
Consumer Staples 8.3%
Information Technology 7.8%
Energy 7.4%
Health Care 7.0%
Telecommunication Services 6.9%
Utilities 3.2%
Cash and Equivalents* 0.4%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
(1) Security, or a portion thereof, was on loan as of November 30, 2007.
(2) Non-income producing.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $2,452,114 (in
thousands), which represented 93.0% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
9
PERFORMANCE
Global Growth
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years Inception Date
INVESTOR CLASS 23.73% 19.50% 12.74% 12/1/98
MSCI WORLD FREE INDEX 12.71% 16.10% 5.93%(1) --
Institutional Class 23.99% 19.76% 5.49% 8/1/00
A Class(2)
No sales charge* 23.47% 19.21% 11.35%
With sales charge* 16.32% 17.80% 10.61% 2/5/99
B Class
No sales charge* 22.51% -- 19.39%
With sales charge* 18.51% -- 17.70% 12/1/05
C Class 22.54% 18.35% 13.04% 3/1/02
R Class 23.08% -- 20.53% 7/29/05
* Sales charges include initial sales charges and contingent deferred sales
charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial
sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B
Class shares redeemed within six years of purchase are subject to a CDSC that
declines from 5.00% during the first year after purchase to 0.00% the sixth
year after purchase. C Class shares redeemed within 12 months of purchase are
subject to a maximum CDSC of 1.00%. Please see the Share Class Information
pages for more about the applicable sales charges for each share class. The
SEC requires that mutual funds provide performance information net of maximum
sales charges in all cases where charges could be applied.
(1) Since 11/30/98, the date nearest the Investor Class's inception for which
data are available.
(2) Prior to September 4, 2007, the A Class was referred to as the Advisor
Class. Performance, with sales charge, prior to that date has been adjusted to
reflect the A Class's current sales charge.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
10
Global Growth
Growth of $10,000 Over Life of Class
$10,000 investment made December 1, 1998
One-Year Returns Over Life of Class
Periods ended November 30
1999* 2000 2001 2002 2003 2004 2005 2006 2007
Investor
Class 66.60% 8.81% -23.62% -12.78% 20.22% 15.59% 18.87% 19.30% 23.73%
MSCI World
Free Index 21.11% -7.64% -16.01% -15.27% 19.17% 17.43% 11.20% 20.28% 12.71%
* From 12/1/98, the Investor Class's inception date. Index data from 11/30/98,
the date nearest the Investor Class's inception for which data are available.
Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
11
PORTFOLIO COMMENTARY
Global Growth
Portfolio Managers: Keith Creveling and Helen O'Donnell
PERFORMANCE SUMMARY
Global Growth gained 23.73%* during the 12 months ended November 30, 2007. The
portfolio's benchmark, the MSCI World Free Index, advanced 12.71%. The
portfolio also outpaced the average return of 15.93%** for the 86 funds in
Lipper Inc.'s Global Large Cap Growth Funds category.
Strong worldwide economic growth and a series of U.S. Federal Reserve rate
cuts helped generate strong 12-month performance among global stocks. Overall,
stock selection was a strong positive contributor to portfolio performance,
particularly in the United States, Germany and Japan, all of which
outperformed the benchmark. Our holdings in the United States made the
greatest contribution to return, followed by Germany and Japan.
Sweden, Taiwan and Finland detracted most from the portfolio's relative
performance. Lagging holdings were the overriding factor in Sweden and
Finland. The benchmark had no exposure to Taiwan, while our small exposure to
that country generated a negative return. On a positive note, the portfolio
benefited from solid performance in the emerging markets of Mexico, India and
Russia, which were not included in the benchmark.
ALL SECTORS SHOWED POSITIVE RETURNS
On an absolute basis, all sectors in the portfolio generated positive total
returns, and all but one sector (utilities) recorded double-digit gains.
Compared to the benchmark, all portfolio sectors outperformed except the
utilities area.
Our stock selection efforts were particularly strong in the financials,
industrials and energy sectors. Deutsche Boerse AG, the Germany-based owner of
several securities exchanges, was the portfolio's top performer in the
financials sector. The company's plans to acquire U.S.-based International
Securities Exchange Holdings and create a massive derivatives market helped
drive performance. In addition, Julius Baer Holdings, the Swiss
wealth-management company, which was not included in the benchmark, advanced
on strong profit growth and a robust inflow of assets from its client base.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Deutsche Boerse AG 2.5% 1.9%
Saipem SpA 1.8% 1.6%
National Bank of Greece SA 1.7% 1.7%
Julius Baer Holding AG 1.7% 1.4%
Allergan, Inc. 1.6% 1.4%
Societe Generale 1.6% 0.9%
Colgate-Palmolive Co. 1.6% 1.1%
Shoppers Drug Mart Corp. 1.6% --
Cisco Systems Inc. 1.5% 2.0%
Hewlett-Packard Co. 1.5% 1.9%
* All fund returns referenced in this commentary are for Investor Class
shares.
** The Lipper Inc.'s Global Large Cap Growth Funds category average returns
for the five-year period as of November 30, 2007, was 15.96%.
Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
12
Global Growth
Our industrials holdings also contributed favorably, primarily due to
overweights and good stock selection in the electrical equipment and aerospace
and defense industries. In the electrical equipment area, our overweighted
positions in Vestas Wind Systems, a Danish supplier of wind power solutions,
and ABB Ltd., a Zurich-based provider of power and automation technologies to
utilities and industries, drove performance. In the aerospace area, shares of
Precision Castparts (which was not included in the benchmark), an Oregon-based
manufacturer of casts for airline engines, soared on strong demand, surging
sales and stellar profit growth.
In the energy sector's equipment and services group, Italy's Saipem was a
strong contributor. The company's stock, which was not included in the
benchmark, benefited from its focus on deepwater exploration projects, an area
gaining attention as worldwide oil reserves are shrinking.
The portfolio's information technology sector also contributed positively to
performance. This primarily was due to impressive results from Japanese
videogame manufacturer Nintendo. The stock, which was among the top performers
in the portfolio, advanced on strong worldwide sales of its Wii game console.
UTILITIES POSTED LAGGING RESULTS
Although our exposure to the utilities sector was minimal, it nevertheless
detracted from relative performance. Our underweight combined with faltering
stocks led to lagging results versus the benchmark.
OUTLOOK
Global Growth seeks to invest in companies located in developed countries
throughout the world, including the United States, exhibiting accelerating
growth characteristics. The portfolio has broad exposure to high-quality
growth companies in numerous markets, and we believe these companies will
deliver solid returns, even during volatile market conditions.
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks 57.0% 58.3%
Foreign Preferred Stocks -- 0.7%
Domestic Common Stocks 41.6% 40.3%
TOTAL EQUITY EXPOSURE 98.6% 99.3%
Temporary Cash Investments 0.4% 0.8%
Other Assets and Liabilities(1) 1.0% (0.1)%
(1) Includes securities lending collateral and other assets and liabilities.
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
United States 41.6% 40.3%
United Kingdom 7.9% 6.2%
France 7.0% 7.0%
Japan 6.5% 8.0%
Switzerland 5.3% 9.3%
Germany 4.9% 4.1%
Canada 3.6% 0.8%
Other Countries 21.8% 23.6%
Cash and Equivalents(2) 1.4% 0.7%
(2) Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
- ------
13
SCHEDULE OF INVESTMENTS
Global Growth
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 98.6%
AUSTRALIA -- 2.5%
194,960 BHP Billiton Ltd.(1) $ 7,408
93,030 CSL Ltd. 2,874
776,710 Oxiana Ltd.(1) 2,754
--------
13,036
--------
AUSTRIA -- 1.1%
81,850 Erste Bank der oesterreichischen Sparkassen AG 5,904
--------
BELGIUM -- 1.8%
36,320 KBC Groupe 5,027
103,507 SES SA Fiduciary Depositary Receipt(2) 2,603
8,420 Umicore 1,974
--------
9,604
--------
BRAZIL -- 1.3%
33,300 Bolsa de Mercadorias e Futuros -- BM&F SA(2) 448
166,800 NET Servicos de Comunicacao SA ADR 2,462
212,200 Redecard SA 3,855
--------
6,765
--------
CANADA -- 3.6%
29,900 Research In Motion Ltd.(2) 3,403
147,460 Shoppers Drug Mart Corp. 8,091
74,531 Suncor Energy Inc. 7,127
--------
18,621
--------
DENMARK -- 1.0%
53,365 Vestas Wind Systems AS(2) 5,046
--------
FINLAND -- 1.0%
96,460 Metso Oyj(1) 5,232
--------
FRANCE -- 7.0%
87,980 Accor SA(1) 7,459
18,990 ALSTOM Co. 4,265
49,708 JC Decaux SA 1,929
53,480 Societe Generale(1) 8,195
85,190 Total SA 6,895
27,190 Veolia Environnement 2,506
63,900 Vinci SA(1) 5,062
--------
36,311
--------
Shares ($ IN THOUSANDS) Value
GERMANY -- 4.9%
69,490 Deutsche Boerse AG(1) $ 13,023
112,370 Fresenius Medical Care AG & Co. KGaA 6,272
31,300 Linde AG 4,094
16,510 Q-Cells AG(2) 2,306
--------
25,695
--------
GREECE -- 1.7%
135,340 National Bank of Greece SA 9,052
--------
HONG KONG -- 1.0%
345,200 Esprit Holdings Ltd. 5,211
--------
INDIA -- 0.9%
205,471 Bharti Airtel Ltd.(2) 4,882
--------
ITALY -- 1.8%
235,470 Saipem SpA 9,492
--------
JAPAN -- 6.5%
124,700 Makita Corp. 5,548
117,000 NGK Insulators Ltd. 3,618
9,000 Nintendo Co., Ltd. 5,531
1,085 Sony Financial Holdings Inc.(2) 4,099
550,000 Sumitomo Chemical Co., Ltd. 4,693
126,000 Sumitomo Realty & Development Co. Ltd. 3,828
56,100 Terumo Corp. 2,833
30,120 Yamada Denki Co. Ltd. 3,489
--------
33,639
--------
LUXEMBOURG -- 0.3%
11,224 Millicom International Cellular SA(2) 1,339
--------
MALAYSIA -- 0.4%
591,000 Bumiputra -- Commerce Holdings Bhd 1,886
--------
MEXICO -- 1.3%
106,220 America Movil, SAB de CV ADR 6,549
--------
NETHERLANDS -- 2.7%
59,220 CNH Global N.V. 3,632
78,960 Heineken N.V. 5,165
54,290 Schlumberger Ltd. 5,073
--------
13,870
--------
- ------
14
Global Growth
Shares ($ IN THOUSANDS) Value
SPAIN -- 1.2%
253,550 Cintra Concesiones de Infraestructuras de Transporte SA $ 4,054
12,677 Cintra Concesiones de Infraestructuras de Transporte
SA Entitlement Shares 202
44,850 Gamesa Corporacion Tecnologica SA 2,035
--------
6,291
--------
SWITZERLAND -- 5.3%
234,170 ABB Ltd. 6,888
107,560 Julius Baer Holding AG 9,030
11,040 Nestle SA 5,283
15,060 Roche Holding AG 2,862
69,760 UBS AG 3,509
--------
27,572
--------
TAIWAN (REPUBLIC OF CHINA) -- 1.5%
815,760 Hon Hai Precision Industry Co., Ltd. 5,227
262,150 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 2,601
--------
7,828
--------
TURKEY -- 0.3%
174,000 Turkiye Garanti Bankasi AS 1,529
--------
UNITED KINGDOM -- 7.9%
200,439 Admiral Group plc 4,297
567,808 Burberry Group plc 6,720
349,979 Capita Group plc 5,338
396,320 Compass Group plc 2,596
396,429 Man Group plc 4,541
453,062 Man Group plc Cl B 634
116,975 Reckitt Benckiser Group plc 6,949
102,930 Shire plc 2,443
776,000 Tesco plc 7,650
--------
41,168
--------
UNITED STATES -- 41.6%
122,520 Activision, Inc.(2) 2,714
89,790 Adobe Systems Inc.(2) 3,784
75,640 Air Products & Chemicals, Inc. 7,491
125,390 Allergan, Inc. 8,407
110,660 American Express Co. 6,526
113,260 American Tower Corp. Cl A(2) 5,158
Shares ($ IN THOUSANDS) Value
60,990 Apollo Group, Inc. Cl A(2) $ 4,667
35,410 Apple Inc.(2) 6,452
170,500 Automatic Data Processing, Inc. 7,683
44,400 Bank of New York Mellon Corp. (The) 2,129
13,500 Charles River Laboratories(2) 858
58,940 Ciena Corp.(2) 2,592
283,890 Cisco Systems Inc.(2) 7,954
87,400 Coca-Cola Company (The) 5,428
101,690 Colgate-Palmolive Co. 8,143
103,200 Corrections Corp. of America(2) 3,149
138,500 CVS/Caremark Corp. 5,552
34,690 Deere & Co. 5,960
52,470 Devon Energy Corporation 4,345
53,990 Exelon Corporation 4,377
95,720 FMC Technologies Inc.(2) 5,321
145,860 General Electric Co. 5,585
10,500 Google Inc. Cl A(2) 7,277
153,850 Hewlett-Packard Co. 7,871
99,460 Hudson City Bancorp, Inc. 1,514
274,090 Intel Corp. 7,148
75,310 McDermott International, Inc.(2) 3,939
91,960 McDonald's Corporation 5,376
107,500 Merck & Co., Inc. 6,381
198,840 Microsoft Corporation 6,681
57,820 Monsanto Co. 5,746
215,410 News Corp. Cl B 4,670
80,670 Occidental Petroleum Corp. 5,629
86,590 Owens-Illinois Inc.(2) 3,887
48,560 Precision Castparts Corp. 7,154
51,490 Prudential Financial, Inc. 4,847
108,437 Schering-Plough Corp. 3,394
158,790 Schwab (Charles) Corp. 3,860
72,600 Southwestern Energy Company(2) 3,613
92,500 St. Jude Medical, Inc.(2) 3,677
78,440 Textron Inc. 5,416
67,540 Thermo Fisher Scientific Inc.(2) 3,893
--------
216,248
--------
TOTAL COMMON STOCKS
(Cost $393,035) 512,770
--------
- ------
15
Global Growth
Shares ($ IN THOUSANDS) Value
Temporary Cash Investments -- 0.4%
Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized
by various U.S. Treasury obligations, 2.625%, 7/15/17, valued at
$1,942), in a joint trading account at 3.10%, dated 11/30/07, due
12/3/07 (Delivery value $1,901)
(Cost $1,900) $ 1,900
--------
Temporary Cash Investments -- Securities Lending Collateral(3) -- 4.1%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $8,003) 8,000
Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized
by various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.56%, dated 11/30/07, due 12/3/07 (Delivery value
$5,112) 5,110
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at the
lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery value
$8,003) 8,000
--------
TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL
(Cost $21,110) 21,110
--------
TOTAL INVESTMENT SECURITIES -- 103.1%
(Cost $416,045) 535,780
--------
OTHER ASSETS AND LIABILITIES -- (3.1)% (16,062)
--------
TOTAL NET ASSETS -- 100.0% $519,718
========
Market Sector Diversification
(as a % of net assets)
Financials 18.8%
Information Technology 14.8%
Industrials 14.5%
Consumer Discretionary 10.8%
Consumer Staples 10.1%
Energy 9.1%
Health Care 8.4%
Materials 7.3%
Telecommunication Services 3.5%
Utilities 1.3%
Cash and Equivalents* 1.4%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt.
(1) Security, or a portion thereof, was on loan as of November 30, 2007.
(2) Non-income producing.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $251,105 (in
thousands), which represented 48.3% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
16
PERFORMANCE
Emerging Markets
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years 10 years Inception Date
INVESTOR CLASS 48.81% 38.14% 16.32% 13.93% 9/30/97
MSCI EM INDEX 45.57% 36.44% 14.76% 12.09% --
Institutional Class 49.21% 38.38% -- 21.64% 1/28/99
A Class(1)
No sales charge* 48.61% 37.77% -- 18.10%
With sales charge* 40.08% 36.13% -- 17.29% 5/12/99
B Class
No sales charge* -- -- -- 4.28%(2)
With sales charge* -- -- -- -0.72%(2) 9/28/07
C Class 47.39% 36.81% -- 26.48% 12/18/01
R Class -- -- -- 4.36%(2) 9/28/07
* Sales charges include initial sales charges and contingent deferred sales
charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial
sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B
Class shares redeemed within six years of purchase are subject to a CDSC that
declines from 5.00% during the first year after purchase to 0.00% the sixth
year after purchase. C Class shares redeemed within 12 months of purchase are
subject to a maximum CDSC of 1.00%. Please see the Share Class Information
pages for more about the applicable sales charges for each share class. The
SEC requires that mutual funds provide performance information net of maximum
sales charges in all cases where charges could be applied.
(1) Prior to September 4, 2007, the A Class was referred to as the Advisor
Class. Performance, with sales charge, prior to that date has been adjusted to
reflect the A Class's current sales charge.
(2) Total returns for periods less than one year are not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks. The fund's performance may be affected by
investments in initial public offerings.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
17
Emerging Markets
Growth of $10,000 Over 10 Years
$10,000 investment made November 30, 1997
One-Year Returns Over 10 Years
Periods ended November 30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Investor Class -15.90% 61.03% -16.73% -10.28% -10.86% 46.26% 18.94% 33.10% 46.10% 48.81%
MSCI EM Index -22.42% 45.49% -23.63% -7.37% 4.95% 40.87% 28.88% 33.13% 34.38% 45.57%
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks. The fund's performance may be affected by
investments in initial public offerings.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
18
PORTFOLIO COMMENTARY
Emerging Markets
Portfolio Managers: Mark On and Patricia Ribeiro
PERFORMANCE SUMMARY
Emerging Markets gained 48.81%* during the 12 months ended November 30, 2007.
The portfolio's benchmark, the MSCI EM Index, advanced 45.57%. Compared to its
peers, Emerging Markets outperformed the average return of 41.98%** for the
257 funds in Lipper Inc.'s Emerging Markets Funds category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks, particularly those
from the world's emerging markets. Emerging market stocks significantly
outperformed the developed markets, which, as measured by the MSCI EAFE Index,
returned 17.30% for the reporting period. The portfolio's performance
benefited from this trend, and from our stock selection across most market
sectors. Overall, stock selection accounted for the portfolio's outperformance
relative to the benchmark.
On an absolute basis, all sectors the portfolio invested in posted positive
returns and made positive contributions to performance. Compared with the
benchmark, each of the portfolio's market sectors outperformed except
materials and financials. The portfolio also derived a portion of its returns
from participating in several initial public offerings (IPOs).
INDIA, RUSSIA, MEXICO OUTPERFORMED
From a country perspective, India, Russia and Mexico had the greatest positive
influence on the portfolio's relative performance. Stock selection was the key
contributor in all three markets. Strong stock selection in South Korea also
contributed to the portfolio's outperformance.
Brazil and China detracted from the portfolio's relative performance, with
stock selection accounting for the shortfall.
TECH, ENERGY, CONSUMER DISCRETIONARY LED ALL SECTORS
Good stock selection helped make the information technology sector the top
contributor to the portfolio's relative performance. Our stock picks and
allocation decisions were particularly strong in the semiconductor industry,
where underweighting South Korea's Samsung Electronics, which faced waning
demand in the memory chip market, proved effective.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Petroleo Brasileiro SA ADR 3.0% 2.0%
China Mobile Ltd. ADR 2.3% 0.9%
Cia Vale do Rio Doce ADR 2.1% 1.7%
PT Bumi Resources Tbk 1.9% --
America Movil, SAB de CV ADR 1.8% 1.7%
Turkiye Garanti Bankasi AS 1.7% 1.5%
Samsung Electronics 1.6% 1.8%
Focus Media Holding Ltd. ADR 1.5% 0.7%
China National Building Material Co. Ltd. Cl H 1.4% 0.3%
ICICI Bank Ltd. ADR 1.4% 1.3%
* All fund returns referenced in this commentary are for Investor Class shares.
** The Lipper Inc.'s Emerging Markets Funds category average returns for the
five- and 10-year periods as of November 30, 2007, were 34.72% and 14.16%,
respectively.
Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
19
Emerging Markets
In the energy sector, good security selection--particularly in the oil, gas
and consumable fuels industry--helped the portfolio outperform the benchmark.
Similarly, our favorable stock choices led to outperformance for the
portfolio's consumer discretionary sector. For example, our out-of-benchmark
position in Parkson Retail Group, which operates a chain of department stores
in China, benefited from the company's expansion plans and China's growing
retail market. In the auto components industry, Nokian Renkaat Oyj, another
position not represented in the benchmark, contributed strongly to relative
performance. The Finnish tire manufacturer advanced on strong sales and profit
growth, primarily in Russia.
MATERIALS, FINANCIALS LAGGED
The materials and financials sectors were the largest detractors from the
portfolio's relative performance. This primarily was due to our underweighted
positions in both areas. Specifically, our underweight to the outperforming
metals and mining industry hurt relative performance in the materials sector.
The financials sector was the portfolio's largest, yet underweights and poor
stock selection in the insurance and capital markets segments detracted from
the portfolio's performance. The subprime mortgage market mess reverberated
globally during the reporting period and dragged down holdings such as Shin
Kong Financial Holding, a Taiwanese life insurer that acknowledged a portion
of its fixed income portfolio was backed by U.S. subprime mortgages. In
addition, not having any exposure to diversified financial services companies
hurt the portfolio's results relative to the benchmark.
OUTLOOK
Focusing almost exclusively on equity securities of companies located in
emerging market countries, we seek out companies with earnings and revenues
growing at an improving rate. We will continue to select stocks based on
extensive company-level research that focuses on identifying accelerating
growth characteristics.
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks and Rights 97.9% 96.5%
Foreign Preferred Stocks -- 1.4%
TOTAL EQUITY EXPOSURE 97.9% 97.9%
Temporary Cash Investments 1.4% 2.6%
Other Assets and Liabilities(1) 0.7% (0.5)%
(1) Includes securities lending collateral and other assets and liabilities.
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
People's Republic of China 15.0% 5.8%
South Korea 13.1% 14.9%
Brazil 11.7% 13.3%
India 9.2% 5.0%
Russian Federation 7.5% 6.5%
South Africa 7.0% 8.0%
Taiwan (Republic of China) 6.9% 11.5%
Mexico 4.7% 6.6%
Indonesia 4.4% 2.5%
Hong Kong 3.1% 4.2%
Other Countries 15.3% 19.6%
Cash and Equivalents(2) 2.1% 2.1%
(2) Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
- ------
20
SCHEDULE OF INVESTMENTS
Emerging Markets
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 97.9%
BRAZIL -- 11.7%
37,300 Bolsa de Mercadorias e Futuros -- BM&F SA(1) $502
734,152 Cia Vale do Rio Doce ADR 25,387
364,552 Dufry South America Ltd. BDR(1) 10,498
717,840 Lojas Renner SA 16,777
550,454 LPS Brasil -- Consultoria de Imoveis SA(1) 8,546
328,300 Lupatech SA 9,135
416,400 Marisa SA(1) 2,484
750,600 Net Servicos de Comunicacao SA(1) 11,111
369,025 Petroleo Brasileiro SA ADR 35,537
653,400 Redecard SA 11,869
210,818 Totvs SA 7,156
----------
139,002
----------
CHILE -- 2.6%
2,230,015 Cencosud SA 8,410
709,607 Compania Cervecerias Unidas SA 5,133
1,554,437 La Polar SA 11,736
367,645 Lan Airlines SA ADR(2) 5,423
----------
30,702
----------
CZECH REPUBLIC -- 2.1%
190,973 CEZ AS 14,115
50,689 Komercni Banka AS 11,418
----------
25,533
----------
EGYPT -- 0.9%
112,116 Orascom Construction Industries 10,223
----------
HONG KONG -- 3.1%
7,090,000 AAC Acoustic Technology Holdings Inc.(1)(2) 9,600
299,121 China Mobile Ltd. ADR 27,417
----------
37,017
----------
INDIA -- 9.2%
328,815 ABB India Ltd. 12,954
211,812 Bharat Heavy Electricals Ltd. 14,424
538,001 DLF Ltd. 12,843
279,851 ICICI Bank Ltd. ADR 16,933
610,693 JSW Steel Ltd. 15,587
6,730 Mundra Port and Special Economic Zone Ltd.(1) 157
577,404 Reliance Communication Ventures Ltd. 9,855
Shares ($ IN THOUSANDS) Value
218,834 Reliance Industries Ltd. $ 15,786
612,500 Rolta India Ltd. 11,305
----------
109,844
----------
INDONESIA -- 4.4%
4,996,500 PT Astra International Tbk 13,384
24,086,000 PT Bank Mandiri Tbk 9,175
36,526,000 PT Bumi Resources Tbk 22,161
756,000 PT International Nickel Indonesia Tbk 7,636
----------
52,356
----------
ISRAEL -- 0.6%
66,407 Elbit Systems Ltd. 3,766
350,387 Israel Chemicals Ltd. 3,738
----------
7,504
----------
KAZAKHSTAN -- 0.7%
305,218 KazMunaiGas Exploration Production GDR 8,189
----------
MALAYSIA -- 2.0%
4,118,200 Bumiputra - Commerce Holdings Bhd 13,145
2,073,300 Genting Bhd 4,920
4,584,500 Resorts World Bhd 5,192
----------
23,257
----------
MEXICO -- 4.7%
343,441 America Movil, SAB de CV ADR 21,177
4,819,827 Axtel, SAB de CV(1)(2) 11,815
192,704 Grupo Aeroportuario del Pacifico, SAB de CV ADR 8,851
2,189,803 Grupo Financiero Banorte, SAB de CV 9,492
1,396,860 Urbi Desarrollos Urbanos, SAB de CV(1) 4,736
----------
56,071
----------
PAKISTAN -- 0.6%
340,975 Oil & Gas Development Co. Ltd. GDR 6,649
----------
PEOPLE'S REPUBLIC OF CHINA -- 15.0%
8,100,000 Agile Property Holdings Ltd.(2) 16,143
2,179,851 Alibaba.com Ltd.(1)(2) 11,185
10,638 Baidu.com, Inc. ADR(1) 4,063
11,259,000 China Construction Bank Cl H 10,891
26,804,000 China Gas Holdings Ltd.(2) 12,498
2,791,000 China Merchants Bank Co., Ltd. Cl H 12,953
3,906,000 China National Building Material Co. Ltd. Cl H 17,005
- ------
21
Emerging Markets
Shares ($ IN THOUSANDS) Value
9,312,000 China Petroleum & Chemical Corp. Cl H(2) $ 14,164
1,215,500 China Shenhua Energy Co. Ltd. Cl H 7,227
8,614,000 China Yurun Food Group Ltd.(2) 14,179
8,505,000 CNOOC Ltd. 15,683
306,121 Focus Media Holding Ltd. ADR(1)(2) 17,278
4,677,314 Nine Dragons Paper Holdings Ltd.(2) 11,799
1,332,000 Parkson Retail Group Ltd.(2) 14,133
----------
179,201
----------
PERU -- 0.6%
107,243 Credicorp Ltd. 7,635
----------
PHILIPPINES -- 1.6%
100,251,000 Alliance Global Group Inc.(1) 13,531
13,343,600 Robinsons Land Corp. 5,774
----------
19,305
----------
POLAND -- 0.7%
42,272 BRE Bank SA(1) 8,450
----------
RUSSIAN FEDERATION -- 7.5%
168,486 Mobile TeleSystems ADR 15,282
199,870 OAO Gazprom ADR(1) 10,493
119,794 OAO LUKOIL 10,333
312,483 OAO TMK GDR 13,547
30,236 OJSC MMC Norilsk Nickel ADR 8,754
351,032 OJSC Pharmstandard GDR(1) 8,251
2,323,974 Sberbank(1) 9,803
198,830 Uralkali GDR (Acquired 10/15/07-11/30/07, Cost
$4,154) (1)(2)(3) 4,772
254,752 X5 Retail Group N.V. GDR(1) 7,993
----------
89,228
----------
SOUTH AFRICA -- 7.0%
146,042 Anglo American plc 9,738
388,000 Barloworld Ltd. 6,489
6,314,987 Dimension Data Holdings plc(2) 7,918
669,512 Exxaro Resources Ltd. 10,211
267,575 Impala Platinum Holdings Limited 9,284
364,908 Kumba Iron Ore Ltd. 14,457
727,515 Murray & Roberts Holdings Ltd. 10,278
1,366,550 Pretoria Portland Cement Co. Ltd.(2) 9,077
274,304 Sun International Ltd. 5,717
----------
83,169
----------
Shares ($ IN THOUSANDS) Value
SOUTH KOREA -- 13.1%
59,035 Daelim Industrial Co., Ltd. $ 10,390
183,190 Doosan Infracore Co., Ltd. 6,509
167,460 GS Holdings Corp. 11,296
57,209 Hyundai Department Store Co. Ltd. 6,988
30,026 Hyundai Heavy Industries Co., Ltd. 15,350
101,790 LG.Philips LCD Co., Ltd.(1) 5,731
319,600 LIG Non-Life Insurance Co., Ltd. 7,920
46,964 MegaStudy Co., Ltd. 15,933
19,653 Mirae Asset Securities Co. Ltd.(1) 3,351
121,713 Modetour Network Inc. 6,720
55,160 NHN Corp.(1) 15,664
16,109 POSCO 10,176
31,104 Samsung Electronics 19,053
191,511 Shinhan Financial Group Co., Ltd. 10,430
13,360 Shinsegae Co. Ltd. 10,517
----------
156,028
----------
TAIWAN (REPUBLIC OF CHINA) -- 6.9%
5,817,409 Asia Cement Corp. 8,502
6,432,000 AU Optronics Corp. 12,573
2,020,000 Catcher Technology Co. Ltd. 12,467
6,255,663 China Steel Corp. 8,224
2,340,000 Hon Hai Precision Industry Co., Ltd. 14,994
4,773,000 U-Ming Marine Transport Corp. 12,754
7,403,979 Wistron Corp. 12,787
----------
82,301
----------
TURKEY -- 2.9%
874,020 Enka Insaat ve Sanayi AS 14,078
2,308,895 Turkiye Garanti Bankasi AS 20,293
----------
34,371
----------
TOTAL COMMON STOCKS
(Cost $824,429) 1,166,035
----------
Temporary Cash Investments -- 1.4%
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Treasury obligations, 2.625%,
7/15/17, valued at $16,863), in a joint trading account at 3.10%,
dated 11/30/07, due 12/3/07 (Delivery value $16,504)
(Cost $16,500) 16,500
----------
- ------
22
Emerging Markets
Shares ($ IN THOUSANDS) Value
Temporary Cash Investments -- Securities Lending Collateral(4) -- 4.9%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $20,008) $ 20,000
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Government Agency obligations in a
pooled account at the lending agent), 4.56%, dated 11/30/07, due
12/3/07 (Delivery value $18,169) 18,162
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery
value $20,008) 20,000
----------
TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL
(Cost $58,162) 58,162
----------
TOTAL INVESTMENT SECURITIES -- 104.2%
(Cost $899,091) 1,240,697
----------
OTHER ASSETS AND LIABILITIES -- (4.2)% (49,688)
----------
TOTAL NET ASSETS -- 100.0% $1,191,009
==========
Market Sector Diversification
(as a % of net assets)
Financials 17.5%
Materials 14.6%
Energy 14.4%
Consumer Discretionary 12.4%
Information Technology 12.1%
Industrials 11.8%
Telecommunication Services 7.2%
Consumer Staples 5.0%
Utilities 2.2%
Health Care 0.7%
Cash and Equivalents* 2.1%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
BDR = Brazilian Depositary Receipt
GDR = Global Depositary Receipt
OJSC = Open Joint Stock Company
(1) Non-income producing.
(2) Security, or a portion thereof, was on loan as of November 30, 2007.
(3) Security was purchased under Rule 144A 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, 2007 was $4,772 (in
thousands), which represented 0.4% of total net assets.
(4) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $846,880 (in
thousands), which represented 71.1% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
23
PERFORMANCE
International Value
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years 10 years Inception Date
A CLASS(1)
No sales charge* 23.44% 20.78% 8.43% 7.74%
With sales charge* 16.31% 19.35% 7.79% 7.14% 3/31/97
MSCI EAFE INDEX 17.30% 21.31% 9.00% 8.67% --
Investor Class 23.55% -- -- 21.45% 4/3/06
Institutional Class 23.77% -- -- 21.68% 4/3/06
B Class(1)
No sales charge* 22.51% 19.96% 7.71% 7.02%
With sales charge* 18.51% 19.86% 7.71% 7.02% 3/31/97
C Class 22.28% -- -- 20.24% 4/3/06
R Class 22.91% -- -- 20.81% 4/3/06
* Sales charges include initial sales charges and contingent deferred sales
charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial
sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B
Class shares redeemed within six years of purchase are subject to a CDSC that
declines from 5.00% during the first year after purchase to 0.00% the sixth
year after purchase. C Class shares redeemed within 12 months of purchase are
subject to a maximum CDSC of 1.00%. Please see the Share Class Information
pages for more about the applicable sales charges for each share class. The
SEC requires that mutual funds provide performance information net of maximum
sales charges in all cases where charges could be applied.
International Value acquired all the net assets of the Mason Street
International Equity Fund on March 31, 2006, pursuant to a plan of
reorganization approved by the acquired fund's shareholders on March 15, 2006.
Performance information prior to April 1, 2006, is that of the Mason Street
International Equity Fund.
(1) Class returns would have been lower if fees had not been waived.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects A Class shares; performance
for other share classes will vary due to differences in fee structure. For
information about other share classes available, please consult the
prospectus. Data assumes reinvestment of dividends and capital gains, and none
of the charts reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. Returns for the index are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the index do not.
- ------
24
International Value
Growth of $10,000 Over 10 Years
$10,000 investment made November 30, 1997*
One-Year Returns Over 10 Years
Periods ended November 30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
A Class (no
sales charge)** -0.96% 11.54% 0.00% -11.24% -10.87% 20.77% 21.40% 10.68% 28.36% 23.44%
%
MSCI EAFE
Index 16.45% 21.10% -9.67 -19.13% -12.50% 24.22% 24.19% 13.25% 28.20% 17.30%
* International Value A Class's initial investment is $9,425 to reflect the
maximum 5.75% initial sales charge.
** Class returns would have been lower, along with ending value, if fees had
not been waived.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects A Class shares; performance
for other share classes will vary due to differences in fee structure. For
information about other share classes available, please consult the
prospectus. Data assumes reinvestment of dividends and capital gains, and none
of the charts reflect the deduction of taxes that a shareholder would pay on
fund distributions or the redemption of fund shares. Returns for the index are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the index do not.
- ------
25
PORTFOLIO COMMENTARY
International Value
Portfolio Managers: Gary Motyl and Guang Yang
PERFORMANCE SUMMARY
International Value returned 23.44%* for the 12 months ended November 30,
2007. Its benchmark, the MSCI EAFE Index, returned 17.30%.
The portfolio's performance reflected the generally positive global economic
and investing climate prevailing during the fiscal year (see the Market
Perspective on page 2). In that environment, every sector contributed to
performance on an absolute basis. Relative to the benchmark, contribution to
return was broad based, driven by holdings benefiting from global economic
growth. In addition, good stock picks and an underweight position in
financials shares helped performance. However, an underweight position among
materials shares detracted from relative results.
KEY CONTRIBUTORS
The key theme explaining the portfolio's outperformance was its exposure to
firms benefiting from economic expansion and a rise in living standards around
the world. For example, the top contributor to return for the year was China
Shenhua Energy. The company is the largest coal producer in China, which
relies heavily on coal-fired plants to fuel its rapid expansion. Other top-10
contributors to performance were Shanghai Electric Group, which is China's
biggest power-equipment maker, and Cheung Kong Holdings, a Hong Kong-listed
stock with exposure to the strong Hong Kong and Chinese real estate markets.
You can also see this theme at work in the portfolio's telecommunication
services holdings, which benefited from exposure to growing emerging market
economies. Key contributors in this space included BCE, Telefonos de Mexico,
China Telecom, Telenor, and Telefonica. Spanish firm Telefonica is a good
example -- it's an overweight position that gained more than 60% for the year
on strong mobile subscriber growth in South America and continued to generate
strong free cash flow. In addition, the company owns fixed and mobile
providers in the Czech Republic, Argentina, and Great Britain.
Similarly, the industrial sector was home to a number of leading contributors
to portfolio performance, including Danish firm Vestas Wind Systems. The stock
is a long-held overweight position and one of the largest stakes in the
portfolio. It's a leading provider of wind turbines, and continued to benefit
from demand for alternative energy sources driven by record-high oil prices.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Nintendo Co., Ltd. 2.7% 1.7%
Telenor ASA 1.9% 1.7%
E.On AG 1.8% 1.6%
Telefonica SA ADR 1.8% 1.3%
Cia Vale do Rio Doce ADR 1.6% 1.1%
Vestas Wind Systems AS 1.4% 1.6%
Rolls-Royce Group plc 1.4% 1.4%(1)
Deutsche Post AG 1.3% 1.4%
ING Groep N.V. CVA 1.3% 1.7%
Cheung Kong Holdings Ltd. 1.3% 1.0%
(1) Includes shares traded on all exchanges.
*All fund returns referenced in this commentary are for A Class shares and are
not reduced by sales charges. A Class shares are subject to a maximum sales
charge of 5.75%. Had the sales charge been applied, returns would have been
lower than those shown.
- ------
26
International Value
MATERIALS DETRACTED
The portfolio's performance relative to the benchmark would have been even
better but for positioning among materials shares, where an overweight
position in the paper & forest products industry limited relative results. The
business climate for these shares was difficult during the fiscal year because
of falling demand for their products and rising costs associated with raw
material prices. Leading detractors in this industry segment were Norwegian
paper products firm Norske Skogindustrier and Finnish firm UPM-Kymmene, the
world's leading producer of magazine paper.
While these stocks underperformed, they are a good example of our
value-oriented investment process at work. We're looking for companies trading
at a discount to our estimate of their value, and our long-term approach means
we're willing to build positions in out-of-favor industries where we believe
the prospects for an eventual turnaround are good. That process led us to hold
an overweight position in what we believe is a temporarily beaten-down
industry that's attractively valued and that we believe is well on its way to
restructuring and consolidation.
STARTING POINT FOR NEXT REPORTING PERIOD
"Because we build the International Value portfolio stock by stock, our sector
and industry allocations typically reflect where we're finding the best values
in the market at a given time," explained portfolio manager Guang Yang. "As of
November 30, we continued to see opportunity in the telecommunication and
industrials sectors, which were our largest overweight positions. At the same
time, our most significant underweight position was in financial shares. In
part this is because financials make up almost 30% of our index and we're
reluctant to concentrate the portfolio so heavily in a single sector. But it's
also because of earnings and valuation concerns we have for a number of
companies in the sector amid difficult business conditions for many banks and
other financial firms."
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks 84.5% 92.5%
Foreign Preferred Stocks 2.0% 1.6%
TOTAL EQUITY EXPOSURE 86.5% 94.1%
Temporary Cash Investments 12.9% 5.6%
Other Assets and Liabilities 0.6% 0.3%
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
United Kingdom 18.3% 19.9%
Japan 8.5% 8.6%
France 8.2% 8.7%
Germany 6.8% 6.9%
Netherlands 6.2% 7.1%
South Korea 4.8% 5.2%
Spain 4.8% 4.4%
Switzerland 3.8% 2.4%
Hong Kong 3.4% 2.8%
Other Countries 21.7% 28.1%
Cash and Equivalents(1) 13.5% 5.9%
(1) Includes temporary cash investments and other assets and liabilities.
- ------
27
SCHEDULE OF INVESTMENTS
International Value
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 84.5%
AUSTRALIA -- 1.7%
48,280 Alumina Ltd. $ 276
4,630 Australia & New Zealand Banking Group Ltd. 115
26,912 National Australia Bank Ltd. 913
-------
1,304
-------
BELGIUM -- 0.2%
11,400 AGFA-Gevaert N.V. 126
-------
BERMUDA -- 1.3%
11,760 Ace, Ltd. 704
4,700 XL Capital Ltd. Cl A 275
-------
979
-------
CANADA -- 0.5%
49,300 Domtar Corp.(1) 374
-------
DENMARK -- 1.4%
11,664 Vestas Wind Systems AS(1) 1,103
-------
FINLAND -- 1.3%
34,110 Stora Enso Oyj R Shares 562
20,660 UPM-Kymmene Oyj 437
-------
999
-------
FRANCE -- 8.2%
4,160 Accor SA 353
24,219 AXA SA 983
8,110 Compagnie Generale des Etablissements Michelin Cl B 963
6,680 Electricite de France 813
21,700 France Telecom SA 823
8,483 Sanofi-Aventis 806
12,420 Suez SA 824
15,920 Thomson 248
3,880 Total SA 314
5,032 Valeo SA 254
-------
6,381
-------
GERMANY -- 6.8%
4,310 BASF AG 597
15,080 Bayerische Motoren Werke AG 920
30,710 Deutsche Post AG 1,043
6,950 E.On AG 1,416
25,810 Infineon Technologies AG(1) 307
6,300 Siemens AG ADR 956
-------
5,239
-------
Shares ($ IN THOUSANDS) Value
HONG KONG -- 3.4%
54,300 Cheung Kong Holdings Ltd. $ 1,023
56,900 Hutchison Whampoa Ltd. 677
40,500 Swire Pacific Ltd. A Shares 550
146,000 Swire Pacific Ltd. B Shares 366
-------
2,616
-------
ISRAEL -- 0.5%
19,490 Check Point Software Technologies Ltd.(1) 445
-------
ITALY -- 1.8%
21,370 ENI SpA 764
26,230 Mediaset SpA 256
42,150 UniCredito Italiano SpA 357
-------
1,377
-------
JAPAN -- 8.5%
8,200 FUJIFILM Holdings Corp. 361
62,400 Hitachi Ltd. 436
6,600 Mabuchi Motor Co. Ltd. 428
22,000 Mitsubishi UFJ Financial Group, Inc. 216
9,000 Mitsubishi UFJ Financial Group, Inc. ADR 88
3,400 Nintendo Co., Ltd. 2,090
101 Nippon Telegraph & Telephone Corp. 457
17,600 Nomura Holdings, Inc. 315
11,900 Olympus Corp. 491
32,600 Sompo Japan Insurance Inc. 315
12,300 Sony Corp. 664
10,600 Takeda Pharmaceutical Co Ltd. 685
300 Toshiba Corp. 2
-------
6,548
-------
MEXICO -- 1.1%
22,820 Telefonos de Mexico, SAB de CV ADR 851
-------
NETHERLANDS -- 6.2%
4,410 Akzo Nobel N.V. 339
27,040 ING Groep N.V. CVA 1,041
23,417 Koninklijke Philips Electronics N.V. 975
33,730 Reed Elsevier N.V. 622
21,145 Royal Dutch Shell plc Cl B 849
23,440 SBM Offshore N.V. 816
5,240 Wolters Kluwer N.V. 162
-------
4,804
-------
- ------
28
International Value
Shares ($ IN THOUSANDS) Value
NORWAY -- 2.1%
23,899 Norske Skogindustrier ASA $ 172
62,970 Telenor ASA 1,460
-------
1,632
-------
PEOPLE'S REPUBLIC OF CHINA -- 1.7%
63,500 China Shenhua Energy Co. Ltd. Cl H 378
824,000 China Telecom Corp. Ltd. Cl H 659
400,000 Shanghai Electric Group Corp. Cl H 319
-------
1,356
-------
PORTUGAL -- 0.7%
32,950 Portugal Telecom SGPS SA 449
4,641 PT Multimedia-Servicos de Telecomunicacoes e
Multimedia, SGPS, SA 64
-------
513
-------
SINGAPORE -- 1.1%
61,500 DBS Group Holdings Ltd. 854
-------
SOUTH KOREA -- 4.8%
10,360 Hyundai Motor Company 778
6,890 Kookmin Bank 498
13,780 Korea Electric Power Corp. 577
19,660 KT Corp. ADR 515
1,370 Samsung Electronics 839
16,530 SK Telecom Co. Ltd. ADR 524
-------
3,731
-------
SPAIN -- 4.8%
41,710 Banco Santander Central Hispano SA 895
27,680 Iberdrola SA 456
27,430 Repsol YPF, SA 1,013
13,460 Telefonica SA ADR 1,355
-------
3,719
-------
SWEDEN -- 2.8%
50,980 Atlas Copco AB A Shares 749
12,900 Nordea Bank AB 217
47,630 Nordea Bank AB FDR 793
18,570 Securitas AB B Shares 254
18,570 Securitas Direct AB B Shares(1) 78
18,570 Securitas Systems AB B Shares 59
-------
2,150
-------
Shares ($ IN THOUSANDS) Value
SWITZERLAND -- 3.8%
2,030 Nestle SA $ 971
16,660 Novartis AG 944
9,307 Swiss Reinsurance 687
6,520 UBS AG 328
-------
2,930
-------
TAIWAN (REPUBLIC OF CHINA) -- 1.2%
16,044 Chunghwa Telecom Co. Ltd. ADR 320
302,082 Compal Electronics Inc. 350
148,733 Lite-On Technology Corp. 257
-------
927
-------
TURKEY -- 0.3%
10,400 Turkcell Iletisim Hizmetleri AS ADR 284
-------
UNITED KINGDOM -- 18.3%
23,810 Aviva plc 334
92,850 BAE Systems plc 878
54,390 BP plc 659
63,150 British Sky Broadcasting Group plc 812
30,150 Burberry Group plc 357
56,630 Cadbury Schweppes plc 727
76,750 Compass Group plc 503
45,210 GKN plc 297
18,940 GlaxoSmithKline plc 500
58,200 HSBC Holdings plc 988
145,040 Kingfisher plc 455
32,590 Lloyds TSB Group plc 332
35,602 National Grid plc 601
195,070 Old Mutual plc 675
40,140 Pearson plc 616
139,260 Rentokil Initial plc 432
99,630 Rolls-Royce Group plc 1,081
74,010 Royal Bank of Scotland Group plc 698
16,746 Smiths Group plc 368
19,350 Standard Chartered plc 763
18,085 Unilever plc 663
230,903 Vodafone Group plc 864
61,640 Yell Group plc 527
-------
14,130
-------
TOTAL COMMON STOCKS
(Cost $38,735) 65,372
-------
- ------
29
International Value
Shares ($ IN THOUSANDS) Value
Preferred Stocks -- 2.0%
BRAZIL -- 2.0%
41,720 Cia Vale do Rio Doce ADR $ 1,207
7,470 Empresa Brasiliera de Aeronautica SA ADR 326
-------
TOTAL PREFERRED STOCKS
(Cost $302) 1,533
-------
Temporary Cash Investments -- 12.9%
Repurchase Agreement, Bank of America Securities, LLC, (collateralized
by various U.S. Treasury obligations, 3.625%, 1/15/08, valued at
$2,449), in a joint trading account at 3.00%, dated 11/30/07, due
12/3/07 (Delivery value $2,401) 2,400
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized
by various U.S. Treasury obligations, 6.25%, 8/15/23, valued at
$3,873), in a joint trading account at 3.05%, dated 11/30/07, due
12/3/07 (Delivery value $3,801) 3,800
Repurchase Agreement, Merrill Lynch & Co., Inc., (collateralized by
various U.S. Treasury obligations, 3.68%, 12/27/07, valued at $3,875),
in a joint trading account at 3.05%, dated 11/30/07, due 12/3/07
(Delivery value $3,801) 3,800
-------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $10,000) 10,000
-------
TOTAL INVESTMENT SECURITIES -- 99.4%
(Cost $49,037) 76,905
-------
OTHER ASSETS AND LIABILITIES -- 0.6% 442
-------
TOTAL NET ASSETS -- 100.0% $77,347
=======
Market Sector Diversification
(as a % of net assets)
Financials 19.8%
Consumer Discretionary 12.8%
Telecommunication Services 11.1%
Industrials 10.6%
Information Technology 7.1%
Energy 6.2%
Utilities 6.1%
Materials 5.1%
Health Care 4.6%
Consumer Staples 3.1%
Cash and Equivalents* 13.5%
* Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
CVA = Certificaten Van Aandelen
FDR = Finnish Depositary Receipt
(1) Non-income producing.
As of November 30, 2007, securities with an aggregate value of $58,682 (in
thousands), which represented 75.9% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
30
SHAREHOLDER FEE EXAMPLES (UNAUDITED)
Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds.
The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from June 1, 2007 to November 30, 2007
(except as noted).
ACTUAL EXPENSES
The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.
- ------
31
Expenses
Paid
Beginning Ending During
Account Account Period(1) Annualized
Value Value 6/1/07 - Expense
6/1/07 11/30/07 11/30/07 Ratio(1)
International Growth
ACTUAL
Investor Class $1,000 $1,080.70 $6.68 1.28%
Institutional Class $1,000 $1,082.00 $5.64 1.08%
Advisor Class $1,000 $1,079.40 $7.98 1.53%
A Class $1,000 $1,080.10 $7.98 1.53%
B Class $1,000 $1,076.20 $11.87 2.28%
C Class $1,000 $1,075.90 $11.87 2.28%
R Class $1,000 $1,077.90 $9.27 1.78%
HYPOTHETICAL
Investor Class $1,000 $1,018.65 $6.48 1.28%
Institutional Class $1,000 $1,019.65 $5.47 1.08%
Advisor Class $1,000 $1,017.40 $7.74 1.53%
A Class $1,000 $1,017.40 $7.74 1.53%
B Class $1,000 $1,013.64 $11.51 2.28%
C Class $1,000 $1,013.64 $11.51 2.28%
R Class $1,000 $1,016.14 $9.00 1.78%
Global Growth
ACTUAL
Investor Class $1,000 $1,078.20 $6.77 1.30%
Institutional Class $1,000 $1,079.30 $5.73 1.10%
A Class $1,000 $1,076.30 $8.07 1.55%
B Class $1,000 $1,073.00 $11.95 2.30%
C Class $1,000 $1,072.30 $11.95 2.30%
R Class $1,000 $1,075.00 $9.36 1.80%
HYPOTHETICAL
Investor Class $1,000 $1,018.55 $6.58 1.30%
Institutional Class $1,000 $1,019.55 $5.57 1.10%
A Class $1,000 $1,017.30 $7.84 1.55%
B Class $1,000 $1,013.54 $11.61 2.30%
C Class $1,000 $1,013.54 $11.61 2.30%
R Class $1,000 $1,016.04 $9.10 1.80%
(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
- ------
32
Expenses
Paid
Beginning Ending During
Account Account Period(1) Annualized
Value Value 6/1/07 - Expense
6/1/07 11/30/07 11/30/07 Ratio(1)
Emerging Markets
ACTUAL
Investor Class $1,000 $1,222.50 $9.03 1.62%
Institutional Class $1,000 $1,223.50 $7.92 1.42%
A Class $1,000 $1,220.50 $10.41 1.87%
B Class $1,000 $1,042.80(2) $4.62(3) 2.62%
C Class $1,000 $1,216.10 $14.56 2.62%
R Class $1,000 $1,043.60(2) $3.74(3) 2.12%
HYPOTHETICAL
Investor Class $1,000 $1,016.95 $8.19 1.62%
Institutional Class $1,000 $1,017.95 $7.18 1.42%
A Class $1,000 $1,015.69 $9.45 1.87%
B Class $1,000 $1,011.93(4) $13.21(4) 2.62%
C Class $1,000 $1,011.93 $13.21 2.62%
R Class $1,000 $1,014.44(4) $10.71(4) 2.12%
(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
(2) Ending account value based on actual return from September 28, 2007
(commencement of sale) through November 30, 2007.
(3) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 63, the number of days in the period from September 28, 2007
(commencement of sale) through November 30, 2007, divided by 365, to reflect
the period. Had the class been available for the full period, the expenses
paid during the period would have been higher.
(4) Ending account value and expenses paid during period assumes the class had
been available throughout the entire period and are calculated using the
class's annualized expense ratio listed in the table above.
- ------
33
Expenses
Paid
Beginning Ending During
Account Account Period(1) Annualized
Value Value 6/1/07 - Expense
6/1/07 11/30/07 11/30/07 Ratio(1)
International Value
ACTUAL
Investor Class $1,000 $1,050.30 $6.68 1.30%
Institutional Class $1,000 $1,051.20 $5.66 1.10%
A Class (after waiver)(2) $1,000 $1,049.30 $7.19 1.40%
A Class (before waiver) $1,000 $1,049.30(3) $7.96 1.55%
B Class (after waiver)(2) $1,000 $1,045.90 $10.72 2.09%
B Class (before waiver) $1,000 $1,045.90(3) $11.80 2.30%
C Class $1,000 $1,045.00 $11.79 2.30%
R Class $1,000 $1,046.70 $9.24 1.80%
HYPOTHETICAL
Investor Class $1,000 $1,018.55 $6.58 1.30%
Institutional Class $1,000 $1,019.55 $5.57 1.10%
A Class (after waiver)(2) $1,000 $1,018.05 $7.08 1.40%
A Class (before waiver) $1,000 $1,017.30 $7.84 1.55%
B Class (after waiver)(2) $1,000 $1,014.59 $10.56 2.09%
B Class (before waiver) $1,000 $1,013.54 $11.61 2.30%
C Class $1,000 $1,013.54 $11.61 2.30%
R Class $1,000 $1,016.04 $9.10 1.80%
(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
(2) During the six months ended November 30, 2007, the class received a
partial waiver of its distribution and service fees.
(3) Ending account value assumes the return earned after waiver. The return
would have been lower had fees not been waived and may have resulted in a
lower ending account value.
- ------
34
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
International Global Emerging International
Growth Growth Markets Value
ASSETS
Investment securities
- -- at value (cost of
$1,922,698, $394,935,
$840,929 and $49,037,
respectively) --
including $128,531,
$28,070, $57,610 and $-
of securities on loan,
respectively $2,638,440 $514,670 $1,182,535 $76,905
Investments made with
cash collateral
received for securities
on loan, at value (cost
of $132,398, $21,110,
$58,162 and $-,
respectively) 132,398 21,110 58,162 --
----------- ---------- ---------- -----------
Total investment
securities, at value
(cost of $2,055,096,
$416,045, $899,091 and
$49,037, respectively) 2,770,838 535,780 1,240,697 76,905
Cash -- 234 1,091 50
Foreign currency
holdings, at value
(cost of $2,874, $6,
$5,811 and $5,
respectively) 2,884 6 5,804 5
Receivable for
investments sold 45,173 11,309 13,258 8
Receivable for capital
shares sold 518 411 3 300
Dividends and interest
receivable 4,001 616 1,562 168
----------- ---------- ---------- -----------
2,823,414 548,356 1,262,415 77,436
----------- ---------- ---------- -----------
LIABILITIES
Disbursements in excess
of demand deposit cash 348 -- -- --
Payable for collateral
received for securities
on loan 132,398 21,110 58,162 --
Payable for investments
purchased 49,957 6,973 11,688 --
Payable for capital
shares redeemed -- 2 -- 9
Accrued management fees 2,701 547 1,541 75
Distribution fees
payable 7 2 6 3
Service fees (and
distribution fees --
Advisor Class, A Class
and R Class) payable 60 4 9 2
----------- ---------- ---------- -----------
185,471 28,638 71,406 89
----------- ---------- ---------- -----------
NET ASSETS $2,637,943 $519,718 $1,191,009 $77,347
=========== ========== ========== ===========
See Notes to Financial Statements.
- ------
35
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS EXCEPT AS NOTED)
International Global Emerging International
Growth Growth Markets Value
NET ASSETS CONSIST OF:
Capital (par
value and
paid-in surplus) $1,776,637 $315,357 $ 724,652 $43,409
Accumulated
undistributed
net investment
income (loss) 17,791 (42) 3,042 938
Undistributed
net realized
gain on
investment and
foreign currency
transactions 129,036 84,670 125,278 5,128
Net unrealized
appreciation on
investments and
translation of
assets and
liabilities in
foreign
currencies 714,479 119,733 338,037 27,872
----------- ----------- ----------- -----------
$2,637,943 $519,718 $1,191,009 $77,347
=========== =========== =========== ===========
INVESTOR CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $2,267,093,056 $481,553,351 $1,070,138,397 $3,043,927
Shares
outstanding 152,435,490 37,945,883 84,333,974 265,144
Net asset value
per share $14.87 $12.69 $12.69 $11.48
INSTITUTIONAL CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $80,452,140 $16,297,521 $74,896,772 $45,262,332
Shares
outstanding 5,394,335 1,273,992 5,798,290 3,935,852
Net asset value
per share $14.91 $12.79 $12.92 $11.50
ADVISOR CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $241,578,575 N/A N/A N/A
Shares
outstanding 16,299,576 N/A N/A N/A
Net asset value
per share $14.82 N/A N/A N/A
A CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $34,138,899 $18,401,691 $36,794,559 $24,558,179
Shares
outstanding 2,300,787 1,465,401 2,968,112 2,138,031
Net asset value
per share $14.84 $12.56 $12.40 $11.49
Maximum offering
price (net asset
value divided by
0.9425) $15.75 $13.33 $13.16 $12.19
B CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $3,319,574 $638,906 $53,837 $4,058,842
Shares
outstanding 226,194 51,108 4,249 363,670
Net asset value
per share $14.68 $12.50 $12.67 $11.16
C CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $7,318,465 $2,624,593 $9,098,265 $221,712
Shares
outstanding 501,246 215,804 751,828 19,504
Net asset value
per share $14.60 $12.16 $12.10 $11.37
R CLASS, $0.01 PAR VALUE ($ AND SHARES IN FULL)
Net assets $4,042,421 $201,916 $26,887 $201,820
Shares
outstanding 272,871 15,996 2,120 17,668
Net asset value
per share $14.81 $12.62 $12.68 $11.42
See Notes to Financial Statements.
- ------
36
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
International Global Emerging International
Growth Growth Markets Value
INVESTMENT INCOME (LOSS)
INCOME:
Dividends (net of foreign
taxes withheld of $4,989,
$454, $1,793 and $175,
respectively) $ 56,613 $ 7,176 $ 20,782 $ 2,068
Interest and other income 375 151 1,175 170
Securities lending 3,026 237 935 --
--------- --------- --------- ---------
60,014 7,564 22,892 2,238
--------- --------- --------- ---------
EXPENSES:
Management fees 33,295 6,157 14,302 810
Distribution fees:
Advisor Class 560 -- -- --
A Class -- 11 28 --
B Class 23 3 -- 32
C Class 50 12 42 1
Service fees:
Advisor Class 560 -- -- --
A Class -- 11 28 --
B Class 8 1 -- 11
C Class 17 4 14 --
Distribution and service
fees:
Advisor Class 167 -- -- --
A Class 78 11 20 55
A Class (old)
(Note 10) -- 14 -- --
R Class 15 -- -- --
Directors' fees and
expenses 59 9 16 2
Other expenses 263 11 9 --
--------- --------- --------- ---------
35,095 6,244 14,459 911
--------- --------- --------- ---------
Amount waived -- -- -- (42)
--------- --------- --------- ---------
35,095 6,244 14,459 869
--------- --------- --------- ---------
NET INVESTMENT INCOME
(LOSS) 24,919 1,320 8,433 1,369
--------- --------- --------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS)
ON:
Investment transactions
(net of foreign taxes
accrued of $1,358, $240,
$570 and $-, respectively) 470,033 79,288 111,033 4,686
Foreign currency
transactions 115,259 9,085 12,907 784
--------- --------- --------- ---------
585,292 88,373 123,940 5,470
--------- --------- --------- ---------
CHANGE IN NET UNREALIZED
APPRECIATION
(DEPRECIATION) ON:
Investments (net of
foreign taxes accrued of
$(1,089), $286, $(3,299)
and $-, respectively) (64,727) 5,746 193,247 5,510
Translation of assets and
liabilities in foreign
currencies 24,945 5,005 15,601 1,828
--------- --------- --------- ---------
(39,782) 10,751 208,848 7,338
--------- --------- --------- ---------
NET REALIZED AND
UNREALIZED GAIN (LOSS) 545,510 99,124 332,788 12,808
--------- --------- --------- ---------
NET INCREASE (DECREASE)
IN NET ASSETS
RESULTING FROM OPERATIONS $570,429 $100,444 $341,221 $14,177
========= ========= ========= =========
See Notes to Financial Statements.
- ------
37
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30, 2007 AND NOVEMBER 30, 2006 (AMOUNTS IN THOUSANDS)
International Growth Global Growth
Increase (Decrease) in Net
Assets 2007 2006 2007 2006
OPERATIONS
Net investment income (loss) $ 24,919 $ 13,732 $ 1,320 $ (228)
Net realized gain (loss) 585,292 431,240 88,373 62,564
Change in net unrealized
appreciation (depreciation) (39,782) 223,543 10,751 10,585
---------- ---------- ---------- ----------
Net increase (decrease) in net
assets resulting from
operations 570,429 668,515 100,444 72,921
---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class (16,995) (40,600) (1,908) (2,722)
Institutional Class (1,199) (4,912) (56) (80)
Advisor Class (1,634) (4,014) -- --
A Class (140) (391) (11) (16)
A Class (old) (Note 10) -- -- (11) --
B Class -- (13) -- --
C Class -- (42) -- --
R Class (5) (24) -- --
From net realized gains:
Investor Class -- -- (8,547) --
Institutional Class -- -- (266) --
A Class -- -- (113) --
A Class (old) (Note 10) -- -- (136) --
B Class -- -- (8) --
C Class -- -- (28) --
R Class -- -- (1) --
---------- ---------- ---------- ----------
Decrease in net assets from
distributions (19,973) (49,996) (11,085) (2,818)
---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net
assets from capital share
transactions (767,214) (553,900) (8,664) (22,870)
---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS (216,758) 64,619 80,695 47,233
NET ASSETS
Beginning of period 2,854,701 2,790,082 439,023 391,790
---------- ---------- ---------- ----------
End of period $2,637,943 $2,854,701 $519,718 $439,023
========== ========== ========== ==========
Accumulated undistributed net
investment income (loss) $17,791 $(11,917) $(42) $(3,027)
========== ========== ========== ==========
See Notes to Financial Statements.
- ------
38
YEARS ENDED NOVEMBER 30, 2007 AND NOVEMBER 30, 2006 (AMOUNTS IN THOUSANDS)
Emerging Markets
Increase (Decrease) in Net Assets 2007 2006
OPERATIONS
Net investment income (loss) $ 8,433 $ 6,296
Net realized gain (loss) 123,940 92,060
Change in net unrealized appreciation (depreciation) 208,848 71,275
---------- ---------
Net increase (decrease) in net assets resulting from
operations 341,221 169,631
---------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class (6,964) (1,354)
Institutional Class (1,223) (916)
A Class (110) (6)
C Class (9) --
From net realized gains:
Investor Class (77,026) (38,795)
Institutional Class (11,255) (18,743)
A Class (1,526) (323)
C Class (449) (145)
---------- ---------
Decrease in net assets from distributions (98,562) (60,282)
---------- ---------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets from capital share
transactions 326,166 175,844
---------- ---------
NET INCREASE (DECREASE) IN NET ASSETS 568,825 285,193
NET ASSETS
Beginning of period 622,184 336,991
---------- ---------
End of period $1,191,009 $622,184
========== =========
Undistributed net investment income $3,042 $4,164
========== =========
See Notes to Financial Statements.
- ------
39
YEAR ENDED NOVEMBER 30, 2007, EIGHT MONTHS ENDED NOVEMBER 30, 2006 AND YEAR ENDED
MARCH 31, 2006 (AMOUNTS IN THOUSANDS)
International Value
Nov. 30, Nov. 30, March 31,
Increase (Decrease) in Net Assets 2007 2006(1) 2006
OPERATIONS
Net investment income (loss) $ 1,369 $ 1,046 $ 3,019
Net realized gain (loss) 5,470 4,933 70,935
Change in net unrealized appreciation
(depreciation) 7,338 1,099 (38,416)
--------- --------- ---------
Net increase (decrease) in net assets
resulting from operations 14,177 7,078 35,538
--------- --------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class (15) -- --
Institutional Class (1,222) -- --
A Class (614) -- (2,743)
B Class (113) -- (23)
C Class (1) -- --
R Class (1) -- --
From net realized gains:
Investor Class (145) -- --
Institutional Class (11,690) -- --
A Class (6,476) -- (3,924)
B Class (1,432) -- (86)
C Class (14) -- --
R Class (9) -- --
--------- --------- ---------
Decrease in net assets from distributions (21,732) -- (6,776)
--------- --------- ---------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets from
capital share transactions 24,619 (6,329) (177,608)
--------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS 17,064 749 (148,846)
NET ASSETS
Beginning of period 60,283 59,534 208,380
--------- --------- ---------
End of period $77,347 $60,283 $ 59,534
========= ========= =========
Undistributed net investment income $938 $1,532 $496
========= ========= =========
(1) The fund's fiscal year end was changed from March 31 to November 30,
resulting in an eight-month annual reporting period (see Note 9).
See Notes to Financial Statements.
- ------
40
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century World Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 (the 1940 Act) as an
open-end management investment company. International Growth Fund
(International Growth), Global Growth Fund (Global Growth), Emerging Markets
Fund (Emerging Markets) and International Value Fund (International Value)
(collectively, the funds) are four funds in a series issued by the corporation
(see Note 9). The funds are diversified under the 1940 Act. International
Growth, Global Growth and Emerging Markets' investment objective is to seek
capital growth. International Value's investment objective is to seek
long-term capital growth. International Growth pursues its objective by
investing primarily in equity securities of foreign companies located in at
least three developed countries (excluding the United States). Global Growth
pursues its objective by investing primarily in equity securities of issuers
in the United States and other developed countries. Emerging Markets invests
at least 80% of its assets in securities of issuers in emerging market
countries and companies that derive a significant portion of their business
from emerging market countries. International Value pursues its objective by
investing primarily in equity securities of foreign companies. International
Value may also invest a portion of its assets in U.S. companies. The following
is a summary of the funds' significant accounting policies.
MULTIPLE CLASS -- International Growth is authorized to issue the Investor
Class, the Institutional Class, the Advisor Class, the A Class, the B Class,
the C Class and the R Class. Global Growth is authorized to issue the Investor
Class, the Institutional Class, the A Class (formerly Advisor Class) (see Note
10), the B Class, the C Class and the R Class. Emerging Markets is authorized
to issue the Investor Class, the Institutional Class, the A Class (formerly
Advisor Class), the B Class, the C Class and the R Class. International Value
is authorized to issue the Investor Class, the Institutional Class, the A
Class, the B Class, the C Class and the R Class. The A Class may incur an
initial sales charge. The A Class, B Class and C Class may be subject to a
contingent deferred sales charge. The share classes differ principally in
their respective sales charges and distribution and shareholder servicing
expenses and arrangements. All shares of the funds represent an equal pro rata
interest in the net assets of the class to which such shares belong, and have
identical voting, dividend, liquidation and other rights and the same terms
and conditions, except for class specific expenses and exclusive rights to
vote on matters affecting only individual classes. Income, non-class specific
expenses, and realized and unrealized capital gains and losses of the funds
are allocated to each class of shares based on their relative net assets. Sale
of Global Growth's B Class commenced on December 1, 2005. Sale of Emerging
Market's B Class and R Class commenced on September 28, 2007. Sale of
International Value's Investor Class, Institutional Class, C Class and R Class
commenced on April 3, 2006.
SECURITY VALUATIONS -- Securities traded primarily on a principal securities
exchange are valued at the last reported sales price, or at the mean of the
latest bid and asked prices where no last sales price is available. Depending
on local convention or regulation, securities traded over-the-counter are
valued at the mean of the latest bid and asked prices, the last sales price,
or the official close price. 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. Discount notes may be valued
through a commercial pricing service or at amortized cost, which approximates
fair value. Securities traded on foreign securities exchanges and
over-the-counter markets are normally completed before the close of business
on days that the New York Stock Exchange (the Exchange) is open and may also
take place on days when the Exchange is not open. If an event occurs after the
value of a security was established but before the net asset value per share
was determined that was likely to materially change the net asset value, that
security would be valued as determined in accordance with procedures adopted
by the Board of Directors. If the funds determine that the market price of a
portfolio security is not readily available, or that the valuation methods
mentioned above do not reflect the security's fair value, such security is
valued as determined by, or in accordance with procedures adopted by, the
Board of Directors or its designee if such determination would materially
impact a fund's net asset value. Certain other circumstances may cause the
funds to use alternative procedures to value a security such as: a security
has been declared in default; trading in a security has been halted during the
trading day; or there is a foreign market holiday and no trading will
commence.
- ------
41
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
SECURITY TRANSACTIONS -- For financial reporting purposes, 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. Certain countries impose taxes on realized gains
on the sale of securities registered in their country. The funds record the
foreign tax expense, if any, on an accrual basis. The realized and unrealized
tax provision reduces the net realized gain (loss) on investment transactions
and net unrealized appreciation (depreciation) on investments, respectively.
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.
SECURITIES ON LOAN -- International Growth, Global Growth and Emerging Markets
may lend portfolio securities through their lending agent to certain approved
borrowers in order to earn additional income. International Growth, Global
Growth and Emerging Markets continue to recognize any gain or loss in the
market price of the securities loaned and record any interest earned or
dividends declared.
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. 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. Realized
and unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component
of realized gain (loss) on foreign currency transactions and unrealized
appreciation (depreciation) on translation of assets and liabilities in
foreign currencies, respectively. Certain countries may impose taxes on the
contract amount of purchases and sales of foreign currency contracts in their
currency. The funds record the foreign tax expense, if any, as a reduction to
the net realized gain (loss) on foreign currency transactions.
REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements with
institutions that American Century Investment Management, Inc. (ACIM) has
determined are creditworthy pursuant to criteria adopted by the Board of
Directors. Each repurchase agreement is recorded at cost. Each fund requires
that the collateral, represented by securities, received in a repurchase
transaction be transferred to the custodian in a manner sufficient to enable
each fund 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
each fund under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund, along with other registered
investment companies having management agreements with ACIM or American
Century Global Investment Management, Inc. (ACGIM), 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 each fund's policy to distribute substantially 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. The funds are no longer subject to examination by tax
authorities for years prior to 2004. At this time, management has not
identified any uncertain tax positions that would materially impact the
financial statements. Accordingly, no provision has been made for federal or
state income taxes. Interest and penalties associated with any federal or
state income tax obligations, if any, are recorded as interest expense.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid annually. Distributions from net realized gains,
if any, are generally declared and paid twice per year. 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 1940 Act.
- ------
42
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
REDEMPTION -- The funds may impose a 2.00% redemption fee on shares held less
than 60 days. The redemption fee may not be applicable to all classes. The
redemption fee is recorded as a reduction in the cost of shares redeemed. The
redemption fee is retained by the funds and helps cover transaction costs that
long-term investors may bear when a fund sells securities to meet investor
redemptions.
INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.
USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.
2. FEES AND TRANSACTIONS WITH RELATED PARTIES
On July 27, 2007, the Advisor Class shareholders of International Growth and
the A Class (formerly Advisor Class, also referred to as "A Class (new)")
shareholders of Global Growth and Emerging Markets approved a change to the
class's fee structure. The change was approved by the Board of Directors on
November 29, 2006 and March 7, 2007. Effective September 4, 2007, the fee
structure change resulted in an increase of 0.25% in the unified management
fee and a simultaneous decrease of 0.25% in the total distribution and service
fee, resulting in no change to the total operating expense ratio of the class.
MANAGEMENT FEES -- The corporation has entered into a Management Agreement
with ACGIM (the investment advisor), under which ACGIM provides the funds with
investment advisory and management services in exchange for a single, unified
management fee (the fee) per class. The Agreement provides that all expenses
of the funds, except brokerage commissions, taxes, interest, fees and expenses
of those directors who are not considered "interested persons" as defined in
the 1940 Act (including counsel fees) and extraordinary expenses, will be paid
by ACGIM. The fee is computed and accrued daily based on the daily net assets
of each specific class of shares of each fund and paid monthly in arrears. For
funds with a stepped fee schedule, the rate of the fee is determined by
applying a fee rate calculation formula. This formula takes into account all
of the investment advisor's assets under management in each fund's investment
strategy (strategy assets) to calculate the appropriate fee rate for each
fund. The strategy assets include each fund's assets and the assets of other
clients of the investment advisor that are not in the American Century family
of funds, but that have the same investment team and investment strategy. The
strategy assets of International Growth includes the assets of NT
International Growth Fund, one fund in a series issued by the corporation. The
annual management fee schedule for International Growth ranges from 1.10% to
1.50% for the Investor Class, Advisor Class, A Class, B Class, C Class and R
Class. Prior to September 4, 2007, the Advisor Class was 0.25% less at each
point within the range for International Growth. The annual management fee
schedule for Global Growth ranges from 1.05% to 1.30% for the Investor Class,
A Class, B Class, C Class and R Class. The annual management fee schedule for
Emerging Markets ranges from 1.25% to 1.85% for the Investor Class, A Class, B
Class, C Class and R Class. Prior to September 4, 2007, the A Class (new) was
0.25% less at each point within the range for Global Growth and Emerging
Markets. The annual management fee schedule for International Value ranges
from 1.10% to 1.30% for the Investor Class, A Class, B Class, C Class and R
Class. The Institutional Class of each fund is 0.20% less at each point within
the range.
- ------
43
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
The effective annual management fee for each class of each fund for the year
ended November 30, 2007, was as follows:
Investor
& C Institutional Advisor A B R
International Growth 1.26% 1.06% 1.06% 1.26% 1.26% 1.26%
Global Growth 1.30% 1.10% N/A 1.18% 1.30% 1.30%
Emerging Markets 1.66% 1.46% N/A 1.50% 1.58% 1.58%
International Value 1.30% 1.10% N/A 1.30% 1.30% 1.30%
ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on
behalf of International Growth, Global Growth and Emerging Markets. The
subadvisor makes investment decisions for the cash portion of International
Growth, Global Growth and Emerging Markets in accordance with their investment
objectives, policies and restrictions under the supervision of ACGIM and the
Board of Directors. ACGIM pays all costs associated with retaining ACIM as the
subadvisor of International Growth, Global Growth and Emerging Markets.
ACGIM has entered into a Subadvisory Agreement with Templeton Investment
Counsel, LLC (Templeton) on behalf of International Value. Templeton makes
investment decisions for International Value in accordance with its investment
objectives, policies, and restrictions under the supervision of ACGIM and the
Board of Directors. ACGIM pays all costs associated with retaining Templeton
as the subadvisor of International Value.
DISTRIBUTION AND SERVICE FEES -- For International Growth, the Board of
Directors has adopted a separate Master Distribution and Individual
Shareholder Services Plan for each of the Advisor Class, A Class, B Class, C
Class and R Class (collectively the International Growth plans), pursuant to
Rule 12b-1 of the 1940 Act. The International Growth plans provide that the
Advisor Class will pay American Century Investment Services, Inc. (ACIS) an
annual distribution and service fee of 0.25%. Prior to September 4, 2007, the
Board of Directors had adopted a Master Distribution and Shareholder Services
Plan for the Advisor Class of International Growth, pursuant to Rule 12b-1 of
the 1940 Act, which provided that the Advisor Class would pay ACIS an annual
distribution fee of 0.25% and service fee of 0.25%. The International Growth
plans provide that the A Class and the R Class will pay ACIS an annual
distribution and service fee of 0.25% for the A Class and 0.50% for the R
Class. The International Growth plans provide that the B Class and the C Class
will each pay ACIS an annual distribution fee of 0.75% and service fee of
0.25%.
For Global Growth and Emerging Markets, the Board of Directors has adopted a
separate Master Distribution and Individual Shareholder Services Plan for each
of the A Class, B Class, C Class and R Class (collectively the plans),
pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class
will pay ACIS an annual distribution and service fee of 0.25%. The plans
provide that the B Class and the C Class will each pay ACIS an annual
distribution fee of 0.75% and service fee of 0.25%. The plans provide that the
R Class will pay ACIS an annual distribution and service fee of 0.50%. Prior
to September 4, 2007, the Board of Directors had adopted a Master Distribution
and Shareholder Services Plan for the A Class (new) for Global Growth and
Emerging Markets, pursuant to Rule 12b-1 of the 1940 Act, in which the A Class
(new) paid ACIS an annual distribution fee of 0.25% and service fee of 0.25%.
For International Value, the Board of Directors has adopted a separate Master
Distribution and Individual Shareholder Services Plan for each of the A Class,
B Class, C Class and R Class (collectively the International Value plans),
pursuant to Rule 12b-1 of the 1940 Act. The International Value plans provide
that the A Class will pay ACIS an annual distribution and service fee of
0.25%. The International Value plans provide that the B Class and C Class will
each pay ACIS an annual distribution fee of 0.75% and service fee of 0.25%.
The International Value plans provide that the R Class will pay ACIS an annual
distribution and service fee of 0.50%.
- ------
44
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
The fees are computed and accrued daily based on each class's daily net assets
and paid monthly in arrears. The distribution fee provides compensation for
expenses incurred in connection with distributing shares of the classes
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 ACIS, its affiliates or independent third
party providers for Advisor Class shares and prior to September 4, 2007, for A
Class (new) shares. The service fee provides compensation for individual
shareholder services rendered by broker/dealers or other independent financial
intermediaries for A Class (new), A Class (old), B Class, C Class and R Class
shares. ACIS has agreed to voluntarily waive a portion of its distribution and
service fees through March 31, 2008, by 0.15% for the A Class and 0.21% for
the B Class of International Value. For the year ended November 30, 2007, the
A Class and B Class of International Value waived $32,784 and $8,861 ($ in
full), respectively, of distribution and service fees. Fees incurred under the
International Growth plans, the plans, and the International Value plans
during the year ended November 30, 2007, are detailed in the Statement of
Operations.
RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACGIM, the corporation's subadvisor, ACIM, the distributor
of the corporation, ACIS, and the corporation's transfer agent, American
Century Services, LLC.
Beginning in December 2006, the funds are eligible to invest in a money market
fund for temporary purposes, which is managed by J.P. Morgan Investment
Management, Inc. (JPMIM). JPMIM is a wholly owned subsidiary of JPMorgan Chase
& Co. (JPM). JPM is an equity investor in ACC. The funds have a bank line of
credit agreement with JPMorgan Chase Bank (JPMCB). International Growth,
Global Growth and Emerging Markets have a securities lending agreement with
JPMCB. JPMCB is a custodian of the funds and a wholly owned subsidiary of JPM.
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 2007, were as follows:
International Global Emerging International
Growth Growth Markets Value
Purchases $3,576,387 $512,851 $962,656 $7,307
Proceeds from
sales $4,345,192 $538,421 $724,062 $10,068
- ------
45
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the funds were as follows:
Year ended Year ended
November 30, 2007 November 30, 2006
Shares Amount Shares Amount
International Growth
INVESTOR CLASS/SHARES
AUTHORIZED 1,000,000 1,000,000
========= =========
Sold 22,606 $ 302,364 31,222 $ 343,306
Issued in reinvestment of
distributions 1,168 14,427 3,469 34,698
Redeemed (64,757) (860,557)(1) (72,005) (780,967)(2)
--------- ------------ --------- ------------
(40,983) (543,766) (37,314) (402,963)
--------- ------------ --------- ------------
INSTITUTIONAL CLASS/SHARES
AUTHORIZED 150,000 150,000
========= =========
Sold 1,731 22,661 4,490 48,649
Issued in reinvestment of
distributions 90 1,117 435 4,357
Redeemed (6,740) (89,101)(3) (19,888) (212,746)(4)
--------- ------------ --------- ------------
(4,919) (65,323) (14,963) (159,740)
--------- ------------ --------- ------------
ADVISOR CLASS/SHARES
AUTHORIZED 100,000 100,000
========= =========
Sold 7,416 98,766 10,987 120,231
Issued in reinvestment of
distributions 121 1,489 373 3,722
Redeemed (18,992) (259,071)(5) (10,331) (112,654)(6)
--------- ------------ --------- ------------
(11,455) (158,816) 1,029 11,299
--------- ------------ --------- ------------
A CLASS/SHARES AUTHORIZED 25,000 25,000
========= =========
Sold 507 6,888 608 6,644
Issued in reinvestment of
distributions 11 134 38 377
Redeemed (554) (7,490) (899) (9,623)
--------- ------------ --------- ------------
(36) (468) (253) (2,602)
--------- ------------ --------- ------------
B CLASS/SHARES AUTHORIZED 10,000 10,000
========= =========
Sold 32 425 80 866
Issued in reinvestment of
distributions -- -- 1 10
Redeemed (30) (398) (31) (330)
--------- ------------ --------- ------------
2 27 50 546
--------- ------------ --------- ------------
C CLASS/SHARES AUTHORIZED 10,000 10,000
========= =========
Sold 108 1,470 128 1,397
Issued in reinvestment of
distributions -- -- 3 32
Redeemed (129) (1,700) (156) (1,664)
--------- ------------ --------- ------------
(21) (230) (25) (235)
--------- ------------ --------- ------------
R CLASS/SHARES AUTHORIZED 5,000 5,000
========= =========
Sold 165 2,253 140 1,533
Issued in reinvestment of
distributions -- 4 2 20
Redeemed (66) (895) (154) (1,758)
--------- ------------ --------- ------------
99 1,362 (12) (205)
--------- ------------ --------- ------------
Net increase (decrease) (57,313) $(767,214) (51,488) $(553,900)
========= ============ ========= ============
(1) Net of redemption fees of $183.
(2) Net of redemption fees of $156.
(3) Net of redemption fees of $65.
(4) Net of redemption fees of $16.
(5) Net of redemption fees of $87.
(6) Net of redemption fees of $81.
- ------
46
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
Year ended Year ended
November 30, 2007 November 30, 2006
Shares Amount Shares Amount
Global Growth
INVESTOR CLASS/SHARES
AUTHORIZED 150,000 150,000
======== ========
Sold 3,827 $ 44,774 5,161 $ 50,085
Issued in reinvestment of
distributions 962 10,090 289 2,636
Redeemed (6,605) (75,173)(1) (8,373) (80,834)(2)
-------- ------------ -------- ------------
(1,816) (20,309) (2,923) (28,113)
-------- ------------ -------- ------------
INSTITUTIONAL CLASS/SHARES
AUTHORIZED 5,000 5,000
======== ========
Sold 664 7,441 219 2,130
Issued in reinvestment of
distributions 30 322 9 80
Redeemed (226) (2,605)(3) (391) (3,851)
-------- ------------ -------- ------------
468 5,158 (163) (1,641)
-------- ------------ -------- ------------
A CLASS/SHARES AUTHORIZED 15,000 5,000
======== ========
Sold 258 3,045 332 3,165
Issued in connection with
reclassification (Note 10) 845 9,866 -- --
Issued in reinvestment of
distributions 12 124 1 13
Redeemed (185) (2,159) (215) (2,037)(4)
-------- ------------ -------- ------------
930 10,876 118 1,141
-------- ------------ -------- ------------
A CLASS (OLD)/SHARES AUTHORIZED NA 10,000
======== ========
Sold 427 4,824 532 5,196
Issued in reinvestment of
distributions 13 134 -- --
Redeemed in connection with
reclassification (Note 10) (845) (9,866) -- --
Redeemed (100) (1,127) (27) (261)
-------- ------------ -------- ------------
(505) (6,035) 505 4,935
-------- ------------ -------- ------------
B CLASS/SHARES AUTHORIZED 10,000 10,000
======== ========
Sold 20 244 37 357
Issued in reinvestment of
distributions 1 8 -- --
Redeemed (4) (46) (3) (32)
-------- ------------ -------- ------------
17 206 34 325
-------- ------------ -------- ------------
C CLASS/SHARES AUTHORIZED 10,000 5,000
======== ========
Sold 134 1,518 82 772
Issued in reinvestment of
distributions 2 22 -- --
Redeemed (24) (263) (31) (289)
-------- ------------ -------- ------------
112 1,277 51 483
-------- ------------ -------- ------------
R CLASS/SHARES AUTHORIZED 5,000 10,000
======== ========
Sold 16 200 -- --
Issued in reinvestment of
distributions -- 1 -- --
Redeemed (3) (38) -- --
-------- ------------ -------- ------------
13 163 -- --
-------- ------------ -------- ------------
Net increase (decrease) (781) $ (8,664) (2,378) $(22,870)
======== ============ ======== ============
(1) Net of redemption fees of $18.
(2) Net of redemption fees of $18.
(3) Net of redemption fees of $2.
(4) Net of redemption fees of $1.
- ------
47
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
Year ended Year ended
November 30, 2007(1) November 30, 2006
Shares Amount Shares Amount
Emerging Markets
INVESTOR CLASS/SHARES
AUTHORIZED 185,000 100,000
======== ========
Sold 47,827 $ 504,521 35,516 $ 303,189
Issued in reinvestment of
distributions 8,563 74,867 4,400 32,030
Redeemed (24,149) (254,670)(2) (14,582) (122,512)(3)
-------- ------------ -------- ------------
32,241 324,718 25,334 212,707
-------- ------------ -------- ------------
INSTITUTIONAL CLASS/SHARES
AUTHORIZED 40,000 50,000
======== ========
Sold 1,338 13,765 3,640 29,912
Issued in reinvestment of
distributions 1,405 12,478 2,503 18,363
Redeemed (5,355) (51,169)(4) (11,341) (93,403)(5)
-------- ------------ -------- ------------
(2,612) (24,926) (5,198) (45,128)
-------- ------------ -------- ------------
A CLASS/SHARES AUTHORIZED 10,000 5,000
======== ========
Sold 2,414 26,234 975 8,291
Issued in reinvestment of
distributions 190 1,625 43 313
Redeemed (641) (6,494)(6) (232) (1,859)(7)
-------- ------------ -------- ------------
1,963 21,365 786 6,745
-------- ------------ -------- ------------
B CLASS/SHARES AUTHORIZED 10,000 N/A
======== ========
Sold 4 52
-------- ------------
C CLASS/SHARES AUTHORIZED 5,000 5,000
======== ========
Sold 651 6,763 321 2,649
Issued in reinvestment of
distributions 52 442 20 142
Redeemed (219) (2,274) (165) (1,271)
-------- ------------ -------- ------------
484 4,931 176 1,520
-------- ------------ -------- ------------
R CLASS/SHARES AUTHORIZED 10,000 N/A
======== ========
Sold 2 26
-------- ------------ -------- ------------
Net increase (decrease) 32,082 $ 326,166 21,098 $ 175,844
======== ============ ======== ============
(1) September 28, 2007 (commencement of sale) through November 30, 2007 for
the B Class and R Class.
(2) Net of redemption fees of $1,726.
(3) Net of redemption fees of $540.
(4) Net of redemption fees of $20.
(5) Net of redemption fees of $134.
(6) Net of redemption fees of $30.
(7) Net of redemption fees of $14.
- ------
48
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
Year ended Period ended Year ended
November 30, 2007 November 30, 2006(1) March 31, 2006
Shares Amount Shares Amount Shares Amount
International Value
INVESTOR
CLASS/SHARES
AUTHORIZED 55,000 55,000 N/A
======= ======= ========
Sold 248 $ 2,766 30 $ 413
Issued in
reinvestment of
distributions 16 157 -- --
Redeemed (29) (314)(2) -- --
------- ---------- ------- ----------
235 2,609 30 413
------- ---------- ------- ----------
INSTITUTIONAL
CLASS/SHARES
AUTHORIZED 55,000 55,000 N/A
======= ======= ========
Sold 159 1,650 2,474 31,954
Issued in
reinvestment of
distributions 1,355 12,912 -- --
Redeemed (52) (550)(3) -- --
------- ---------- ------- ----------
1,462 14,012 2,474 31,954
------- ---------- ------- ----------
A CLASS/SHARES
AUTHORIZED 55,000 55,000 179,529
======= ======= ========
Sold 737 7,785 242 3,170 474 $ 5,502
Issued in
reinvestment of
distributions 697 6,655 -- -- 565 6,637
Redeemed (682) (7,201) (3,158) (40,813) (15,369) (188,758)
------- ---------- ------- ---------- -------- ----------
752 7,239 (2,916) (37,643) (14,330) (176,619)
------- ---------- ------- ---------- -------- ----------
B CLASS/SHARES
AUTHORIZED 5,000 5,000 90,471
======= ======= ========
Sold 55 547 30 385 54 604
Issued in
reinvestment of
distributions 161 1,506 -- -- 9 108
Redeemed (158) (1,631) (117) (1,501) (150) (1,701)
------- ---------- ------- ---------- -------- ----------
58 422 (87) (1,116) (87) (989)
------- ---------- ------- ---------- -------- ----------
C CLASS/SHARES
AUTHORIZED 50,000 50,000 N/A
======= ======= ========
Sold 19 199 3 38
Issued in
reinvestment of
distributions 2 15 -- --
Redeemed (4) (38) -- --
------- ---------- ------- ----------
17 176 3 38
------- ---------- ------- ----------
R CLASS/SHARES
AUTHORIZED 5,000 5,000 N/A
======= ======= ========
Sold 18 188 2 25
Issued in
reinvestment of
distributions 1 10 -- --
Redeemed (3) (37) -- --
------- ---------- ------- ----------
16 161 2 25
------- ---------- ------- ---------- -------- ----------
Net increase
(decrease) 2,540 $24,619 (494) $ (6,329) (14,417) $(177,608)
======= ========== ======= ========== ======== ==========
(1) April 3, 2006 (commencement of sale) through November 30, 2006 for
Investor Class, Institutional Class, C Class and R Class. April 1, 2006
through November 30, 2006 for A Class and B Class. International Value's
fiscal year end was changed from March 31 to November 30, resulting in an
eight-month annual reporting period (see Note 9).
(2) Net of redemption fees of $3.
(3) Net of redemption fees of $1.
- ------
49
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
5. SECURITIES LENDING
As of November 30, 2007, securities in International Growth, Global Growth and
Emerging Markets valued at $128,531, $28,070 and $57,610, respectively, were
on loan through the lending agent, JPMCB, to certain approved borrowers. JPMCB
receives and maintains collateral in the form of cash and/or acceptable
securities as approved by ACIM or ACGIM. Cash collateral is invested in
authorized investments by the lending agent in a pooled account. The value of
cash collateral received at period end is disclosed in the Statement of Assets
and Liabilities and investments made with the cash by the lending agent are
listed in the Schedule of Investments. Any deficiencies or excess of
collateral must be delivered or transferred by the member firms no later than
the close of business on the next business day. The total value of all
collateral received, at this date, was $132,398, $28,835 and $58,162,
respectively. International Growth, Global Growth and Emerging Markets' risks
in securities lending are that the borrower may not provide additional
collateral when required or return the securities when due. If the borrower
defaults, receipt of the collateral by International Growth, Global Growth and
Emerging Markets may be delayed or limited.
6. BANK LINE OF CREDIT
International Growth, Global Growth and Emerging Markets, along with certain
other funds managed by ACIM or ACGIM, have a $500 million unsecured bank line
of credit agreement (the agreement) with JPMCB. International Value entered
into the agreement on December 13, 2006. The funds may borrow money for
temporary or emergency purposes to fund shareholder redemptions. Borrowings
under the agreement bear interest at the Federal Funds rate plus 0.40%. The
funds did not borrow from the line during the year ended November 30, 2007.
Effective December 12, 2007, the funds, along with certain other funds managed
by ACIM or ACGIM, have a $500 million unsecured bank line of credit agreement
with Bank of America, N.A. (the Bank of America agreement). The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the Bank of America agreement bear interest at
the Federal Funds rate plus 0.40%.
7. RISK FACTORS
There are certain risks involved in investing in foreign securities. These
risks include those resulting from future adverse political, social, and
economic developments, fluctuations in currency exchange rates, the possible
imposition of exchange controls, and other foreign laws or restrictions.
Investing in emerging markets may accentuate these risks.
Emerging Market's performance may be affected by investments in initial public
offerings (IPOs). The impact of IPOs on a fund's performance depends on the
strength of the IPO market and the size of the fund. IPOs may have less impact
on a fund's performance as its assets grow.
8. FEDERAL TAX INFORMATION
On December 18, 2007, International Growth, Emerging Markets and International
Value declared and paid the following per-share distributions from net
investment income to shareholders of record on December 17, 2007:
Investor Institutional A B C R
International
Growth $0.0843 $0.1124 $0.0492 -- -- $0.0141
Emerging Markets $0.1027 $0.1265 $0.0729 -- -- $0.0432
International
Value $0.2361 $0.2585 $0.2082 $0.1244 $0.1244 $0.1803
On December 18, 2007, International Growth, Global Growth and International
Value declared and paid a per-share distribution from net realized gains to
shareholders of record on December 17, 2007 of $0.7403, $1.9888 and $0.5580,
respectively, for each class of the funds.
On December 18, 2007, Emerging Markets declared and paid a per-share
distribution from net realized gains to shareholders of record on December 17,
2007 of $1.0786 for the Investor Class, Institutional Class, A Class and R
Class and $1.0623 for the B Class and C Class.
- ------
50
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
The tax character of distributions paid during the years ended November 30,
2007 and November 30, 2006 for International Growth, Global Growth and
Emerging Markets were as follows:
International Growth Global Growth Emerging Markets
2007 2006 2007 2006 2007 2006
DISTRIBUTIONS PAID FROM
Ordinary income $19,973 $49,996 $1,986 $2,818 $64,774 $38,186
Long-term capital gain -- -- $9,099 -- $33,788 $22,096
The tax character of distributions paid during the year ended November 30,
2007, the eight months ended November 30, 2006 and the year ended March 31,
2006 for International Value were as follows:
International Value
Nov. 30, 2007 Nov. 30, 2006(1) March 31, 2006
DISTRIBUTIONS PAID FROM
Ordinary income $3,184 -- $2,768
Long-term capital gain $18,548 -- $4,008
(1) April 1, 2006 through November 30, 2006, International Value's fiscal year
end was changed from March 31 to November 30, resulting in an eight-month
annual reporting period.
The book-basis 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 realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.
As of November 30, 2007, the components of distributable earnings on a
tax-basis and the federal tax cost of investments were as follows:
International Global Emerging International
Growth Growth Markets Value
Federal tax cost of
investments $2,065,967 $416,129 $904,079 $49,988
============== ========= ========= ==============
Gross tax appreciation
of investments $719,073 $121,250 $349,266 $28,320
Gross tax depreciation
of investments (14,202) (1,599) (12,648) (1,403)
-------------- --------- --------- --------------
Net tax appreciation
(depreciation) of
investments $704,871 $119,651 $336,618 $26,917
============== ========= ========= ==============
Net tax appreciation
(depreciation) on
translation of assets
and liabilities in
foreign currencies $(1,196) $(38) $(3,588) $4
-------------- --------- --------- --------------
Net tax appreciation
(depreciation) $703,675 $119,613 $333,030 $26,921
============== ========= ========= ==============
Undistributed ordinary
income $18,363 $24,420 $63,284 $2,487
Accumulated long-term
gains $139,372 $60,334 $70,118 $4,542
Currency loss deferrals $(104) $(6) $(75) $(12)
The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales, return of capital dividends and on investments in
passive foreign investment companies.
The currency loss deferrals listed above represent net foreign currency losses
incurred in the one-month period ended November 30, 2007. The funds have
elected to treat such losses as having been incurred in the following fiscal
year for federal income tax purposes.
- ------
51
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
9. REORGANIZATION PLAN
As of the close of business on March 31, 2006, International Value acquired
all of the net assets of the Mason Street International Equity Fund
(International Equity), one fund in a series issued by Mason Street Funds,
Inc., pursuant to a plan of reorganization approved by the acquired fund's
shareholders on March 15, 2006. International Value is maintaining the
financial statements and performance history of International Equity.
International Value's fiscal year end changed from March 31 to November 30.
Prior to the reorganization, International Equity had A Class and B Class
shares. At the close of business and as a result of the reorganization, A
Class shares and B Class shares of the acquired fund were converted to A Class
shares and B Class shares, respectively, of the surviving fund.
A Class and B Class net assets of International Equity before the
reorganization were $54,617 and $4,917, respectively. Immediately after the
reorganization, A Class and B Class net assets of International Value were
$54,617 and $4,917, respectively.
10. CORPORATE EVENT
On July 27, 2007, the A Class (old) shareholders of Global Growth approved a
reclassification of A Class (old) shares into Advisor Class shares. The change
was approved by the Board of Directors on November 29, 2006 and March 7, 2007.
The reclassification was effective on September 4, 2007. Subsequent to the
reclassification, the Advisor Class was renamed A Class.
On September 25, 2007, the A Class shareholders of International Growth
approved a reclassification of A Class shares into Advisor Class shares. The
change was approved by the Board of Directors on November 29, 2006 and March
7, 2007. The reclassification was effective December 3, 2007. Subsequent to
the reclassification, the Advisor Class was renamed A Class.
11. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.
The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.
- ------
52
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
12. OTHER TAX INFORMATION (UNAUDITED) ($ IN FULL)
The following information is provided pursuant to provisions of the Internal
Revenue Code.
The funds hereby designate up to the maximum amount allowable as qualified
dividend income for the fiscal year ended November 30, 2007.
For corporate taxpayers, the following ordinary income distributions paid
during the fiscal year ended November 30, 2007, qualify for the corporate
dividends received deduction.
International Growth Global Growth Emerging Markets International Value
$176,082 $539,954 -- --
The funds hereby designate capital gain distributions for the fiscal year
ended November 30, 2007, as follows:
International Growth Global Growth Emerging Markets International Value
-- $9,098,675 $33,788,249 $18,548,406
The funds hereby designate qualified short-term capital gains distributions
for purposes of Internal Revenue Code Section 871 for the fiscal year ended
November 30, 2007, as follows:
International Growth Global Growth Emerging Markets International Value
-- $273,868 $56,467,424 $1,219,621
As of November 30, 2007, the funds designate the following as a foreign tax
credit, which represents taxes paid on income derived from sources within
foreign countries or possession of the United States.
International Growth Global Growth Emerging Markets International Value
$1,492,534 $92,186 $828,471 $168,931
- ------
53
FINANCIAL HIGHLIGHTS
International Growth
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning
of Period $12.17 $9.75 $8.79 $7.54 $6.69
-------- -------- -------- -------- --------
Income From
Investment
Operations
Net
Investment
Income
(Loss)(1) 0.13 0.06 0.11 0.05 0.06
Net Realized
and
Unrealized
Gain (Loss) 2.66 2.54 0.94 1.26 0.85
-------- -------- -------- -------- --------
Total From
Investment
Operations 2.79 2.60 1.05 1.31 0.91
-------- -------- -------- -------- --------
Distributions
From Net
Investment
Income (0.09) (0.18) (0.09) (0.06) (0.06)
-------- -------- -------- -------- --------
Net Asset Value,
End
of Period $14.87 $12.17 $9.75 $8.79 $7.54
========- ======== ======== ======== ========
TOTAL RETURN(2) 23.09% 27.03% 12.09% 17.45% 13.70%
RATIOS/SUPPLEMENTAL DATA
Ratio of
Operating
Expenses to
Average Net Assets 1.27% 1.26% 1.23% 1.26% 1.28%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets 0.94% 0.52% 1.22% 0.57% 0.84%
Portfolio
Turnover Rate 133% 95% 89% 118% 169%
Net Assets, End
of Period (in
thousands) $2,267,093 $2,352,967 $2,249,430 $2,395,249 $2,502,831
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
54
International Growth
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $12.20 $9.78 $8.82 $7.56 $6.71
-------- -------- -------- -------- --------
Income From
Investment Operations
Net Investment
Income (Loss)(1) 0.17 0.07 0.13 0.06 0.07
Net Realized and
Unrealized Gain (Loss) 2.66 2.55 0.94 1.27 0.85
-------- -------- -------- -------- --------
Total From
Investment Operations 2.83 2.62 1.07 1.33 0.92
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income (0.12) (0.20) (0.11) (0.07) (0.07)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period $14.91 $12.20 $9.78 $8.82 $7.56
======== ======== ======== ======== ========
TOTAL RETURN(2) 23.36% 27.19% 12.28% 17.78% 13.89%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 1.07% 1.06% 1.03% 1.06% 1.08%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 1.14% 0.72% 1.42% 0.77% 1.04%
Portfolio Turnover Rate 133% 95% 89% 118% 169%
Net Assets, End of Period
(in thousands) $80,452 $125,814 $247,077 $283,330 $301,854
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
55
International Growth
Advisor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $12.12 $9.72 $8.76 $7.52 $6.66
-------- -------- -------- -------- --------
Income From
Investment Operations
Net Investment
Income (Loss)(1) 0.08 0.03 0.09 0.03 0.03
Net Realized and
Unrealized Gain (Loss) 2.68 2.52 0.94 1.25 0.87
-------- -------- -------- -------- --------
Total From
Investment Operations 2.76 2.55 1.03 1.28 0.90
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income (0.06) (0.15) (0.07) (0.04) (0.04)
-------- -------- -------- -------- --------
Net Asset Value,
End of Period $14.82 $12.12 $9.72 $8.76 $7.52
======== ======== ======== ======== ========
TOTAL RETURN(2) 22.87% 26.57% 11.85% 17.07% 13.62%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 1.52% 1.51% 1.48% 1.51% 1.53%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.69% 0.27% 0.97% 0.32% 0.59%
Portfolio Turnover Rate 133% 95% 89% 118% 169%
Net Assets, End of Period
(in thousands) $241,579 $336,497 $259,651 $275,195 $239,256
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
56
International Growth
A Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value,
Beginning of Period $12.14 $9.73 $8.77 $7.53 $6.10
-------- -------- -------- -------- --------
Income From Investment
Operations
Net Investment
Income (Loss)(2) 0.10 0.04 0.09 0.03 (0.02)
Net Realized and
Unrealized Gain
(Loss) 2.66 2.52 0.94 1.25 1.45
-------- -------- -------- -------- --------
Total From
Investment Operations 2.76 2.56 1.03 1.28 1.43
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income (0.06) (0.15) (0.07) (0.04) --
-------- -------- -------- -------- --------
Net Asset Value,
End of Period $14.84 $12.14 $9.73 $8.77 $7.53
======== ======== ======== ======== ========
TOTAL RETURN(3) 22.84% 26.65% 11.84% 17.10% 23.44%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average Net
Assets 1.52% 1.51% 1.48% 1.51% 1.53%(4)
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.69% 0.27% 0.97% 0.32% (0.40)%(4)
Portfolio Turnover Rate 133% 95% 89% 118% 169%(5)
Net Assets, End of Period
(in thousands) $34,139 $28,367 $25,193 $14,170 $7,395
(1) January 31, 2003 (commencement of sale) through November 30, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(4) Annualized.
(5) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2003.
See Notes to Financial Statements.
- ------
57
International Growth
B Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value,
Beginning of Period $12.04 $9.65 $8.70 $7.48 $6.10
------- ------- ------- ------- -------
Income From
Investment Operations
Net Investment
Income (Loss)(2) --(3) (0.05) 0.02 (0.03) (0.03)
Net Realized and
Unrealized Gain (Loss) 2.64 2.52 0.93 1.25 1.41
------- ------- ------- ------- -------
Total From
Investment Operations 2.64 2.47 0.95 1.22 1.38
------- ------- ------- ------- -------
Distributions
From Net
Investment Income -- (0.08) --(3) -- --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $14.68 $12.04 $9.65 $8.70 $7.48
======= ======= ======= ======= =======
TOTAL RETURN(4) 21.93% 25.71% 10.97% 16.31% 22.62%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 2.27% 2.26% 2.23% 2.26% 2.28%(5)
Ratio of Net Investment
Income (Loss) to Average Net
Assets (0.06)% (0.48)% 0.22% (0.43)% (0.51)%(5)
Portfolio Turnover Rate 133% 95% 89% 118% 169%(6)
Net Assets, End of Period (in
thousands) $3,320 $2,699 $1,676 $1,107 $513
(1) January 31, 2003 (commencement of sale) through November 30, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(5) Annualized.
(6) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2003.
See Notes to Financial Statements.
- ------
58
International Growth
C Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $11.97 $9.60 $8.66 $7.45 $6.60
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment
Income (Loss)(1) --(2) (0.05) 0.02 (0.03) (0.01)
------- ------- ------- ------- -------
Net Realized and
Unrealized Gain (Loss) 2.63 2.50 0.92 1.24 0.86
------- ------- ------- ------- -------
Total From
Investment Operations 2.63 2.45 0.94 1.21 0.85
Distributions
From Net Investment Income -- (0.08) --(2) -- --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $14.60 $11.97 $9.60 $8.66 $7.45
======= ======= ======= ======= =======
TOTAL RETURN(3) 21.97% 25.64% 10.91% 16.24% 12.88%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 2.27% 2.26% 2.23% 2.26% 2.28%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.06)% (0.48)% 0.22% (0.43)% (0.16)%
Portfolio Turnover Rate 133% 95% 89% 118% 169%
Net Assets, End of Period
(in thousands) $7,318 $6,250 $5,246 $5,070 $1,933
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
59
International Growth
R Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value, Beginning
of Period $12.12 $9.71 $8.75 $7.53 $7.02
------- ------- ------- ------- -------
Income From Investment
Operations
Net Investment
Income (Loss)(2) 0.07 0.01 0.07 0.02 (0.01)
Net Realized and
Unrealized Gain (Loss) 2.65 2.53 0.94 1.25 0.52
------- ------- ------- ------- -------
Total From
Investment Operations 2.72 2.54 1.01 1.27 0.51
------- ------- ------- ------- -------
Distributions
From Net
Investment Income (0.03) (0.13) (0.05) (0.05) --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $14.81 $12.12 $9.71 $8.75 $7.53
======= ======= ======= ======= =======
TOTAL RETURN(3) 22.48% 26.39% 11.58% 16.92% 7.26%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 1.77% 1.76% 1.69%(4) 1.76% 1.78%(5)
Ratio of Net Investment
Income (Loss) to Average Net
Assets 0.44% 0.02% 0.76%(4) 0.07% (0.74)%(5)
Portfolio Turnover Rate 133% 95% 89% 118% 169%(6)
Net Assets, End of Period
(in thousands) $4,042 $2,106 $1,809 $376 $3
(1) August 29, 2003 (commencement of sale) through November 30, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) During the year ended November 30, 2005, the class received a partial
reimbursement of its distribution and service fees. Had fees not been
reimbursed, the ratio of operating expenses to average net assets and the
ratio of net investment income (loss) to average net assets would have been
1.73% and 0.72%, respectively.
(5) Annualized.
(6) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2003.
See Notes to Financial Statements.
- ------
60
Global Growth
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $10.52 $8.88 $7.49 $6.48 $5.39
-------- -------- -------- -------- --------
Income From Investment
Operations
Net Investment
Income (Loss)(1) 0.03 --(2) --(2) (0.01) --(2)
Net Realized and
Unrealized Gain (Loss) 2.41 1.70 1.41 1.02 1.09
-------- -------- -------- -------- --------
Total From
Investment Operations 2.44 1.70 1.41 1.01 1.09
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income (0.05) (0.06) (0.02) -- --
From Net
Realized Gains (0.22) -- -- -- --
-------- -------- -------- -------- --------
Total Distributions (0.27) (0.06) (0.02) -- --
-------- -------- -------- -------- --------
Net Asset Value,
End of Period $12.69 $10.52 $8.88 $7.49 $6.48
======== ======== ======== ======== ========
TOTAL RETURN(3) 23.73% 19.30% 18.87% 15.59% 20.22%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 1.30% 1.31% 1.30% 1.30% 1.31%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.29% (0.05)% (0.01)% (0.12)% 0.00%
Portfolio Turnover Rate 108% 95% 36% 79% 152%
Net Assets, End of Period
(in thousands) $481,553 $418,185 $378,976 $299,807 $250,306
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
61
Global Growth
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning of
Period $10.60 $8.95 $7.55 $6.52 $5.41
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment
Income (Loss)(1) 0.06 0.01 0.01 --(2) 0.01
Net Realized and
Unrealized Gain (Loss) 2.42 1.72 1.43 1.03 1.10
------- ------- ------- ------- -------
Total From
Investment Operations 2.48 1.73 1.44 1.03 1.11
------- ------- ------- ------- -------
Distributions
From Net Investment Income (0.07) (0.08) (0.04) -- --
From Net Realized Gains (0.22) -- -- -- --
------- ------- ------- ------- -------
Total Distributions (0.29) (0.08) (0.04) -- --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $12.79 $10.60 $8.95 $7.55 $6.52
======= ======= ======= ======= =======
TOTAL RETURN(3) 23.99% 19.50% 19.22% 15.80% 20.52%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.10% 1.11% 1.10% 1.10% 1.11%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.49% 0.15% 0.19% 0.08% 0.20%
Portfolio Turnover Rate 108% 95% 36% 79% 152%
Net Assets, End of Period (in
thousands) $16,298 $8,540 $8,669 $6,774 $7,901
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
62
Global Growth
A Class(1)
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $10.41 $8.79 $7.41 $6.43 $5.36
------- ------- ------- ------- -------
Income From
Investment Operations
Net Investment
Income (Loss)(2) 0.01 (0.03) (0.02) (0.02) (0.02)
Net Realized and
Unrealized Gain (Loss) 2.38 1.69 1.40 1.00 1.09
------- ------- ------- ------- -------
Total From
Investment Operations 2.39 1.66 1.38 0.98 1.07
------- ------- ------- ------- -------
Distributions
From Net Investment Income (0.02) (0.04) -- -- --
From Net Realized Gains (0.22) -- -- -- --
------- ------- ------- ------- -------
Total Distributions (0.24) (0.04) -- -- --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $12.56 $10.41 $8.79 $7.41 $6.43
======= ======= ======= ======= =======
TOTAL RETURN(3) 23.47% 18.97% 18.62% 15.24% 19.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.55% 1.56% 1.55% 1.55% 1.56%
Ratio of Net Investment Income
(Loss) to Average
Net Assets 0.04% (0.30)% (0.26)% (0.37)% (0.25)%
Portfolio Turnover Rate 108% 95% 36% 79% 152%
Net Assets, End of Period (in
thousands) $18,402 $5,571 $3,664 $2,475 $1,044
(1) Prior to September 4, 2007, the A Class was referred to as the Advisor
Class.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
63
Global Growth
B Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006
PER-SHARE DATA
Net Asset Value, Beginning of Period $10.42 $9.02
------- -------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.08) (0.11)
Net Realized and Unrealized Gain (Loss) 2.38 1.57
------- -------
Total From Investment Operations 2.30 1.46
------- -------
Distributions
From Net Investment Income -- (0.06)
From Net Realized Gains (0.22) --
------- -------
Total Distributions (0.22) (0.06)
------- -------
Net Asset Value, End of Period $12.50 $10.42
======= =======
TOTAL RETURN(2) 22.51% 16.29%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 2.30% 2.31%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.71)% (1.05)%
Portfolio Turnover Rate 108% 95%
Net Assets, End of Period (in thousands) $639 $352
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
64
Global Growth
C Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $10.14 $8.59 $7.29 $6.37 $5.35
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment
Income (Loss)(1) (0.07) (0.10) (0.08) (0.08) (0.05)
Net Realized and
Unrealized Gain (Loss) 2.31 1.65 1.38 1.00 1.07
------- ------- ------- ------- -------
Total From
Investment Operations 2.24 1.55 1.30 0.92 1.02
------- ------- ------- ------- -------
Distributions
From Net Realized Gains (0.22) -- -- -- --
------- ------- ------- ------- -------
Net Asset Value,
End of Period $12.16 $10.14 $8.59 $7.29 $6.37
======= ======= ======= ======= =======
TOTAL RETURN(2) 22.54% 18.04% 17.83% 14.44% 19.07%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 2.30% 2.31% 2.30% 2.30% 2.31%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.71)% (1.05)% (1.01)% (1.12)% (1.00)%
Portfolio Turnover Rate 108% 95% 36% 79% 152%
Net Assets, End of Period
(in thousands) $2,625 $1,050 $454 $184 $56
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
65
Global Growth
R Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $10.47 $8.86 $8.37
-------- -------- --------
Income From Investment Operations
Net Investment Income (Loss)(2) 0.02 (0.05) (0.02)
Net Realized and Unrealized Gain (Loss) 2.35 1.71 0.51
-------- -------- --------
Total From Investment Operations 2.37 1.66 0.49
-------- -------- --------
Distributions
From Net Investment Income -- (0.05) --
From Net Realized Gains (0.22) -- --
-------- -------- --------
Total Distributions (0.22) (0.05) --
-------- -------- --------
Net Asset Value, End of Period $12.62 $10.47 $8.86
======== ======== ========
TOTAL RETURN(3) 23.08% 18.79% 5.85%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets 1.80% 1.81% 1.80%(4)
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.21)% (0.55)% (0.71)%(4)
Portfolio Turnover Rate 108% 95% 36%(5)
Net Assets, End of Period (in thousands) $202 $32 $26
(1) July 29, 2005 (commencement of sale) through November 30, 2005.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) Annualized.
(5) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2005.
See Notes to Financial Statements.
- ------
66
Emerging Markets
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $10.06 $8.25 $6.28 $5.28 $3.61
-------- -------- -------- -------- --------
Income From Investment
Operations
Net Investment
Income (Loss)(1) 0.10 0.11 0.01 (0.01) --(2)
Net Realized and
Unrealized Gain
(Loss) 4.06 3.11 2.05 1.00 1.66
-------- -------- -------- -------- --------
Total From
Investment
Operations 4.16 3.22 2.06 0.99 1.66
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income (0.13) (0.05) -- -- --
From Net
Realized Gains (1.42) (1.37) (0.09) -- --
-------- -------- -------- -------- --------
Total Distributions (1.55) (1.42) (0.09) -- --
-------- -------- -------- -------- --------
Redemption Fees(1) 0.02 0.01 --(2) 0.01 0.01
-------- -------- -------- -------- --------
Net Asset Value,
End of Period $12.69 $10.06 $8.25 $6.28 $5.28
======== ======== ======== ======== ========
TOTAL RETURN(3) 48.81% 46.10% 33.10% 18.94% 46.26%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average Net
Assets 1.66% 1.80% 1.94% 2.00% 2.01%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets 0.96% 1.31% 0.17% (0.22)% 0.03%
Portfolio Turnover Rate 85% 115% 153% 208% 286%
Net Assets, End of Period
(in thousands) $1,070,138 $523,813 $220,720 $135,355 $103,737
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
67
Emerging Markets
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $10.21 $8.36 $6.35 $5.33 $3.64
------- ------- ------- ------- -------
Income From
Investment Operations
Net Investment
Income (Loss)(1) 0.12 0.12 0.03 --(2) 0.01
Net Realized and
Unrealized Gain (Loss) 4.14 3.16 2.07 1.01 1.67
------- ------- ------- ------- -------
Total From
Investment Operations 4.26 3.28 2.10 1.01 1.68
------- ------- ------- ------- -------
Distributions
From Net
Investment Income (0.15) (0.07) -- -- --
From Net Realized Gains (1.42) (1.37) (0.09) -- --
------- ------- ------- ------- -------
Total Distributions (1.57) (1.44) (0.09) -- --
------- ------- ------- ------- -------
Redemption Fees(1) 0.02 0.01 --(2) 0.01 0.01
------- ------- ------- ------- -------
Net Asset Value, End of Period $12.92 $10.21 $8.36 $6.35 $5.33
======= ======= ======= ======= =======
TOTAL RETURN(3) 49.21% 46.31% 33.37% 19.14% 46.43%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating
Expenses to Average
Net Assets 1.46% 1.60% 1.74% 1.80% 1.81%
Ratio of Net Investment Income
(Loss) to Average Net Assets 1.16% 1.51% 0.37% (0.02)% 0.23%
Portfolio Turnover Rate 85% 115% 153% 208% 286%
Net Assets, End of Period (in
thousands) $74,897 $85,886 $113,765 $92,673 $63,242
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
68
Emerging Markets
A Class(1)
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $9.85 $8.11 $6.19 $5.22 $3.58
------- ------- ------- ------- -------
Income From
Investment Operations
Net Investment
Income (Loss)(2) 0.07 0.11 (0.01) (0.03) --(3)
Net Realized and
Unrealized Gain (Loss) 3.99 3.02 2.02 0.99 1.63
------- ------- ------- ------- -------
Total From
Investment Operations 4.06 3.13 2.01 0.96 1.63
------- ------- ------- ------- -------
Distributions
From Net Investment Income (0.11) (0.03) -- -- --
From Net Realized Gains (1.42) (1.37) (0.09) -- --
------- ------- ------- ------- -------
Total Distributions (1.53) (1.40) (0.09) -- --
------- ------- ------- ------- -------
Redemption Fees(2) 0.02 0.01 --(3) 0.01 0.01
------- ------- ------- ------- -------
Net Asset Value,
End of Period $12.40 $9.85 $8.11 $6.19 $5.22
======= ======= ======= ======= =======
TOTAL RETURN(4) 48.61% 45.59% 32.77% 18.58% 45.81%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.91% 2.05% 2.19% 2.25% 2.26%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.71% 1.06% (0.08)% (0.47)% (0.22)%
Portfolio Turnover Rate 85% 115% 153% 208% 286%
Net Assets, End of Period (in
thousands) $36,795 $9,905 $1,773 $1,178 $597
(1) Prior to September 4, 2007, the A Class was referred to as the Advisor
Class.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
69
Emerging Markets
B Class
For a Share Outstanding Throughout the Period Indicated
2007(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $12.15
--------
Income From Investment Operations
Net Investment Income (Loss)(2) (0.03)
Net Realized and Unrealized Gain (Loss) 0.53
--------
Total From Investment Operations 0.50
--------
Redemption Fees(2) 0.02
--------
Net Asset Value, End of Period $12.67
========
TOTAL RETURN(3) 4.28%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 2.58%(4)
Ratio of Net Investment Income (Loss) to Average Net Assets (1.30)%(4)
Portfolio Turnover Rate 85%(5)
Net Assets, End of Period (in thousands) $54
(1) September 28, 2007 (commencement of sale) through November 30, 2007.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(4) Annualized.
(5) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2007.
See Notes to Financial Statements.
- ------
70
Emerging Markets
C Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $9.64 $7.95 $6.12 $5.19 $3.58
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment
Income (Loss)(1) (0.01) 0.03 (0.05) (0.07) (0.04)
Net Realized and
Unrealized Gain (Loss) 3.90 2.99 1.97 0.99 1.64
------- ------- ------- ------- -------
Total From
Investment Operations 3.89 3.02 1.92 0.92 1.60
------- ------- ------- ------- -------
Distributions
From Net Investment Income (0.03) -- -- -- --
From Net Realized Gains (1.42) (1.34) (0.09) -- --
------- ------- ------- ------- -------
Total Distributions (1.45) (1.34) (0.09) -- --
------- ------- ------- ------- -------
Redemption Fees(1) 0.02 0.01 --(2) 0.01 0.01
------- ------- ------- ------- -------
Net Asset Value,
End of Period $12.10 $9.64 $7.95 $6.12 $5.19
======= ======= ======= ======= =======
TOTAL RETURN(3) 47.39% 44.59% 31.67% 17.92% 44.97%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 2.66% 2.80% 2.94% 3.00% 3.01%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.04)% 0.31% (0.83)% (1.22)% (0.97)%
Portfolio Turnover Rate 85% 115% 153% 208% 286%
Net Assets, End of Period
(in thousands) $9,098 $2,581 $733 $521 $291
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three decimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
- ------
71
Emerging Markets
R Class
For a Share Outstanding Throughout the Period Indicated
2007(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $12.15
--------
Income From Investment Operations
Net Investment Income (Loss)(2) (0.01)
Net Realized and Unrealized Gain (Loss) 0.52
--------
Total From Investment Operations 0.51
--------
Redemption Fees(2) 0.02
--------
Net Asset Value, End of Period $12.68
========
TOTAL RETURN(3) 4.36%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 2.08%(4)
Ratio of Net Investment Income (Loss) to Average Net Assets (0.68)%(4)
Portfolio Turnover Rate 85%(5)
Net Assets, End of Period (in thousands) $27
(1) September 28, 2007 (commencement of sale) through November 30, 2007.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) Annualized.
(5) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2007.
See Notes to Financial Statements.
- ------
72
International Value
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $14.36 $12.85
-------- --------
Income From Investment Operations
Net Investment Income (Loss)(2) 0.22 0.15
Net Realized and Unrealized Gain (Loss) 2.09 1.36
-------- --------
Total From Investment Operations 2.31 1.51
-------- --------
Distributions
From Net Investment Income (0.47) --
From Net Realized Gains (4.72) --
-------- --------
Total Distributions (5.19) --
-------- --------
Net Asset Value, End of Period $11.48 $14.36
======== ========
TOTAL RETURN(3) 23.55% 11.75%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 1.30% 1.30%(4)
Ratio of Net Investment Income (Loss)
to Average Net Assets 1.96% 2.77%(4)(5)
Portfolio Turnover Rate 11% 17%
Net Assets, End of Period (in thousands) $3,044 $437
(1) April 3, 2006 (commencement of sale) through November 30, 2006.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) Annualized.
(5) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
73
International Value
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $14.38 $12.85
-------- --------
Income From Investment Operations
Net Investment Income (Loss)(2) 0.23 0.25
Net Realized and Unrealized Gain (Loss) 2.10 1.28
-------- --------
Total From Investment Operations 2.33 1.53
-------- --------
Distributions
From Net Investment Income (0.49) --
From Net Realized Gains (4.72) --
-------- --------
Total Distributions (5.21) --
-------- --------
Net Asset Value, End of Period $11.50 $14.38
======== ========
TOTAL RETURN(3) 23.77% 11.91%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 1.10% 1.10%(4)
Ratio of Net Investment Income (Loss)
to Average Net Assets 2.16% 2.97%(4)(5)
Portfolio Turnover Rate 11% 17%
Net Assets, End of Period (in thousands) $45,262 $35,574
(1) April 3, 2006 (commencement of sale) through November 30, 2006.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) Annualized.
(5) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
74
International Value
A Class
For a Share Outstanding Throughout the Years Ended November 30 (except as noted)
2007 2006(1) 2006 2005 2004 2003
PER-SHARE DATA
Net Asset
Value,
Beginning of
Period $14.35 $12.70 $10.91 $9.64 $6.22 $8.70
-------- -------- -------- -------- -------- --------
Income From
Investment
Operations
Net
Investment
Income
(Loss)(2) 0.20 0.25 0.18 0.13 0.10 0.07
Net Realized
and
Unrealized
Gain (Loss) 2.11 1.40 1.97 1.37 3.42 (2.51)
-------- -------- -------- -------- -------- --------
Total From
Investment
Operations 2.31 1.65 2.15 1.50 3.52 (2.44)
-------- -------- -------- -------- -------- --------
Distributions
From Net
Investment
Income (0.45) -- (0.15) (0.11) (0.10) (0.04)
From Net
Realized
Gains (4.72) -- (0.21) (0.12) -- --
-------- -------- -------- -------- -------- --------
Total
Distributions (5.17) -- (0.36) (0.23) (0.10) (0.04)
-------- -------- -------- -------- -------- --------
Net Asset
Value,
End of Period $11.49 $14.35 $12.70 $10.91 $9.64 $6.22
======== ======== ======== ======== ======== ========
TOTAL RETURN(3) 23.44% 12.99% 19.95% 15.58% 56.65% (28.10)%
RATIOS/SUPPLEMENTAL DATA
Ratio of
Operating
Expenses
to Average Net
Assets 1.40%(4) 1.40%(4)(5) 1.35% 1.41% 1.47% 1.65%(6)
Ratio of
Operating
Expenses
to Average Net
Assets
(Before Expense
Waiver) 1.55% 1.55%(5) 1.35% 1.41% 1.47% 1.66%
Ratio of Net
Investment
Income (Loss) to
Average
Net Assets 1.86%(4) 2.67%(4)(5)(7) 1.52% 1.28% 1.13% 0.89%(6)
Ratio of Net
Investment
Income (Loss)
to Average Net
Assets
(Before Expense
Waiver) 1.71% 2.52%(5)(7) 1.52% 1.28% 1.13% 0.90%
Portfolio
Turnover Rate 11% 17% 7% 18% 10% 18%
Net Assets, End
of Period
(in thousands) $24,558 $19,890 $54,617 $203,215 $174,387 $105,862
(1) April 1, 2006 through November 30, 2006. The fund's fiscal year end was
changed from March 31 to November 30, resulting in an eight-month annual
reporting period. For the years before November 30, 2006, the fund's fiscal
year end was March 31.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(4) During the periods ended November 30, 2007 and November 30, 2006, the
distributor voluntarily waived a portion of its distribution and service fees.
(5) Annualized.
(6) The investment advisor voluntarily agreed to waive fees and absorb certain
operating expenses.
(7) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
75
International Value
B Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006(1) 2006 2005 2004 2003
PER-SHARE DATA
Net Asset
Value,
Beginning of
Period $14.08 $12.51 $10.75 $9.52 $6.14 $8.61
-------- -------- -------- -------- --------- --------
Income From
Investment
Operations
Net
Investment
Income
(Loss)(2) 0.12 0.17 0.10 0.06 0.04 0.01
Net Realized
and
Unrealized
Gain (Loss) 2.05 1.40 1.93 1.34 3.39 (2.48)
-------- -------- -------- -------- --------- --------
Total From
Investment
Operations 2.17 1.57 2.03 1.40 3.43 (2.47)
-------- -------- -------- -------- --------- --------
Distributions
From Net
Investment
Income (0.37) -- (0.06) (0.05) (0.05) --
From Net
Realized
Gains (4.72) -- (0.21) (0.12) -- --
-------- -------- -------- -------- --------- --------
Total
Distributions (5.09) -- (0.27) (0.17) (0.05) --
-------- -------- -------- -------- --------- --------
Net Asset
Value,
End of Period $11.16 $14.08 $12.51 $10.75 $9.52 $6.14
======== ======== ======== ======== ========- ========
TOTAL RETURN(3) 22.51% 12.55% 19.07% 14.69% 55.86% (28.69)%
RATIOS/SUPPLEMENTAL DATA
Ratio of
Operating
Expenses
to Average Net
Assets 2.09%(4) 2.09%(4)(5) 2.08% 2.09% 2.11% 2.30%(6)
Ratio of
Operating
Expenses
to Average Net
Assets
(Before Expense
Waiver) 2.30% 2.30%(5) 2.08% 2.09% 2.11% 2.31%
Ratio of Net
Investment
Income (Loss)
to Average Net
Assets 1.17%(4) 1.98%(4)(5)(7) 0.90% 0.61% 0.52% 0.10%(6)
Ratio of Net
Investment
Income (Loss)
to Average Net
Assets
(Before Expense
Waiver) 0.96% 1.77%(5)(7) 0.90% 0.61% 0.52% 0.09%
Portfolio
Turnover Rate 11% 17% 7% 18% 10% 18%
Net Assets, End
of Period
(in thousands) $4,059 $4,313 $4,917 $5,165 $4,491 $3,011
(1) April 1, 2006 through November 30, 2006. The fund's fiscal year end was
changed from March 31 to November 30, resulting in an eight-month annual
reporting period. For the years before November 30, 2006, the fund's fiscal
year end was March 31.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(4) During the periods ended November 30, 2007 and November 30, 2006, the
distributor voluntarily waived a portion of its distribution and service fees.
(5) Annualized.
(6) The investment advisor voluntarily agreed to waive fees and absorb certain
operating expenses.
(7) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
76
International Value
C Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $14.27 $12.85
-------- --------
Income From Investment Operations
Net Investment Income (Loss)(2) 0.12 0.14
Net Realized and Unrealized Gain (Loss) 2.07 1.28
-------- --------
Total From Investment Operations 2.19 1.42
-------- --------
Distributions
From Net Investment Income (0.37) --
From Net Realized Gains (4.72) --
-------- --------
Total Distributions (5.09) --
-------- --------
Net Asset Value, End of Period $11.37 $14.27
======== ========
TOTAL RETURN(3) 22.28% 11.05%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 2.30% 2.30%(4)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.96% 1.77%(4)(5)
Portfolio Turnover Rate 11% 17%
Net Assets, End of Period (in thousands) $222 $41
(1) April 3, 2006 (commencement of sale) through November 30, 2006.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
Total returns for periods less than one year are not annualized. The total
return of the classes may not precisely reflect the class expense differences
because of the impact of calculating the net asset values to two decimal
places. If net asset values were calculated to three decimal places, the total
return differences would more closely reflect the class expense differences.
The calculation of net asset values to two decimal places is made in
accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
(4) Annualized.
(5) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
77
International Value
R Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $14.31 $12.85
-------- --------
Income From Investment Operations
Net Investment Income (Loss)(2) 0.11 0.19
Net Realized and Unrealized Gain (Loss) 2.14 1.27
-------- --------
Total From Investment Operations 2.25 1.46
-------- --------
Distributions
From Net Investment Income (0.42) --
From Net Realized Gains (4.72) --
-------- --------
Total Distributions (5.14) --
-------- --------
Net Asset Value, End of Period $11.42 $14.31
======== ========
TOTAL RETURN(3) 22.91% 11.36%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 1.80% 1.80%(4)
Ratio of Net Investment Income (Loss)
to Average Net Assets 1.46% 2.27%(4)(5)
Portfolio Turnover Rate 11% 17%
Net Assets, End of Period (in thousands) $202 $28
(1) April 3, 2006 (commencement of sale) through November 30, 2006.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(4) Annualized.
(5) Due to cyclical dividends and the eight-month period ended November 30,
2006, the annualized ratio of net investment income (loss) to average net
assets is higher than expected.
See Notes to Financial Statements.
- ------
78
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of International Growth Fund, Global
Growth Fund, Emerging Markets Fund, and International Value Fund (the
"Funds"), four of the mutual funds comprising American Century World Mutual
Funds, Inc., as of November 30, 2007, and the related statements of operations
for the year then ended, and the statements of changes in net assets and the
financial highlights for the periods presented (except as noted below). These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial statements and financial highlights for International Value Fund for
each of the periods ended March 31, 2006 and prior were audited by other
auditors whose report, dated May 1, 2006, expressed an unqualified opinion on
those financial statements and financial highlights.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
November 30, 2007, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of American Century World Mutual Funds, Inc. as of
November 30, 2007, the results of their operations for the year then ended,
and the changes in their net assets and the financial highlights for the
periods presented (except as noted above in reference to the report of other
auditors), in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 14, 2008
- ------
79
PROXY VOTING RESULTS
Special meetings of shareholders were held on July 27, 2007 and August 24,
2007, to vote on the following proposals. The proposals received the required
number of votes of the American Century World Mutual Funds, Inc. or the
applicable fund, depending on the proposal, and were adopted. A summary of
voting results is listed below each proposal.
PROPOSAL 1:
To elect nine Directors to the Board of Directors of American Century World
Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds
issued by American Century World Mutual Funds, Inc.).
James E. Stowers, Jr. For: 4,492,465,030
Withhold: 84,151,860
Abstain: 0
Broker Non-Vote: 0
Jonathan S. Thomas For: 4,496,101,969
Withhold: 80,514,921
Abstain: 0
Broker Non-Vote: 0
Thomas A. Brown For: 4,497,551,079
Withhold: 79,065,811
Abstain: 0
Broker Non-Vote: 0
Andrea C. Hall For: 4,497,808,657
Withhold: 78,808,233
Abstain: 0
Broker Non-Vote: 0
James A. Olson For: 4,497,582,906
Withhold: 79,033,984
Abstain: 0
Broker Non-Vote: 0
Donald H. Pratt For: 4,496,273,853
Withhold: 80,343,037
Abstain: 0
Broker Non-Vote: 0
Gale E. Sayers For: 4,496,553,346
Withhold: 80,063,544
Abstain: 0
Broker Non-Vote: 0
M. Jeannine Strandjord For: 4,494,879,736
Withhold: 81,737,154
Abstain: 0
Broker Non-Vote: 0
Timothy S. Webster For: 4,497,903,345
Withhold: 78,713,545
Abstain: 0
Broker Non-Vote: 0
- ------
80
PROPOSAL 2:
To approve a change in the fee structure of the Advisor Class. This proposal
was voted on by the Advisor Class shareholders of the following funds:
International Growth Global Growth Emerging Markets
For: 245,711,113 2,292,355 5,260,676
Against: 1,308,358 73,170 286,704
Abstain: 2,136,809 124,243 365,861
Broker Non-Vote: 26,235,847 376,929 1,766,698
PROPOSAL 3:
To approve the reclassification of the A Class shares of the fund, whereby all
of the A Class shares will be reclassified as Advisor Class shares of the
funds. This proposal was voted on by the A Class shareholders of the following
funds:
International Growth Global Growth
For: 16,241,902 4,145,193
Against: 963,656 64,926
Abstain: 1,099,165 147,213
Broker Non-Vote: 12,602,709 3,294,547
- ------
81
MANAGEMENT
The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Global Investment Management, Inc. (ACGIM) or American Century
Investment Management, Inc. (ACIM); the funds' principal underwriter, American
Century Investment Services, Inc. (ACIS); and the funds' transfer agent,
American Century Services, LLC (ACS).
The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACGIM, ACIM, ACIS, and ACS. The directors
serve in this capacity for seven registered investment companies in the
American Century family of funds.
All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies in the American Century family of funds
advised by ACIM, or ACGIM, a wholly owned subsidiary of ACIM, unless otherwise
noted. Only officers with policy-making functions are listed. No officer is
compensated for his or her service as an officer of the funds. The listed
officers are interested persons of the funds and are appointed or re-appointed
on an annual basis.
INTERESTED DIRECTORS
JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 105
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
- ------
82
INDEPENDENT DIRECTORS
THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust
DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and services
provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.
- ------
83
TIMOTHY S. WEBSTER, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); Founder and Principal,
Growth Consulting and Investments LLC (November 2007 to present); President
and Chief Executive Officer, American Italian Pasta Company (2001 to December
2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
OFFICERS
BARRY FINK, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1955
POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and
Executive Vice President, ACC (September 2007 to present); President, ACS LLC
(October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007);
Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as:
Director, ACC, ACS, ACIS and other ACC subsidiaries
MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS
CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to
present); Vice President, ACC (November 2005 to present); General Counsel, ACC
(March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS,
ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS
ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present) and Controller, various American Century funds (1997 to
September 2006)
JON ZINDEL, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS
The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.
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84
SHARE CLASS INFORMATION
Seven classes of shares are authorized for sale by International Growth:
Investor Class, Institutional Class, Advisor Class, A Class, B Class, C Class,
and R Class. Six classes of shares are authorized for sale by Global Growth,
Emerging Markets and International Value: Investor Class, Institutional Class,
A Class, B Class, C Class, and R Class. The total expense ratio of
Institutional Class shares is lower than that of Investor Class shares. The
total expense ratios of Advisor Class, A Class, B Class, C Class, and R Class
shares are higher than that of Investor Class shares. The Advisor Class is no
longer available effective December 3, 2007.
INVESTOR CLASS shares are available for purchase in two ways: 1) directly from
American Century without any commissions or other fees; and/or 2) through
certain financial intermediaries (such as banks, broker-dealers, insurance
companies and investment advisors), which may require payment of a transaction
fee to the financial intermediary. The funds' prospectuses contain additional
information regarding eligibility for Investor Class shares.
INSTITUTIONAL CLASS shares are available to large investors such as
endowments, foundations, and retirement plans, and to financial intermediaries
serving these investors. This class recognizes the relatively lower cost of
serving institutional customers and others who invest at least $5 million ($3
million for endowments and foundations) in an American Century fund or at
least $10 million in multiple funds. In recognition of the larger investments
and account balances and comparatively lower transaction costs, the unified
management fee of Institutional Class shares is 0.20% less than the unified
management fee of Investor Class shares.
ADVISOR CLASS shares are sold primarily through institutions such as
investment advisors, banks, broker-dealers, insurance companies, and financial
advisors. The unified management fee for Advisor Class shares is the same as
for Investor Class shares. Advisor Class shares are subject to a 0.25% annual
Rule 12b-1 distribution and service fee.
A CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. A Class shares are sold at their offering price,
which is net asset value plus an initial sales charge that ranges from 5.75%
to 0.00% for equity funds, depending on the amount invested. The initial sales
charge is deducted from the purchase amount before it is invested. A Class
shares may be subject to a contingent deferred sales charge (CDSC). There is
no CDSC on shares acquired through reinvestment of dividends or capital gains.
The prospectus contains information regarding reductions and waivers of sales
charges for A Class shares. The unified management fee for A Class shares is
the same as for Investor Class shares. A Class shares also are subject to a
0.25% annual Rule 12b-1 distribution and service fee.
B CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. B Class shares redeemed within six years of purchase
are subject to a CDSC that declines from 5.00% during the first year after
purchase to 0.00% after the sixth year. There is no CDSC on shares acquired
through reinvestment of dividends or capital gains. The unified management fee
for B Class shares is the same as for Investor Class shares. B Class shares
also are subject to a 1.00% annual Rule 12b-1 distribution and service fee. B
Class shares automatically convert to A Class shares (with lower expenses)
eight years after their purchase date.
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85
C CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. C Class shares redeemed within 12 months of purchase
are subject to a CDSC of 1.00%. There is no CDSC on shares acquired through
reinvestment of dividends or capital gains. The unified management fee for C
Class shares is the same as for Investor Class shares. C Class shares also are
subject to a Rule 12b-1 distribution and service fee of 1.00%.
R CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. The unified management fee for R Class shares is the
same as for Investor Class shares. R Class shares are subject to a 0.50%
annual Rule 12b-1 distribution and service fee.
All classes of shares represent a pro rata interest in the funds and generally
have the same rights and preferences.
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86
ADDITIONAL INFORMATION
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.
If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. 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 notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.
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.
State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.
PROXY VOTING GUIDELINES
American Century Global Investment Management, Inc., the funds' investment
advisor, is responsible for exercising the voting rights associated with the
securities purchased and/or held by the funds. A description of the policies
and procedures the advisor uses in fulfilling this responsibility is available
without charge, upon request, by calling 1-800-345-2021. It is also available
on American Century's website at americancentury.com and on the Securities and
Exchange Commission's website at sec.gov. Information regarding how the
investment advisor voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available on the "About Us" page
at americancentury.com. It is also available at sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.
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87
INDEX DEFINITIONS
The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.
Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.
The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.
The MSCI EAFE® GROWTH INDEX is a capitalization-weighted index that monitors
the performance of growth stocks from Europe, Australasia, and the Far East.
The MSCI EAFE® VALUE INDEX is a capitalization-weighted index that monitors
the performance of value stocks from Europe, Australasia, and the Far East.
The MSCI EM (Emerging Markets) INDEX represents the gross performance of
stocks in global emerging market countries.
The MSCI EUROPE INDEX is designed to measure equity market performance in
Europe.
The MSCI JAPAN INDEX is designed to measure equity market performance in Japan.
The MSCI WORLD FREE INDEX represents the performance of stocks in developed
countries (including the United States) that are available for purchase by
global investors.
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88
[back cover]
CONTACT US
AMERICANCENTURY.COM
AUTOMATED INFORMATION LINE:
1-800-345-8765
INVESTOR SERVICES REPRESENTATIVE:
1-800-345-2021 or 816-531-5575
INVESTORS USING ADVISORS:
1-800-378-9878
BUSINESS, NOT-FOR-PROFIT,
EMPLOYER-SPONSORED RETIREMENT PLANS:
1-800-345-3533
BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL PROFESSIONALS, INSURANCE COMPANIES:
1-800-345-6488
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 or 816-444-3485
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
INVESTMENT ADVISOR:
American Century Global Investment Management, Inc.
New York, New York
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.
American Century Investments
P.O. Box 419200
Kansas City, MO 64141-6200
PRSRT STD
U.S. POSTAGE PAID
AMERICAN CENTURY
COMPANIES
American Century Investment Services, Inc., Distributor
©2008 American Century Proprietary Holdings, Inc. All rights reserved.
The American Century Investments logo, American Century and American Century
Investments are service marks of American Century Proprietary Holdings, Inc.
0801
SH-ANN-57975S
[front cover]
AMERICAN CENTURY INVESTMENTS
Annual Report November 30, 2007
[photo of winter]
International Stock Fund
International Discovery Fund
International Opportunities Fund
[american century investments logo and text logo]
OUR MESSAGE TO YOU
[photo of Jonathan Thomas]
JONATHAN THOMAS
President and CEO
American Century Companies, Inc.
To help you monitor your investment, my colleagues and I take pride in
providing you with the annual report for the American Century® International
Stock, International Discovery and International Opportunities funds for the
12 months ended November 30, 2007. I am honored to be addressing you in the
"Our Message" space long devoted to company founder Jim Stowers, Jr. and his
son Jim Stowers III.
Jim Stowers III stepped down from the American Century Companies, Inc. (ACC)
board of directors in July 2007, his final step in a well-planned career
transition to pursue new ventures outside the company. This reflected his
family's support of our company's direction and its leadership team.
The Stowers family remains an integral part of our heritage, leadership, and
financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the
ACC board with Richard Brown, who has been on the board since 1998.
American Century Investments, our clients, and our employees have been my top
priority since I became company president and CEO in March, 2007. We have also
added the executive talents of overall chief investment officer (CIO) Enrique
Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito,
and chief operating officer Barry Fink.
This skilled group, combined with our existing senior management team, has
already had a positive impact on the development and management of the
products and services we take pride in delivering to you. We believe the
ultimate measure of our performance is our clients' success. Therefore, our
focus continues to be on building a long-term relationship with you and on
delivering superior investment performance across our product line.
/s/ Jonathan Thomas
Jonathan Thomas
[photo of James E. Stowers, Jr.]
JAMES E. STOWERS, JR.
Founder and Co-Chairman of the Board American Century Companies, Inc.
[photo of Richard Brown]
RICHARD BROWN
Co-Chairman of the Board American Century Companies, Inc.
TABLE OF CONTENTS
Market Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . 2
International Equity Total Returns . . . . . . . . . . . . . . . . 2
INTERNATIONAL STOCK
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 5
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Types of Investments in Portfolio and Investments by Country . . . . 6
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 7
INTERNATIONAL DISCOVERY
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 12
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Types of Investments in Portfolio and Investments by Country . . . . 13
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 14
INTERNATIONAL OPPORTUNITIES
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 19
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Types of Investments in Portfolio and Investments by Country . . . . 20
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 21
Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 24
FINANCIAL STATEMENTS
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 26
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 28
Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 29
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 31
Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 39
Report of Independent Registered Public Accounting Firm . . . . . . . 45
OTHER INFORMATION
Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . . 46
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Share Class Information . . . . . . . . . . . . . . . . . . . . . . . 51
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 52
Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 53
The opinions expressed in the Market Perspective and each of the Portfolio
Commentaries reflect those of the portfolio management team as of the date of
the report, and do not necessarily represent the opinions of American Century
or any other person in the American Century organization. Any such opinions
are subject to change at any time based upon market or other conditions and
American Century disclaims any responsibility to update such opinions. These
opinions may not be relied upon as investment advice and, because investment
decisions made by American Century funds are based on numerous factors, may
not be relied upon as an indication of trading intent on behalf of any
American Century fund. Security examples are used for representational
purposes only and are not intended as recommendations to purchase or sell
securities. Performance information for comparative indices and securities is
provided to American Century by third party vendors. To the best of American
Century's knowledge, such information is accurate at the time of printing.
MARKET PERSPECTIVE
[photo of Chief Investment Officer]
By Mark On, Chief Investment Officer, International Equity
INTERNATIONAL STOCKS SHOWED ROBUST GAINS
A strong global economy combined with relatively tame inflation and healthy
labor markets helped promote stellar stock gains for the 12 months ended
November 30, 2007. Among the developed markets, Europe fared well, with the
strongest returns coming from the euro-zone nations. In contrast, performance
was flat in Japan, as weak consumer spending, a challenging political climate,
and slowing demand from the United States pressured Japan's stocks.
Emerging markets remained the world's standout performers, due to optimistic
growth forecasts for developing markets and higher commodity prices.
U.S. CREDIT WOES RATTLED MARKETS
Mounting problems in the U.S. subprime mortgage market led to concerns
regarding global economic growth, generating periodic market volatility and
contributing to a growing desire globally for less-risky assets. In an effort
to soothe frayed nerves, the U.S. Federal Reserve (the Fed), the European
Central Bank, and the Bank of England injected liquidity into their banking
systems.
A mid-September rate cut by the Fed served to strengthen the euro and British
pound, relative to the sagging U.S. dollar. Late in the period, the dollar hit
new record lows against those currencies.
RATES ROSE IN EUROPE AND BRITAIN
Healthy economic growth prompted the European Central Bank and the Bank of
England to raise interest rates three times during the period. Although
inflationary pressures remained at the fore, both banks held off making
additional rate increases given the fallout from the credit-market turmoil.
Optimism surrounding improving economic growth prompted the Bank of Japan to
raise rates in February. Nevertheless, expectations for additional rate hikes
went unfulfilled, as sluggish domestic consumption kept the central bank on
hold.
OPPORTUNITIES ABOUND
Although the outlook for international equities remains somewhat uncertain, we
believe international stocks present significant opportunities for investors.
Combining the higher growth rate of the international markets with our
international team's focus on companies with growth acceleration, we believe
there is a significant opportunity to deliver attractive performance in the
coming year.
International Equity Total Returns
For the 12 months ended November 30, 2007 (in U.S. dollars)
MSCI EM Index 45.57%
MSCI EAFE Growth Index 22.32%
MSCI Europe Index 19.61%
MSCI EAFE Index 17.30%
MSCI World Free Index 12.71%
MSCI EAFE Value Index 12.30%
MSCI Japan Index 2.19%
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2
PERFORMANCE
International Stock
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year Inception Date
INVESTOR CLASS 22.22% 21.20% 3/31/05
MSCI EAFE INDEX 17.30% 20.22% --
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the index are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the index do not.
- ------
3
International Stock
Growth of $10,000 Over Life of Class
$10,000 investment made March 31, 2005
One-Year Returns Over Life of Class
Periods ended November 30
2005* 2006 2007
Investor Class 8.40% 26.07% 22.22%
MSCI EAFE Index 8.67% 28.20% 17.30%
* From 3/31/05, the Investor Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the index are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the index do not.
- ------
4
PORTFOLIO COMMENTARY
International Stock
Portfolio Managers: Alex Tedder and Keith Creveling
PERFORMANCE SUMMARY
International Stock gained 22.22% during the 12 months ended November 30,
2007. The portfolio's benchmark, the MSCI EAFE Index, advanced 17.30%.
Compared to its peers, International Stock outperformed the average return of
15.06%* for the 129 funds in Lipper Inc.'s International Multi-Cap Value Funds
category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks. On an absolute basis,
all sectors the portfolio invested in posted positive, double-digit returns
and made positive contributions to performance. Stock selection was the
primary driver of the portfolio's overall outperformance relative to the
benchmark.
JAPAN, UK CONTRIBUTED STRONGLY
From a country perspective, Japan, the United Kingdom and Germany made the
greatest positive contributions to the portfolio's relative performance.
Japan, the largest country weighting in the portfolio, benefited from strong
stock selection and a significant underweight relative to the benchmark. Stock
selection was the overriding positive influence in the United Kingdom and
Germany. Maintaining an overweighted position in Germany also helped.
Our small allocation to Sweden detracted from performance relative to the
benchmark due to poor stock selection. Our small weighting to South Korea was
another detractor, due to our unfavorable stock selections and the benchmark's
avoidance of the market.
FINANCIALS, INDUSTRIALS SHOWED STRONG RETURNS
The financials sector, the largest weighting in the portfolio, was the top
sector contributor, primarily due to strong stock selection. Specifically, our
position in Deutsche Boerse AG, the Germany-based owner of several securities
exchanges and one of the portfolio's largest holdings, made a strong showing.
The company's plans to acquire U.S.-based International Securities Exchange
Holdings to create a massive derivatives
Top Ten Holdings as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Deutsche Boerse AG 1.7% 1.1%
Nintendo Co., Ltd. 1.7% 1.6%
Julius Baer Holding AG 1.7% 1.3%
National Bank of Greece SA 1.7% 1.6%
Saipem SpA 1.6% 1.2%
BG Group plc 1.5% 1.2%
BHP Billiton Ltd. 1.5% 1.2%
Tesco plc 1.4% 1.3%
America Movil, SAB de CV ADR 1.4% 1.0%
ABB Ltd. 1.4% 1.1%
* Data provided by Lipper Inc. - A Reuters Company. ©2007 Reuters. All rights
reserved. Any copying, republication or redistribution of Lipper content,
including by caching, framing or similar means, is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for
any errors or delays in the content, or for any actions taken in reliance
thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
5
International Stock
market helped drive results. In addition, our position in China Merchants
Bank, an emerging-market investment not represented in the benchmark, boosted
performance, as the stock returned 142% during the reporting period.
The portfolio's holdings in the industrials sector also contributed
positively. Strong stock selection combined with an overweight to the sector
drove outperformance. In particular, our stocks in the electrical equipment
industry performed well, including Q-Cells AG, a German manufacturer of solar
cells, and Vestas Wind Systems, a Danish supplier of wind power solutions.
Our information technology stocks also were strong contributors, led by
Japan's Nintendo, a videogame manufacturer, which advanced 160% during the
reporting period on strong sales of its Wii gaming system. Nintendo was the
portfolio's best-performing stock for the period.
TELECOM, CONSUMER SECTORS LAGGED
Despite a healthy absolute return of 28.47%, the portfolio's telecommunication
services sector was the largest detractor on a relative basis. Our underweight
to the sector accounted for the bulk of the underperformance. The portfolio's
consumer staples sector returned 24.48% for the reporting period, but
nevertheless weighed on relative performance as unfavorable stock selection
led to lagging results compared to the benchmark. The consumer discretionary
sector also detracted, due to our overweight and slumping stocks, with our
stock selection in the automobile industry having the largest negative impact.
OUTLOOK
International Stock seeks companies located outside the United States
exhibiting accelerating growth characteristics. Our analysis indicates the
outlook for such companies remains favorable. The portfolio has broad exposure
to high-quality growth companies in numerous markets, and we believe these
companies will deliver solid returns, even during volatile markets.
Types of Investments in Portfolio
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Foreign Common Stocks 99.9% 98.5%
Foreign Preferred Stocks -- 0.4%
TOTAL EQUITY EXPOSURE 99.9% 98.9%
Temporary Cash Investments -- 0.9%
Other Assets and Liabilities(1) 0.1% 0.2%
(1) Includes securities lending collateral and other assets and liabilities.
Investments by Country as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Japan 15.5% 18.2%
United Kingdom 13.6% 14.7%
Switzerland 10.8% 11.7%
Germany 10.0% 10.5%
France 8.6% 9.8%
Australia 5.4% 4.8%
Spain 3.9% 1.5%
Canada 3.7% 0.8%
Italy 2.7% 4.0%
Denmark 2.2% 1.0%
Belgium 2.1% 1.7%
Norway 2.0% 2.9%
Singapore 2.0% 0.7%
Other Countries 17.4% 16.6%
Cash and Equivalents(2) 0.1% 1.1%
(2) Includes temporary cash investments, securities lending collateral and
other assets and liabilities.
- ------
6
SCHEDULE OF INVESTMENTS
International Stock
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 99.9%
AUSTRALIA -- 5.4%
10,060 Babcock & Brown Ltd.(1) $ 235
56,711 BHP Billiton Ltd.(1) 2,155
192,295 Boart Longyear Group(2) 412
49,016 CSL Ltd. 1,514
98,809 Oxiana Ltd.(1) 350
55,149 QBE Insurance Group Ltd. 1,597
8,329 Rio Tinto Ltd.(1) 1,072
19,977 Westpac Banking Corp. 501
--------
7,836
--------
AUSTRIA -- 0.6%
11,400 Erste Bank der oesterreichischen Sparkassen AG 822
--------
BELGIUM -- 2.1%
9,899 KBC Groupe 1,370
26,173 SES SA Fiduciary Depositary Receipt(2) 658
4,235 Umicore 993
--------
3,021
--------
BRAZIL -- 1.0%
9,400 Bolsa de Mercadorias e Futuros - BM&F SA(2) 127
48,100 Redecard SA 873
24,600 Unibanco-Uniao de Bancos Brasileiros SA 364
--------
1,364
--------
CANADA -- 3.7%
11,926 EnCana Corp. 778
14,268 Research In Motion Ltd.(2) 1,624
35,809 Rogers Communications Inc. Cl B 1,489
13,404 Shoppers Drug Mart Corp. 735
7,821 Suncor Energy Inc. 748
--------
5,374
--------
CZECH REPUBLIC -- 1.1%
21,027 CEZ AS 1,554
--------
DENMARK -- 2.2%
13,698 Novo Nordisk AS B Shares 1,732
15,374 Vestas Wind Systems AS(2) 1,454
--------
3,186
--------
FINLAND -- 1.4%
5,204 Metso Oyj 282
42,445 Nokia Oyj 1,672
--------
1,954
--------
Shares ($ IN THOUSANDS) Value
FRANCE -- 8.6%
7,773 Accor SA $ 659
6,618 ALSTOM Co. 1,487
31,130 AXA SA 1,263
11,927 Groupe Danone(1) 1,053
5,232 L'Oreal SA 726
5,576 PPR SA 940
2,767 Renault SA 403
3,296 Schneider Electric SA 457
11,276 Societe Generale 1,728
17,627 Suez SA 1,168
23,572 Total SA(1) 1,908
9,216 Vinci SA 730
--------
12,522
--------
GERMANY -- 10.0%
5,206 Allianz SE 1,072
9,831 BASF AG 1,363
6,429 Continental AG 837
13,499 Deutsche Boerse AG 2,531
28,086 Fresenius Medical Care AG & Co. KGaA 1,568
31,807 GEA Group AG(2) 1,153
8,513 Hochtief AG 1,126
6,093 K+S AG 1,244
3,423 Linde AG 448
9,879 Q-Cells AG(2) 1,379
11,166 SAP AG 569
7,391 Siemens AG 1,122
--------
14,412
--------
GREECE -- 1.7%
35,980 National Bank of Greece SA 2,406
--------
HONG KONG -- 1.5%
99,000 Esprit Holdings Ltd. 1,494
37,000 Hang Seng Bank Ltd. 708
--------
2,202
--------
INDIA -- 1.3%
13,192 Bharat Heavy Electricals Ltd. 898
17,990 DLF Ltd. 429
22,871 Tata Consultancy Services Ltd. 588
--------
1,915
--------
IRELAND -- 0.6%
18,928 Anglo Irish Bank Corp. plc 330
26,378 Kingspan Group plc 558
--------
888
--------
- ------
7
International Stock
Shares ($ IN THOUSANDS) Value
ITALY -- 2.7%
17,089 ENI SpA $ 611
15,738 Fiat SpA 433
18,708 Finmeccanica SpA 559
57,846 Saipem SpA 2,332
--------
3,935
--------
JAPAN -- 15.5%
30,200 Canon, Inc. 1,591
38,100 Daikin Industries Ltd. 1,962
7,400 Daito Trust Construction Co., Ltd. 355
104 East Japan Railway Co. 860
4,800 Fanuc Ltd. 502
14,700 Ibiden Co. Ltd.(1) 1,162
49,000 Isuzu Motors Ltd. 227
249 Japan Tobacco Inc. 1,410
96,000 Kobe Steel Ltd. 316
30,500 Kuraray Co. Ltd. 375
10,700 Makita Corp. 476
169,000 Marubeni Corp. 1,297
53,000 Mitsubishi Electric Corp. 605
4,100 Nintendo Co., Ltd. 2,520
95,000 Nippon Yusen Kabushiki Kaisha 825
454 NTT DoCoMo, Inc. 720
279 Sony Financial Holdings Inc.(2) 1,054
89,000 Sumitomo Chemical Co., Ltd. 759
42,000 Sumitomo Heavy Industries Ltd. 456
135,000 Sumitomo Metal Industries Ltd.(1) 599
39,000 Sumitomo Realty & Development Co. Ltd. 1,185
15,300 Terumo Corp. 773
31,700 Toyota Motor Corp. 1,785
5,140 Yamada Denki Co. Ltd. 596
--------
22,410
--------
MALAYSIA -- 0.6%
288,600 Bumiputra - Commerce Holdings Bhd 921
--------
MEXICO -- 1.4%
33,227 America Movil, SAB de CV ADR 2,048
--------
NETHERLANDS -- 1.4%
10,741 ASML Holding N.V. 373
4,673 CNH Global N.V. 287
20,443 Heineken N.V. 1,337
--------
1,997
--------
Shares ($ IN THOUSANDS) Value
NORWAY -- 2.0%
26,205 Aker Kvaerner ASA $ 747
51,525 StatoilHydro ASA 1,674
13,550 Yara International ASA 515
--------
2,936
--------
PEOPLE'S REPUBLIC OF CHINA -- 1.3%
222,000 Agile Property Holdings Ltd. 442
1,169 Alibaba.com Ltd.(1)(2) 6
288,000 China Merchants Bank Co., Ltd. Cl H 1,337
--------
1,785
--------
SINGAPORE -- 2.0%
186,000 Keppel Corp. Ltd. 1,731
203,000 Oversea-Chinese Banking Corp. 1,197
--------
2,928
--------
SOUTH AFRICA -- 1.3%
17,015 Anglo American plc 1,152
38,423 MTN Group Ltd. 774
--------
1,926
--------
SOUTH KOREA -- 0.2%
546 Samsung Electronics 334
--------
SPAIN -- 3.9%
58,405 Banco Bilbao Vizcaya Argentaria SA 1,448
44,245 Cintra Concesiones de Infraestructuras de Transporte
SA(1) 707
1,574 Cintra Concesiones de Infraestructuras de Transporte SA
Entitlement Shares 25
27,233 Inditex SA 1,891
48,816 Telefonica SA 1,635
--------
5,706
--------
SWITZERLAND -- 10.8%
67,403 ABB Ltd. 1,982
12,148 Actelion Ltd.(2) 539
14,365 Compagnie Financiere Richemont SA Cl A 988
15,607 Holcim Ltd. 1,672
29,916 Julius Baer Holding AG 2,512
4,073 Nestle SA 1,949
14,664 Novartis AG 831
9,394 Roche Holding AG 1,785
4,703 Sonova Holding AG 504
7,602 Syngenta AG 1,884
19,397 UBS AG 976
--------
15,622
--------
- ------
8
International Stock
Shares ($ IN THOUSANDS) Value
TAIWAN (REPUBLIC OF CHINA) -- 1.4%
411,000 AU Optronics Corp. $ 803
198,320 Hon Hai Precision Industry Co., Ltd. 1,271
--------
2,074
--------
TURKEY -- 0.6%
103,581 Turkiye Garanti Bankasi AS 910
--------
UNITED KINGDOM -- 13.6%
30,055 Admiral Group plc 644
33,999 Aggreko plc 355
40,858 AMEC plc 647
28,016 Barclays plc 325
104,650 BG Group plc 2,193
172 British American Tobacco plc 7
8,813 British Sky Broadcasting Group plc 113
139,518 Burberry Group plc 1,652
42,500 Capita Group plc 648
43,634 Compass Group plc 286
32,075 easyJet plc(2) 371
17,674 GlaxoSmithKline plc 467
36,876 HSBC Holdings plc 630
131,356 International Power plc 1,260
107,885 Man Group plc 1,236
123,298 Man Group plc Cl B 173
28,786 Reckitt Benckiser Group plc 1,710
52,740 Reed Elsevier plc 663
55,836 Scottish and Southern Energy plc 1,825
209,097 Tesco plc 2,061
121,381 TUI Travel plc(2) 687
483,686 Vodafone Group plc 1,811
--------
19,764
--------
TOTAL COMMON STOCKS
(Cost $114,928) 144,752
--------
Temporary Cash Investments - Securities
Lending Collateral(3) -- 5.2%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $3,001) 3,000
Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized
by various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.56%, dated 11/30/07, due 12/3/07 (Delivery value
$1,502) 1,501
Shares ($ IN THOUSANDS) Value
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at the
lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery value
$3,001) $3,000
--------
TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES
LENDING COLLATERAL
(Cost $7,501) 7,501
--------
TOTAL INVESTMENT SECURITIES -- 105.1%
(Cost $122,429) 152,253
--------
OTHER ASSETS AND LIABILITIES -- (5.1)% (7,441)
--------
TOTAL NET ASSETS -- 100.0% $144,812
========
Market Sector Diversification
(as a % of net assets)
Financials 21.6%
Industrials 17.1%
Consumer Discretionary 10.5%
Materials 10.3%
Information Technology 8.6%
Energy 7.6%
Consumer Staples 7.6%
Health Care 6.7%
Telecommunication Services 5.9%
Utilities 4.0%
Cash and Equivalents* 0.1%
* Includes securities lending collateral and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
(1) Security, or a portion thereof, was on loan as of November 30, 2007.
(2) Non-income producing.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $135,480 (in
thousands), which represented 93.6% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
9
PERFORMANCE
International Discovery
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years 10 years Inception Date
INVESTOR CLASS 32.18% 29.52% 17.48% 17.45% 4/1/94
S&P/CITIGROUP EMI GROWTH
WORLD EX-US 14.82% 26.10% 10.27% 7.93%(1) --
Institutional Class 32.45% 29.75% -- 17.68% 1/2/98
Advisor Class 31.83% 29.20% -- 15.24% 4/28/98
(1) Since 3/31/94, the date nearest the Investor Class's inception for which
data are available.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
10
International Discovery
Growth of $10,000 Over 10 Years
$10,000 investment made November 30, 1997
One-Year Returns Over 10 Years
Periods ended November 30
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Investor Class 14.79% 65.12% -1.27% -20.17% -8.00% 37.05% 18.76% 24.30% 36.41% 32.18%
S&P/Citigroup
EMI Growth
World ex-US 7.30% 27.50% -14.20% -20.23% -10.96% 38.79% 27.58% 19.21% 31.56% 14.82%
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
11
PORTFOLIO COMMENTARY
International Discovery
Portfolio Managers: Mark Kopinski and Brian Brady
PERFORMANCE SUMMARY
International Discovery gained 32.18%* during the 12 months ended November 30,
2007. The portfolio's benchmark, the S&P/Citigroup EMI Growth World ex-U.S.
Index, advanced 14.82%. Compared to its peers, International Discovery
outperformed the average return of 18.85%** for the 96 funds in Lipper Inc.'s
International Small/Mid Cap Growth Funds category.
Sustained global economic growth combined with a weak U.S. dollar helped
generate strong 12-month performance among international stocks. The
portfolio's holdings benefited from this trend. Overall, stock selection
accounted for the portfolio's outperformance relative to the benchmark.
On an absolute basis, all sectors in the portfolio posted positive returns and
contributed to performance. The utilities sector, generally not viewed as a
growth sector, was the only exception. Total returns in seven of the
portfolio's 10 market sectors exceeded 33% for the reporting period,
outperforming the benchmark handsomely.
COUNTRY GAINS WERE WIDESPREAD
From a country perspective, the portfolio enjoyed positive performance from
most markets in which it invested. In particular, markets in Japan, Australia
and China offered the greatest contributions on a relative basis. While
benchmark returns for Japan were among the smallest, stock selection was a
particularly strong factor among our holdings. Our overweights in Australia
and China combined with good stock selection also contributed favorably.
Taiwan (which was not represented in the benchmark), Greece and Singapore
comprised the largest detractors to the portfolio's relative performance. On
an absolute basis, performance in Taiwan was positive, but currency factors
led to an overall negative effect on relative performance. The portfolio
underperformed the benchmark in Greece, where stock selection was the culprit.
In Singapore, our underweight accounted for the lagging results.
Top Ten Holdings as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
CSL Ltd. 3.1% 2.5%
Boart Longyear Group 2.4% 2.3%
Mitsumi Electric Co., Ltd. 2.3% 0.7%
Gildan Activewear Inc. 2.2% 1.5%
IG Group Holdings plc 2.2% 1.0%
NGK Insulators Ltd. 2.0% 2.2%
Millicom International Cellular SA 2.0% 2.9%
FLSmidth & Co. AS 1.9% 1.3%
Focus Media Holding Ltd. ADR 1.9% 1.6%
Lonza Group AG 1.9% 2.0%
* All fund returns referenced in this commentary are for Investor Class shares.
** The Lipper Inc.'s International Small/Mid Cap Growth Funds category average
returns for the five- and 10-year periods as of November 30, 2007, were 28.00%
and 16.23%, respectively.
Data provided by Lipper Inc. - A Reuters Company. ©2007 Reuters. All rights
reserved. Any copying, republication or redistribution of Lipper content,
including by caching, framing or similar means, is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for
any errors or delays in the content, or for any actions taken in reliance
thereon.
Lipper Fund Performance - Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be
reliable. Although carefully verified, data on compilations is not guaranteed
by Lipper and may be incomplete. No offer or solicitations to buy or sell any
of the securities herein is being made by Lipper.
- ------
12
International Discovery
AUSTRALIAN DRUG MAKER CONTRIBUTED STRONGLY
Our position in Australian vaccine and drug treatment maker CSL, which we have
owned since early 2004, was among the portfolio's top contributors. Continued
strong financial results, positive product developments, and royalties
received from the popular Gardasil vaccine for cervical cancer buoyed
performance. CSL is the largest position in the portfolio.
STOCK PICKS IN JAPAN BOOSTED SECTOR RESULTS
Industrials, the portfolio's largest sector weighting, made the greatest
contribution to relative performance, due to strong stock selection and an
overweight to the sector. Our position in Japan Steel Works, a manufacturer of
fabricating machinery, was particularly helpful, as the stock was among the
portfolio's top 10 contributors for the reporting period. The company's stock
participated in a rally among suppliers to the nuclear power industry, as
officials in Texas announced plans to build two power-generating reactors.
Similarly, stock selection in Japan contributed to our consumer discretionary
sector's favorable performance. For example, the auto components industry was
the sector's top contributor, primarily due to NGK Insulators, a Japanese
manufacturer of various insulation products and one of the portfolio's best
performers for the reporting period. The company's stock advanced on upgraded
sales and profit projections.
UTILITIES SECTOR LAGGED
Our utilities sector, the smallest sector in the portfolio, was the only
sector that detracted from relative performance. Stock selection primarily was
to blame, as the few positions we owned performed poorly. Also, our
underweight relative to the benchmark was a slightly negative influence.
OUTLOOK
We remain committed to our investment strategy of seeking the stocks of small-
to mid-sized foreign companies we believe have a high likelihood of growing
earnings and revenues at an improving rate. We select these stocks with the
assistance of extensive company-level research that focuses on identifying
accelerating growth characteristics.
Types of Investments in Portfolio
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Foreign Common Stocks 96.9% 99.0%
Temporary Cash Investments 3.6% --
Other Assets and Liabilities(1) (0.5)% 1.0%
(1) Includes securities lending collateral and other assets and liabilities.
Investments by Country as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
United Kingdom 15.1% 11.8%
Australia 12.4% 12.1%
Japan 10.6% 10.5%
Germany 6.6% 8.3%
Canada 5.6% 7.3%
People's Republic of China 4.0% 3.4%
Switzerland 4.0% 6.0%
Spain 3.5% 1.6%
South Africa 3.2% 0.6%
Norway 2.8% 1.6%
Hong Kong 2.5% 0.5%
Taiwan (Republic of China) 2.3% 2.4%
Finland 2.2% 0.8%
Singapore 2.1% 1.2%
Luxembourg 2.0% 2.9%
Other Countries 18.0% 28.0%
Cash and Equivalents(2) 3.1% 1.0%
(2) Includes temporary cash investments, securities lending collateral and
other assets and liabilities.
- ------
13
SCHEDULE OF INVESTMENTS
International Discovery
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 96.9%
AUSTRALIA -- 12.4%
6,195,000 Arrow Energy NL(1) $ 16,876
1,152,600 Babcock & Brown Ltd. 26,929
6,108,200 Babcock & Brown Power Ltd. 16,176
21,761,500 Boart Longyear Group(1) 46,621
1,899,900 CSL Ltd. 58,696
147,100 Incitec Pivot Ltd. 11,841
5,999,100 Oxiana Ltd. 21,268
1,805,900 Paladin Energy Ltd.(1) 10,961
771,600 Transfield Services Ltd. 10,497
366,200 WorleyParsons Ltd. 16,252
----------
236,117
----------
AUSTRIA -- 0.3%
108,200 Andritz AG 6,622
----------
BELGIUM -- 1.5%
631,700 Telenet Group Holding N.V. 18,150
43,400 Umicore 10,174
----------
28,324
----------
BERMUDA -- 0.6%
10,067,000 Synear Food Holdings Ltd.(1) 12,172
----------
BRAZIL -- 0.7%
428,300 Rossi Residencial SA 12,525
----------
CANADA -- 5.6%
382,000 Agrium Inc. 22,095
1,098,000 Gildan Activewear Inc.(1) 41,721
465,200 Petrobank Energy & Resources Ltd.(1) 23,428
928,900 Sino-Forest Corp.(1) 20,440
----------
107,684
----------
DENMARK -- 1.9%
362,800 FLSmidth & Co. AS 36,671
----------
EGYPT -- 1.3%
1,387,300 Egyptian Financial Group - Hermes Holding SAE 14,430
799,900 Orascom Hotels & Development 11,134
----------
25,564
----------
FINLAND -- 2.2%
910,900 Nokian Renkaat Oyj 34,738
106,200 Outotec Oyj 6,725
----------
41,463
----------
Shares ($ IN THOUSANDS) Value
FRANCE -- 0.4%
53,000 Nexans SA $ 7,092
----------
GERMANY -- 6.6%
106,600 ElringKlinger AG 11,332
115,600 Hamburger Hafen und Logistik AG(1) 10,153
267,826 IVG Immobilien AG 10,554
115,900 K+S AG 23,671
195,400 Leoni AG 10,270
165,100 SGL Carbon AG(1) 9,325
368,600 SolarWorld AG 22,009
1,190,639 United Internet AG 27,737
----------
125,051
----------
GREECE -- 1.5%
1,477,752 Intralot SA 27,483
----------
HONG KONG -- 2.5%
6,988,000 AAC Acoustic Technology Holdings Inc.(1) 9,462
8,956,000 C C Land Holdings Ltd. 15,299
2,037,000 Kowloon Development Co. Ltd. 5,146
10,660,000 Melco International Development Ltd. 17,143
----------
47,050
----------
INDIA -- 1.3%
113,100 Aban Offshore Ltd.(1) 13,179
307,500 ABB India Ltd. 12,114
----------
25,293
----------
IRELAND -- 0.7%
240,700 ICON plc ADR(1) 14,276
----------
ISRAEL -- 0.6%
1,391,000 Makhteshim-Agan Industries Ltd.(1) 11,864
----------
ITALY -- 1.4%
962,418 Geox SpA 21,534
187,400 Prysmian SpA(1) 4,713
----------
26,247
----------
JAPAN -- 10.6%
522,700 Capcom Co. Ltd. 14,080
796,000 Hitachi Chemical Co., Ltd. 18,861
1,659,000 Japan Steel Works Ltd. (The) 24,416
185,900 Konami Corp. 5,483
1,511,500 Kuraray Co. Ltd. 18,589
154,800 Makita Corp. 6,887
1,098,500 Mitsumi Electric Co., Ltd. 43,214
- ------
14
International Discovery
Shares ($ IN THOUSANDS) Value
1,259,000 NGK Insulators Ltd. $38,934
3,082,000 SANYO Electric Co., Ltd.(1) 5,899
277,500 Shinko Electric Industries Co., Ltd. 6,076
209,300 Toyo Tanso Co. Ltd. 20,128
----------
202,567
----------
LUXEMBOURG -- 2.0%
325,200 Millicom International Cellular SA(1) 38,790
----------
NETHERLANDS -- 1.4%
311,600 Fugro N.V. CVA 25,655
----------
NORWAY -- 2.8%
3,762,905 Pronova BioPharma AS(1) 14,128
973,100 SeaDrill Ltd.(1) 21,108
1,347,300 Sevan Marine ASA(1) 18,036
----------
53,272
----------
PEOPLE'S REPUBLIC OF CHINA -- 4.0%
8,424,901 Agile Property Holdings Ltd. 16,790
444,539 China Nepstar Chain Drugstore Ltd. ADR(1)(2) 8,282
646,000 Focus Media Holding Ltd. ADR(1)(2) 36,460
351,000 Mindray Medical International Ltd. ADR(2) 14,216
----------
75,748
----------
RUSSIAN FEDERATION -- 0.5%
82,400 Wimm-Bill-Dann Foods OJSC ADR 9,441
----------
SINGAPORE -- 2.1%
19,055,600 Noble Group Ltd. 29,500
4,260,000 Yanlord Land Group Ltd. 11,041
----------
40,541
----------
SOUTH AFRICA -- 3.2%
626,700 Aquarius Platinum Ltd. 22,860
976,100 Exxaro Resources Ltd. 14,886
1,692,200 Murray & Roberts Holdings Ltd. 23,905
----------
61,651
----------
SOUTH KOREA -- 1.6%
96,100 Hyundai Steel Co. 8,141
106,200 SODIFF Advanced Materials Co. Ltd. 7,768
6,412,000 STX Pan Ocean Co. Ltd. 13,998
----------
29,907
----------
Shares ($ IN THOUSANDS) Value
SPAIN -- 3.5%
296,900 Bolsas y Mercados Espanoles $ 21,260
482,940 Solaria Energia y Medio Ambiente SA(1) 14,403
430,000 Tecnicas Reunidas SA 30,987
----------
66,650
----------
SWEDEN -- 0.3%
285,700 Hexagon AB Cl B 6,475
----------
SWITZERLAND -- 4.0%
2,706 Barry Callebaut AG 2,112
70,400 Basilea Pharmaceutica AG(1) 12,183
7,800 Lindt & Spruengli AG 25,880
302,300 Lonza Group AG 35,373
----------
75,548
----------
TAIWAN (REPUBLIC OF CHINA) -- 2.3%
3,923,368 Epistar Corp. 16,356
53,250,916 HannStar Display Corp.(1) 23,805
457,000 Motech Industries Inc. 3,503
----------
43,664
----------
THAILAND -- 0.6%
891,700 Banpu Public Company Ltd. 11,607
----------
TURKEY -- 1.0%
2,272,639 Asya Katilim Bankasi AS(1) 18,747
----------
UNITED ARAB EMIRATES -- 0.4%
1,136,400 Lamprell plc 8,419
----------
UNITED KINGDOM -- 15.1%
1,487,300 Admiral Group plc 31,885
986,900 Aggreko plc 10,291
1,106,700 Autonomy Corp. plc(1) 18,161
796,400 AVEVA Group plc 15,486
1,420,600 Carphone Warehouse Group plc 10,678
316,200 De La Rue plc 5,676
1,026,300 Expro International Group plc 21,394
2,334,800 Ferrexpo plc(1) 11,535
4,884,000 IG Group Holdings plc 41,115
988,200 Intertek Group plc 18,376
527,300 Rotork plc 10,676
2,487,100 Serco Group plc 24,292
2,268,657 VT Group plc 30,094
1,075,400 Wellstream Holdings plc(1) 23,183
605,400 WS Atkins plc 15,046
----------
287,888
----------
TOTAL COMMON STOCKS
(Cost $1,431,884) 1,848,068
----------
- ------
15
International Discovery
Shares ($ IN THOUSANDS) Value
Temporary Cash Investments -- 3.6%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%,
8/15/23, valued at $39,347), in a joint trading account at 3.05%,
dated 11/30/07, due 12/3/07 (Delivery value $38,610) $ 38,600
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Treasury obligations, 2.625%,
7/15/17, valued at $30,456), in a joint trading account at 3.10%,
dated 11/30/07, due 12/3/07 (Delivery value $29,808) 29,800
----------
TOTAL TEMPORARY CASH INVESTMENTS
(Cost $68,400) 68,400
----------
Temporary Cash Investments -- Securities
Lending Collateral(3) -- 2.6%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $17,507) 17,500
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Government Agency obligations in a
pooled account at the lending agent), 4.56%, dated 11/30/07, due
12/3/07 (Delivery value $14,856) 14,850
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery
value $17,507) 17,500
----------
TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES
LENDING COLLATERAL
(Cost $49,850) 49,850
----------
TOTAL INVESTMENT SECURITIES -- 103.1%
(Cost $1,550,134) 1,966,318
----------
OTHER ASSETS AND LIABILITIES -- (3.1)% (59,766)
----------
TOTAL NET ASSETS -- 100.0% $1,906,552
==========
Market Sector Diversification
(as a % of net assets)
Industrials 22.6%
Consumer Discretionary 14.1%
Materials 14.1%
Financials 12.1%
Energy 11.0%
Information Technology 10.2%
Health Care 6.0%
Consumer Staples 3.0%
Telecommunication Services 3.0%
Utilities 0.8%
Cash and Equivalents* 3.1%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
CVA = Certificaten Van Aandelen
OJSC = Open Joint Stock Company
(1) Non-income producing.
(2) Security, or a portion thereof, was on loan as of November 30, 2007.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $1,606,395 (in
thousands), which represented 84.3% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
16
PERFORMANCE
International Opportunities
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years Inception Date
INVESTOR CLASS 33.73% 36.01% 25.62% 6/1/01
S&P/CITIGROUP EMI GROWTH WORLD EX-US 14.82% 26.10% 14.62%(1) --
Institutional Class 33.97% -- 36.75% 1/9/03
(1) Since 5/31/01, the date nearest the Investor Class's inception for which
data are available.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
17
International Opportunities
Growth of $10,000 Over Life of Class
$10,000 investment made June 1, 2001
One-Year Returns Over Life of Class
Periods ended November 30
2001* 2002 2003 2004 2005 2006 2007
Investor Class -2.60% -2.87% 61.54% 27.14% 35.28% 25.37% 33.73%
S&P/Citigroup EMI
Growth World ex-US -14.51% -10.96% 38.79% 27.58% 19.21% 31.56% 14.82%
* From 6/1/01, the Investor Class's inception date. Index data from 5/31/01,
the date nearest the Investor Class's inception for which data are available.
Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the index
are provided for comparison. The fund's total returns include operating
expenses (such as transaction costs and management fees) that reduce returns,
while the total returns of the index do not.
- ------
18
PORTFOLIO COMMENTARY
International Opportunities
Portfolio Managers: Federico Laffan and Trevor Gurwich
PERFORMANCE SUMMARY
International Opportunities gained 33.73%* during the 12 months ended November
30, 2007. The portfolio's benchmark, the S&P/Citigroup EMI Growth World
ex-U.S. Index, advanced 14.82%. Compared to its peers, International
Opportunities outperformed the average return of 18.85%** for the 96 funds in
Lipper Inc.'s International Small/Mid Cap Growth Funds category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks.
On an absolute basis, all sectors the portfolio invested in posted positive,
double-digit--and, in the case of energy, triple-digit--returns and
contributed to absolute performance, except telecommunication services.
Compared to the benchmark, eight out of 10 of the portfolio's market sectors
outperformed, with the exception of utilities and telecommunication services.
Overall, our stock selection was stellar, accounting for the bulk of the
portfolio's outperformance.
COUNTRY CONTRIBUTIONS WERE BROAD
From a country perspective, most markets in which the portfolio invested
contributed positively to total return. Markets in Japan, China, and Singapore
were the strongest contributors to relative performance. Stock selection was
positive in all three markets, and an underweight in Japan and overweights in
China and Singapore contributed to the portfolio's outperformance versus the
benchmark.
Our exposure to Australia was the greatest detractor relative to the
benchmark. A significant underweight combined with poor stock selection
accounted for our underperformance. Our underweight in South Korea also
contributed to lagging performance for that market. In addition, our exposure
to Taiwan, which was not in the benchmark, detracted from relative
performance.
Top Ten Holdings as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Straits Asia Resources Ltd. 2.2% 0.8%
Hosiden Corp. 2.2% --
Major Drilling Group International Inc. 2.1% --
Tubacex SA 1.9% 0.5%
Southern Cross Healthcare Ltd. 1.9% 1.9%
Grifols SA 1.8% 1.6%
Capcom Co. Ltd. 1.8% 0.6%
China National Building Material Co. Ltd. Cl H 1.8% 1.6%
PT Bakrie Sumatera Plantations Tbk 1.7% 0.8%
Mount Gibson Iron Ltd. 1.6% --
* All fund returns referenced in this commentary are for Investor Class shares.
** The Lipper Inc.'s International Small/Mid Cap Growth Funds category average
return for the five-year period as of November 30, 2007, was 28.00%.
Data provided by Lipper Inc. - A Reuters Company. ©2007 Reuters. All rights
reserved. Any copying, republication or redistribution of Lipper content,
including by caching, framing or similar means, is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for
any errors or delays in the content, or for any actions taken in reliance
thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
19
CHINA DEMAND HELPED PERFORMANCE
From a sector perspective, our consumer discretionary holdings made the
greatest contribution to the portfolio's total return, with strong stock
selection driving results. For example, China's Li Ning, a fast-growing
sports-apparel retailer not represented in the benchmark, was the sector's top
contributor to performance. Growing consumer demand in China led to strong
sales growth and soaring profits for the company.
Favorable stock selection also led to strong performance for the portfolio's
financials and energy sectors. China's Shenzhen Investment, a property
developer not represented in the benchmark, was the financial sector's leading
contributor. In energy, our overweighted position in Straits Asia Resources, a
Singapore-based mining company, contributed strongly to performance on rising
coal prices and robust demand.
TELECOMM, UTILITIES SECTORS LAGGED
Our stocks in the utilities sector, the portfolio's second-smallest sector
weighting, represented the largest performance detractor in the portfolio. Our
underweight combined with poor stock selection led to the lagging results. The
portfolio's telecommunication services sector also detracted from relative
performance. Stock selection was the major culprit, as the few positions we
owned in this sector (the portfolio's smallest) performed poorly. Most of the
benchmark companies in the telecommunication and utilities sectors have market
capitalizations that exceed the portfolio's requirements.
OUTLOOK
We remain committed to our investment strategy of seeking the stocks of small,
foreign companies we believe have a high likelihood of growing earnings and
revenues at an improving rate. We select these stocks with the assistance of
extensive company-level research that focuses on identifying accelerating
growth characteristics.
Types of Investments in Portfolio
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Foreign Common Stocks 96.9% 97.4%
Foreign Preferred Stocks 0.6% 1.2%
TOTAL EQUITY EXPOSURE 97.5% 98.6%
Temporary Cash Investments 2.1% 1.0%
Other Assets and Liabilities(1) 0.4% 0.4%
(1) Includes securities lending collateral and other assets and liabilities.
Investments by Country as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Japan 11.5% 6.9%
United Kingdom 11.0% 10.5%
People's Republic of China 7.3% 5.6%
Germany 6.7% 10.6%
Canada 5.7% 2.6%
Hong Kong 5.6% 2.7%
Australia 5.2% 1.4%
Singapore 5.1% 4.2%
South Korea 4.8% 2.0%
Spain 4.7% 3.9%
Switzerland 3.9% 5.9%
Norway 3.7% 4.8%
France 3.3% 4.9%
Netherlands 2.8% 6.1%
India 2.4% -
Indonesia 2.3% 1.2%
Greece 2.1% 3.0%
Other Countries 9.4% 22.3%
Cash and Equivalents(2) 2.5% 1.4%
(2) Includes temporary cash investments, securities lending collateral and
other assets and liabilities.
- ------
20
SCHEDULE OF INVESTMENTS
International Opportunities
NOVEMBER 30, 2007
Shares ($ IN THOUSANDS) Value
Common Stocks -- 96.9%
AUSTRALIA -- 5.2%
604,058 Arrow Energy NL(1)(2) $1,646
265,694 Bradken Ltd. 3,184
787,246 HFA Holdings Ltd.(2) 1,508
1,475,639 Mount Gibson Iron Ltd.(1) 3,408
532,970 NRW Holdings Ltd.(1) 1,443
--------
11,189
--------
BELGIUM -- 1.0%
18,859 EVS Broadcast Equipment SA 2,232
--------
BRAZIL -- 1.3%
179,800 Drogasil SA 1,271
54,386 Dufry South America Ltd. BDR(1) 1,566
--------
2,837
--------
CANADA -- 5.7%
664,400 Bayou Bend Petroleum Ltd.(1) 309
86,331 Canadian Western Bank(2) 2,334
30,993 Forzani Group Ltd. (The) Cl A(1) 438
77,634 Major Drilling Group International Inc.(1) 4,443
63,009 Petrobank Energy & Resources Ltd.(1)(2) 3,173
41,966 Transat A.T. Inc. Cl B 1,566
--------
12,263
--------
DENMARK -- 0.7%
21,876 East Asiatic Co. Ltd. AS (The)(2) 1,497
--------
FRANCE -- 3.3%
9,921 Eurofins Scientific SA 1,170
11,469 Nexans SA 1,535
34,881 Sechilienne-Sidec(2) 2,792
28,020 SeLoger.com(1) 1,689
--------
7,186
--------
GERMANY -- 6.1%
87,767 D+S europe AG(1)(2) 1,671
97,549 Gildemeister AG 2,449
141,268 Kontron AG 3,046
18,521 Leoni AG 973
6,796 Software AG 555
4,813 SOLON AG fur Solartechnik(1) 514
10,105 Vossloh AG 1,094
168,657 Wire Card AG(1) 2,836
--------
13,138
--------
Shares ($ IN THOUSANDS) Value
GREECE -- 2.1%
85,936 Hellenic Exchanges SA $2,537
126,991 Michaniki SA 1,112
49,627 Sprider Stores SA 954
--------
4,603
--------
HONG KONG -- 5.6%
4,856,000 Dore Holdings Ltd.(2) 1,395
1,245,000 Huabao International Holdings Ltd. 1,288
1,654,000 Peace Mark Holdings Ltd. 2,459
3,115,000 Polytec Asset Holdings Ltd. 965
16,775,000 REXCAPITAL Financial Holdings Ltd.(1)(2) 3,011
2,648,000 Xinyi Glass Holdings Co. Ltd. 3,113
--------
12,231
--------
INDIA -- 2.4%
162,887 Elecon Engineering Co. Ltd.(1) 1,207
49,844 Tulip IT Services Ltd. 1,176
470,775 Voltas Ltd. 2,872
--------
5,255
--------
INDONESIA -- 2.3%
15,280,850 PT Bakrie Sumatera Plantations Tbk 3,609
3,169,500 PT Sumalindo Lestari Jaya Tbk(1) 1,048
124,000 PT Timah Tbk 333
--------
4,990
--------
ITALY -- 0.9%
314,185 Polynt SpA(1) 1,341
57,951 SNAI SpA(1) 505
--------
1,846
--------
JAPAN -- 11.5%
147,700 Capcom Co. Ltd.(2) 3,979
281,900 Hosiden Corp.(2) 4,757
270,000 Nippon Synthetic Chemical Industry Co., Ltd.
(The)(2) 1,576
147,500 Shinko Plantech Co. Ltd.(2) 2,354
690 So-net Entertainment Corp.(2) 2,943
140,000 Takasago Thermal Engineering Co. Ltd.(2) 1,267
108,700 Tamron Co. Ltd.(2) 3,250
214,000 Tokai Carbon Co. Ltd.(2) 2,289
25,872 Toyo Tanso Co. Ltd.(2) 2,488
--------
24,903
--------
- ------
21
International Opportunities
Shares ($ IN THOUSANDS) Value
MALAYSIA -- 0.8%
1,953,000 Alliance Financial Group Bhd $1,751
--------
NETHERLANDS -- 2.8%
31,167 Draka Holding N.V.(2) 1,097
22,313 Imtech N.V.(2) 537
19,402 Smartrac N.V.(1) 1,040
24,417 Smit Internationale N.V. 2,461
35,982 Unit 4 Agresso N.V. 943
--------
6,078
--------
NORWAY -- 3.7%
555,161 Deep Sea Supply plc 2,508
370,736 Golden Ocean Group Ltd.(2) 2,358
141,424 ODIM ASA(1) 2,127
265,698 StepStone ASA(1) 1,115
--------
8,108
--------
PEOPLE'S REPUBLIC OF CHINA -- 7.3%
27,306 Agria Corp. ADR(1) 334
1,190,000 Ajisen China Holdings Ltd.(1) 1,858
878,000 China National Building Material Co. Ltd. Cl H 3,822
58,336 China Nepstar Chain Drugstore Ltd. ADR(1)(2) 1,087
1,598,000 China Properties Group Ltd. 1,084
1,868,000 Fibrechem Technologies Ltd.(2) 1,855
739,000 Haitian International Holdings Ltd. 523
982,000 Li Ning Co. Ltd.(2) 3,335
2,448,000 Shenzhen Investment Ltd.(2) 1,870
--------
15,768
--------
PHILIPPINES -- 0.2%
14,141,800 Filinvest Land Inc.(1) 501
--------
SINGAPORE -- 5.1%
1,055,000 Epure International Ltd.(1) 1,465
814,000 Ezra Holdings Ltd. 1,887
539,000 Midas Holdings Ltd.(2) 540
2,195,000 Straits Asia Resources Ltd.(2) 4,809
1,016,000 Tat Hong Holdings Ltd. 2,244
--------
10,945
--------
SOUTH AFRICA -- 1.6%
93,545 JSE Ltd. 1,257
272,410 Spar Group Ltd. (The) 2,259
--------
3,516
--------
Shares ($ IN THOUSANDS) Value
SOUTH KOREA -- 4.8%
69,070 Hotel Shilla Co. Ltd. $1,886
75,711 Jinsung T.E.C. Co., Ltd.(1) 926
127,180 LIG Non-Life Insurance Co., Ltd. 3,152
7,888 MegaStudy Co., Ltd. 2,676
49,584 TK Corp. 1,710
--------
10,350
--------
SPAIN -- 4.7%
172,161 Grifols SA 3,989
396,943 Tubacex SA(2) 4,177
88,884 Viscofan SA 2,074
--------
10,240
--------
SWEDEN -- 1.1%
143,103 Intrum Justitia AB(2) 2,444
--------
SWITZERLAND -- 3.9%
11,500 Bucher Industries AG 2,845
5,530 Galenica Holding AG 3,012
5,411 Meyer Burger Technology AG(1) 1,670
12,350 SCHMOLZ+BICKENBACH AG 1,030
--------
8,557
--------
TAIWAN (REPUBLIC OF CHINA) -- 0.9%
433,000 Chicony Electronics Co. Ltd. 799
328,680 Merry Electronics Co. Ltd. 999
--------
1,798
--------
TURKEY -- 0.9%
229,640 Asya Katilim Bankasi AS(1) 1,894
--------
UNITED KINGDOM -- 11.0%
241,512 Babcock International Group plc 2,929
36,271 Chemring Group plc 1,599
186,805 Hikma Pharmaceuticals plc 1,815
176,162 IG Group Holdings plc 1,483
296,679 MITIE Group plc 1,681
830,653 RAB Capital plc 1,463
157,809 RPS Group plc 980
340,390 Southern Cross Healthcare Ltd. 4,041
95,692 Spice plc 989
65,242 Tradus plc(1) 2,290
65,908 Wellstream Holdings plc(1) 1,421
89,651 WSP Group plc 1,268
310,494 Xchanging Ltd.(1) 1,889
--------
23,848
--------
TOTAL COMMON STOCKS
(Cost $162,227) 209,968
--------
- ------
22
International Opportunities
Shares ($ IN THOUSANDS) Value
Preferred Stocks -- 0.6%
GERMANY -- 0.6%
17,535 Hugo Boss AG $1,206
(Cost $524)
--------
Temporary Cash Investments -- 2.1%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%, 8/15/23,
valued at $4,587), in a joint trading account at 3.05%, dated
11/30/07, due 12/3/07 (Delivery value $4,501)
(Cost $4,500) 4,500
--------
Temporary Cash Investments - Securities
Lending Collateral(3) -- 14.7%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $10,004) 10,000
Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized
by various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.56%, dated 11/30/07, due 12/3/07 (Delivery value
$11,906) 11,901
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at the
lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery value
$10,004) 10,000
--------
TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES
LENDING COLLATERAL
(Cost $31,901) 31,901
--------
TOTAL INVESTMENT SECURITIES -- 114.3%
(Cost $199,152) 247,575
--------
OTHER ASSETS AND LIABILITIES -- (14.3)% (30,905)
--------
TOTAL NET ASSETS -- 100.0% $216,670
========
Market Sector Diversification
(as a % of net assets)
Industrials 25.7%
Consumer Discretionary 16.3%
Financials 11.5%
Materials 11.0%
Information Technology 10.2%
Energy 8.2%
Health Care 6.5%
Consumer Staples 5.6%
Utilities 2.0%
Telecommunication Services 0.5%
Cash and Equivalents* 2.5%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
BDR = Brazilian Depositary Receipt
(1) Non-income producing.
(2) Security, or a portion thereof, was on loan as of November 30, 2007.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $194,651 (in
thousands), which represented 89.8% of total net assets, were valued in
accordance with alternative pricing procedures adopted by the Board of
Directors.
See Notes to Financial Statements.
- ------
23
SHAREHOLDER FEE EXAMPLES (UNAUDITED)
Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds.
The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from June 1, 2007 to November 30, 2007.
ACTUAL EXPENSES
The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.
- ------
24
Expenses Paid
Beginning Ending During Period* Annualized
Account Account Value 6/1/07 - Expense
Value 6/1/07 11/30/07 11/30/07 Ratio*
International Stock
ACTUAL
Investor Class $1,000 $1,075.50 $7.80 1.50%
HYPOTHETICAL
Investor Class $1,000 $1,017.55 $7.59 1.50%
International Discovery
ACTUAL
Investor Class $1,000 $1,080.40 $7.04 1.35%
Institutional
Class $1,000 $1,082.10 $6.00 1.15%
Advisor Class $1,000 $1,079.40 $8.34 1.60%
HYPOTHETICAL
Investor Class $1,000 $1,018.30 $6.83 1.35%
Institutional
Class $1,000 $1,019.30 $5.82 1.15%
Advisor Class $1,000 $1,017.05 $8.09 1.60%
International Opportunities
ACTUAL
Investor Class $1,000 $1,042.20 $9.22 1.80%
Institutional
Class $1,000 $1,042.80 $8.19 1.60%
HYPOTHETICAL
Investor Class $1,000 $1,016.04 $9.10 1.80%
Institutional
Class $1,000 $1,017.05 $8.09 1.60%
* Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
- ------
25
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
International International International
Stock Discovery Opportunities
ASSETS
Investment securities, at
value (cost of $114,928,
$1,500,284 and $167,251,
respectively) -- including
$7,257, $50,160 and $30,481 of
securities on loan,
respectively $144,752 $1,916,468 $215,674
Investments made with cash
collateral received for
securities on loan, at value
(cost of $7,501, $49,850 and
$31,901, respectively) 7,501 49,850 31,901
------------- ------------- --------------
Total investment securities,
at value (cost of $122,429,
$1,550,134 and $199,152,
respectively) 152,253 1,966,318 247,575
Cash -- 633 --
Foreign currency holdings, at
value (cost of $-, $7,314 and
$1,009, respectively) -- 7,294 1,013
Receivable for investments sold 1,528 31,552 2,657
Dividends and interest
receivable 229 1,821 673
------------- ------------- --------------
154,010 2,007,618 251,918
------------- ------------- --------------
LIABILITIES
Disbursements in excess of
demand deposit cash 224 -- 186
Payable for collateral
received for securities on loan 7,501 49,850 31,901
Payable for investments
purchased 1,295 49,111 2,837
Accrued management fees 178 2,105 324
------------- ------------- --------------
9,198 101,066 35,248
------------- ------------- --------------
NET ASSETS $144,812 $1,906,552 $216,670
============= ============= =============
See Notes to Financial Statements.
- ------
26
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS EXCEPT AS NOTED)
International International International
Stock Discovery Opportunities
NET ASSETS CONSIST OF:
Capital (par value and
paid-in surplus) $108,855 $1,059,034 $118,861
Undistributed net investment
income 935 6,987 1,023
Undistributed net realized
gain on investment and
foreign currency transactions 5,206 424,762 48,409
Net unrealized appreciation
on investments and
translation of assets and
liabilities in foreign
currencies 29,816 415,769 48,377
------------- --------------- -------------
$144,812 $1,906,552 $216,670
============= =============== =============
INVESTOR CLASS, $0.01 PAR
VALUE ($ AND SHARES IN FULL)
Net assets $144,812,053 $1,758,334,824 $212,157,420
Shares outstanding 8,758,992 95,580,864 18,652,511
Net asset value per share $16.53 $18.40 $11.37
INSTITUTIONAL CLASS, $0.01
PAR VALUE ($ AND SHARES IN
FULL)
Net assets N/A $145,723,196 $4,512,753
Shares outstanding N/A 7,840,680 394,428
Net asset value per share N/A $18.59 $11.44
ADVISOR CLASS, $0.01 PAR
VALUE ($ AND SHARES IN FULL)
Net assets N/A $2,493,976 N/A
Shares outstanding N/A 137,932 N/A
Net asset value per share N/A $18.08 N/A
See Notes to Financial Statements.
- ------
27
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
International International International
Stock Discovery Opportunities
INVESTMENT INCOME (LOSS)
INCOME:
Dividends (net of foreign
taxes withheld of $241,
$2,016 and $310,
respectively) $ 2,818 $ 27,301 $ 3,733
Interest 95 1,221 156
Securities lending 85 460 276
------------ ------------ ------------
2,998 28,982 4,165
------------ ------------ ------------
EXPENSES:
Management fees 1,924 23,428 3,742
Distribution and service
fees -- Advisor Class -- 1 --
Directors' fees and expenses 2 31 4
Other expenses 1 72 8
------------ ------------ ------------
1,927 23,532 3,754
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) 1,071 5,450 411
------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
Investment transactions (net
of foreign taxes accrued of
$--, $1,397 and $2,
respectively) 1,900 353,922 40,588
Foreign currency
transactions 4,090 76,634 9,282
------------ ------------ ------------
5,990 430,556 49,870
------------ ------------ ------------
CHANGE IN NET UNREALIZED
APPRECIATION (DEPRECIATION)
ON:
Investments (net of foreign
taxes accrued of $(13), $79
and $(15), respectively) 12,810 20,907 6,728
Translation of assets and
liabilities in foreign
currencies 4,624 14,773 1,156
------------ ------------ ------------
17,434 35,680 7,884
------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) 23,424 466,236 57,754
------------ ------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING FROM
OPERATIONS $24,495 $471,686 $58,165
============ ============ ============
See Notes to Financial Statements.
- ------
28
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30, 2007 AND NOVEMBER 30, 2006 (AMOUNTS IN THOUSANDS)
International International
Stock Discovery
Increase (Decrease) in Net Assets 2007 2006 2007 2006
OPERATIONS
Net investment income (loss) $ 1,071 $229 $5,450 $ (1,254)
Net realized gain (loss) 5,990 (508) 430,556 372,416
Change in net unrealized
appreciation (depreciation) 17,434 11,102 35,680 90,140
-------- ------- ---------- ----------
Net increase (decrease) in net
assets resulting from operations 24,495 10,823 471,686 461,302
-------- ------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class (320) (155) -- (9,106)
Institutional Class -- -- -- (2,071)
From net realized gains:
Investor Class -- -- (348,488) (200,178)
Institutional Class -- -- (25,425) (36,186)
Advisor Class -- -- (3) (12)
-------- ------- ---------- ----------
Decrease in net assets from
distributions (320) (155) (373,916) (247,553)
-------- ------- ---------- ----------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net
assets from capital share
transactions 30,456 59,171 255,971 (12,037)
-------- ------- ---------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS 54,631 69,839 353,741 201,712
NET ASSETS
Beginning of period 90,181 20,342 1,552,811 1,351,099
-------- ------- ---------- ----------
End of period $144,812 $90,181 $1,906,552 $1,552,811
======== ======= ========== ==========
Accumulated undistributed net
investment income (loss) $935 $87 $6,987 $(54)
======== ======= ========== ==========
See Notes to Financial Statements.
- ------
29
YEARS ENDED NOVEMBER 30, 2007 AND NOVEMBER 30, 2006 (AMOUNTS IN THOUSANDS)
International
Opportunities
Increase (Decrease) in Net Assets 2007 2006
OPERATIONS
Net investment income (loss) $ 411 $(122)
Net realized gain (loss) 49,870 52,034
Change in net unrealized appreciation (depreciation) 7,884 (7,653)
--------- ---------
Net increase (decrease) in net assets resulting from
operations 58,165 44,259
--------- ---------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income:
Investor Class (46) (213)
Institutional Class (3) --
From net realized gains:
Investor Class (52,245) (48,721)
Institutional Class (352) (8)
--------- ---------
Decrease in net assets from distributions (52,646) (48,942)
--------- ---------
CAPITAL SHARE TRANSACTIONS
Net increase (decrease) in net assets from capital
share transactions 29,320 (11,714)
--------- ---------
NET INCREASE (DECREASE) IN NET ASSETS 34,839 (16,397)
NET ASSETS
Beginning of period 181,831 198,228
--------- ---------
End of period $216,670 $181,831
========= =========
Accumulated undistributed net
investment income (loss) $1,023 $(174)
========= =========
See Notes to Financial Statements.
- ------
30
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century World Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 (the 1940 Act) as an
open-end management investment company. International Stock Fund
(International Stock), International Discovery Fund (International Discovery)
and International Opportunities Fund (International Opportunities)
(collectively, the funds) are three funds in a series issued by the
corporation. The funds are diversified under the 1940 Act. The funds'
investment objective is to seek capital growth. The funds pursue their
objective by investing primarily in equity securities of foreign companies.
International Stock primarily invests in securities of issuers in developed
foreign countries that are large-sized companies. International Discovery
primarily invests in securities of issuers in developed or emerging market
countries that are small- to medium-sized companies at the time of purchase.
International Opportunities primarily invests in securities of issuers in
developed or emerging market countries that are small-sized companies at the
time of purchase. The following is a summary of the funds' significant
accounting policies.
MULTIPLE CLASS -- International Stock is authorized to issue the Investor
Class. International Discovery is authorized to issue the Investor Class, the
Institutional Class and the Advisor Class. International Opportunities is
authorized to issue the Investor Class and the Institutional Class. The share
classes differ principally in their respective distribution and shareholder
servicing expenses and arrangements. All shares of each fund represent an
equal pro rata interest in the net assets of the class to which such shares
belong, and have identical voting, dividend, liquidation and other rights and
the same terms and conditions, except for class specific expenses and
exclusive rights to vote on matters affecting only individual classes. Income,
non-class specific expenses, and realized and unrealized capital gains and
losses of the funds are allocated to each class of shares based on their
relative net assets.
SECURITY VALUATIONS -- Securities traded primarily on a principal securities
exchange are valued at the last reported sales price, or at the mean of the
latest bid and asked prices where no last sales price is available. Depending
on local convention or regulation, securities traded over-the-counter are
valued at the mean of the latest bid and asked prices, the last sales price,
or the official close price. 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. Discount notes may be valued
through a commercial pricing service or at amortized cost, which approximates
fair value. Securities traded on foreign securities exchanges and
over-the-counter markets are normally completed before the close of business
on days that the New York Stock Exchange (the Exchange) is open and may also
take place on days when the Exchange is not open. If an event occurs after the
value of a security was established but before the net asset value per share
was determined that was likely to materially change the net asset value, that
security would be valued as determined in accordance with procedures adopted
by the Board of Directors. If the funds determine that the market price of a
portfolio security is not readily available, or that the valuation methods
mentioned above do not reflect the security's fair value, such security is
valued as determined by, or in accordance with procedures adopted by, the
Board of Directors or its designee if such determination would materially
impact a fund's net asset value. Certain other circumstances may cause the
funds to use alternative procedures to value a security such as: a security
has been declared in default; trading in a security has been halted during the
trading day; or there is a foreign market holiday and no trading will commence.
SECURITY TRANSACTIONS -- For financial reporting purposes, 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. Certain countries impose taxes on realized gains
on the sale of securities registered in their country. The funds record the
foreign tax expense, if any, on an accrual basis. The realized and unrealized
tax provision reduces the net realized gain (loss) on investment transactions
and net unrealized appreciation (depreciation) on investments, respectively.
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.
SECURITIES ON LOAN -- The funds may lend portfolio securities through their
lending agent to certain approved borrowers in order to earn additional
income. The funds continue to recognize any gain or loss in the market price
of the securities loaned and record any interest earned or dividends declared.
- ------
31
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. 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. Realized
and unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component
of realized gain (loss) on foreign currency transactions and unrealized
appreciation (depreciation) on translation of assets and liabilities in
foreign currencies, respectively. Certain countries may impose taxes on the
contract amount of purchases and sales of foreign currency contracts in their
currency. The funds record the foreign tax expense, if any, as a reduction to
the net realized gain (loss) on foreign currency transactions.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the funds' exposure
to foreign currency exchange rate fluctuations. 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. 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 American Century Investment Management, Inc. (ACIM) has
determined are creditworthy pursuant to criteria adopted by the Board of
Directors. Each repurchase agreement is recorded at cost. Each fund requires
that the collateral, represented by securities, received in a repurchase
transaction be transferred to the custodian in a manner sufficient to enable
each fund 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
each fund under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund, along with other registered
investment companies having management agreements with ACIM or American
Century Global Investment Management, Inc. (ACGIM), 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 each fund's policy to distribute substantially 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. The funds are no longer subject to examination by tax
authorities for years prior to 2004. At this time, management has not
identified any uncertain tax positions that would materially impact the
financial statements. Accordingly, no provision has been made for federal or
state income taxes. Interest and penalties associated with any federal or
state income tax obligations, if any, are recorded as interest expense.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid annually. Distributions from net realized gains,
if any, are generally declared and paid twice per year. 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 1940 Act.
REDEMPTION -- International Stock may impose a 2.00% redemption fee on shares
held less then 60 days. International Discovery and International
Opportunities may impose a 2.00% redemption fee on shares held less than 180
days. These fees may not be applicable to all classes. These redemption fees
are recorded as a reduction in the cost of shares redeemed. These redemption
fees are retained by the funds and help cover transaction costs that long-term
investors may bear when a fund sells securities to meet investor redemptions.
- ------
32
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.
USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.
2. FEES AND TRANSACTIONS WITH RELATED PARTIES
On July 27, 2007, the Advisor Class shareholders of International Discovery
approved a change to the class's fee structure. The change was approved by the
Board of Directors on November 29, 2006 and March 7, 2007. Effective September
4, 2007, the fee structure change resulted in an increase of 0.25% in the
unified management fee and a simultaneous decrease of 0.25% in the total
distribution and service fee, resulting in no change to the total operating
expense ratio of the class.
MANAGEMENT FEES -- The corporation has entered into a Management Agreement
with ACGIM (the investment advisor), under which ACGIM provides the funds with
investment advisory and management services in exchange for a single, unified
management fee (the fee) per class. The Agreement provides that all expenses
of the funds, except brokerage commissions, taxes, interest, fees and expenses
of those directors who are not considered "interested persons" as defined in
the 1940 Act (including counsel fees) and extraordinary expenses, will be paid
by ACGIM. The fee is computed and accrued daily based on the daily net assets
of each specific class of shares of each fund and paid monthly in arrears. For
funds with a stepped fee schedule, the rate of the fee is determined by
applying a fee rate calculation formula. This formula takes into account all
of the investment advisor's assets under management in each fund's investment
strategy (strategy assets) to calculate the appropriate fee rate for each
fund. The strategy assets include each fund's assets and the assets of other
clients of the investment advisor that are not in the American Century family
of funds, but that have the same investment team and investment strategy. The
annual management fee schedule for International Stock ranges from 1.10% to
1.50% for the Investor Class. The annual management fee schedule for
International Discovery ranges from 1.20% to 1.75% for the Investor Class and
Advisor Class. The annual management fee schedule for International
Opportunities ranges from 1.60% to 2.00% for the Investor Class. The
Institutional Class is 0.20% less at each point within the range. Prior to
September 4, 2007, the Advisor Class was 0.25% less at each point within the
range for International Discovery. The effective annual management fee for
each class of each fund for the year ended November 30, 2007, was as follows:
Investor Institutional Advisor
International Stock 1.50% N/A N/A
International Discovery 1.35% 1.15% 1.29%
International Opportunities 1.80% 1.60% N/A
ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on
behalf of the funds. The subadvisor makes investment decisions for the cash
portion of the funds in accordance with the funds' investment objectives,
policies and restrictions under the supervision of ACGIM and the Board of
Directors. ACGIM pays all costs associated with retaining ACIM as the
subadvisor of the funds.
- ------
33
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
DISTRIBUTION AND SERVICE FEE -- The Board of Directors has adopted a Master
Distribution and Individual Shareholder Services Plan (the plan) for the
Advisor Class, pursuant to Rule 12b-1 of the 1940 Act. The plan provides that
the Advisor Class will pay American Century Investment Services, Inc. (ACIS)
an annual distribution and service fee of 0.25%. Prior to September 4, 2007,
the Board of Directors had adopted a Master Distribution and Shareholder
Services Plan for the Advisor Class, pursuant to Rule 12b-1 of the 1940 Act,
which provided that the Advisor Class would pay ACIS an annual distribution
fee of 0.25% and service fee of 0.25%. The fees are computed and accrued daily
based on the Advisor Class's daily net assets and paid monthly in arrears. The
distribution fee provides compensation for 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 ACIS, its affiliates or independent third
party providers. Fees incurred under the plans during the year ended November
30, 2007, are detailed in the Statement of Operations.
RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACGIM, the corporation's subadvisor, ACIM, the distributor
of the corporation, ACIS, and the corporation's transfer agent, American
Century Services, LLC.
Beginning in December 2006, the funds are eligible to invest in a money market
fund for temporary purposes, which is managed by J.P. Morgan Investment
Management, Inc. (JPMIM). JPMIM is a wholly owned subsidiary of JPMorgan Chase
& Co. (JPM). JPM is an equity investor in ACC. The funds have a bank line of
credit agreement and securities lending agreement with JPMorgan Chase Bank
(JPMCB). JPMCB is a custodian of the funds and a wholly owned subsidiary of
JPM.
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 2007, were as follows:
International International International
Stock Discovery Opportunities
Purchases $164,331 $2,779,903 $303,879
Proceeds from
sales $131,374 $2,896,069 $326,402
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the funds were as follows:
Year ended Year ended
November 30, 2007 November 30, 2006
Shares Amount Shares Amount
International Stock
INVESTOR CLASS/SHARES AUTHORIZED 100,000 100,000
======== ========
Sold 4,667 $69,026 6,064 $75,036
Issued in reinvestment of
distributions 23 314 14 152
Redeemed (2,577) (38,884)(1) (1,309) (16,017)(2)
-------- ----------- -------- -----------
Net increase (decrease) 2,113 $30,456 4,769 $59,171
======== =========== ======== ===========
(1) Net of redemption fees of $30.
(2) Net of redemption fees of $37.
- ------
34
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
Year ended Year ended
November 30, 2007 November 30, 2006
Shares Amount Shares Amount
International Discovery
INVESTOR CLASS/SHARES
AUTHORIZED 400,000 400,000
========= ========
Sold 8,720 $151,608 5,524 $89,151
Issued in reinvestment of
distributions 22,035 328,727 14,024 198,371
Redeemed (15,512) (258,448)(1) (11,071) (179,701)(2)
--------- ------------ -------- ------------
15,243 221,887 8,477 107,821
--------- ------------ -------- ------------
INSTITUTIONAL CLASS/SHARES
AUTHORIZED 75,000 75,000
========= ========
Sold 1,808 31,398 5,976 97,632
Issued in reinvestment of
distributions 1,690 25,425 2,683 38,220
Redeemed (1,485) (25,232)(3) (15,621) (255,645)(4)
--------- ------------ -------- ------------
2,013 31,591 (6,962) (119,793)
--------- ------------ -------- ------------
ADVISOR CLASS/SHARES
AUTHORIZED 5,000 5,000
========= ========
Sold 142 2,568 -- --
Issued in reinvestment of
distributions -- 3 1 12
Redeemed (4) (78)(5) (5) (77)
--------- ------------ -------- ------------
138 2,493 (4) (65)
--------- ------------ -------- ------------
Net increase (decrease) 17,394 $255,971 1,511 $(12,037)
========= ============ ======== ============
International Opportunities
INVESTOR CLASS/SHARES
AUTHORIZED 100,000 10,000
========= ========
Sold 108 $1,145 96 $1,070
Issued in reinvestment of
distributions 5,745 51,241 4,719 48,005
Redeemed (2,527) (26,039)(6) (5,636) (61,797)
--------- ------------ -------- ------------
3,326 26,347 (821) (12,722)
--------- ------------ -------- ------------
INSTITUTIONAL CLASS/SHARES
AUTHORIZED 10,000 10,000
========= ========
Sold 261 2,618 90 1,000
Issued in reinvestment of
distributions 40 355 1 8
--------- ------------ -------- ------------
301 2,973 91 1,008
--------- ------------ -------- ------------
Net increase (decrease) 3,627 $29,320 (730) $(11,714)
========= ============ ======== ============
(1) Net of redemption fees of $102.
(2) Net of redemption fees of $90.
(3) Net of redemption fees of $23.
(4) Net of redemption fees of $164.
(5) Net of redemption fees of $2.
(6) Net of redemption fees of $1.
- ------
35
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
5. SECURITIES LENDING
As of November 30, 2007, securities in International Stock, International
Discovery and International Opportunities valued at $7,257, $50,160 and
$30,481, respectively, were on loan through the lending agent, JPMCB, to
certain approved borrowers. JPMCB receives and maintains collateral in the
form of cash and/or acceptable securities as approved by ACIM or ACGIM. Cash
collateral is invested in authorized investments by the lending agent in a
pooled account. The value of cash collateral received at period end is
disclosed in the Statement of Assets and Liabilities and investments made with
the cash by the lending agent are listed in the Schedule of Investments. Any
deficiencies or excess of collateral must be delivered or transferred by the
member firms no later than the close of business on the next business day. The
total value of all collateral received, at this date, was $7,501, $49,850 and
$31,901, respectively. The funds' risks in securities lending are that the
borrower may not provide additional collateral when required or return the
securities when due. If the borrower defaults, receipt of the collateral by
the funds may be delayed or limited.
6. BANK LINE OF CREDIT
The funds, along with certain other funds managed by ACIM or ACGIM, have a
$500 million unsecured bank line of credit agreement with JPMCB. The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the agreement bear interest at the Federal Funds
rate plus 0.40%. The funds did not borrow from the line during the year ended
November 30, 2007.
Effective December 12, 2007, the funds, along with certain other funds managed
by ACIM or ACGIM, have a $500 million unsecured bank line of credit agreement
with Bank of America, N.A. (the Bank of America agreement). The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the Bank of America agreement bear interest at
the Federal Funds rate plus 0.40%.
7. RISK FACTORS
There are certain risks involved in investing in foreign securities. These
risks include those resulting from future adverse political, social, and
economic developments, fluctuations in currency exchange rates, the possible
imposition of exchange controls, and other foreign laws or restrictions.
Investing in emerging markets may accentuate these risks.
8. FEDERAL TAX INFORMATION
On December 18, 2007, the funds declared and paid the following per-share
distributions from net investment income to shareholders of record on December
17, 2007:
Investor Institutional Advisor
International Stock $0.1233 N/A N/A
International Discovery $0.0514 $0.0858 $0.0084
International Opportunities $0.0491 $0.0700 N/A
On December 18, 2007, International Stock, International Discovery and
International Opportunities declared and paid a per-share distribution from
net realized gains to shareholders of record on December 17, 2007 of $0.6521,
$3.7176 and $2.4668, respectively, for each class of the funds.
- ------
36
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
The tax character of distributions paid during the years ended November 30,
2007 and November 30, 2006 were as follows:
International Stock International Discovery
2007 2006 2007 2006
DISTRIBUTIONS PAID FROM
Ordinary income $320 $155 $117,025 $115,168
Long-term capital gains -- -- $256,891 $132,385
International Opportunities
2007 2006
DISTRIBUTIONS PAID FROM
Ordinary income $9,422 $19,416
Long-term capital gains $43,224 $29,526
The book-basis 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 realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.
As of November 30, 2007, the components of distributable earnings on a
tax-basis and the federal tax cost of investments were as follows:
International International International
Stock Discovery Opportunities
Federal tax cost of
investments $122,751 $1,554,564 $199,770
============ ============= =============
Gross tax appreciation of
investments $30,592 $447,852 $53,859
Gross tax depreciation of
investments (1,090) (36,098) (6,054)
------------ ------------- -------------
Net tax appreciation
(depreciation) of investments $29,502 $411,754 $47,805
============ ============= =============
Net tax appreciation
(depreciation) on derivatives
and translation of assets and
liabilities in foreign
currencies $(7) $(285) $(59)
------------ ------------- -------------
Net tax appreciation
(depreciation) $29,495 $411,469 $47,746
============ ============= =============
Undistributed ordinary income $3,003 $142,707 $18,331
Accumulated long-term gains $3,692 $293,720 $31,732
Capital loss deferrals $(233) -- --
Currency loss deferrals -- $(378) --
The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales and on investments in passive foreign investment
companies.
The capital and currency loss deferrals listed above represent net capital and
foreign currency losses incurred in the one-month period ended November 30,
2007. The funds have elected to treat such losses as having been incurred in
the following fiscal year for federal income tax purposes.
- ------
37
NOVEMBER 30, 2007 (AMOUNTS IN THOUSANDS)
9. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.
The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.
10. OTHER TAX INFORMATION (UNAUDITED) ($ IN FULL)
The following information is provided pursuant to provisions of the Internal
Revenue Code.
The funds hereby designate up to the maximum amount allowable as qualified
dividend income for the fiscal year ended November 30, 2007.
The funds hereby designate capital gain distributions for the fiscal year
ended November 30, 2007, as follows:
International Stock International Discovery International Opportunities
-- $256,891,012 $43,224,332
For corporate taxpayers, ordinary income distributions paid during the fiscal
year ended November 30, 2007, qualify for the corporate dividends received
deduction as follows:
International Stock International Discovery International Opportunities
$6,559 -- --
The funds hereby designate qualified short-term capital gains distributions
for purposes of Internal Revenue Code Section 871 for the fiscal year ended
November 30, 2007, as follows:
International Stock International Discovery International Opportunities
-- $117,024,896 $9,372,754
As of November 30, 2007, the funds designate the following as a foreign tax
credit, which represents taxes paid on income derived from sources within
foreign countries or possessions of the United States:
International Stock International Discovery International Opportunities
$98,831 $803,250 $168,496
- ------
38
FINANCIAL HIGHLIGHTS
International Stock
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $13.57 $10.84 $10.00
-------- ------- --------
Income From Investment Operations
Net Investment Income (Loss) 0.13 0.06 0.06(2)
Net Realized and Unrealized Gain (Loss) 2.88 2.74 0.78
-------- ------- --------
Total From Investment Operations 3.01 2.80 0.84
-------- ------- --------
Distributions
From Net Investment Income (0.05) (0.08) --
-------- ------- --------
Redemption Fees(2) --(3) 0.01 --
-------- ------- --------
Net Asset Value, End of Period $16.53 $13.57 $10.84
======== ======= ========
TOTAL RETURN(4) 22.22% 26.07% 8.40%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.50% 1.50% 1.50%(5)
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.83% 0.40% 0.91%(5)
Portfolio Turnover Rate 103% 109% 109%
Net Assets, End of Period (in thousands) $144,812 $90,181 $20,342
(1) March 31, 2005 (fund inception) through November 30, 2005.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized.
(5) Annualized.
See Notes to Financial Statements.
- ------
39
International Discovery
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of
Period $18.01 $15.94 $15.11 $12.75 $9.32
---------- ---------- ---------- ---------- ----------
Income From
Investment
Operations
Net
Investment
Income
(Loss)(1) 0.05 (0.02) 0.14 (0.01) 0.03
Net Realized
and
Unrealized
Gain (Loss) 4.60 5.00 2.97 2.40 3.42
---------- ---------- ---------- ---------- ----------
Total From
Investment
Operations 4.65 4.98 3.11 2.39 3.45
---------- ---------- ---------- ---------- ----------
Distributions
From Net
Investment
Income -- (0.13) -- (0.03) (0.02)
From Net
Realized
Gains (4.26) (2.78) (2.28) -- --
---------- ---------- ---------- ---------- ----------
Total
Distributions (4.26) (2.91) (2.28) (0.03) (0.02)
---------- ---------- ---------- ---------- ----------
Net Asset Value,
End of Period $18.40 $18.01 $15.94 $15.11 $12.75
========== ========== ========== ========== ==========
TOTAL RETURN(2) 32.18% 36.41% 24.30% 18.76% 37.05%
RATIOS/SUPPLEMENTAL DATA
Ratio of
Operating
Expenses to
Average Net Assets 1.36% 1.41% 1.47% 1.49% 1.57%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets 0.30% (0.11)% 1.02% (0.06)% 0.27%
Portfolio
Turnover Rate 162% 148% 145% 201% 215%
Net Assets, End
of Period (in
thousands) $1,758,335 $1,446,955 $1,145,623 $1,112,870 $1,028,934
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
40
International Discovery
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $18.16 $16.06 $15.21 $12.84 $9.39
-------- -------- -------- -------- --------
Income From Investment
Operations
Net Investment
Income (Loss)(1) 0.09 0.04 0.17 0.02 0.05
Net Realized and
Unrealized Gain (Loss) 4.64 5.00 2.99 2.40 3.43
-------- -------- -------- -------- --------
Total From
Investment Operations 4.73 5.04 3.16 2.42 3.48
-------- -------- -------- -------- --------
Distributions
From Net
Investment Income -- (0.16) -- (0.05) (0.03)
-------- -------- -------- -------- --------
From Net Realized Gains (4.30) (2.78) (2.31) -- --
-------- -------- -------- -------- --------
Total Distributions (4.30) (2.94) (2.31) (0.05) (0.03)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period $18.59 $18.16 $16.06 $15.21 $12.84
======== ======== ======== ======== ========
TOTAL RETURN(2) 32.45% 36.65% 24.56% 18.94% 37.25%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets 1.16% 1.21% 1.27% 1.29% 1.37%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.50% 0.09% 1.22% 0.14% 0.47%
Portfolio Turnover Rate 162% 148% 145% 201% 215%
Net Assets, End of Period
(in thousands) $145,723 $105,849 $205,406 $165,600 $147,531
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
41
International Discovery
Advisor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value,
Beginning of Period $17.76 $15.75 $14.95 $12.63 $9.23
------ ------- ------ ------- ------
Income From Investment Operations
Net Investment Income (Loss)(1) 0.07 (0.08) 0.10 (0.05) 0.01
Net Realized and
Unrealized Gain (Loss) 4.46 4.96 2.95 2.37 3.39
------ ------- ------ ------- ------
Total From
Investment Operations 4.53 4.88 3.05 2.32 3.40
------ ------- ------ ------- ------
Distributions
From Net Investment Income -- (0.09) -- -- --
From Net Realized Gains (4.21) (2.78) (2.25) -- --
------ ------- ------ ------- ------
Total Distributions (4.21) (2.87) (2.25) -- --
------ ------- ------ ------- ------
Net Asset Value, End of Period $18.08 $17.76 $15.75 $14.95 $12.63
====== ======= ====== ======= ======
TOTAL RETURN(2) 31.83% 36.08% 24.01% 18.37% 36.84%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.61% 1.66% 1.72% 1.74% 1.82%
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.05% (0.36)% 0.77% (0.31)% 0.02%
Portfolio Turnover Rate 162% 148% 145% 201% 215%
Net Assets, End of Period (in
thousands) $2,494 $7 $70 $201 $161
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
42
International Opportunities
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $11.79 $12.27 $9.35 $7.62 $4.73
-------- -------- -------- -------- -------
Income From Investment
Operations
Net Investment
Income (Loss)(1) 0.02 (0.01) 0.02 (0.05) (0.01)
Net Realized and
Unrealized Gain (Loss) 2.94 2.53 3.19 2.03 2.90
-------- -------- -------- -------- -------
Total From
Investment Operations 2.96 2.52 3.21 1.98 2.89
-------- -------- -------- -------- -------
Distributions
From Net
Investment Income --(2) (0.01) -- -- (0.01)
From Net Realized Gains (3.38) (2.99) (0.29) (0.27) --
-------- -------- -------- -------- -------
Total Distributions (3.38) (3.00) (0.29) (0.27) (0.01)
-------- -------- -------- -------- -------
Redemption Fees(1) --(2) --(2) --(2) 0.02 0.01
-------- -------- -------- -------- -------
Net Asset Value, End of
Period $11.37 $11.79 $12.27 $9.35 $7.62
======== ======== ======== ======== =======
TOTAL RETURN(3) 33.73% 25.37% 35.28% 27.14% 61.54%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets 1.81% 1.85% 1.91% 1.97% 2.00%
Ratio of Net Investment
Income (Loss) to Average Net
Assets 0.19% (0.06)% 0.20% (0.63)% (0.23)%
Portfolio Turnover Rate 149% 160% 112% 139% 219%
Net Assets, End of Period
(in thousands) $212,157 $180,732 $198,197 $176,100 $72,008
(1) Computed using average shares outstanding throughout the period.
(2) Per-share amount was less than $0.005.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
43
International Opportunities
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
(except as noted)
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value, Beginning of
Period $11.85 $12.32 $9.37 $7.63 $4.80
------ ------ ------ ------- --------
Income From Investment Operations
Net Investment Income
(Loss)(2) 0.06 0.02 0.10 (0.03) 0.01
Net Realized and Unrealized
Gain (Loss) 2.94 2.54 3.14 2.04 2.81
------ ------ ------ ------- --------
Total From Investment
Operations 3.00 2.56 3.24 2.01 2.82
------ ------ ------ ------- --------
Distributions
From Net Investment Income (0.03) (0.04) -- -- --
From Net Realized Gains (3.38) (2.99) (0.29) (0.29) --
------ ------ ------ ------- --------
Total Distributions (3.41) (3.03) (0.29) (0.29) --
------ ------ ------ ------- --------
Redemption Fees(2) --(3) --(3) --(3) 0.02 0.01
------ ------ ------ ------- --------
Net Asset Value, End of Period $11.44 $11.85 $12.32 $9.37 $7.63
====== ====== ====== ======= ========
TOTAL RETURN(4) 33.97% 25.66% 35.53% 27.50% 58.96%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.61% 1.65% 1.71% 1.77% 1.80%(5)
Ratio of Net Investment Income
(Loss) to Average Net Assets 0.39% 0.14% 0.40% (0.43)% 0.18%(5)
Portfolio Turnover Rate 149% 160% 112% 139% 219%(6)
Net Assets, End of Period (in
thousands) $4,513 $1,099 $31 $10,868 $8,523
(1) January 9, 2003 (commencement of sale) through November 30, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Per-share amount was less than $0.005.
(4) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.
(5) Annualized.
(6) Portfolio turnover is calculated at the fund level. Percentage indicated
was calculated for the year ended November 30, 2003.
See Notes to Financial Statements.
- ------
44
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of International Stock Fund,
International Discovery Fund and International Opportunities Fund (the
"Funds"), three of the mutual funds comprising American Century World Mutual
Funds, Inc., as of November 30, 2007, and the related statements of operations
for the year then ended, the statements of changes in net assets for each of
the two years in the period then ended, and the financial highlights for each
of the periods presented. These financial statements and financial highlights
are the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
November 30, 2007, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of American Century World Mutual Funds, Inc. as of
November 30, 2007, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for each of the periods presented, in
conformity with accounting principles generally accepted in the United States
of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 14, 2008
- ------
45
PROXY VOTING RESULTS
A special meeting of shareholders was held on July 27, 2007, to vote on the
following proposals. The proposals received the required number of votes of
the American Century World Mutual Funds, Inc. or the applicable fund,
depending on the proposal, and were adopted. A summary of voting results is
listed below each proposal.
PROPOSAL 1:
To elect nine Directors to the Board of Directors of American Century World
Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds
issued by American Century World Mutual Funds, Inc.).
James E. Stowers, Jr. For: 4,492,465,030
Withhold: 84,151,860
Abstain: 0
Broker Non-Vote: 0
Jonathan S. Thomas For: 4,496,101,969
Withhold: 80,514,921
Abstain: 0
Broker Non-Vote: 0
Thomas A. Brown For: 4,497,551,079
Withhold: 79,065,811
Abstain: 0
Broker Non-Vote: 0
Andrea C. Hall For: 4,497,808,657
Withhold: 78,808,233
Abstain: 0
Broker Non-Vote: 0
James A. Olson For: 4,497,582,906
Withhold: 79,033,984
Abstain: 0
Broker Non-Vote: 0
Donald H. Pratt For: 4,496,273,853
Withhold: 80,343,037
Abstain: 0
Broker Non-Vote: 0
Gale E. Sayers For: 4,496,553,346
Withhold: 80,063,544
Abstain: 0
Broker Non-Vote: 0
M. Jeannine Strandjord For: 4,494,879,736
Withhold: 81,737,154
Abstain: 0
Broker Non-Vote: 0
Timothy S. Webster For: 4,497,903,345
Withhold: 78,713,545
Abstain: 0
Broker Non-Vote: 0
- ------
46
PROPOSAL 2:
To approve a change in the fee structure of the Advisor Class of International
Discovery. This proposal was voted on by the Advisor Class shareholders of
International Discovery.
International Discovery
For: 141,301
Against: 0
Abstain: 0
Broker Non-Vote: 0
- ------
47
MANAGEMENT
The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Global Investment Management, Inc. (ACGIM) or American Century
Investment Management, Inc. (ACIM); the funds' principal underwriter, American
Century Investment Services, Inc. (ACIS); and the funds' transfer agent,
American Century Services, LLC (ACS).
The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACGIM, ACIM, ACIS, and ACS. The directors
serve in this capacity for seven registered investment companies in the
American Century family of funds.
All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies in the American Century family of funds
advised by ACIM, or ACGIM, a wholly owned subsidiary of ACIM, unless otherwise
noted. Only officers with policy-making functions are listed. No officer is
compensated for his or her service as an officer of the funds. The listed
officers are interested persons of the funds and are appointed or re-appointed
on an annual basis.
INTERESTED DIRECTORS
JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 105
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
- ------
48
INDEPENDENT DIRECTORS
THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust
DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and services
provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.
- ------
49
TIMOTHY S. WEBSTER, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); Founder and Principal,
Growth Consulting and Investments LLC (November 2007 to present); President
and Chief Executive Officer, American Italian Pasta Company (2001 to December
2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
OFFICERS
BARRY FINK, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1955
POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and
Executive Vice President, ACC (September 2007 to present); President, ACS LLC
(October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007);
Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as:
Director, ACC, ACS, ACIS and other ACC subsidiaries
MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS
CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to
present); Vice President, ACC (November 2005 to present); General Counsel, ACC
(March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS,
ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS
ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present) and Controller, various American Century funds (1997 to
September 2006)
JON ZINDEL, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS
The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.
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50
SHARE CLASS INFORMATION
One class of shares is authorized for sale by International Stock: Investor
Class. Three classes of shares are authorized for sale by International
Discovery: Investor Class, Institutional Class and Advisor Class. Two classes
of shares are authorized for sale by International Opportunities: Investor
Class and Institutional Class. The total expense ratio of Institutional Class
shares is lower than that of Investor Class shares. The total expense ratio of
Advisor Class shares is higher than that of Investor Class shares.
INVESTOR CLASS shares are available for purchase in two ways: 1) directly from
American Century without any commissions or other fees; and/or 2) through
certain financial intermediaries (such as banks, broker-dealers, insurance
companies and investment advisors), which may require payment of a transaction
fee to the financial intermediary. The funds' prospectuses contain additional
information regarding eligibility for Investor Class shares.
INSTITUTIONAL CLASS shares are available to large investors such as
endowments, foundations, and retirement plans, and to financial intermediaries
serving these investors. This class recognizes the relatively lower cost of
serving institutional customers and others who invest at least $5 million ($3
million for endowments and foundations) in an American Century fund or at
least $10 million in multiple funds. In recognition of the larger investments
and account balances and comparatively lower transaction costs, the unified
management fee of Institutional Class shares is 0.20% less than the unified
management fee of Investor Class shares.
ADVISOR CLASS shares are sold primarily through institutions such as
investment advisors, banks, broker-dealers, insurance companies, and financial
advisors. The unified management fee for Advisor Class shares is the same as
for Investor Class shares. Advisor Class shares are subject to a 0.25% annual
Rule 12b-1 distribution and service fee.
All classes of shares represent a pro rata interest in the funds and generally
have the same rights and preferences.
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51
ADDITIONAL INFORMATION
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.
If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. 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 notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.
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.
State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.
PROXY VOTING GUIDELINES
American Century Global Investment Management, Inc., the funds' investment
advisor, is responsible for exercising the voting rights associated with the
securities purchased and/or held by the funds. A description of the policies
and procedures the advisor uses in fulfilling this responsibility is available
without charge, upon request, by calling 1-800-345-2021. It is also available
on American Century's website at americancentury.com and on the Securities and
Exchange Commission's website at sec.gov. Information regarding how the
investment advisor voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available on the "About Us" page
at americancentury.com. It is also available at sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.
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52
INDEX DEFINITIONS
The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.
Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.
The MSCI EAFE® (EUROPE, AUSTRALASIA, FAR EAST) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.
The MSCI EAFE® GROWTH INDEX is a capitalization-weighted index that monitors
the performance of growth stocks from Europe, Australasia, and the Far East.
The MSCI EAFE® VALUE INDEX is a capitalization-weighted index that monitors
the performance of value stocks from Europe, Australasia, and the Far East.
The MSCI EM (EMERGING MARKETS) INDEX represents the gross performance of
stocks in global emerging market countries.
The MSCI EUROPE INDEX is designed to measure equity market performance in
Europe.
The MSCI JAPAN INDEX is designed to measure equity market performance in Japan.
The MSCI WORLD FREE INDEX represents the performance of stocks in developed
countries (including the United States) that are available for purchase by
global investors.
The S&P/CITIGROUP EMI (EXTENDED MARKET INDEX) GROWTH WORLD EX-US represents
the smaller-cap universe of stocks of growth companies in developed country
markets outside the United States.
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53
NOTES
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54
NOTES
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55
NOTES
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56
[back cover]
CONTACT US
AMERICANCENTURY.COM
AUTOMATED INFORMATION LINE:
1-800-345-8765
INVESTOR SERVICES REPRESENTATIVE:
1-800-345-2021 or 816-531-5575
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1-800-634-4113 or 816-444-3485
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
INVESTMENT ADVISOR:
American Century Global Investment Management, Inc.
New York, New York
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.
American Century Investments
P.O. Box 419200
Kansas City, MO 64141-6200
PRSRT STD
U.S. POSTAGE PAID
AMERICAN CENTURY
COMPANIES
American Century Investment Services, Inc., Distributor
©2008 American Century Proprietary Holdings, Inc. All rights reserved.
The American Century Investments logo, American Century and American Century
Investments are service marks of American Century Proprietary Holdings, Inc.
0801
SH-ANN-57974S
[front cover]
AMERICAN CENTURY INVESTMENTS
Annual Report November 30, 2007
[winter photo]
Life Sciences Fund
Technology Fund
[american century investments logo and text logo]
OUR MESSAGE TO YOU
[photo of Jonathan Thomas]
JONATHAN THOMAS
President and CEO
American Century Companies, Inc.
To help you monitor your investment, my colleagues and I take pride in
providing you with the annual report for the American Century® Life Sciences
and Technology funds for the 12 months ended November 30, 2007. I am honored
to be addressing you in the "Our Message" space long devoted to company
founder Jim Stowers, Jr. and his son Jim Stowers III.
Jim Stowers III stepped down from the ACC board in July 2007, his final step
in a well-planned career transition to pursue new ventures outside the
company. This reflected his family's support of our company's direction and
the leadership team of American Century Investments.
The Stowers family remains an integral part of our heritage, leadership, and
financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the
American Century Companies, Inc. (ACC) board of directors with Richard Brown,
who has been on the board since 1998.
American Century Investments, our clients, and our employees have been my top
priority since I became company president and CEO in March, 2007. We have also
added the executive talents of overall chief investment officer (CIO) Enrique
Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito,
and chief operating officer Barry Fink.
This skilled group, combined with our existing senior management team, has
already had a positive impact on the development and management of the
products and services we take pride in delivering to you. We believe the
ultimate measure of our performance is our clients' success. Therefore, our
focus continues to be on building a long-term relationship with you and on
delivering superior investment performance across our product line.
/s/Jonathan Thomas
[photo of James E. Stowers, Jr.]
JAMES E. STOWERS, JR.
Founder and Co-Chairman of the Board
American Century Companies, Inc.
[photo of Richard Brown]
RICHARD BROWN
Co-Chairman of the Board
American Century Companies, Inc.
TABLE OF CONTENTS
Market Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Market Returns . . . . . . . . . . . . . . . . . . . . . . . . . . 2
LIFE SCIENCES
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 5
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . 5
Top Five Industries. . . . . . . . . . . . . . . . . . . . . . . . 6
Types of Investments in Portfolio. . . . . . . . . . . . . . . . . 6
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 7
TECHNOLOGY
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 11
Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . 11
Top Five Industries. . . . . . . . . . . . . . . . . . . . . . . . 12
Types of Investments in Portfolio. . . . . . . . . . . . . . . . . 12
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 13
Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 15
FINANCIAL STATEMENTS
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 17
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 18
Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 19
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 20
Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 27
Report of Independent Registered Public Accounting Firm . . . . . . . 34
OTHER INFORMATION
Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . . 35
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Share Class Information . . . . . . . . . . . . . . . . . . . . . . . 40
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 41
Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 42
The opinions expressed in the Market Perspective and each of the Portfolio
Commentaries reflect those of the portfolio management team as of the date of
the report, and do not necessarily represent the opinions of American Century
or any other person in the American Century organization. Any such opinions
are subject to change at any time based upon market or other conditions and
American Century disclaims any responsibility to update such opinions. These
opinions may not be relied upon as investment advice and, because investment
decisions made by American Century funds are based on numerous factors, may
not be relied upon as an indication of trading intent on behalf of any
American Century fund. Security examples are used for representational
purposes only and are not intended as recommendations to purchase or sell
securities. Performance information for comparative indices and securities is
provided to American Century by third party vendors. To the best of American
Century's knowledge, such information is accurate at the time of printing.
MARKET PERSPECTIVE
[photo of Chief Investment Officer]
By Enrique Chang, Chief Investment Officer, American Century Investments
STOCKS ADVANCED DESPITE INCREASE IN VOLATILITY
The broad U.S. stock indexes gained ground for the 12 months ended November
30, 2007, despite facing a confluence of challenges that led to extraordinary
market volatility.
The stock market generally rallied during the first half of the period, with
the exception of a brief drop in late February caused by a drop in the Chinese
stock market and growing financial troubles among subprime mortgage lenders.
Stocks benefited from corporate earnings growth, which gradually decelerated
but continued to surpass expectations, and robust merger activity, which
continued at a brisk pace thanks to leveraged buy-outs from private equity
firms.
After reaching all-time highs in mid-July, however, the major stock indexes
declined sharply as subprime lending problems worsened, leading to a credit
crisis that threatened to derail the economic expansion. Tighter lending
standards crimped funding for leveraged buy-outs, removing an important leg of
support for the stock market, and rising energy and commodity prices sparked
inflation worries despite slowing economic activity.
As investors grew increasingly risk-averse, the Federal Reserve (the Fed)
lowered its discount rate in mid-August and its federal funds rate target in
both September and October -- the Fed's first rate cuts since June 2003. The
Fed's actions helped alleviate some of the credit and economic concerns,
allowing the major stock indexes to stage an uneven recovery in September and
October. However, stocks finished the period on a down note, declining in
November amid reports of further subprime-related losses. Energy was the
best-performing sector in the stock market during the 12-month period,
benefiting from a 40% increase in the price of oil. Materials and utilities
stocks also fared well. The only two sectors of the market to decline during
the period were financials and consumer discretionary.
ECONOMIC STRENGTH BOOSTED FOREIGN STOCKS
Overseas stock markets comfortably outperformed domestic equities during the
period, benefiting from strong economic conditions outside the U.S. Weakness
in the U.S. dollar also contributed favorably to international stock returns.
By far, emerging markets generated the best results, while Pacific Rim
countries (excluding Japan, which posted modest gains) were the top performers
among developed markets.
Market Returns
For the 12 months ended November 30, 2007
U.S. STOCKS
Russell 1000 Index (Large-Cap) 7.83%
Russell Midcap Index 5.92%
Russell 2000 Index (Small-Cap) -1.17%
FOREIGN STOCKS
MSCI EAFE Index 17.30%
MSCI EM Index 45.57%
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2
PERFORMANCE
Life Sciences
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years Inception Date
INVESTOR CLASS 14.94% 11.12% 2.84% 6/30/00
S&P COMPOSITE 1500 HEALTH CARE
INDEX(1) 11.93% 8.41% 2.82% --
S&P 500 INDEX(1) 7.72% 11.63% 1.95% --
Institutional Class 15.12% 11.33% 2.36% 7/17/00
Advisor Class 14.59% 10.90% 1.40% 11/14/00
C Class 13.68% 10.11% 2.50% 11/29/01
(1) Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The fund concentrates its investments in a narrow segment
of the total market and is therefore subject to greater risks and market
fluctuations than a portfolio representing a broader range of industries.
International investing involves special risks, such as political instability
and currency fluctuations.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
- ------
3
Life Sciences
Growth of $10,000 Over Life of Class
$10,000 investment made June 30, 2000
One-Year Returns Over Life of Class
Periods ended November 30
2000* 2001 2002 2003 2004 2005 2006 2007
Investor 5.60% -5.35% -27.31% 23.16% 7.57% 13.43% -1.88% 14.94%
Class
S&P Composite 7.11% -6.10% -18.37% 8.06% 2.91% 10.26% 9.09% 11.93%
1500 Health
Care Index
S&P 500 -9.16% -12.22% -16.51% 15.09% 12.86% 8.44% 14.23% 7.72%
Index
*From 6/30/00, the Investor's Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The fund concentrates its investments in a narrow segment
of the total market and is therefore subject to greater risks and market
fluctuations than a portfolio representing a broader range of industries.
International investing involves special risks, such as political instability
and currency fluctuations.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
- ------
4
PORTFOLIO COMMENTARY
Life Sciences
Portfolio Managers: Arnold Douville and Christy Turner
PERFORMANCE SUMMARY
Life Sciences returned 14.94%* for the 12 months ended November 30, 2007. The
portfolio's benchmark, the S&P Composite 1500 Health Care Index, returned
11.93%. The broader equity market, represented by the S&P 500 Index, returned
7.72%. The portfolio outperformed the average return for the 180 funds in the
Lipper Health/Biotechnology Funds category, which returned 11.73%.**
Periods of volatility in the equity markets generally led to better
performance from companies with stable earnings-growth prospects. This
sentiment helped the health care sector and led to gains in the portfolio and
its benchmark.
We also allocated a portion of Life Science's assets to holdings of companies
outside of the United States. The portfolio benefited from this allocation, as
international stocks generated higher returns than the domestic market,
boosted by improving global economic conditions and a declining U.S. dollar.
STOCK SELECTION DROVE RESULTS
Strong stock selection throughout the health care industry accounted for the
majority of the portfolio's outperformance relative to the benchmark.
Additionally, overweights in health care equipment and life sciences tools and
services and an underweight in the struggling pharmaceuticals area contributed
positively to the portfolio's performance.
In the health care equipment category, our overweight position in Respironics,
a manufacturer of respiratory products that treat sleep disorders, boosted
performance. The company, which reported record earnings and revenue growth in
the third calendar quarter of 2007, was among the portfolio's top-10
contributors for the reporting period.
Our position in Waters Corp. was the top contributor in the life sciences
tools and services segment and one of the portfolio's top 10 contributing
securities. The company, which produces analytical instruments for research
labs, experienced strong stock gains due to earnings growth and a favorable
spending environment.
Another top contributor was Thermo Fisher Scientific, which has prospered
since the merger of Thermo Electron and Fisher Scientific International
created the company in late 2006. The supplier of laboratory devices reported
solid revenues and profits and increased its full-year earnings and revenue
projections for 2007.
Top Ten Holdings as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Merck & Co., Inc 5.8% 4.9%
Thermo Fisher Scientific Inc. 5.6% 5.1%
Johnson & Johnson 5.1% 2.6%
Abbott Laboratories 4.3% 3.5%
Manor Care, Inc. 4.1% 3.6%
Gilead Sciences, Inc 3.7% 2.6%
Baxter International Inc. 3.6% 3.2%
Respironics, Inc. 3.0% 2.8%
Schering-Plough Corp. 2.9% 1.5%
Novartis AG ADR 2.8% 2.5%
* All fund returns referenced in this commentary are for Investor Class shares.
** As of November 30, 2007, the five-year average return for the 144 funds in
the Lipper category was 11.93%.
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5
Life Sciences
UNDERWEIGHTS HELPED IN PHARMACEUTICALS
Although pharmaceuticals represented the largest weighting in the portfolio,
our hefty underweight compared to the benchmark was a positive influence on
relative performance. Our underweighted positions in some drug makers (such as
Johnson & Johnson), and avoidance of others (including Pfizer and Eli Lilly),
paid off during the reporting period. Many drug companies posted significant
losses -- some due to regulatory issues and others due to disappointing
financial results -- and our strategy helped the portfolio's relative
performance.
OUT-OF-BENCHMARK POSITIONS HELPED
A small, out-of-benchmark weighting to the materials industry contributed
favorably to the portfolio's relative performance. Specifically, in the
materials sector, our exposure to the chemicals industry through a position in
Sigma-Aldrich Corp. was a positive influence.
INDIVIDUAL NAMES DETRACTED
All sectors in which the portfolio invested contributed positively to relative
performance. In general, detractors included stocks that performed well but
were either not represented or were underweighted in the portfolio. For
example, Medco Health Solutions, the pharmacy benefit manager, represented the
largest individual detractor to the portfolio's relative performance. This
outperforming stock was included in the benchmark but not in the portfolio.
STARTING POINT FOR NEXT REPORTING PERIOD
Regardless of the macro-economic environment, we will continue to emphasize
companies exhibiting accelerating earnings in our attempt to build and
maintain a portfolio of strong individual companies. Our investment decisions
may result in shifts in industry weightings, but any such developments stem
from a fundamental, bottom-up assessment of each company's merits.
Top Five Industries as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Pharmaceuticals 34.8% 29.3%
Health Care Equipment & Supplies 24.1% 27.5%
Health Care Providers & Services 16.8% 24.3%
Life Sciences Tools & Services 9.9% 11.3%
Biotechnology 8.3% 4.7%
Types of Investments in Portfolio
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Domestic Common Stocks 82.6% 84.1%
Foreign Common Stocks(1) 16.2% 15.1%
TOTAL COMMON STOCKS 98.8% 99.2%
Temporary Cash Investments 1.4% 0.8%
Other Assets & Liabilities (0.2)% --(2)
(1) Includes depositary shares, dual listed securities and foreign ordinary
shares.
(2) Category is less than 0.05% of total net assets.
- ------
6
SCHEDULE OF INVESTMENTS
Life Sciences
NOVEMBER 30, 2007
Shares Value
Common Stocks -- 98.8%
BIOTECHNOLOGY -- 8.3%
22,000 Biogen Idec Inc.(1) $ 1,630,640
25,051 Celgene Corp.(1) 1,541,889
14,000 Genentech, Inc.(1) 1,067,500
82,542 Gilead Sciences, Inc.(1) 3,841,505
24,000 PDL BioPharma Inc.(1) 425,040
------------
8,506,574
------------
CHEMICALS -- 2.3%
44,250 Sigma-Aldrich Corp. 2,329,763
------------
FOOD & STAPLES RETAILING -- 1.6%
40,500 CVS/Caremark Corp. 1,623,645
------------
HEALTH CARE EQUIPMENT & SUPPLIES -- 24.1%
20,000 Alcon, Inc. 2,782,800
13,000 C.R. Bard, Inc. 1,098,890
62,068 Baxter International Inc. 3,716,011
15,570 Beckman Coulter, Inc. 1,101,266
27,982 Becton, Dickinson & Co. 2,314,951
57,000 DENTSPLY International Inc. 2,438,460
25,000 Inverness Medical Innovations, Inc.(1) 1,467,000
44,000 Medtronic, Inc. 2,237,400
8,600 Mettler-Toledo International, Inc.(1) 1,000,697
61,500 Respironics, Inc.(1) 3,029,490
26,323 Smith & Nephew plc ADR 1,573,326
40,000 St. Jude Medical, Inc.(1) 1,590,000
21,000 TomoTherapy Inc.(1) 390,600
------------
24,740,891
------------
HEALTH CARE PROVIDERS & SERVICES -- 16.8%
23,000 Express Scripts, Inc.(1) 1,558,250
17,359 Humana Inc.(1) 1,337,164
13,000 Laboratory Corp. of America Holdings(1) 944,710
65,000 Manor Care, Inc. 4,200,299
25,491 Owens & Minor Inc. 1,001,032
57,417 Psychiatric Solutions, Inc.(1) 2,097,443
53,000 Skilled Healthcare Group Inc. Cl A(1) 802,950
134,000 Sun Healthcare Group, Inc.(1) 2,223,060
47,000 Sunrise Senior Living, Inc.(1) 1,475,330
18,300 WellPoint Inc.(1) 1,541,043
------------
17,181,281
------------
Shares Value
LIFE SCIENCES TOOLS & SERVICES -- 9.9%
15,000 Covance Inc.(1) $ 1,309,950
21,000 Millipore Corp.(1) 1,719,480
100,000 Thermo Fisher Scientific Inc.(1) 5,764,000
17,557 Waters Corp.(1) 1,370,148
------------
10,163,578
------------
MULTI-INDUSTRY -- 1.0%
14,400 iShares Dow Jones U.S. Healthcare Sector Index
Fund 1,046,304
------------
PHARMACEUTICALS -- 34.8%
76,500 Abbott Laboratories 4,399,515
27,196 Allergan, Inc. 1,823,220
71,005 Bristol-Myers Squibb Co. 2,103,878
66,873 Elan Corp. plc ADR(1) 1,540,085
76,500 Johnson & Johnson 5,182,110
100,000 Merck & Co., Inc. 5,935,999
50,000 Novartis AG ADR 2,826,000
25,000 Pharmaceutical HOLDRs(SM) Trust 2,066,250
11,250 Roche Holding AG ORD 2,138,179
94,000 Schering-Plough Corp. 2,942,200
38,000 Shire plc ADR 2,696,100
46,662 Teva Pharmaceutical Industries Ltd. ADR 2,082,525
------------
35,736,061
------------
TOTAL COMMON STOCKS
(Cost $82,205,405) 101,328,097
------------
Temporary Cash Investments -- 1.4%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%,
8/15/23, valued at $1,427,078), in a joint trading account at
3.05%, dated 11/30/07, due 12/3/07 (Delivery value $1,400,356)
(Cost $1,400,000) 1,400,000
------------
TOTAL INVESTMENT SECURITIES -- 100.2%
(Cost $83,605,405) 102,728,097
------------
OTHER ASSETS AND LIABILITIES -- (0.2)% (163,069)
------------
TOTAL NET ASSETS -- 100.0% $102,565,028
============
- ------
7
Life Sciences
Forward Foreign Currency Exchange Contracts
Settlement Unrealized Gain
Contracts to Sell Date Value (Loss)
1,192,500 CHF for USD 12/31/07 $1,056,680 $13,556
============= ================
(Value on Settlement Date $1,070,236)
Notes to Schedule of Investments
ADR = American Depositary Receipt
CHF = Swiss Franc
HOLDRs = Holding Company Depositary Receipts
ORD = Foreign Ordinary Share
USD = United States Dollar
(1) Non-income producing.
As of November 30, 2007, securities with an aggregate value of $2,138,179,
which represented 2.1% of total net assets, were valued in accordance with
alternative pricing procedures adopted by the Board of Directors.
See Notes to Financial Statements.
- ------
8
PERFORMANCE
Technology
Total Returns as of November 30, 2007
Average Annual Returns
Since Inception
1 year 5 years Inception Date
INVESTOR CLASS 21.33% 12.19% -8.62% 6/30/00
S&P COMPOSITE 1500 TECHNOLOGY
INDEX(1) 12.50% 10.32% -7.64% --
S&P 500 INDEX(1) 7.72% 11.63% 1.95% --
Institutional Class 21.54% 12.39% -9.73% 7/14/00
Advisor Class 21.04% 11.88% -8.88% 6/30/00
(1) Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The fund concentrates its investments in a narrow segment
of the total market and is therefore subject to greater risks and market
fluctuations than a portfolio representing a broader range of industries. The
fund's investment process may involve high portfolio turnover and high capital
gains distributions. In addition, its investment approach may involve higher
volatility and risk. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
- ------
9
Technology
Growth of $10,000 Over Life of Class
$10,000 investment made June 30, 2000
One-Year Returns Over Life of Class
Periods ended November 30
2000* 2001 2002 2003 2004 2005 2006 2007
Technology -36.20% -34.48% -31.10% 35.97% -7.05% 7.75% 7.60% 21.33%
S&P Composite -33.66% -29.22% -27.70% 24.02% 1.48% 7.21% 7.65% 12.50%
1500
Technology
Index
S&P 500 Index -9.16% -12.22% -16.51% 15.09% 12.86% 8.44% 14.23% 7.72%
*From 6/30/00, the Investor's Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The fund concentrates its investments in a narrow segment
of the total market and is therefore subject to greater risks and market
fluctuations than a portfolio representing a broader range of industries. The
fund's investment process may involve high portfolio turnover and high capital
gains distributions. In addition, its investment approach may involve higher
volatility and risk. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as transaction costs and management fees) that reduce
returns, while the total returns of the indices do not.
- ------
10
PORTFOLIO COMMENTARY
Technology
Portfolio Manager: Tom Telford
PERFORMANCE SUMMARY
Technology returned 21.33%* for the 12 months ended November 30, 2007. The
portfolio's benchmark, the S&P Composite 1500 Technology Index, returned
12.50%. The broader equity market, represented by the S&P 500 Index, returned
7.72%. The portfolio outperformed the average return of 13.66%** for the 270
funds in the Lipper Science and Technology Funds category.
With mounting concerns surrounding U.S. economic growth prospects, investors
returned to the traditional growth sectors during the reporting period. This
sentiment helped the technology sector, where firms with accelerating earnings
and revenue growth rates and positive share price momentum performed well. In
addition, more than 23% of the portfolio's assets were allocated to foreign
stocks during the period (down slightly from 28% on May 31, 2007). The
portfolio benefited significantly from this allocation as international stocks
generated higher returns than the domestic market, boosted by improving global
economic conditions and a declining U.S. dollar.
STOCK SELECTION DROVE RESULTS
Strong stock selection accounted for the bulk of our portfolio's
outperformance relative to the benchmark. Additionally, our holdings in the
industrials and telecommunication services sectors made positive
contributions.
RIM WAS TOP CONTRIBUTOR
The portfolio's communication equipment segment made the greatest contribution
to returns, primarily due to strong performance from Research in Motion (RIM),
the Canadian manufacturer of the BlackBerry wireless handheld device. RIM was
the portfolio's top absolute and relative contributor and largest holding. The
company benefited from multiple new product cycles, expanding market share,
and increasing demand for smartphones, which led to accelerating revenue and
earnings growth rates throughout the year. RIM continues to enjoy strong
subscriber growth, and the company's earnings and revenue outlooks are robust.
As such, the company remains among our portfolio's largest holdings.
In the software industry, the portfolio's performance benefited from
investments in Vasco Data Security and Nintendo, but was hindered by i2
Technologies. Vasco Data Security, the provider of security software, is
benefiting from the growth in online banking and from the increasing need for
strong user authentication for online access
Top Ten Holdings as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Research In Motion Ltd. 8.0% 4.6%
Google Inc. Cl A 6.4% 3.3%
Intel Corp. 5.4% 2.1%
Cisco Systems Inc. 4.5% 3.1%
Microsoft Corporation 4.4% 2.8%
MEMC Electronic Materials Inc. 3.3% 1.3%
Corning Inc. 3.2% 3.1%
Apple Inc. 3.1% 1.9%
Hewlett-Packard Co. 3.0% 2.2%
Adobe Systems Inc. 2.8% 2.4%
* All fund returns referenced in this commentary are for Investor Class shares.
** As of November 30, 2007, the five-year average return for the 224 funds in
the Lipper category was 12.77%.
- ------
11
Technology
and e-commerce. Nintendo, a Japanese videogame manufacturer, is experiencing
strong growth from its new Wii and next generation Nintendo DS game consoles.
Hurt by disappointing software sales and the departure of its CEO, i2
Technologies was the portfolio's biggest software detractor.
INDUSTRIALS, TELECOM ENHANCE RESULTS
In the industrials sector, our investment in aerospace-and-defense-industry
component Precision Castparts, the Oregon-based manufacturer of casts for
airline engines, soared on strong demand, surging sales and stellar profit
growth. Precision Castparts was among the portfolio's top contributors.
Our positive performance in the telecommunication services sector reflected
the growing demand for such services in the emerging markets. For example, our
position in Millicom International Cellular, the Luxembourg-based provider of
prepaid cellular phone service in developing countries, contributed strongly
and was among the portfolio's leading contributors.
In the internet group, our second largest holding, Google, continued to gain
market share in internet search and internet advertising. The stock was up
42.94% for the year. Ebay, an e-commerce marketplace, failed to meet rising
investor expectations and was among the portfolio's biggest absolute and
relative detractors.
In the semiconductor industry, MEMC Electronic Materials, a maker of silicon
wafers and polysilicon, benefited from rising demand for semiconductors and
rapidly increasing demand for silicon-based solar cells. Our position in
Credence Systems, a manufacturer of test and analytical equipment for the
global semiconductor industry, hindered performance, as the company
experienced poor execution and sales shortfalls at key customer Advanced Micro
Devices.
STARTING POINT FOR NEXT REPORTING PERIOD
We will continue to focus on technology firms with accelerating earnings and
revenue growth rates and positive share price momentum, as we believe such
stocks will generate superior returns over time. Although returns from
technology stocks have been strong recently, it's important to remember sector
funds can show strong volatility to the up and down sides. Therefore, it may
be best to use such funds in the context of a larger, long-term,
growth-oriented strategy.
Top Five Industries as of November 30, 2007
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Communications Equipment 21.4% 17.1%
Software 21.4% 21.2%
Semiconductors & Semiconductor Equipment 15.6% 15.4%
Computers & Peripherals 12.0% 8.4%
Internet Software & Services 8.8% 8.3%
Types of Investments in Portfolio
% of % of
net assets net assets
as of as of
11/30/07 5/31/07
Domestic Common Stocks 73.9% 70.8%
Foreign Common Stocks(1) 23.2% 27.9%
TOTAL COMMON STOCKS 97.1% 98.7%
Temporary Cash Investments 3.2% 0.2%
Other Assets & Liabilities (0.3)% 1.1%
(1) Includes depositary shares, dual listed securities and foreign ordinary
shares.
- ------
12
SCHEDULE OF INVESTMENTS
Technology
NOVEMBER 30, 2007
Shares Value
Common Stocks -- 97.1%
AEROSPACE & DEFENSE -- 3.1%
9,710 Lockheed Martin Corp. $ 1,074,606
14,157 Precision Castparts Corp. 2,085,892
16,605 Raytheon Company 1,027,019
------------
4,187,517
------------
COMMERCIAL SERVICES & SUPPLIES -- 0.8%
29,500 Nissha Printing Co., Ltd. ORD 1,076,864
------------
COMMUNICATIONS EQUIPMENT -- 21.4%
62,124 Ciena Corp.(1) 2,732,214
219,744 Cisco Systems Inc.(1) 6,157,227
179,806 Corning Inc. 4,367,488
72,689 Foundry Networks, Inc.(1) 1,281,507
63,685 Juniper Networks, Inc.(1) 1,892,718
50,701 Nokia Oyj ADR 1,994,070
95,718 Research In Motion Ltd.(1) 10,894,623
------------
29,319,847
------------
COMPUTERS & PERIPHERALS -- 12.0%
23,187 Apple Inc.(1) 4,225,134
49,392 EMC Corp.(1) 951,784
78,898 Hewlett-Packard Co. 4,036,422
137,900 High Tech Computer Corp. ORD 2,568,689
28,736 Logitech International SA(1) 977,886
201,000 Toshiba Corp. ORD 1,644,567
74,287 Western Digital Corp.(1) 2,052,550
------------
16,457,032
------------
ELECTRICAL EQUIPMENT -- 2.5%
187,000 BYD Co. Ltd. Cl H ORD 1,431,199
35,804 Emerson Electric Co. 2,041,544
------------
3,472,743
------------
ELECTRONIC EQUIPMENT & INSTRUMENTS -- 4.3%
141,718 Brightpoint Inc.(1) 2,353,937
168,000 Everlight Electronics Co. Ltd. ORD 648,613
32,322 Plexus Corp.(1) 961,903
125,000 SMK Corp. ORD 1,044,178
696,000 Wintek Corp. ORD 928,657
------------
5,937,288
------------
INTERNET & CATALOG RETAIL -- 1.3%
14,972 Priceline.com Inc.(1) 1,703,814
------------
Shares Value
INTERNET SOFTWARE & SERVICES -- 8.8%
8,305 Equinix Inc.(1) $ 864,634
12,612 Google Inc. Cl A(1) 8,740,116
155,279 NaviSite, Inc.(1) 1,445,647
37,489 Yahoo! Inc.(1) 1,005,080
------------
12,055,477
------------
IT SERVICES -- 2.7%
19,157 DST Systems, Inc.(1) 1,623,556
18,492 International Business Machines Corp. 1,944,988
------------
3,568,544
------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 15.6%
79,419 Advanced Analogic Technologies Inc.(1) 855,343
284,699 Intel Corp. 7,424,949
58,590 MEMC Electronic Materials Inc.(1) 4,545,412
63,112 Monolithic Power Systems, Inc.(1) 1,204,177
104,681 NVIDIA Corp.(1) 3,301,639
107,766 Pericom Semiconductor Corp.(1) 1,785,683
117,847 Semtech Corp.(1) 1,798,345
8,384 Varian Semiconductor Equipment Associates,
Inc.(1) 348,020
------------
21,263,568
------------
SOFTWARE -- 21.4%
90,194 Adobe Systems Inc.(1) 3,800,774
70,898 Aladdin Knowledge Systems Ltd.(1) 1,856,110
60,724 Citrix Systems, Inc.(1) 2,245,574
162,252 FalconStor Software, Inc.(1) 1,964,872
95,267 Informatica Corp.(1) 1,633,829
53,980 McAfee Inc.(1) 2,102,521
12,890 Micros Systems, Inc.(1) 929,885
178,314 Microsoft Corporation 5,991,349
9,219 MicroStrategy Inc. Cl A(1) 929,736
127,550 NetScout Systems, Inc.(1) 1,549,733
3,600 Nintendo Co., Ltd. ORD 2,212,238
95,654 Oracle Corp.(1) 1,930,298
59,001 Sybase, Inc.(1) 1,512,786
6,663 VMware, Inc. Cl A(1) 608,798
------------
29,268,503
------------
- ------
13
Shares Value
WIRELESS TELECOMMUNICATION SERVICES -- 3.2%
16,377 America Movil, SAB de CV ADR $ 1,009,806
14,581 China Mobile Ltd. ADR 1,336,494
533,535 Vodafone Group plc ORD 1,997,349
------------
4,343,649
------------
TOTAL COMMON STOCKS
(Cost $114,070,791) 132,654,846
------------
Temporary Cash Investments -- 3.2%
Repurchase Agreement, Bank of America Securities, LLC,
(collateralized by various U.S. Treasury obligations, 3.625%,
1/15/08, valued at $4,488,983), in a joint trading account at
3.00%, dated 11/30/07, due 12/3/07 (Delivery value $4,401,100)
(Cost $4,400,000) 4,400,000
------------
TOTAL INVESTMENT SECURITIES -- 100.3%
(Cost $118,470,791) 137,054,846
------------
OTHER ASSETS AND LIABILITIES -- (0.3)% (355,708)
------------
TOTAL NET ASSETS -- 100.0% $136,699,138
============
Notes to Schedule of Investments
ADR = American Depositary Receipt
ORD = Foreign Ordinary Share
(1) Non-income producing.
As of November 30, 2007, securities with an aggregate value of $13,552,354,
which represented 9.9% of total net assets, were valued in accordance with
alternative pricing procedures adopted by the Board of Directors.
See Notes to Financial Statements.
- ------
14
SHAREHOLDER FEE EXAMPLES (UNAUDITED)
Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds.
The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from June 1, 2007 to November 30, 2007.
ACTUAL EXPENSES
The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.
- ------
15
Expenses Paid
Beginning Ending During Period* Annualized
Account Account Value 6/1/07 -- Expense
Value 6/1/07 11/30/07 11/30/07 Ratio*
Life Sciences
ACTUAL
Investor Class $1,000 $1,030.90 $6.87 1.35%
Institutional $1,000 $1,030.50 $5.85 1.15%
Class
Advisor Class $1,000 $1,029.70 $8.14 1.60%
C Class $1,000 $1,025.40 $11.93 2.35%
HYPOTHETICAL
Investor Class $1,000 $1,018.30 $6.83 1.35%
Institutional $1,000 $1,019.30 $5.82 1.15%
Class
Advisor Class $1,000 $1,017.05 $8.09 1.60%
C Class $1,000 $1,013.29 $11.86 2.35%
Technology
ACTUAL
Investor Class $1,000 $1,077.40 $7.81 1.50%
Institutional $1,000 $1,078.40 $6.77 1.30%
Class
Advisor Class $1,000 $1,075.90 $9.11 1.75%
HYPOTHETICAL
Investor Class $1,000 $1,017.55 $7.59 1.50%
Institutional $1,000 $1,018.55 $6.58 1.30%
Class
Advisor Class $1,000 $1,016.29 $8.85 1.75%
*Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
- ------
16
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2007
Life Sciences Technology
ASSETS
Investment securities, at value (cost of
$83,605,405 and $118,470,791, respectively) $102,728,097 $137,054,846
Cash 7,174 176,895
Foreign currency holdings, at value (cost of $--
and $16, respectively) -- 16
Receivable for investments sold -- 1,590,555
Receivable for forward foreign currency exchange
contracts 13,556 --
Receivable for capital shares sold -- 20,754
Dividends and interest receivable 58,816 131,332
------------ ------------
102,807,643 138,974,398
------------ ------------
LIABILITIES
Payable for investments purchased 130,492 2,109,484
Accrued management fees 112,066 165,695
Distribution fees payable 26 --
Service fees (and distribution fees - Advisor
Class) payable 31 81
------------ ------------
242,615 2,275,260
------------ ------------
NET ASSETS $102,565,028 $136,699,138
============ ============
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) $92,977,166 $314,134,933
Accumulated net investment loss (32,513) --
Accumulated net realized loss on investment and
foreign currency transactions (9,516,784) (196,020,935)
Net unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 19,137,159 18,585,140
------------ ------------
$102,565,028 $136,699,138
============ ============
INVESTOR CLASS, $0.01 PAR VALUE
Net assets $100,120,280 $130,853,761
Shares outstanding 16,697,477 5,111,654
Net asset value per share $6.00 $25.60
INSTITUTIONAL CLASS, $0.01 PAR VALUE
Net assets $2,308,644 $5,480,584
Shares outstanding 379,159 210,688
Net asset value per share $6.09 $26.01
ADVISOR CLASS, $0.01 PAR VALUE
Net assets $92,570 $364,793
Shares outstanding 15,724 14,547
Net asset value per share $5.89 $25.08
C CLASS, $0.01 PAR VALUE
Net assets $43,534 N/A
Shares outstanding 7,709 N/A
Net asset value per share $5.65 N/A
See Notes to Financial Statements.
- ------
17
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 2007
Life Sciences Technology
INVESTMENT INCOME (LOSS)
INCOME:
Dividends (net of foreign taxes withheld of $18,738
and $45,248, respectively) $ 894,147 $ 645,824
Interest 125,626 98,346
----------- -----------
1,019,773 744,170
----------- -----------
EXPENSES:
Management fees 1,435,187 1,836,825
Distribution fees:
Advisor Class 194 238
C Class 299 --
Service fees:
Advisor Class 194 238
C Class 99 --
Distribution and service fees:
Advisor Class 69 199
Directors' fees and expenses 1,934 2,200
Other expenses 985 8,116
----------- -----------
1,438,961 1,847,816
----------- -----------
NET INVESTMENT INCOME (LOSS) (419,188) (1,103,646)
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
Investment transactions (net of foreign taxes
accrued of $-- and $20,132, respectively) 7,570,298 22,508,552
Foreign currency transactions (27,085) 6,653
----------- -----------
7,543,213 22,515,205
----------- -----------
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments (net of foreign taxes accrued of $-- and
$23,057, respectively) 7,659,730 1,101,596
Translation of assets and liabilities in foreign
currencies 45,146 (3,093)
----------- -----------
7,704,876 1,098,503
----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS) 15,248,089 23,613,708
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $14,828,901 $22,510,062
=========== ===========
See Notes to Financial Statements.
- ------
18
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED NOVEMBER 30, 2007 AND NOVEMBER 30, 2006
Life Sciences Technology
Increase (Decrease)
in Net Assets 2007 2006 2007 2006
OPERATIONS
Net investment income
(loss) $(419,188) $(930,959) $(1,103,646) $(1,597,767)
Net realized gain
(loss) 7,543,213 4,474,185 22,515,205 16,541,436
Change in net
unrealized
appreciation
(depreciation) 7,704,876 (6,266,439) 1,098,503 (5,347,428)
------------ ------------ ------------ ------------
Net increase
(decrease) in net
assets resulting from
operations 14,828,901 (2,723,213) 22,510,062 9,596,241
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS
Net increase
(decrease) in net
assets from capital
share transactions (27,830,419) (41,767,562) (13,354,560) (25,969,525)
------------ ------------ ------------ ------------
NET INCREASE
(DECREASE) IN NET
ASSETS (13,001,518) (44,490,775) 9,155,502 (16,373,284)
NET ASSETS
Beginning of period 115,566,546 160,057,321 127,543,636 143,916,920
------------ ------------ ------------ ------------
End of period $102,565,028 $115,566,546 $136,699,138 $127,543,636
============ ============ ============ ============
Accumulated net
investment loss $(32,513) $(98,867) -- $(3,910)
============ ============ ============ ============
See Notes to Financial Statements.
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19
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2007
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century World Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 (the 1940 Act) as an
open-end management investment company. Life Sciences Fund (Life Sciences) and
Technology Fund (Technology) (collectively, the funds) are two funds in a
series issued by the corporation. The funds are non-diversified under the 1940
Act. The funds' investment objectives are to seek capital growth. Life
Sciences and Technology pursue their objectives by seeking to invest primarily
in stocks of growing companies in the life sciences and in the technology and
telecommunications-related sectors, respectively. Specifically, Life Sciences
invests at least 80% of its assets in companies that engage in the business of
providing products and services that help promote health and wellness. In
addition, Technology invests at least 80% of its assets in companies primarily
engaged in offering, using or developing products, processes or services that
provide or will benefit significantly from technological advancements or
improvements. The following is a summary of the funds' significant accounting
policies.
MULTIPLE CLASS -- Life Sciences is authorized to issue the Investor Class, the
Institutional Class, the Advisor Class and the C Class. Technology is
authorized to issue the Investor Class, the Institutional Class and the
Advisor Class. The C Class may be subject to a contingent deferred sales
charge. The share classes differ principally in their respective sales charges
and distribution and shareholder servicing 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. Income, non-class specific expenses, and realized and
unrealized capital gains and losses of the funds are allocated to each class
of shares based on their relative net assets.
SECURITY VALUATIONS -- Securities traded primarily on a principal securities
exchange are valued at the last reported sales price, or at the mean of the
latest bid and asked prices where no last sales price is available. Depending
on local convention or regulation, securities traded over-the-counter are
valued at the mean of the latest bid and asked prices, the last sales price,
or the official close price. 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. Discount notes may be valued
through a commercial pricing service or at amortized cost, which approximates
fair value. Securities traded on foreign securities exchanges and
over-the-counter markets are normally completed before the close of business
on days that the New York Stock Exchange (the Exchange) is open and may also
take place on days when the Exchange is not open. If an event occurs after the
value of a security was established but before the net asset value per share
was determined that was likely to materially change the net asset value, that
security would be valued as determined in accordance with procedures adopted
by the Board of Directors. If the funds determine that the market price of a
portfolio security is not readily available, or that the valuation methods
mentioned above do not reflect the security's fair value, such security is
valued as determined by, or in accordance with procedures adopted by, the
Board of Directors or its designee if such determination would materially
impact a fund's net asset value. Certain other circumstances may cause the
funds to use alternative procedures to value a security such as: a security
has been declared in default; trading in a security has been halted during the
trading day; or there is a foreign market holiday and no trading will commence.
SECURITY TRANSACTIONS -- For financial reporting purposes, 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. Certain countries impose taxes on realized gains
on the sale of securities registered in their country. The funds record the
foreign tax expense, if any, on an accrual basis. The realized and unrealized
tax provision reduces the net realized gain (loss) on investment transactions
and net unrealized appreciation (depreciation) on investments, respectively.
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.
- ------
20
EXCHANGE TRADED FUNDS -- The funds may invest in exchange traded funds (ETFs).
ETFs are a type of index fund bought and sold on a securities exchange. An ETF
trades like common stock and represents a fixed portfolio of securities
designed to track the performance and dividend yield of a particular domestic
or foreign market index. A fund may purchase an ETF to temporarily gain
exposure to a portion of the U.S. or a foreign market while awaiting purchase
of underlying securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities they are designed to track, although
the lack of liquidity on an ETF could result in it being more volatile.
Additionally, ETFs have management fees, which increase their cost.
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. 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. For
assets and liabilities, other than investments in securities, net realized and
unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component
of realized gain (loss) on investment transactions and unrealized appreciation
(depreciation) on investments, respectively. Certain countries may impose
taxes on the contract amount of purchases and sales of foreign currency
contracts in their currency. The funds record the foreign tax expense, if any,
as a reduction to the net realized gain (loss) on foreign currency
transactions.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the funds' exposure
to foreign currency exchange rate fluctuations. 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. 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 American Century Investment Management, Inc. (ACIM) has
determined are creditworthy pursuant to criteria adopted by the Board of
Directors. Each repurchase agreement is recorded at cost. Each fund requires
that the collateral, represented by securities, received in a repurchase
transaction be transferred to the custodian in a manner sufficient to enable
each fund 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
each fund under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund, along with other registered
investment companies having management agreements with ACIM or American
Century Global Investment Management, Inc. (ACGIM), 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 each fund's policy to distribute substantially 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. The funds are no longer subject to examination by tax
authorities for years prior to 2004. At this time, management has not
identified any uncertain tax positions that would materially impact the
financial statements. Accordingly, no provision has been made for federal or
state income taxes. Interest and penalties associated with any federal or
state income tax obligations, if any, are recorded as interest expense.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid annually. Distributions from net realized gains,
if any, are generally declared and paid twice per year. 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 1940 Act.
- ------
21
INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.
USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.
2. FEES AND TRANSACTIONS WITH RELATED PARTIES
On July 27, 2007, the Advisor Class shareholders of Life Sciences and
Technology approved a change to the class's fee structure. The change was
approved by the Board of Directors on November 29, 2006 and March 7, 2007.
Effective September 4, 2007, the fee structure change resulted in an increase
of 0.25% in the unified management fee and a simultaneous decrease of 0.25% in
the total distribution and service fee, resulting in no change to the total
operating expense ratio of the class.
MANAGEMENT FEES -- The corporation has entered into a Management Agreement
with ACIM for Technology and ACGIM for Life Sciences (the investment advisor,
respectively), under which the investment advisor provides the funds with
investment advisory and management services in exchange for a single, unified
management fee (the fee) per class. The Agreement provides that all expenses
of the funds, except brokerage commissions, taxes, interest, fees and expenses
of those directors who are not considered "interested persons" as defined in
the 1940 Act (including counsel fees) and extraordinary expenses, will be paid
by the investment advisor. The fee is computed and accrued daily based on the
daily net assets of each specific class of shares of each fund and paid
monthly in arrears. For funds with a stepped fee schedule, the rate of the fee
is determined by applying a fee rate calculation formula. This formula takes
into account all of the investment advisor's assets under management in each
fund's investment strategy (strategy assets) to calculate the appropriate fee
rate for each fund. The strategy assets include each fund's assets and the
assets of other clients of the investment advisor that are not in the American
Century family of funds, but that have the same investment team and investment
strategy. The annual management fee schedule for Life Sciences ranges from
1.10% to 1.35% for Investor Class, Advisor Class and C Class. The annual
management fee schedule for Technology ranges from 1.20% to 1.50% for Investor
Class and Advisor Class. The Institutional Class is 0.20% less at each point
within the range. Prior to September 4, 2007, the Advisor Class was 0.25% less
at each point within the range.
The effective annual management fee for each class of the funds for the year
ended November 30, 2007, was as follows:
Investor Institutional Advisor C
Life Sciences 1.35% 1.15% 1.16% 1.35%
Technology 1.50% 1.30% 1.36% N/A
ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on
behalf of Life Sciences. The subadvisor makes investment decisions for the
cash portion of Life Sciences in accordance with Life Sciences' investment
objectives, policies and restrictions under the supervision of ACGIM and the
Board of Directors. ACGIM pays all costs associated with retaining ACIM as the
subadvisor of Life Sciences.
- ------
22
DISTRIBUTION AND SERVICE FEES -- The Board of Directors has adopted a separate
Master Distribution and Individual Shareholder Services Plan for each of the
Advisor Class and C Class (collectively, the plans), pursuant to Rule 12b-1 of
the 1940 Act. The plans provide that the Advisor Class will pay American
Century Investment Services, Inc. (ACIS) an annual distribution and service
fee of 0.25%. Prior to September 4, 2007, the Board of Directors had adopted a
Master Distribution and Shareholder Services Plan for the Advisor Class,
pursuant to Rule 12b-1of the 1940 Act, in which provided that the Advisor
Class paid ACIS an annual distribution fee of 0.25% and service fee of 0.25%.
The plans provide that the C Class will pay ACIS an annual distribution fee of
0.75% and service fee of 0.25%. The fees are computed and accrued daily based
on each class's daily net assets and paid monthly in arrears. The distribution
fee provides compensation for expenses incurred by financial intermediaries in
connection with distributing shares of the classes 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
ACIS, its affiliates or independent third party providers for Advisor Class
shares and for individual shareholder services rendered by broker/dealers or
other independent financial intermediaries for C Class shares. Fees incurred
under the plans during the year ended November 30, 2007, are detailed in the
Statement of Operations.
RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACIM or ACGIM, the distributor of the corporation, ACIS,
and the corporation's transfer agent, American Century Services, LLC.
Beginning in December 2006, the funds are eligible to invest in a money market
fund for temporary purposes, which is managed by J.P. Morgan Investment
Management, Inc. (JPMIM). JPMIM is a wholly owned subsidiary of JPMorgan Chase
& Co. (JPM). JPM is an equity investor in ACC. The funds have a bank line of
credit agreement with JPMorgan Chase Bank (JPMCB). JPMCB is a custodian of the
funds and a wholly owned subsidiary of JPM.
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 2007, were as follows:
Life Sciences Technology
Purchases $75,670,441 $315,948,174
Proceeds from sales $100,631,654 $332,515,445
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23
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the funds were as follows:
Year ended Year ended
November 30, 2007 November 30, 2006
Shares Amount Shares Amount
Life Sciences
INVESTOR CLASS/SHARES
AUTHORIZED 100,000,000 100,000,000
=========== ===========
Sold 1,584,191 $ 8,866,913 2,142,299 $ 11,360,065
Redeemed (6,459,895) (35,850,490) (9,872,777) (51,883,699)
----------- ------------- ----------- -------------
(4,875,704) (26,983,577) (7,730,478) (40,523,634)
----------- ------------- ----------- -------------
INSTITUTIONAL
CLASS/SHARES
AUTHORIZED 5,000,000 5,000,000
=========== ===========
Sold 107,059 588,684 131,154 713,811
Redeemed (246,509) (1,377,285) (347,592) (1,871,619)
----------- ------------- ----------- -------------
(139,450) (788,601) (216,438) (1,157,808)
----------- ------------- ----------- -------------
ADVISOR CLASS/SHARES
AUTHORIZED 5,000,000 5,000,000
=========== ===========
Sold 5,964 32,965 15,949 84,134
Redeemed (17,468) (95,202) (20,660) (106,796)
----------- ------------- ----------- -------------
(11,504) (62,237) (4,711) (22,662)
----------- ------------- ----------- -------------
C CLASS/SHARES
AUTHORIZED 5,000,000 5,000,000
=========== ===========
Sold 750 3,996 5,990 31,096
Redeemed -- -- (18,910) (94,554)
----------- ------------- ----------- -------------
750 3,996 (12,920) (63,458)
----------- ------------- ----------- -------------
Net increase
(decrease) (5,025,908) $(27,830,419) (7,964,547) $(41,767,562)
=========== ============= =========== =============
Technology
INVESTOR CLASS/SHARES
AUTHORIZED 100,000,000 100,000,000
=========== ===========
Sold 1,561,495 $ 38,575,501 1,661,765 $ 34,930,608
Redeemed (2,249,110) (51,673,565) (2,886,044) (59,469,218)
----------- ------------- ----------- -------------
(687,615) (13,098,064) (1,224,279) (24,538,610)
----------- ------------- ----------- -------------
INSTITUTIONAL
CLASS/SHARES
AUTHORIZED 5,000,000 5,000,000
=========== ===========
Sold 80,907 2,000,214 69,396 1,474,148
Redeemed (106,292) (2,480,039) (140,648) (2,927,075)
----------- ------------- ----------- -------------
(25,385) (479,825) (71,252) (1,452,927)
----------- ------------- ----------- -------------
ADVISOR CLASS/SHARES
AUTHORIZED 10,000,000 5,000,000
=========== ===========
Sold 15,122 393,853 3,675 72,810
Redeemed (7,302) (170,524) (2,582) (50,798)
----------- ------------- ----------- -------------
7,820 223,329 1,093 22,012
----------- ------------- ----------- -------------
Net increase
(decrease) (705,180) $(13,354,560) (1,294,438) $(25,969,525)
=========== ============= =========== =============
5. BANK LINE OF CREDIT
The funds, along with certain other funds managed by ACIM or ACGIM, have a
$500,000,000 unsecured bank line of credit agreement with JPMCB. The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the agreement bear interest at the Federal Funds
rate plus 0.40%. The funds did not borrow from the line during the year ended
November 30, 2007.
Effective December 12, 2007, the funds, along with certain other funds managed
by ACIM or ACGIM, have a $500,000,000 unsecured bank line of credit agreement
with Bank of America, N.A (the Bank of America agreement). The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the Bank of America agreement bear interest at
the Federal Funds rate plus 0.40%.
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24
6. RISK FACTORS
The funds concentrate their investments in a narrow segment of the total
market. Because of this, the funds may be subject to greater risks and market
fluctuations than a portfolio representing a broader range of industries. In
addition, its investment approach may involve higher volatility and risk.
There are certain risks involved in investing in foreign securities. These
risks include those resulting from future adverse political, social, and
economic developments, fluctuations in currency exchange rates, the possible
imposition of exchange controls, and other foreign laws or restrictions.
Technology's investment process may result in high portfolio turnover, high
commission costs and high capital gains distributions. Investing in emerging
markets may accentuate these risks.
7. FEDERAL TAX INFORMATION
The book-basis 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 realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.
There were no distributions paid by the funds during the years ended November
30, 2007 and November 30, 2006.
As of November 30, 2007, the components of distributable earnings on a
tax-basis and the federal tax cost of investments were as follows:
Life Sciences Technology
Federal tax cost of investments $83,626,472 $118,867,589
============ ==============
Gross tax appreciation of investments $20,020,968 $21,134,281
Gross tax depreciation of investments (919,343) (2,947,024)
------------ --------------
Net tax appreciation (depreciation) of investments $19,101,625 $18,187,257
============ ==============
Net tax appreciation (depreciation) on
derivatives and translation of assets and
liabilities in foreign currencies $912 $1,084
------------ --------------
Net tax appreciation (depreciation) $19,102,537 $18,188,341
============ ==============
Accumulated capital losses $(9,361,643) $(195,624,136)
Capital loss deferrals $(134,074) --
Currency loss deferrals $(18,958) --
The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales and the realization for tax purposes of unrealized gains
on certain forward foreign currency exchange contracts.
The accumulated capital losses listed above represent net capital loss
carryovers that may be used to offset future realized capital gains for
federal income tax purposes. The capital loss carryovers expire as follows:
2009 2010
Life Sciences -- $(9,361,643)
Technology $(142,889,307) $(52,734,829)
The capital and currency deferrals represent net capital and foreign currency
losses incurred in the one-month period ended November 30, 2007. The funds
have elected to treat such losses as having been incurred in the following
fiscal year for federal income tax purposes.
8. CORPORATE EVENT
On July 27, 2007, the Advisor Class and C Class shareholders of Life Sciences
approved a reclassification of Advisor Class and C Class shares into Investor
Class shares. On July 27, 2007, the Advisor Class shareholders of Technology
approved a reclassification of Advisor Class shares into Investor Class
shares. Each change was approved by the Board of Directors on November 29,
2006 and March 7, 2007. The reclassification was effective December 3, 2007.
- ------
25
9. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.
The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.
- ------
26
FINANCIAL HIGHLIGHTS
Life Sciences
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning
of Period $5.22 $5.32 $4.69 $4.36 $3.54
-------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income
(Loss)(1) (0.02) (0.04) (0.04) (0.04) (0.03)
Net Realized and
Unrealized Gain (Loss) 0.80 (0.06) 0.67 0.37 0.85
-------- -------- -------- -------- --------
Total From Investment
Operations 0.78 (0.10) 0.63 0.33 0.82
-------- -------- -------- -------- --------
Net Asset Value, End of
Period $6.00 $5.22 $5.32 $4.69 $4.36
======== ======== ======== ======== ========
TOTAL RETURN(2) 14.94% (1.88)% 13.43% 7.57% 23.16%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets 1.35% 1.46% 1.50% 1.50% 1.50%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.39)% (0.67)% (0.81)% (0.85)% (0.89)%
Portfolio Turnover Rate 73% 151% 162% 215% 138%
Net Assets, End of Period
(in thousands) $100,120 $112,648 $155,835 $155,530 $160,187
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
27
Life Sciences
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning of
Period $5.29 $5.38 $4.74 $4.40 $3.56
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.01) (0.02) (0.03) (0.03) (0.03)
Net Realized and Unrealized
Gain (Loss) 0.81 (0.07) 0.67 0.37 0.87
------- ------- ------- ------- -------
Total From Investment Operations 0.80 (0.09) 0.64 0.34 0.84
------- ------- ------- ------- -------
Net Asset Value, End of Period $6.09 $5.29 $5.38 $4.74 $4.40
======= ======= ======= ======= =======
TOTAL RETURN(2) 15.12% (1.67)% 13.50% 7.73% 23.60%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.15% 1.26% 1.30% 1.30% 1.30%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.19)% (0.47)% (0.61)% (0.65)% (0.69)%
Portfolio Turnover Rate 73% 151% 162% 215% 138%
Net Assets, End of Period (in
thousands) $2,309 $2,744 $3,953 $3,510 $4,019
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
- ------
28
Life Sciences
Advisor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning of
Period $5.14 $5.25 $4.64 $4.33 $3.51
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.04) (0.05) (0.05) (0.05) (0.04)
Net Realized and Unrealized
Gain (Loss) 0.79 (0.06) 0.66 0.36 0.86
------- ------- ------- ------- -------
Total From Investment Operations 0.75 (0.11) 0.61 0.31 0.82
------- ------- ------- ------- -------
Net Asset Value, End of Period $5.89 $5.14 $5.25 $4.64 $4.33
======= ======= ======= ======= =======
TOTAL RETURN(2) 14.59% (2.10)% 13.15% 7.16% 23.36%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.60% 1.71% 1.75% 1.75% 1.75%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.64)% (0.92)% (1.06)% (1.10)% (1.14)%
Portfolio Turnover Rate 73% 151% 162% 215% 138%
Net Assets, End of Period (in
thousands) $93 $140 $168 $107 $46
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
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29
Life Sciences
C Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003
PER-SHARE DATA
Net Asset Value, Beginning of
Period $4.97 $5.11 $4.56 $4.28 $3.49
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.08) (0.09) (0.09) (0.08) (0.07)
Net Realized and Unrealized
Gain (Loss) 0.76 (0.05) 0.64 0.36 0.86
------- ------- ------- ------- -------
Total From Investment Operations 0.68 (0.14) 0.55 0.28 0.79
------- ------- ------- ------- -------
Net Asset Value, End of Period $5.65 $4.97 $5.11 $4.56 $4.28
======= ======= ======= ======= =======
TOTAL RETURN(2) 13.68% (2.74)% 12.06% 6.54% 22.64%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 2.35% 2.46% 2.50% 2.50% 2.50%
Ratio of Net Investment Income
(Loss) to Average Net Assets (1.39)% (1.67)% (1.81)% (1.85)% (1.89)%
Portfolio Turnover Rate 73% 151% 162% 215% 138%
Net Assets, End of Period (in
thousands) $44 $35 $102 $25 $10
(1) Computed using average shares outstanding throughout the period.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any, and does not reflect applicable sales charges.
The total return of the classes may not precisely reflect the class expense
differences because of the impact of calculating the net asset values to two
decimal places. If net asset values were calculated to three dicimal places,
the total return differences would more closely reflect the class expense
differences. The calculation of net asset values to two decimal places is made
in accordance with SEC guidelines and does not result in any gain or loss of
value between one class and another.
See Notes to Financial Statements.
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30
Technology
Investor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value, Beginning
of Period $21.10 $19.61 $18.20 $19.58 $14.40
-------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income
(Loss)(2) (0.21) (0.24) (0.19) (0.24) (0.19)
Net Realized and
Unrealized Gain (Loss) 4.71 1.73 1.60 (1.14) 5.37
-------- -------- -------- -------- --------
Total From Investment
Operations 4.50 1.49 1.41 (1.38) 5.18
-------- -------- -------- -------- --------
Net Asset Value, End of
Period $25.60 $21.10 $19.61 $18.20 $19.58
======== ======== ======== ======== ========
TOTAL RETURN(3) 21.33% 7.60% 7.75% (7.05)% 35.97%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses
to Average Net Assets 1.51% 1.51% 1.51% 1.50% 1.50%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.91)% (1.15)% (1.06)% (1.30)% (1.25)%
Portfolio Turnover Rate 260% 385% 388% 279% 218%
Net Assets, End of Period
(in thousands) $130,854 $122,353 $137,710 $166,986 $202,884
(1) Per-share data has been restated, as applicable, to reflect a 1-for-10
reverse share split that occurred on the close of business on May 16, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
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31
Technology
Institutional Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value, Beginning of
Period $21.40 $19.84 $18.38 $19.74 $14.50
------- ------- ------- ------- -------
Income From Investment Operations
Net Investment Income (Loss)(2) (0.17) (0.20) (0.15) (0.20) (0.16)
Net Realized and Unrealized
Gain (Loss) 4.78 1.76 1.61 (1.16) 5.40
------- ------- ------- ------- -------
Total From Investment Operations 4.61 1.56 1.46 (1.36) 5.24
------- ------- ------- ------- -------
Net Asset Value, End of Period $26.01 $21.40 $19.84 $18.38 $19.74
======= ======= ======= ======= =======
TOTAL RETURN(3) 21.54% 7.86% 7.94% (6.89)% 36.14%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.31% 1.31% 1.31% 1.30% 1.30%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.71)% (0.95)% (0.86)% (1.10)% (1.05)%
Portfolio Turnover Rate 260% 385% 388% 279% 218%
Net Assets, End of Period (in
thousands) $5,481 $5,051 $6,099 $7,805 $10,191
(1) Per-share data has been restated, as applicable, to reflect a 1-for-10
reverse share split that occurred on the close of business on May 16, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
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32
Technology
Advisor Class
For a Share Outstanding Throughout the Years Ended November 30
2007 2006 2005 2004 2003(1)
PER-SHARE DATA
Net Asset Value, Beginning of
Period $20.72 $19.30 $17.96 $19.37 $14.30
Income From Investment Operations
Net Investment Income (Loss)(2) (0.25) (0.28) (0.24) (0.27) (0.20)
Net Realized and Unrealized
Gain (Loss) 4.61 1.70 1.58 (1.14) 5.27
------- ------- ------- ------- -------
Total From Investment Operations 4.36 1.42 1.34 (1.41) 5.07
------- ------- ------- ------- -------
Net Asset Value, End of Period $25.08 $20.72 $19.30 $17.96 $19.37
======= ======= ======= ======= =======
TOTAL RETURN(3) 21.04% 7.36% 7.46% (7.28)% 35.45%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to
Average Net Assets 1.76% 1.76% 1.76% 1.75% 1.75%
Ratio of Net Investment Income
(Loss) to Average Net Assets (1.16)% (1.40)% (1.31)% (1.55)% (1.50)%
Portfolio Turnover Rate 260% 385% 388% 279% 218%
Net Assets, End of Period (in
thousands) $365 $139 $109 $78 $18
(1) Per-share data has been restated, as applicable, to reflect a 1-for-10
reverse share split that occurred on the close of business on May 16, 2003.
(2) Computed using average shares outstanding throughout the period.
(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. The total return of the classes may not precisely
reflect the class expense differences because of the impact of calculating the
net asset values to two decimal places. If net asset values were calculated to
three decimal places, the total return differences would more closely reflect
the class expense differences. The calculation of net asset values to two
decimal places is made in accordance with SEC guidelines and does not result
in any gain or loss of value between one class and another.
See Notes to Financial Statements.
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33
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Life Sciences Fund and Technology
Fund (the "Funds"), two of the mutual funds comprising American Century World
Mutual Funds, Inc., as of November 30, 2007, and the related statements of
operations for the year then ended, the statements of changes in net assets
for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
November 30, 2007, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of American Century World Mutual Funds, Inc., as of
November 30, 2007, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 14, 2008
- ------
34
PROXY VOTING RESULTS
A special meeting of shareholders was held on July 27, 2007, to vote on the
following proposals. The proposals received the required number of votes of
the American Century World Mutual Funds, Inc. or the applicable fund,
depending on the proposal, and were adopted. A summary of voting results is
listed below each proposal.
PROPOSAL 1:
To elect nine Directors to the Board of Directors of American Century World
Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds
issued by American Century World Mutual Funds, Inc.).
James E. Stowers, Jr. For: 4,492,465,030
Withhold: 84,151,860
Abstain: 0
Broker Non-Vote: 0
Jonathan S. Thomas For: 4,496,101,969
Withhold: 80,514,921
Abstain: 0
Broker Non-Vote: 0
Thomas A. Brown For: 4,497,551,079
Withhold: 79,065,811
Abstain: 0
Broker Non-Vote: 0
Andrea C. Hall For: 4,497,808,657
Withhold: 78,808,233
Abstain: 0
Broker Non-Vote: 0
James A. Olson For: 4,497,582,906
Withhold: 79,033,984
Abstain: 0
Broker Non-Vote: 0
Donald H. Pratt For: 4,496,273,853
Withhold: 80,343,037
Abstain: 0
Broker Non-Vote: 0
Gale E. Sayers For: 4,496,553,346
Withhold: 80,063,544
Abstain: 0
Broker Non-Vote: 0
M. Jeannine Strandjord For: 4,494,879,736
Withhold: 81,737,154
Abstain: 0
Broker Non-Vote: 0
Timothy S. Webster For: 4,497,903,345
Withhold: 78,713,545
Abstain: 0
Broker Non-Vote: 0
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35
PROPOSAL 2:
To approve a change in the fee structure of the Advisor Class. This proposal
was voted on by the Advisor Class shareholders of the following funds:
Life Sciences Technology
For: 48,288 93,748
Against: 2,902 0
Abstain: 0 0
Broker Non-votes 0 2,115
PROPOSAL 3:
To approve the reclassification of the Advisor Class shares of the fund,
whereby all of the Advisor Class shares will be reclassified as Investor Class
shares of that fund. This proposal was voted on by the Advisor Class
shareholders of the following funds:
Life Sciences Technology
For: 48,288 93,748
Against: 2,902 0
Abstain: 0 0
Broker Non-Vote: 0 2,115
PROPOSAL 4:
To approve the reclassification of the C Class shares of Life Sciences,
whereby all of the C Class shares will be reclassified as Investor Class
shares of that fund. This proposal was voted on by the C Class shareholders of
Life Sciences.
Life Sciences
For: 30,722
Against: 0
Abstain: 0
Broker Non-Vote: 9,150
- ------
36
MANAGEMENT
The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Global Investment Management, Inc. (ACGIM) or American Century
Investment Management, Inc. (ACIM); the funds' principal underwriter, American
Century Investment Services, Inc. (ACIS); and the funds' transfer agent,
American Century Services, LLC (ACS).
The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACGIM, ACIM, ACIS, and ACS. The directors
serve in this capacity for seven registered investment companies in the
American Century family of funds.
All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies in the American Century family of funds
advised by ACIM, or ACGIM, a wholly owned subsidiary of ACIM, unless otherwise
noted. Only officers with policy-making functions are listed. No officer is
compensated for his or her service as an officer of the funds. The listed
officers are interested persons of the funds and are appointed or re-appointed
on an annual basis.
INTERESTED DIRECTORS
JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 105
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
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37
INDEPENDENT DIRECTORS
THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
Other Directorships Held by Director: None
ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust
DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and services
provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.
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38
TIMOTHY S. WEBSTER, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); Founder and Principal,
Growth Consulting and Investments LLC (November 2007 to present); President
and Chief Executive Officer, American Italian Pasta Company (2001 to December
2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
OFFICERS
BARRY FINK, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1955
POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and
Executive Vice President, ACC (September 2007 to present); President, ACS LLC
(October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007);
Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as:
Director, ACC, ACS, ACIS and other ACC subsidiaries
MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS
CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to
present); Vice President, ACC (November 2005 to present); General Counsel, ACC
(March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS,
ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS
ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present) and Controller, various American Century funds (1997 to
September 2006)
JON ZINDEL, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS
The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.
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39
SHARE CLASS INFORMATION
Four classes of shares are authorized for sale by Life Sciences: Investor
Class, Institutional Class, Advisor Class and C Class. Three classes of shares
are authorized for sale by Technology: Investor Class, Institutional Class and
Advisor Class. The total expense ratio of Institutional Class shares is lower
than that of Investor Class shares. The total expense ratios of Advisor Class
and C Class shares are higher than that of Investor Class shares. The Advisor
Class and C Class are no longer available effective December 3, 2007.
INVESTOR CLASS shares are available for purchase in two ways: 1) directly from
American Century without any commissions or other fees; and/or 2) through
certain financial intermediaries (such as banks, broker-dealers, insurance
companies and investment advisors), which may require payment of a transaction
fee to the financial intermediary. The funds' prospectuses additional
information regarding eligibility for Investor Class shares.
INSTITUTIONAL CLASS shares are available to large investors such as
endowments, foundations, and retirement plans, and to financial intermediaries
serving these investors. This class recognizes the relatively lower cost of
serving institutional customers and others who invest at least $5 million ($3
million for endowments and foundations) in an American Century fund or at
least $10 million in multiple funds. In recognition of the larger investments
and account balances and comparatively lower transaction costs, the unified
management fee of Institutional Class shares is 0.20% less than the unified
management fee of Investor Class shares.
ADVISOR CLASS shares are sold primarily through institutions such as
investment advisors, banks, broker-dealers, insurance companies, and financial
advisors. The unified management fee for Advisor Class shares is the same as
for Investor Class shares. Advisor Class shares are subject to a 0.25% annual
Rule 12b-1 distribution and service fee.
C CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. C Class shares redeemed within 12 months of purchase
are subject to a contingent deferred sales charge (CDSC) of 1.00%. There is no
CDSC on shares acquired through reinvestment of dividends or capital gains.
The unified management fee for C Class shares is the same as for Investor
Class shares. C Class shares also are subject to a Rule 12b-1 distribution and
service fee of 1.00%.
All classes of shares represent a pro rata interest in the funds and generally
have the same rights and preferences.
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40
ADDITIONAL INFORMATION
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.
If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. 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 notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.
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.
State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.
PROXY VOTING GUIDELINES
American Century Investment Management, Inc. and American Century Global
Investment Management, Inc., the funds' investment advisors, are responsible
for exercising the voting rights associated with the securities purchased
and/or held by the funds. A description of the policies and procedures the
advisor uses in fulfilling this responsibility is available without charge,
upon request, by calling 1-800-345-2021. It is also available on American
Century's website at americancentury.com and on the Securities and Exchange
Commission's website at sec.gov. Information regarding how the investment
advisor voted proxies relating to portfolio securities during the most recent
12-month period ended June 30 is available on the "About Us" page at
americancentury.com. It is also available at sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.
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41
INDEX DEFINITIONS
The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.
Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.
The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.
The MSCI EM (Emerging Markets) INDEX represents the performance of stocks in
global emerging market countries.
The RUSSELL 1000® INDEX is a market-capitalization weighted, large-cap index
created by Frank Russell Company to measure the performance of the 1,000
largest companies in the Russell 3000 Index (the 3,000 largest publicly traded
U.S. companies, based on total market capitalization).
The RUSSELL 2000® INDEX is a market-capitalization weighted index created by
Frank Russell Company to measure the performance of the 2,000 smallest of the
3,000 largest publicly traded U.S. companies, based on total market
capitalization.
The RUSSELL MIDCAP® INDEX measures the performance of the 800 smallest of the
1,000 largest publicly traded U.S. companies, based on total market
capitalization.
The S&P 500 INDEX is a market value-weighted index of the stocks of 500
publicly traded U.S. companies chosen for market size, liquidity, and industry
group representation that are considered to be leading firms in dominant
industries. Each stock's weight in the index is proportionate to its market
value. Created by Standard & Poor's, it is considered to be a broad measure of
U.S. stock market performance.
The S&P COMPOSITE 1500 INDEX combines the S&P 500, MidCap 400 and SmallCap 600
indices. The S&P COMPOSITE 1500 HEALTH CARE INDEX represents those S&P
Composite 1500 companies in two main industry groups: Health care equipment
and supplies companies or companies that provide health care related services,
and companies that provide research, development, production and marketing of
pharmaceuticals and biotechnology products. The S&P COMPOSITE 1500 TECHNOLOGY
INDEX represents those S&P Composite 1500 companies in two main industry
groups: Technology software and services companies, and technology hardware
and equipment companies.
- ------
42
NOTES
- ------
43
NOTES
- ------
44
[INSIDE BACK COVER BLANK]
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0801
SH-ANN-57976S
[front cover]
AMERICAN CENTURY INVESTMENTS
Annual Report November 30, 2007
[photo of winter]
NT International Growth Fund
NT Emerging Markets Fund
[american century investments logo and text logo]
OUR MESSAGE TO YOU
To help you monitor your investment, my colleagues and I take pride in
providing you with the annual report for the American Century® NT
International Growth and NT Emerging Markets funds for the 12 months ended
November 30, 2007. I am honored to be addressing you in the "Our Message"
space long devoted to company founder Jim Stowers, Jr. and his son Jim Stowers
III.
Jim Stowers III stepped down from the American Century Companies, Inc. (ACC)
board of directors in July 2007, his final step in a well-planned career
transition to pursue new ventures outside the company. This reflected his
family's support of our company's direction and its leadership team.
The Stowers family remains an integral part of our heritage, leadership, and
financial structure. In fact, Jim Stowers, Jr. continues as co-chair of the
ACC board with Richard Brown, who has been on the board since 1998.
American Century Investments, our clients, and our employees have been my top
priority since I became company president and CEO in March, 2007. We have also
added the executive talents of overall chief investment officer (CIO) Enrique
Chang, international equity CIO Mark On, U.S. growth equity CIO Steve Lurito,
and chief operating officer Barry Fink.
This skilled group, combined with our existing senior management team, has
already had a positive impact on the development and management of the
products and services we take pride in delivering to you. We believe the
ultimate measure of our performance is our clients' success. Therefore, our
focus continues to be on building a long-term relationship with you and on
delivering superior investment performance across our product line.
/s/Jonathan Thomas
Jonathan Thomas
[photo of Jonathan Thomas]
JONATHAN THOMAS
President and CEO
American Century Companies, Inc.
[photo of James E. Stowers, Jr.]
JAMES E. STOWERS, JR.
Founder and Co-Chairman of the Board
American Century Companies, Inc.
[photo of Richard Brown]
RICHARD BROWN
Co-Chairman of the Board
American Century Companies, Inc.
TABLE OF CONTENTS
Market Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . 2
International Equity Total Returns. . . . . . . . . . . . . . . . . . 2
NT INTERNATIONAL GROWTH
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 4
Top Ten Holdings. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Investments by Country. . . . . . . . . . . . . . . . . . . . . . . . 5
Types of Investments in Portfolio . . . . . . . . . . . . . . . . . . 5
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 6
NT EMERGING MARKETS
Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 11
Top Ten Holdings. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Investments by Country. . . . . . . . . . . . . . . . . . . . . . . . 12
Types of Investments in Portfolio . . . . . . . . . . . . . . . . . . 12
Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 13
Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 16
FINANCIAL STATEMENTS
Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 18
Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 19
Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 20
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 21
Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 26
Report of Independent Registered Public Accounting Firm . . . . . . . 28
OTHER INFORMATION
Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . . 29
Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 33
Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 34
The opinions expressed in the Market Perspective and each of the Portfolio
Commentaries reflect those of the portfolio management team as of the date of
the report, and do not necessarily represent the opinions of American Century
or any other person in the American Century organization. Any such opinions
are subject to change at any time based upon market or other conditions and
American Century disclaims any responsibility to update such opinions. These
opinions may not be relied upon as investment advice and, because investment
decisions made by American Century funds are based on numerous factors, may
not be relied upon as an indication of trading intent on behalf of any
American Century fund. Security examples are used for representational
purposes only and are not intended as recommendations to purchase or sell
securities. Performance information for comparative indices and securities is
provided to American Century by third party vendors. To the best of American
Century's knowledge, such information is accurate at the time of printing.
MARKET PERSPECTIVE
[photo of Chief Investment Officer]
By Mark On, Chief Investment Officer,
International Equity
INTERNATIONAL STOCKS SHOWED ROBUST GAINS
A strong global economy combined with relatively tame inflation and healthy
labor markets helped promote stellar stock gains for the 12 months ended
November 30, 2007. Among the developed markets, Europe fared well, with the
strongest returns coming from the euro-zone nations. In contrast, performance
was flat in Japan, as weak consumer spending, a challenging political climate,
and slowing demand from the United States pressured Japan's stocks.
Emerging markets remained the world's standout performers, due to optimistic
growth forecasts for developing markets and higher commodity prices.
U.S. CREDIT WOES RATTLED MARKETS
Mounting problems in the U.S. subprime mortgage market led to concerns
regarding global economic growth, generating periodic market volatility and
contributing to a growing desire globally for less-risky assets. In an effort
to soothe frayed nerves, the U.S. Federal Reserve (the Fed), the European
Central Bank, and the Bank of England injected liquidity into their banking
systems.
A mid-September rate cut by the Fed served to strengthen the euro and British
pound, relative to the sagging U.S. dollar. Late in the period, the dollar hit
new record lows against those currencies.
RATES ROSE IN EUROPE AND BRITAIN
Healthy economic growth prompted the European Central Bank and the Bank of
England to raise interest rates three times during the period. Although
inflationary pressures remained at the fore, both banks held off making
additional rate increases given the fallout from the credit-market turmoil.
Optimism surrounding improving economic growth prompted the Bank of Japan to
raise rates in February. Nevertheless, expectations for additional rate hikes
went unfulfilled, as sluggish domestic consumption kept the central bank on
hold.
OPPORTUNITIES ABOUND
Although the international market continues to be somewhat uncertain, we
believe the international stock market presents significant opportunities for
investors. Combining the higher growth rate of the international markets with
our international team's focus on companies with growth acceleration, we
believe there is a significant opportunity to deliver attractive performance
in the coming year.
International Equity Total Returns
For the 12 months ended November 30, 2007 (in U.S. dollars)
MSCI EM Index 45.15%
MSCI EAFE Growth Index 22.32%
MSCI Europe Index 19.61%
MSCI EAFE Index 17.30%
MSCI World Free Index 12.71%
MSCI EAFE Value Index 12.30%
MSCI Japan Index 2.19%
- ------
2
PERFORMANCE
NT International Growth
Total Returns as of November 30, 2007
Since Inception
1 year Inception Date
INSTITUTIONAL CLASS 23.40% 16.98% 5/12/06
MSCI EAFE INDEX 17.30% 14.32% --
MSCI EAFE GROWTH INDEX 22.32% 15.62% --
Growth of $10,000 Over Life of Class
$10,000 investment made May 12, 2006
One-Year Returns Over Life of Class
Periods ended November 30
2006* 2007
Institutional Class 3.40% 23.40%
MSCI EAFE Index 4.97% 17.30%
MSCI EAFE Growth Index 2.43% 22.32%
*From 5/12/06, the Institutional Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks.
Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the indices are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the indices do not.
- ------
3
PORTFOLIO COMMENTARY
NT International Growth
Portfolio Managers: Alex Tedder and Keith Creveling
PERFORMANCE SUMMARY
NT International Growth gained 23.40% during the 12 months ended November 30,
2007. The portfolio's benchmark, the MSCI EAFE Index, advanced 17.30%.
Compared to its peers, NT International Growth outperformed the average return
of 20.46%* for the 63 funds in Lipper Inc.'s International Large Cap Growth
Funds category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks. On an absolute basis,
all sectors the portfolio invested in posted positive returns, and all but one
sector (consumer discretionary) showed double-digit gains. Favorable stock
selection in six of 10 sectors accounted for the portfolio's outperformance
relative to the benchmark.
From a country perspective, Japan, the United Kingdom, and India, which was
not represented in the benchmark, made the greatest overall contributions to
the portfolio's relative performance. Stock selection in Japan and the United
Kingdom was effective, as was an underweight in Japan. Despite its relatively
small weighting, India had a strong impact on the portfolio's relative return.
The worst country contributors to relative performance included the
Netherlands, North America (U.S.-listed ADRs and Canadian securities), and
South Korea. Our investments and an underweight hurt performance in the
Netherlands, while our overweight in North America accounted for the lagging
results. Our South Korean holdings posted a negative return for the reporting
period, and the benchmark had no exposure to that market.
FINANCIALS, INDUSTRIALS LED ALL SECTORS
The financials sector, the largest weighting in the portfolio, made the
greatest positive contribution to relative performance. Our overweight to
Deutsche Boerse AG, the Germany-based owner of several securities exchanges,
led to solid results for the diversified financial services area. In addition,
our position in China Merchants Bank, an emerging-market investment not
represented in the benchmark, boosted performance in the commercial banking
segment, as the stock returned 142% during the reporting period.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Deutsche Boerse AG 1.7% 1.1%
Nintendo Co., Ltd. 1.7% 1.5%
Julius Baer Holding AG 1.7% 1.2%
National Bank of Greece SA 1.6% 1.5%
Saipem SpA 1.6% 1.1%
BG Group plc 1.5% 1.2%
Nestle SA 1.5% 0.5%
BHP Billiton Ltd. 1.5% 1.2%
America Movil, SAB de CV ADR 1.4% 0.9%
Daikin Industries Ltd. 1.3% 0.5%
*Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All rights
reserved. Any copying, republication or redistribution of Lipper content,
including by caching, framing or similar means, is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for
any errors or delays in the content, or for any actions taken in reliance
thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
4
NT International Growth
The portfolio's relative performance also benefited from strong stock
selection combined with an overweight in the industrials sector. In
particular, our stocks in the electrical equipment industry performed well,
including Q-Cells AG, the German manufacturer of solar cells, and Vestas Wind
Systems, a Danish supplier of wind power solutions.
Our information technology stocks also were strong contributors, led by
Japan's Nintendo, a videogame manufacturer, which advanced 160% during the
reporting period on strong sales of its Wii gaming system. Nintendo was the
portfolio's top contributor for the reporting period.
CONSUMER SECTOR LAGGED
Despite posting a total return of 24.06% for the reporting period, the
portfolio's consumer staples sector was the greatest laggard relative to the
benchmark. Our stock selection and underweight in the food products industry
and avoidance of the tobacco industry primarily accounted for the shortfall.
The telecommunication services sector also detracted, primarily due to our
slight overweight to the sector.
OUTLOOK
NT International Growth seeks companies located throughout the world,
excluding the United States, exhibiting accelerating earnings and revenue
growth. Our analysis indicates the outlook for large-cap growth companies
remains favorable. The portfolio has broad exposure to high-quality growth
companies in numerous markets, and we believe these companies will deliver
solid returns, even during volatile market conditions.
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
United Kingdom 13.6% 14.6%
Japan 13.3% 17.0%
Germany 10.5% 10.0%
Switzerland 10.3% 11.1%
France 8.7% 8.8%
Australia 5.8% 4.4%
Canada 3.6% 0.7%
Spain 3.4% 1.7%
Italy 3.3% 4.0%
India 3.1% 2.4%
Denmark 2.2% 0.8%
Norway 2.0% 2.3%
Belgium 2.0% 1.7%
Singapore 2.0% 0.7%
Other Countries 15.6% 15.6%
Cash and Equivalents(1) 0.6% 4.2%
(1) Includes temporary cash investments, securities lending collateral and
other assets and liabilities.
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks 99.0% 95.4%
Foreign Preferred Stocks 0.4% 0.4%
TOTAL EQUITY EXPOSURE 99.4% 95.8%
Temporary Cash Investments 1.2% 2.5%
Other Assets and Liabilities(2) (0.6)% 1.7%
(2) Includes securities lending collateral and other assets and liabilities.
- ------
5
SCHEDULE OF INVESTMENTS
NT International Growth
NOVEMBER 30, 2007
Shares Value
Common Stocks -- 99.0%
AUSTRALIA -- 5.8%
4,600 Babcock & Brown Ltd.(1) $ 107,474
25,931 BHP Billiton Ltd.(1) 985,384
89,061 Boart Longyear Group(2) 190,797
22,400 CSL Ltd. 692,044
72,400 Oxiana Ltd.(1) 256,680
28,623 QBE Insurance Group Ltd. 828,490
4,146 Rio Tinto Ltd.(1) 533,653
12,000 Westpac Banking Corp. 301,079
-----------
3,895,601
-----------
AUSTRIA -- 0.7%
6,335 Erste Bank der oesterreichischen Sparkassen AG 456,917
-----------
BELGIUM -- 2.0%
4,355 KBC Groupe 602,789
12,030 SES SA Fiduciary Depositary Receipt(2) 302,543
1,897 Umicore 444,714
-----------
1,350,046
-----------
BRAZIL -- 1.0%
4,400 Bolsa de Mercadorias e Futuros - BM&F SA(2) 59,254
20,700 Redecard SA 375,987
18,600 Unibanco-Uniao de Bancos Brasileiros SA 275,326
-----------
710,567
-----------
CANADA -- 3.6%
5,500 EnCana Corp. 358,875
6,400 Research In Motion Ltd.(2) 728,448
16,300 Rogers Communications Inc. Cl B 677,564
6,224 Shoppers Drug Mart Corp. 341,517
3,600 Suncor Energy Inc. 344,265
-----------
2,450,669
-----------
CZECH REPUBLIC -- 1.0%
9,100 CEZ AS 672,588
-----------
DENMARK -- 2.2%
6,400 Novo Nordisk AS B Shares 809,182
7,000 Vestas Wind Systems AS(2) 661,909
-----------
1,471,091
-----------
FINLAND -- 1.3%
2,400 Metso Oyj 130,181
19,600 Nokia Oyj 772,162
-----------
902,343
-----------
Shares Value
FRANCE -- 8.7%
3,721 Accor SA $ 315,462
3,000 ALSTOM Co. 673,784
14,331 AXA SA 581,495
7,982 Groupe Danone 704,403
3,500 L'Oreal SA 485,755
2,367 PPR SA 398,923
1,300 Renault SA 189,538
1,500 Schneider Electric SA 208,040
5,178 Societe Generale 793,412
4,400 Suez SA 291,492
10,924 Total SA 884,138
4,200 Vinci SA 332,713
-----------
5,859,155
-----------
GERMANY -- 10.1%
2,400 Allianz SE 494,202
3,774 Arcandor AG(2) 113,976
5,000 BASF AG 692,927
2,900 Continental AG 377,730
6,240 Deutsche Boerse AG 1,169,396
10,370 Fresenius Medical Care AG & Co. KGaA 578,835
14,543 GEA Group AG(2) 526,971
4,200 Hochtief AG 555,529
2,782 K+S AG 568,182
2,900 Linde AG 379,334
4,500 Q-Cells AG(2) 628,485
5,100 SAP AG 259,979
3,400 Siemens AG 516,123
-----------
6,861,669
-----------
GREECE -- 1.6%
16,000 National Bank of Greece SA 1,070,091
-----------
HONG KONG -- 1.5%
52,700 Esprit Holdings Ltd. 795,510
13,300 Hang Seng Bank Ltd. 254,566
-----------
1,050,076
-----------
INDIA -- 3.1%
7,100 Bharat Heavy Electricals Ltd. 483,487
15,400 Bharti Airtel Ltd.(2) 365,899
5,800 DLF Ltd. 138,452
7,600 Housing Development Finance Corp. Ltd. 537,142
4,500 Reliance Industries Ltd. 324,619
10,500 Tata Consultancy Services Ltd. 269,996
-----------
2,119,595
-----------
- ------
6
NT International Growth
Shares Value
IRELAND -- 0.6%
8,693 Anglo Irish Bank Corp. plc $ 151,677
11,200 Kingspan Group plc 236,732
-----------
388,409
-----------
ITALY -- 3.3%
7,500 Bulgari SpA 111,087
7,811 ENI SpA 279,133
9,200 Fiat SpA 253,327
8,600 Finmeccanica SpA 256,760
9,232 Luxottica Group SpA 307,806
26,062 Saipem SpA 1,050,591
-----------
2,258,704
-----------
JAPAN -- 13.3%
13,300 Canon, Inc. 700,130
17,500 Daikin Industries Ltd.(1) 901,246
2,200 Fanuc Ltd. 230,130
6,700 Ibiden Co. Ltd. 529,830
23,000 Isuzu Motors Ltd. 106,543
44,000 Kobe Steel Ltd. 144,878
16,000 Kuraray Co. Ltd. 196,772
5,000 Makita Corp. 222,436
78,000 Marubeni Corp. 598,708
23,000 Mitsubishi Electric Corp. 262,337
1,900 Nintendo Co., Ltd. 1,167,570
42,000 Nippon Yusen Kabushiki Kaisha 364,584
200 NTT DoCoMo, Inc. 317,395
124 Sony Financial Holdings Inc.(2) 468,556
40,000 Sumitomo Chemical Co., Ltd. 341,281
20,000 Sumitomo Heavy Industries Ltd. 217,337
62,000 Sumitomo Metal Industries Ltd. 274,926
14,000 Sumitomo Realty & Development Co. Ltd.(1) 425,282
7,000 Terumo Corp.(1) 353,524
14,800 Toyota Motor Corp. 833,118
3,100 Yamada Denki Co. Ltd. 359,072
-----------
9,015,655
-----------
MALAYSIA -- 0.6%
132,900 Bumiputra -- Commerce Holdings Bhd 424,214
-----------
MEXICO -- 1.4%
15,248 America Movil, SAB de CV ADR 940,191
-----------
NETHERLANDS -- 1.2%
4,855 ASML Holding N.V. 168,512
9,500 Heineken N.V. 621,386
-----------
789,898
-----------
Shares Value
NORWAY -- 2.0%
11,890 Aker Kvaerner ASA $ 338,854
23,800 StatoilHydro ASA 773,552
6,300 Yara International ASA 239,405
-----------
1,351,811
-----------
PEOPLE'S REPUBLIC OF CHINA -- 1.1%
84,000 Agile Property Holdings Ltd. 167,403
536 Alibaba.com Ltd.(1)(2) 2,750
133,500 China Merchants Bank Co., Ltd. Cl H 619,557
-----------
789,710
-----------
SINGAPORE -- 2.0%
86,000 Keppel Corp. Ltd. 800,485
93,000 Oversea-Chinese Banking Corp. 548,493
-----------
1,348,978
-----------
SOUTH AFRICA -- 1.4%
8,499 Anglo American plc 575,469
17,900 MTN Group Ltd. 360,560
-----------
936,029
-----------
SOUTH KOREA -- 0.2%
4,400 Hynix Semiconductor Inc.(2) 123,529
-----------
SPAIN -- 3.4%
14,200 Banco Bilbao Vizcaya Argentaria SA(1) 352,068
20,200 Cintra Concesiones de Infraestructuras de
Transporte SA 322,937
730 Cintra Concesiones de Infraestructuras de
Transporte SA Entitlement Shares 11,658
12,501 Inditex SA 868,242
22,400 Telefonica SA 750,164
-----------
2,305,069
-----------
SWITZERLAND -- 10.3%
30,015 ABB Ltd. 882,817
6,631 Compagnie Financiere Richemont SA Cl A 455,850
6,600 Holcim Ltd. 707,105
13,600 Julius Baer Holding AG 1,141,806
2,100 Nestle SA 1,004,889
6,765 Novartis AG 383,498
4,366 Roche Holding AG 829,804
2,200 Sonova Holding AG 235,558
3,507 Syngenta AG 869,019
8,858 UBS AG 445,575
-----------
6,955,921
-----------
- ------
7
NT International Growth
Shares Value
TAIWAN (REPUBLIC OF CHINA) -- 1.4%
187,000 AU Optronics Corp. $ 365,533
91,800 Hon Hai Precision Industry Co., Ltd. 588,230
-----------
953,763
-----------
TURKEY -- 0.6%
48,200 Turkiye Garanti Bankasi AS 423,637
-----------
UNITED KINGDOM -- 13.6%
13,900 Admiral Group plc 297,988
13,800 Aggreko plc 143,904
18,800 AMEC plc 297,605
12,851 Barclays plc 148,937
48,331 BG Group plc 1,012,797
7,465 British Sky Broadcasting Group plc 96,023
64,210 Burberry Group plc 759,950
19,801 Capita Group plc 302,022
20,100 Compass Group plc 131,637
19,300 easyJet plc(2) 223,221
8,172 GlaxoSmithKline plc 215,791
28,405 HSBC Holdings plc 485,226
64,800 International Power plc 621,803
49,014 Man Group plc 561,405
56,016 Man Group plc Cl B 78,422
13,207 Reckitt Benckiser Group plc 784,584
24,300 Reed Elsevier plc 305,539
23,800 Scottish and Southern Energy plc 777,683
90,882 Tesco plc 895,907
55,900 TUI Travel plc(2) 316,327
206,800 Vodafone Group plc 774,179
-----------
9,230,950
-----------
TOTAL COMMON STOCKS
(Cost $54,383,179) 67,106,876
-----------
Preferred Stocks -- 0.4%
GERMANY -- 0.4%
4,500 Henkel KGaA 248,482
(Cost $239,648)
-----------
Temporary Cash Investments -- 1.2%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%,
8/15/23, valued at $815,473), in a joint trading account at 3.05%,
dated 11/30/07, due 12/3/07 (Delivery value $800,203)
(Cost $800,000) 800,000
-----------
Shares Value
Temporary Cash Investments -- Securities Lending Collateral(3) -- 4.5%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value
$1,350,523) $ 1,350,000
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Government Agency obligations in a
pooled account at the lending agent), 4.56%, dated 11/30/07, due
12/3/07 (Delivery value $316,467) 316,347
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery
value $1,350,522) 1,350,000
-----------
TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL
(Cost $3,016,347) 3,016,347
-----------
TOTAL INVESTMENT SECURITIES -- 105.1%
(Cost $58,439,174) 71,171,705
-----------
OTHER ASSETS AND LIABILITIES -- (5.1)% (3,468,793)
-----------
TOTAL NET ASSETS -- 100.0% $67,702,912
============
Market Sector Diversification
(as a % of net assets)
Financials 21.7%
Industrials 16.2%
Consumer Discretionary 11.3%
Materials 10.6%
Information Technology 8.4%
Energy 7.9%
Consumer Staples 7.5%
Telecommunication Services 6.2%
Health Care 6.1%
Utilities 3.5%
Cash and Equivalents* 0.6%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
- ------
8
NT International Growth
Notes to Schedule of Investments
ADR = American Depositary Receipt
(1) Security, or a portion thereof, was on loan as of November 30, 2007.
(2) Non-income producing.
(3) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $63,163,844,
which represented 93.3% of total net assets, were valued in accordance with
alternative pricing procedures adopted by the Board of Directors.
See Notes to Financial Statements.
- ------
9
PERFORMANCE
NT Emerging Markets
Total Returns as of November 30, 2007
Since Inception
1 year Inception Date
INSTITUTIONAL CLASS 48.22% 37.06% 5/12/06
MSCI EM INDEX 45.15% 29.85% --
Growth of $10,000 Over Life of Class
$10,000 investment made May 12, 2006
One-Year Returns Over Life of Class
Periods ended November 30
2006* 2007
10.10% 48.22%
Institutional Class
3.37% 45.15%
MSCI EM Index
*From 5/12/06, the Institutional Class's inception date. Not annualized.
Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. International investing involves special risks, such as
political instability and currency fluctuations. Investing in emerging markets
may accentuate these risks. The fund's performance may be affected by
investments in initial public offerings.
Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the index are
provided for comparison. The fund's total returns include operating expenses
(such as transaction costs and management fees) that reduce returns, while the
total returns of the index do not.
- ------
10
PORTFOLIO COMMENTARY
NT Emerging Markets
Portfolio Managers: Mark On and Patricia Ribeiro
PERFORMANCE SUMMARY
NT Emerging Markets gained 48.22% during the 12 months ended November 30,
2007. The portfolio's benchmark, the MSCI EM Index, advanced 45.15%. Compared
to its peers, NT Emerging Markets outperformed the average return of 41.98%*
for the 257 funds in Lipper Inc.'s Emerging Markets Funds category.
Strong global economic growth combined with a weak U.S. dollar helped generate
strong 12-month performance among international stocks, particularly those
from the world's emerging markets. Emerging market stocks significantly
outperformed the developed markets, which, as measured by the MSCI EAFE Index,
returned 17.30% for the reporting period. The portfolio's performance
benefited from this trend, along with our stock selection across most market
sectors. Overall, stock selection accounted for the portfolio's outperformance
relative to the benchmark.
On an absolute basis, all sectors the portfolio invested in posted positive
returns and made positive contributions to performance. Compared with the
benchmark, each of the portfolio's market sectors outperformed except
materials, financials and health care. The portfolio also derived a portion of
its returns from participating in several initial public offerings (IPOs).
RUSSIA, INDIA, SOUTH KOREA OUTPERFORMED
From a country perspective, Russia, India and South Korea had the greatest
positive influence on the portfolio's relative performance. Stock selection
was the key contributor in all three markets.
Brazil and China detracted from the portfolio's relative performance, with
stock selection accounting for the shortfall.
TECH, ENERGY, CONSUMER DISCRETIONARY LED ALL SECTORS
Good stock selection helped make the information technology sector the top
contributor to the portfolio's relative performance. Our stock picks and
allocation decisions were particularly strong in the semiconductor industry,
where underweighting South Korea's Samsung Electronics, which faced waning
demand in the memory chip market, proved effective.
Top Ten Holdings as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Petroleo Brasileiro SA ADR 3.0% 1.5%
China Mobile Ltd. ADR 2.3% --
Cia Vale do Rio Doce ADR 2.1% 1.7%
PT Bumi Resources Tbk 1.8% --
America Movil, SAB de CV ADR 1.7% 1.5%
Turkiye Garanti Bankasi AS 1.7% 1.4%
Samsung Electronics 1.5% 1.9%
China National Building Material Co. Ltd. Cl H 1.4% 0.3%
Focus Media Holding Ltd. ADR 1.4% 0.7%
ICICI Bank Ltd. ADR 1.4% 1.2%
*Data provided by Lipper Inc. -- A Reuters Company. ©2007 Reuters. All rights
reserved. Any copying, republication or redistribution of Lipper content,
including by caching, framing or similar means, is expressly prohibited
without the prior written consent of Lipper. Lipper shall not be liable for
any errors or delays in the content, or for any actions taken in reliance
thereon.
Lipper Fund Performance -- Performance data is total return, and is
preliminary and subject to revision.
The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
- ------
11
NT Emerging Markets
In the energy sector, good security selection -- particularly in the oil, gas
and consumable fuels industry -- helped the portfolio outperform the
benchmark. Similarly, our favorable stock choices led to outperformance for
the portfolio's consumer discretionary sector. For example, in the auto
components industry, Nokian Renkaat Oyj, a position not represented in the
benchmark, contributed strongly to relative performance. The Finnish tire
manufacturer advanced on strong sales and profit growth, primarily in Russia.
Another out-of-benchmark position, Parkson Retail Group, which operates a
chain of department stores in China, benefited from the company's expansion
plans and China's growing retail market.
MATERIALS, FINANCIALS LAGGED
The materials and financials sectors were the largest detractors to the
portfolio's relative performance. This primarily was due to our underweighted
positions in both sectors and to lagging stocks in the financials sector.
The financials sector was the portfolio's largest, yet underweights and stock
selection in the insurance and capital markets segments detracted from the
portfolio's performance. The subprime mortgage market mess reverberated
globally during the reporting period and dragged down holdings such as Shin
Kong Financial Holding, a Taiwanese life insurer that acknowledged a portion
of its fixed income portfolio was backed by U.S. subprime mortgages. In
addition, not having any exposure to diversified financial services companies
hurt the portfolio's results relative to the benchmark.
OUTLOOK
Focusing almost exclusively on equity securities of companies located in
emerging market countries, we seek out companies with earnings and revenues
growing at an improving rate. We will continue to select stocks based on
extensive company-level research that focuses on identifying accelerating
growth characteristics.
Investments by Country as of November 30, 2007
% of net % of net
assets as of assets as of
11/30/07 5/31/07
People's Republic of China 14.6% 5.7%
South Korea 12.9% 15.2%
Brazil 11.5% 13.1%
India 9.0% 5.0%
Russian Federation 7.4% 5.8%
South Africa 6.8% 8.1%
Taiwan (Republic of China) 6.8% 10.8%
Mexico 4.7% 5.7%
Indonesia 4.3% 2.5%
Hong Kong 3.0% 3.3%
Turkey 2.8% 2.1%
Chile 2.5% 3.6%
Czech Republic 2.1% 1.7%
Malaysia 2.0% 3.3%
Other Countries 5.7% 8.6%
Cash and Equivalents(1) 3.9% 5.5%
(1) Includes temporary cash investments, securities lending collateral and
other assets and liabilities.
Types of Investments in Portfolio
% of net % of net
assets as of assets as of
11/30/07 5/31/07
Foreign Common Stocks and Rights 96.1% 93.1%
Foreign Preferred Stocks -- 1.4%
TOTAL EQUITY EXPOSURE 96.1% 94.5%
Temporary Cash Investments 3.5% 4.2%
Other Assets and Liabilities(2) 0.4% 1.3%
(2) Includes securities lending collateral and other assets and liabilities.
- ------
12
SCHEDULE OF INVESTMENTS
NT Emerging Markets
NOVEMBER 30, 2007
Shares Value
Common Stocks -- 96.1%
BRAZIL -- 11.5%
900 Bolsa de Mercadorias e Futuros -- BM&F SA(1) $ 12,120
17,300 Cia Vale do Rio Doce ADR 598,234
8,549 Dufry South America Ltd. BDR(1) 246,194
16,600 Lojas Renner SA 387,980
12,733 LPS Brasil -- Consultoria de Imoveis SA(1) 197,691
7,600 Lupatech SA 211,464
9,700 Marisa SA(1) 57,865
17,400 Net Servicos de Comunicacao SA(1) 257,563
8,764 Petroleo Brasileiro SA ADR 843,973
15,250 Redecard SA 276,995
5,200 Totvs SA 176,516
-----------
3,266,595
-----------
CHILE -- 2.5%
53,973 Cencosud SA 203,539
16,400 Compania Cervecerias Unidas SA 118,636
36,010 La Polar SA 271,874
8,500 Lan Airlines SA ADR(2) 125,375
-----------
719,424
-----------
CZECH REPUBLIC -- 2.1%
4,400 CEZ AS 325,207
1,200 Komercni Banka AS 270,310
-----------
595,517
-----------
EGYPT -- 0.8%
2,600 Orascom Construction Industries 237,064
-----------
HONG KONG -- 3.0%
164,000 AAC Acoustic Technology Holdings Inc.(1) 222,065
7,000 China Mobile Ltd. ADR 641,620
-----------
863,685
-----------
INDIA -- 9.0%
7,600 ABB India Ltd. 299,409
4,900 Bharat Heavy Electricals Ltd. 333,674
12,841 DLF Ltd. 306,527
6,500 ICICI Bank Ltd. ADR 393,315
14,100 JSW Steel Ltd. 359,887
156 Mundra Port and Special Economic Zone Ltd.(1) 3,643
Shares Value
13,800 Reliance Communication Ventures Ltd. $ 235,525
5,100 Reliance Industries Ltd. 367,902
14,200 Rolta India Ltd. 262,085
-----------
2,561,967
-----------
INDONESIA -- 4.3%
116,000 PT Astra International Tbk 310,722
558,000 PT Bank Mandiri Tbk 212,558
846,000 PT Bumi Resources Tbk 513,288
17,500 PT International Nickel Indonesia Tbk 176,761
-----------
1,213,329
-----------
ISRAEL -- 0.6%
1,500 Elbit Systems Ltd. 85,079
8,200 Israel Chemicals Ltd. 87,486
-----------
172,565
-----------
KAZAKHSTAN -- 0.7%
7,169 KazMunaiGas Exploration Production GDR 192,342
-----------
MALAYSIA -- 2.0%
99,100 Bumiputra -- Commerce Holdings Bhd 316,325
46,700 Genting Bhd 110,824
114,100 Resorts World Bhd 129,225
-----------
556,374
-----------
MEXICO -- 4.7%
8,000 America Movil, SAB de CV ADR 493,280
111,561 Axtel, SAB de CV(1) 273,479
4,746 Grupo Aeroportuario del Pacifico, SAB de CV ADR 217,984
50,700 Grupo Financiero Banorte, SAB de CV(2) 219,764
34,775 Urbi Desarrollos Urbanos, SAB de CV(1)(2) 117,912
-----------
1,322,419
-----------
PAKISTAN -- 0.6%
8,527 Oil & Gas Development Co. Ltd. GDR 166,277
-----------
PEOPLE'S REPUBLIC OF CHINA -- 14.6%
188,000 Agile Property Holdings Ltd.(2) 374,664
50,141 Alibaba.com Ltd.(1)(2) 257,270
200 Baidu.com, Inc. ADR(1) 76,392
261,000 China Construction Bank Cl H 252,470
620,000 China Gas Holdings Ltd.(2) 289,100
65,000 China Merchants Bank Co., Ltd. Cl H 301,656
- ------
13
NT Emerging Markets
Shares Value
92,000 China National Building Material Co. Ltd. Cl H $ 400,526
214,000 China Petroleum & Chemical Corp. Cl H 325,515
28,000 China Shenhua Energy Co. Ltd. Cl H(2) 166,475
200,000 China Yurun Food Group Ltd. 329,232
200,000 CNOOC Ltd. 368,769
7,072 Focus Media Holding Ltd. ADR(1)(2) 399,143
109,000 Nine Dragons Paper Holdings Ltd. 274,954
32,000 Parkson Retail Group Ltd. 339,533
-----------
4,155,699
-----------
PERU -- 0.7%
2,600 Credicorp Ltd. 185,094
-----------
PHILIPPINES -- 1.6%
2,401,000 Alliance Global Group Inc.(1) 324,060
321,100 Robinsons Land Corp. 138,955
-----------
463,015
-----------
POLAND -- 0.7%
1,000 BRE Bank SA(1) 199,905
-----------
RUSSIAN FEDERATION -- 7.4%
4,000 Mobile TeleSystems ADR 362,800
4,800 OAO Gazprom ADR(1) 251,985
2,800 OAO LUKOIL 241,510
7,273 OAO TMK GDR 315,323
700 OJSC MMC Norilsk Nickel ADR 202,673
8,101 OJSC Pharmstandard GDR(1) 190,420
53,800 Sberbank(1) 226,941
4,700 Uralkali GDR (Acquired 10/15/07-11/30/07, Cost
$98,205)(1)(3) 112,800
5,869 X5 Retail Group N.V. GDR(1) 184,135
-----------
2,088,587
-----------
SOUTH AFRICA -- 6.8%
3,376 Anglo American plc 225,118
8,982 Barloworld Ltd. 150,219
149,100 Dimension Data Holdings plc(2) 186,955
15,800 Exxaro Resources Ltd. 240,959
6,300 Impala Platinum Holdings Limited 218,601
8,466 Kumba Iron Ore Ltd.(2) 335,387
16,800 Murray & Roberts Holdings Ltd. 237,330
31,632 Pretoria Portland Cement Co. Ltd. 210,111
6,500 Sun International Ltd. 135,467
-----------
1,940,147
-----------
Shares Value
SOUTH KOREA -- 12.9%
1,400 Daelim Industrial Co., Ltd. $ 246,403
4,200 Doosan Infracore Co., Ltd. 149,223
3,830 GS Holdings Corp. 258,360
1,400 Hyundai Department Store Co. Ltd. 171,020
700 Hyundai Heavy Industries Co., Ltd. 357,874
2,400 LG.Philips LCD Co., Ltd.(1) 135,122
7,400 LIG Non-Life Insurance Co., Ltd. 183,384
1,100 MegaStudy Co., Ltd. 373,157
500 Mirae Asset Securities Co. Ltd.(1) 85,262
3,000 Modetour Network Inc. 165,646
1,300 NHN Corp.(1) 369,156
400 POSCO 252,675
700 Samsung Electronics 428,803
4,420 Shinhan Financial Group Co., Ltd. 240,704
300 Shinsegae Co. Ltd. 236,152
-----------
3,652,941
-----------
TAIWAN (REPUBLIC OF CHINA) -- 6.8%
137,611 Asia Cement Corp. 201,115
153,000 AU Optronics Corp. 299,072
47,000 Catcher Technology Co. Ltd. 290,078
145,426 China Steel Corp. 191,185
55,080 Hon Hai Precision Industry Co., Ltd. 352,939
112,000 U-Ming Marine Transport Corp. 299,280
176,565 Wistron Corp. 304,934
-----------
1,938,603
-----------
TURKEY -- 2.8%
20,200 Enka Insaat ve Sanayi AS 325,370
53,500 Turkiye Garanti Bankasi AS 470,220
-----------
795,590
-----------
TOTAL COMMON STOCKS
(Cost $19,903,408) 27,287,139
-----------
Temporary Cash Investments -- 3.5%
Repurchase Agreement, Credit Suisse First Boston, Inc.,
(collateralized by various U.S. Treasury obligations, 6.25%,
8/15/23, valued at $1,019,342), in a joint trading account at
3.05%, dated 11/30/07, due 12/3/07 (Delivery value $1,000,254)
(Cost $1,000,000) 1,000,000
-----------
- ------
14
NT Emerging Markets
Shares Value
Temporary Cash Investments -- Securities Lending Collateral(4) -- 5.9%
Repurchase Agreement, BNP Paribas, (collateralized by various U.S.
Government Agency obligations in a pooled account at the lending
agent), 4.65%, dated 11/30/07, due 12/3/07 (Delivery value $400,155) $ 400,000
Repurchase Agreement, Deutsche Bank Securities, Inc.,
(collateralized by various U.S. Government Agency obligations in a
pooled account at the lending agent), 4.56%, dated 11/30/07, due
12/3/07 (Delivery value $861,308) 860,981
Repurchase Agreement, Lehman Brothers, Inc., (collateralized by
various U.S. Government Agency obligations in a pooled account at
the lending agent), 4.64%, dated 11/30/07, due 12/3/07 (Delivery
value $400,155) 400,000
-----------
TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL
(Cost $1,660,981) 1,660,981
-----------
TOTAL INVESTMENT SECURITIES -- 105.5%
(Cost $22,564,389) 29,948,120
-----------
OTHER ASSETS AND LIABILITIES -- (5.5)% (1,569,749)
-----------
TOTAL NET ASSETS -- 100.0% $28,378,371
===========
Market Sector Diversification
(as a % of net assets)
Financials 17.1%
Materials 14.4%
Energy 14.1%
Consumer Discretionary 12.2%
Information Technology 11.8%
Industrials 11.6%
Telecommunication Services 7.1%
Consumer Staples 4.9%
Utilities 2.2%
Health Care 0.7%
Cash and Equivalents* 3.9%
* Includes temporary cash investments, securities lending collateral and other
assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
BDR = Brazilian Depositary Receipt
GDR = Global Depositary Receipt
OJSC = Open Joint Stock Company
(1) Non-income producing.
(2) Security, or a portion thereof, was on loan as of November 30, 2007.
(3) Security was purchased under Rule 144A 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, 2007 was $112,800,
which represented 0.4% of total net assets.
(4) Investments represent purchases made by the lending agent with cash
collateral received through securities lending transactions.
As of November 30, 2007, securities with an aggregate value of $19,807,534,
which represented 69.8% of total net assets, were valued in accordance with
alternative pricing procedures adopted by the Board of Directors.
See Notes to Financial Statements.
- ------
15
SHAREHOLDER FEE EXAMPLES (UNAUDITED)
Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds.
The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from June 1, 2007 to November 30, 2007.
ACTUAL EXPENSES
The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.
- ------
16
Expenses Paid
Beginning Ending During Period*
Account Value Account Value 6/1/07 - Annualized
6/1/07 11/30/07 11/30/07 Expense Ratio*
NT International Growth -- Institutional Class
Actual $1,000 $1,085.30 $5.59 1.07%
Hypothetical $1,000 $1,019.70 $5.42 1.07%
NT Emerging Markets -- Institutional Class
Actual $1,000 $1,215.50 $7.94 1.43%
Hypothetical $1,000 $1,017.90 $7.23 1.43%
*Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 183, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period.
- ------
17
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2007
NT
International NT Emerging
Growth Markets
ASSETS
Investment securities -- at value (cost of
$55,422,827 and $20,903,408, respectively) --
including $2,919,428 and $1,642,441 of securities
on loan, respectively $68,155,358 $28,287,139
Investments made with cash collateral received for
securities on loan, at value (cost of $3,016,347
and $1,660,981, respectively) 3,016,347 1,660,981
----------- -----------
Total investment securities -- at value (cost of
$58,439,174 and $22,564,389, respectively) 71,171,705 29,948,120
Cash 14,642 7,038
Foreign currency holdings, at value (cost of
$43,105 and $72,912, respectively) 43,402 72,723
Receivable for investments sold 509,774 304,977
Dividends and interest receivable 126,181 34,269
----------- -----------
71,865,704 30,367,127
----------- -----------
LIABILITIES
Payable for collateral received for securities on
loan 3,016,347 1,660,981
Payable for investments purchased 1,088,556 296,008
Accrued management fees 57,889 31,767
----------- -----------
4,162,792 1,988,756
----------- -----------
NET ASSETS $67,702,912 $28,378,371
=========== ===========
INSTITUTIONAL CLASS CAPITAL SHARES, $0.01 PAR VALUE
Authorized 50,000,000 50,000,000
=========== ===========
Outstanding 5,323,213 1,752,457
=========== ===========
NET ASSET VALUE PER SHARE $12.72 $16.19
=========== ===========
NET ASSETS CONSIST OF:
Capital (par value and paid-in surplus) $53,284,140 $17,001,929
Undistributed net investment income 569,114 218,538
Undistributed net realized gain on investment and
foreign currency transactions 1,163,990 3,854,942
Net unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 12,685,668 7,302,962
----------- -----------
$67,702,912 $28,378,371
=========== ===========
See Notes to Financial Statements.
- ------
18
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 2007
NT NT
International Emerging
Growth Markets
INVESTMENT INCOME (LOSS)
INCOME:
Dividends (net of foreign taxes withheld of $96,330
and $45,593, respectively) $ 1,180,040 $543,066
Interest 41,217 30,186
Securities lending 20,842 1,132
----------- ----------
1,242,099 574,384
----------- ----------
EXPENSES:
Management fees 594,176 324,338
Directors' fees and expenses 992 394
Other expenses 3,084 191
----------- ----------
598,252 324,923
----------- ----------
NET INVESTMENT INCOME (LOSS) 643,847 249,461
----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
Investment transactions (net of foreign taxes
accrued of $34,410 and $19,263, respectively) 1,434,368 3,523,495
Foreign currency transactions (net of foreign taxes
accrued of $-- and $249, respectively) 1,255,442 418,833
----------- ----------
2,689,810 3,942,328
----------- ----------
CHANGE IN NET UNREALIZED APPRECIATION
(DEPRECIATION) ON:
Investments (net of foreign taxes accrued of
$(31,009) and $(72,797), respectively) 6,162,057 4,617,096
Translation of assets and liabilities in foreign
currencies 2,535,293 394,068
----------- ----------
8,697,350 5,011,164
----------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) 11,387,160 8,953,492
----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $12,031,007 $9,202,953
=========== ==========
See Notes to Financial Statements.
- ------
19
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30, 2007 AND PERIOD ENDED NOVEMBER 30, 2006(1)
NT International Growth NT Emerging Markets
Increase (Decrease) in
Net Assets 2007 2006 2007 2006
OPERATIONS
Net investment income
(loss) $ 643,847 $ 118,808 $ 249,461 $ 134,730
Net realized gain (loss) 2,689,810 (1,581,308) 3,942,328 (120,093)
Change in net
unrealized appreciation
(depreciation) 8,697,350 3,988,318 5,011,164 2,291,798
----------- ----------- ------------ -----------
Net increase (decrease)
in net assets resulting
from operations 12,031,007 2,525,818 9,202,953 2,306,435
----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment
income (138,053) -- (132,946) --
----------- ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares
sold 25,863,755 44,735,507 10,699,873 17,857,562
Payments for shares
redeemed (16,433,430) (881,692) (11,235,649) (319,857)
----------- ----------- ------------ -----------
Net increase (decrease)
in net assets from
capital share
transactions 9,430,325 43,853,815 (535,776) 17,537,705
----------- ----------- ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS 21,323,279 46,379,633 8,534,231 19,844,140
NET ASSETS
Beginning of period 46,379,633 -- 19,844,140 --
----------- ----------- ------------ -----------
End of period $67,702,912 $46,379,633 $28,378,371 $19,844,140
=========== =========== ============ ===========
Undistributed net
investment income $569,114 $96,508 $218,538 $121,733
=========== =========== ============ ===========
TRANSACTIONS IN SHARES OF THE FUNDS
Sold 2,284,414 4,577,398 836,418 1,836,860
Redeemed (1,444,625) (93,974) (886,517) (34,304)
----------- ----------- ------------ -----------
Net increase (decrease)
in shares of the funds 839,789 4,483,424 (50,099) 1,802,556
=========== =========== ============ ===========
(1) May 12, 2006 (fund inception) through November 30, 2006.
See Notes to Financial Statements.
- ------
20
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2007
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION -- American Century World Mutual Funds, Inc. (the corporation) is
registered under the Investment Company Act of 1940 (the 1940 Act) as an
open-end management investment company. NT International Growth Fund (NT
International Growth) and NT Emerging Markets Fund (NT Emerging Markets)
(collectively, the funds) are two funds in a series issued by the corporation.
The funds are diversified under the 1940 Act. The funds' investment objective
is to seek capital growth. The funds pursue this objective by investing
primarily in equity securities of foreign companies. NT International Growth
primarily invests in companies located in at least three developed countries
(excluding United States). NT Emerging Markets invests at least 80% of its
assets in securities of issuers in emerging market countries and companies
that derive a significant portion of their business from emerging market
countries. The funds are not permitted to invest in any securities issued by
companies assigned by the Global Industry Classification Standard to the
tobacco industry. The funds incepted on May 12, 2006. The following is a
summary of the funds' significant accounting policies.
SECURITY VALUATIONS -- Securities traded primarily on a principal securities
exchange are valued at the last reported sales price, or at the mean of the
latest bid and asked prices where no last sales price is available. Depending
on local convention or regulation, securities traded over-the-counter are
valued at the mean of the latest bid and asked prices, the last sales price,
or the official close price. 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. Discount notes may be valued
through a commercial pricing service or at amortized cost, which approximates
fair value. Securities traded on foreign securities exchanges and
over-the-counter markets are normally completed before the close of business
on days that the New York Stock Exchange (the Exchange) is open and may also
take place on days when the Exchange is not open. If an event occurs after the
value of a security was established but before the net asset value per share
was determined that was likely to materially change the net asset value, that
security would be valued as determined in accordance with procedures adopted
by the Board of Directors. If the funds determine that the market price of a
portfolio security is not readily available, or that the valuation methods
mentioned above do not reflect the security's fair value, such security is
valued as determined by, or in accordance with procedures adopted by, the
Board of Directors or its designee if such determination would materially
impact a fund's net asset value. Certain other circumstances may cause the
funds to use alternative procedures to value a security such as: a security
has been declared in default; trading in a security has been halted during the
trading day; or there is a foreign market holiday and no trading will commence.
SECURITY TRANSACTIONS -- For financial reporting purposes, 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. Certain countries impose taxes on realized gains
on the sale of securities registered in their country. The funds record the
foreign tax expense, if any, on an accrual basis. The realized and unrealized
tax provision reduces the net realized gain (loss) on investment transactions
and net unrealized appreciation (depreciation) on investments, respectively.
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.
EXCHANGE TRADED FUNDS -- The funds may invest in exchange traded funds (ETFs).
ETFs are a type of index fund bought and sold on a securities exchange. An ETF
trades like common stock and represents a fixed portfolio of securities
designed to track the performance and dividend yield of a particular domestic
or foreign market index. A fund may purchase an ETF to temporarily gain
exposure to a portion of the U.S. or a foreign market while awaiting purchase
of underlying securities. The risks of owning an ETF generally reflect the
risks of owning the underlying securities they are designed to track, although
the lack of liquidity on an ETF could result in it being more volatile.
Additionally, ETFs have management fees, which increase their cost.
FOREIGN CURRENCY TRANSACTIONS -- All assets and liabilities initially
expressed in foreign currencies are translated into U.S. dollars at prevailing
exchange rates at period end. 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. Realized
and unrealized gains and losses from foreign currency translations arise from
changes in currency exchange rates.
- ------
21
Net realized and unrealized foreign currency exchange gains or losses
occurring during the holding period of investment securities are a component
of realized gain (loss) on foreign currency transactions and unrealized
appreciation (depreciation) on translation of assets and liabilities in
foreign currencies, respectively. Certain countries may impose taxes on the
contract amount of purchases and sales of foreign currency contracts in their
currency. The funds record the foreign tax expense, if any, as a reduction to
the net realized gain (loss) on foreign currency transactions.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The funds may enter into
forward foreign currency exchange contracts to facilitate transactions of
securities denominated in a foreign currency or to hedge the funds' exposure
to foreign currency exchange rate fluctuations. 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. 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.
SECURITIES ON LOAN -- The funds may lend portfolio securities through their
lending agent to certain approved borrowers in order to earn additional
income. The funds continue to recognize any gain or loss in the market price
of the securities loaned and record any interest earned or dividends declared.
REPURCHASE AGREEMENTS -- The funds may enter into repurchase agreements with
institutions that American Century Investment Management, Inc. (ACIM) has
determined are creditworthy pursuant to criteria adopted by the Board of
Directors. Each repurchase agreement is recorded at cost. Each fund requires
that the collateral, represented by securities, received in a repurchase
transaction be transferred to the custodian in a manner sufficient to enable
each fund 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
each fund under each repurchase agreement.
JOINT TRADING ACCOUNT -- Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, each fund, along with other registered
investment companies having management agreements with ACIM or American
Century Global Investment Management, Inc. (ACGIM), 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 each fund's policy to distribute substantially 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. At this time, management has not identified any uncertain tax
positions that would materially impact the financial statements. Accordingly,
no provision has been made for federal or state income taxes. Interest and
penalties associated with any federal or state income tax obligations, if any,
are recorded as interest expense.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid annually. Distributions from net realized gains,
if any, are generally declared and paid twice per year. 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 1940 Act.
INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.
USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.
2. FEES AND TRANSACTIONS WITH RELATED PARTIES
MANAGEMENT FEES -- The corporation has entered into a Management Agreement
with ACGIM (the investment advisor), under which ACGIM provides the funds with
investment advisory and management services in exchange for a single, unified
management fee (the fee). The Agreement provides that all expenses of the
funds, except brokerage commissions, taxes, interest, fees and expenses of
those
- ------
22
directors who are not considered "interested persons" as defined in the 1940
Act (including counsel fees) and extraordinary expenses, will be paid by ACIM.
The fee is computed and accrued daily based on the daily net assets of each
fund and paid monthly in arrears. For funds with a stepped fee schedule, the
rate of the fee is determined by applying a fee rate calculation formula. This
formula takes into account all of the investment advisor's assets under
management in each fund's investment strategy (strategy assets) to calculate
the appropriate fee rate for each fund. The strategy assets include each
fund's assets and the assets of other clients of the investment advisor that
are not in the American Century family of funds, but that have the same
investment team and investment strategy. The strategy assets of NT
International Growth and NT Emerging Markets include the assets of
International Growth Fund and Emerging Markets Fund, respectively, two funds
in a series issued by the corporation. The annual management fee schedule for
NT International Growth ranges from 0.90% to 1.30%. The annual management fee
schedule for NT Emerging Markets ranges from 1.05% to 1.65%. The effective
annual management fee for NT International Growth and NT Emerging Markets for
the year ended November 30, 2007 was 1.06% and 1.46%, respectively.
ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on
behalf of the funds. The subadvisor makes investment decisions for the cash
portion of the funds in accordance with the funds' investment objectives,
policies and restrictions under the supervision of ACGIM and the Board of
Directors. ACGIM pays all costs associated with retaining ACIM as the
subadvisor of the funds.
RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACGIM, the corporation's subadvisor, ACIM, the distributor
of the corporation, American Century Investment Services, Inc., and the
corporation's transfer agent, American Century Services, LLC. The funds are
wholly owned by American Century Asset Allocation Portfolios, Inc. (ACAAP).
ACAAP does not invest in the funds for purpose of exercising management or
control.
Beginning in December 2006, the funds are eligible to invest in a money market
fund for temporary purposes, which is managed by J.P. Morgan Investment
Management, Inc. (JPMIM). JPMIM is a wholly owned subsidiary of JPMorgan Chase
& Co. (JPM). JPM is an equity investor in ACC. The funds have a bank line of
credit agreement and securities lending agreement with JPMorgan Chase Bank
(JPMCB). JPMCB is a custodian of the funds and a wholly owned subsidiary of
JPM.
3. INVESTMENT TRANSACTIONS
Investment transactions, excluding short-term investments, for the year ended
November 30, 2007, were as follows:
NT International Growth NT Emerging Markets
Purchases $70,196,786 $25,082,712
Proceeds from sales $57,648,047 $24,613,657
4. SECURITIES LENDING
As of November 30, 2007, securities in NT International Growth and NT Emerging
Markets valued at $2,919,428 and $1,642,441, respectively, were on loan
through the lending agent, JPMCB, to certain approved borrowers. JPMCB
receives and maintains collateral in the form of cash and/or acceptable
securities as approved by ACIM. Cash collateral is invested in authorized
investments by the lending agent in a pooled account. The value of cash
collateral received at period end is disclosed in the Statement of Assets and
Liabilities and investments made with the cash by the lending agent are listed
in the Schedule of Investments. Any deficiencies or excess of collateral must
be delivered or transferred by the member firms no later than the close of
business on the next business day. The total value of all collateral received,
at this date, was $3,016,347 and $1,660,981, respectively. The funds' risks in
securities lending are that the borrower may not provide additional collateral
when required or return the securities when due. If the borrower defaults,
receipt of the collateral by the funds may be delayed or limited.
- ------
23
5. BANK LINE OF CREDIT
The funds, along with certain other funds managed by ACIM or ACGIM, have a
$500,000,000 unsecured bank line of credit agreement with JPMCB. The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the agreement bear interest at the Federal Funds
rate plus 0.40%. The funds did not borrow from the line during the year ended
November 30, 2007.
Effective December 12, 2007, the funds, along with certain other funds managed
by ACIM or ACGIM, have a $500,000,000 unsecured bank line of credit agreement
with Bank of America, N.A. (the Bank of America agreement). The funds may
borrow money for temporary or emergency purposes to fund shareholder
redemptions. Borrowings under the Bank of America agreement bear interest at
the Federal Funds rate plus 0.40%.
6. RISK FACTORS
There are certain risks involved in investing in foreign securities. These
risks include those resulting from future adverse political, social, and
economic developments, fluctuations in currency exchange rates, the possible
imposition of exchange controls, and other foreign laws or restrictions.
Investing in emerging markets may accentuate these risks.
NT Emerging Market's performance may be affected by investments in initial
public offerings (IPOs). The impact of IPOs on a fund's performance depends on
the strength of the IPO market and the size of the fund. IPOs may have less
impact on a fund's performance as its assets grow.
7. FEDERAL TAX INFORMATION
The tax character of distributions paid during the year ended November 30,
2007 and the period May 12, 2006 (fund inception) through November 30, 2006
were as follows:
NT International Growth NT Emerging Markets
2007 2006 2007 2006
DISTRIBUTIONS PAID FROM
Ordinary income $138,053 -- $132,946 --
Long-term capital gains -- -- -- --
The book-basis 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 realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.
As of November 30, 2007, the components of distributable earnings on a
tax-basis and the federal tax cost of investments were as follows:
NT International NT Emerging
Growth Markets
Federal tax cost of investments $58,648,867 $22,613,143
=========== ===========
Gross tax appreciation of investments $13,140,633 $7,629,439
Gross tax depreciation of investments (617,795) (294,462)
----------- -----------
Net tax appreciation (depreciation) of
investments $12,522,838 $7,334,977
=========== ===========
Net tax appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies $(45,961) $(81,208)
----------- -----------
Net tax appreciation (depreciation) $12,476,877 $7,253,769
=========== ===========
Undistributed ordinary income $1,138,429 $2,306,135
Accumulated long-term gains $864,531 $1,821,253
Capital loss deferrals $(61,065) --
Currency loss deferrals -- $(4,715)
- ------
24
The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales, the realization for tax purposes of unrealized gains on
certain forward foreign currency contracts and on investments in passive
foreign investment companies.
The capital and currency loss deferrals listed on the previous page for the
funds represent net capital and foreign currency losses incurred in the
one-month period ended November 30, 2007. The funds have elected to treat such
losses as having been incurred in the following fiscal year for federal income
tax purposes.
8. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.
The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.
9. OTHER TAX INFORMATION (UNAUDITED)
The following information is provided pursuant to provisions of the Internal
Revenue Code.
The funds hereby designate up to the maximum amount allowable as qualified
dividend income for the fiscal year ended November 30, 2007.
For corporate taxpayers, the ordinary income distributions paid during the
fiscal year ended November 30, 2007, qualify for the corporate dividends
received deduction as follows:
NT International Growth NT Emerging Markets
$2,944 --
As of November 30, 2007, the funds designate the following as a foreign tax
credit, which represents taxes paid on income derived from sources within
foreign countries or possessions of the United States.
NT International Growth NT Emerging Markets
$86,311 $20,951
- ------
25
FINANCIAL HIGHLIGHTS
NT International Growth
For a Share Outstanding Throughout the Years Ended November 30 (except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $10.34 $10.00
-------- --------
Income From Investment Operations
Net Investment Income (Loss) 0.12 0.03
Net Realized and Unrealized Gain (Loss) 2.29 0.31
-------- --------
Total From Investment Operations 2.41 0.34
-------- --------
Distributions
From Net Investment Income (0.03) --
-------- --------
Net Asset Value, End of Period $12.72 $10.34
======== ========
TOTAL RETURN(2) 23.40% 3.40%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 1.07% 1.07%(3)
Ratio of Net Investment Income (Loss) to Average
Net Assets 1.15% 0.59%(3)
Portfolio Turnover Rate 104% 65%
Net Assets, End of Period (in thousands) $67,703 $46,380
(1) May 12, 2006 (fund inception) through November 30, 2006.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized.
(3) Annualized.
See Notes to Financial Statements.
- ------
26
NT Emerging Markets
For a Share Outstanding Throughout the Years Ended November 30 (except as noted)
2007 2006(1)
PER-SHARE DATA
Net Asset Value, Beginning of Period $11.01 $10.00
------- -------
Income From Investment Operations
Net Investment Income (Loss) 0.15 0.07
Net Realized and Unrealized Gain (Loss) 5.12 0.94
------- -------
Total From Investment Operations 5.27 1.01
------- -------
Distributions
From Net Investment Income (0.09) -
------- -------
Net Asset Value, End of Period $16.19 $11.01
======= =======
TOTAL RETURN(2) 48.22% 10.10%
RATIOS/SUPPLEMENTAL DATA
Ratio of Operating Expenses to Average Net Assets 1.46% 1.60%(3)
Ratio of Net Investment Income (Loss) to Average Net Assets 1.12% 1.68%(3)
Portfolio Turnover Rate 113% 59%
Net Assets, End of Period (in thousands) $28,378 $19,844
(1) May 12, 2006 (fund inception) through November 30, 2006.
(2) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized.
(3) Annualized.
See Notes to Financial Statements.
- ------
27
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of NT International Growth Fund and NT
Emerging Markets Fund (the "Funds"), two of the mutual funds comprising
American Century World Mutual Funds, Inc., as of November 30, 2007, and the
related statements of operations for the year then ended, and the statements
of changes in net assets and the financial highlights for the year ended
November 30, 2007 and the period May 12, 2006 (fund inception) to November 30,
2006. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
November 30, 2007, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing
procedures. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds of American Century World Mutual Funds, Inc. as of
November 30, 2007, the results of their operations for the year then ended,
and the changes in their net assets and the financial highlights for the year
ended November 30, 2007 and the period May 12, 2006 (fund inception) to
November 30, 2006, in conformity with accounting principles generally accepted
in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 14, 2008
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28
PROXY VOTING RESULTS
A special meeting of shareholders was held on July 27, 2007, to vote on the
following proposal. The proposal received the required number of votes of the
American Century World Mutual Funds, Inc. and was adopted. A summary of voting
results is listed below the proposal.
PROPOSAL:
To elect nine Directors to the Board of Directors of American Century World
Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds
issued by American Century World Mutual Funds, Inc.).
James E. Stowers, Jr. For: 4,492,465,030
Withhold: 84,151,860
Abstain: 0
Broker Non-Vote: 0
Jonathan S. Thomas For: 4,496,101,969
Withhold: 80,514,921
Abstain: 0
Broker Non-Vote: 0
Thomas A. Brown For: 4,497,551,079
Withhold: 79,065,811
Abstain: 0
Broker Non-Vote: 0
Andrea C. Hall For: 4,497,808,657
Withhold: 78,808,233
Abstain: 0
Broker Non-Vote: 0
James A. Olson For: 4,497,582,906
Withhold: 79,033,984
Abstain: 0
Broker Non-Vote: 0
Donald H. Pratt For: 4,496,273,853
Withhold: 80,343,037
Abstain: 0
Broker Non-Vote: 0
Gale E. Sayers For: 4,496,553,346
Withhold: 80,063,544
Abstain: 0
Broker Non-Vote: 0
M. Jeannine Strandjord For: 4,494,879,736
Withhold: 81,737,154
Abstain: 0
Broker Non-Vote: 0
Timothy S. Webster For: 4,497,903,345
Withhold: 78,713,545
Abstain: 0
Broker Non-Vote: 0
- ------
29
MANAGEMENT
The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Global Investment Management, Inc. (ACGIM) or American Century
Investment Management, Inc. (ACIM); the funds' principal underwriter, American
Century Investment Services, Inc. (ACIS); and the funds' transfer agent,
American Century Services, LLC (ACS).
The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACGIM, ACIM, ACIS, and ACS. The directors
serve in this capacity for seven registered investment companies in the
American Century family of funds.
All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies in the American Century family of funds
advised by ACIM, or ACGIM, a wholly owned subsidiary of ACIM, unless otherwise
noted. Only officers with policy-making functions are listed. No officer is
compensated for his or her service as an officer of the funds. The listed
officers are interested persons of the funds and are appointed or re-appointed
on an annual basis.
INTERESTED DIRECTORS
JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 105
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
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30
INDEPENDENT DIRECTORS
THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust
DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and services
provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.
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31
TIMOTHY S. WEBSTER, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); Founder and Principal,
Growth Consulting and Investments LLC (November 2007 to present); President
and Chief Executive Officer, American Italian Pasta Company (2001 to December
2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None
OFFICERS
BARRY FINK, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1955
POSITION(S) HELD WITH FUND: Executive Vice President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and
Executive Vice President, ACC (September 2007 to present); President, ACS LLC
(October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007);
Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as:
Director, ACC, ACS, ACIS and other ACC subsidiaries
MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS
CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to
present); Vice President, ACC (November 2005 to present); General Counsel, ACC
(March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS,
ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS
ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present) and Controller, various American Century funds (1997 to
September 2006)
JON ZINDEL, 4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS
The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.
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32
ADDITIONAL INFORMATION
RETIREMENT ACCOUNT INFORMATION
As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.
If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. 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 notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.
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.
State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.
PROXY VOTING GUIDELINES
American Century Global Investment Management, Inc., the funds' investment
advisor, is responsible for exercising the voting rights associated with the
securities purchased and/or held by the funds. A description of the policies
and procedures the advisor uses in fulfilling this responsibility is available
without charge, upon request, by calling 1-800-345-2021. It is also available
on American Century's website at americancentury.com and on the Securities and
Exchange Commission's website at sec.gov. Information regarding how the
investment advisor voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available on the "About Us" page
at americancentury.com. It is also available at sec.gov.
QUARTERLY PORTFOLIO DISCLOSURE
The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.
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33
INDEX DEFINITIONS
The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.
Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.
The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.
The MSCI EAFE® GROWTH INDEX is a capitalization-weighted index that monitors
the performance of growth stocks from Europe, Australasia, and the Far East.
The MSCI EAFE® VALUE INDEX is a capitalization-weighted index that monitors
the performance of value stocks from Europe, Australasia, and the Far East.
The MSCI EM (Emerging Markets) INDEX represents the net performance of stocks
in global emerging market countries.
The MSCI EUROPE INDEX is designed to measure equity market performance in
Europe.
The MSCI JAPAN INDEX is designed to measure equity market performance in Japan.
The MSCI WORLD FREE INDEX represents the performance of stocks in developed
countries (including the United States) that are available for purchase by
global investors.
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34
NOTES
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35
NOTES
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36
CONTACT US
AMERICANCENTURY.COM
AUTOMATED INFORMATION LINE:
1-800-345-8765
INVESTOR SERVICES REPRESENTATIVE:
1-800-345-2021 or 816-531-5575
BUSINESS, NOT-FOR-PROFIT,
EMPLOYER-SPONSORED RETIREMENT PLANS:
1-800-345-3533
BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL PROFESSIONALS, INSURANCE COMPANIES:
1-800-345-6488
TELECOMMUNICATIONS DEVICE FOR THE DEAF:
1-800-634-4113 or 816-444-3485
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
INVESTMENT ADVISOR:
American Century Global Investment Management, Inc.
New York, New York
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.
American Century Investment Services, Inc., Distributor
©2008 American Century Proprietary Holdings, Inc. All rights reserved.
The American Century Investments logo, American Century and American Century
Investments are service marks of American Century Proprietary Holdings, Inc.
0801
SH-ANN-57978N
ITEM 2. CODE OF ETHICS.
a. The registrant has adopted a Code of Ethics for Senior Financial
Officers that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer, and persons
performing similar functions.
b. No response required.
c. None.
d. None.
e. Not applicable.
f. The registrant's Code of Ethics for Senior Financial Officers was
filed as Exhibit 12 (a)(1) to American Century Asset Allocation
Portfolios, Inc.'s Annual Certified Shareholder Report on Form N-CSR,
File No. 811-21591, on September 29, 2005, and is incorporated herein
by reference.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) The registrant's board has determined that the registrant has at least
one audit committee financial expert serving on its audit committee.
(a)(2) Donald H. Pratt, Thomas A. Brown, Timothy S. Webster and Gale E.
Sayers are the registrant's designated audit committee financial
experts. They are "independent" as defined in Item 3 of Form N-CSR.
(a)(3) Not applicable.
(b) No response required.
(c) No response required.
(d) No response required.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees.
The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the registrant's
annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years were as follows:
FY 2006: $202,398
FY 2007: $236,908
(b) Audit-Related Fees.
The aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountant that are reasonably related to the
performance of the audit of the registrant's financial statements and are not
reported under paragraph (a) of this Item were as follows:
For services rendered to the registrant:
FY 2006: $0
FY 2007: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X (relating to certain engagements for non-audit
services with the registrant's investment adviser and its affiliates):
FY 2006: $0
FY 2007: $0
(c) Tax Fees.
The aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning were as follows:
For services rendered to the registrant:
FY 2006: $32,267
FY 2007: $ 3,941
These services included review of federal and state income tax forms
and federal excise tax forms related to fiscal year end 2006, of
which some of the 2006 fiscal year end services were received in 2007.
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X (relating to certain engagements for non-audit
services with the registrant's investment adviser and its affiliates):
FY 2006: $0
FY 2007: $0
(d) All Other Fees.
The aggregate fees billed in each of the last two fiscal years for products and
services provided by the principal accountant, other than the services reported
in paragraphs (a) through (c) of this Item were as follows:
For services rendered to the registrant:
FY 2006: $0
FY 2007: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X (relating to certain engagements for non-audit
services with the registrant's investment adviser and its affiliates):
FY 2006: $0
FY 2007: $0
(e)(1) In accordance with paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation
S-X, before the accountant is engaged by the registrant to render
audit or non-audit services, the engagement is approved by the
registrant's audit committee. Pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X, the registrant's audit committee also
pre-approves its accountant's engagements for non-audit services with
the registrant's investment adviser, its parent company, and any
entity controlled by, or under common control with the investment
adviser that provides ongoing services to the registrant, if the
engagement relates directly to the operations and financial reporting
of the registrant.
(e)(2) All services described in each of paragraphs (b) through (d) of this
Item were pre-approved before the engagement by the registrant's audit
committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of
Regulation S-X. Consequently, none of such services were required to
be approved by the audit committee pursuant to paragraph (c)(7)(i)(C).
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than 50%.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant were as follows:
FY 2006: $201,504
FY 2007: $160,804
(h) The registrant's investment adviser and accountant have notified the
registrant's audit committee of all non-audit services that were
rendered by the registrant's accountant to the registrant's investment
adviser, its parent company, and any entity controlled by, or under
common control with the investment adviser that provides services to
the registrant, which services were not required to be pre-approved
pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The
notification provided to the registrant's audit committee included
sufficient details regarding such services to allow the registrant's
audit committee to consider the continuing independence of its
principal accountant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS.
The schedule of investments is included as part of the report to stockholders
filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by
which shareholders may recommend nominees to the registrant's board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) are effective based on their evaluation of these controls
and procedures as of a date within 90 days of the filing date of this
report.
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940) that occurred during the registrant's second
fiscal quarter of the period covered by this report that have
materially affected, or are reasonably likely to materially affect,
the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Registrant's Code of Ethics for Senior Financial Officers, which is
the subject of the disclosure required by Item 2 of Form N-CSR, was
filed as Exhibit 12(a)(1) to American Century Asset Allocation
Portfolios, Inc.'s Certified Shareholder Report on Form N-CSR, File
No. 811-21591, on September 29, 2005.
(a)(2) Separate certifications by the registrant's principal executive
officer and principal financial officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment
Company Act of 1940, are filed and attached hereto as Exhibit
99.302CERT.
(a)(3) Not applicable.
(b) A certification by the registrant's chief executive officer and chief
financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, is furnished and attached hereto as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AMERICAN CENTURY WORLD MUTUAL FUNDS, INC.
By: /s/ Jonathan S. Thomas
------------------------------------
Name: Jonathan S. Thomas
Title: President
Date: January 6, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Jonathan S. Thomas
-------------------------------------
Name: Jonathan S. Thomas
Title: President
(principal executive officer)
Date: January 6, 2008
By: /s/ Robert J. Leach
-------------------------------------
Name: Robert J. Leach
Title: Vice President, Treasurer, and
Chief Financial Officer
(principal financial officer)
Date: January 6, 2008