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 --------------------------------------------- AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) CHARLES A. ETHERINGTON, 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 816-531-5575 ---------------------------- Date of fiscal year end: 11-30 ------------------------------------------------------ Date of reporting period: 05-31-2008 ------------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS. [front cover] SEMIANNUAL REPORT MAY 31, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS INTERNATIONAL GROWTH FUND GLOBAL GROWTH FUND EMERGING MARKETS FUND INTERNATIONAL VALUE FUND PRESIDENT'S LETTER [photo of Jonathan Thomas] JONATHAN THOMAS Dear Investor, At American Century Investments®, we are committed to helping you reach your financial goals. Your success is the ultimate measure of our performance. That's why we focus on achieving superior investment results and building long-term relationships with investors like you. Part of that relationship is to clearly communicate investment results and what influenced them. To help you monitor your investment with us, we take pride in providing you with the semiannual report for the American Century® International Growth, Global Growth, Emerging Markets, and International Value funds for the six months ended May 31, 2008. We also recommend americancentury.com, where we provide company news, quarterly portfolio commentaries, investment views, and other useful information. As noted on the website, 2008 marks the 50th anniversary of American Century Investments. Since 1958, we've worked to make wise decisions with your interests as our guide. Fifty years also means that we've met the challenges of previous economic downturns. As we've crossed those hurdles and earned your trust, our assets under management have grown to nearly $100 billion, putting us in the top 5% of our industry. This growth has given us the resources to offer a wide array of financial products and services, including a well-diversified line-up of portfolios that provide you with many choices in these uncertain times. Though our offerings are diverse, they share several key qualities, including our disciplined investment approach and active, team-based management. Strict adherence to our processes and long-term strategies allows us to stay focused during volatile periods. Investors in our portfolios also benefit from the sum of our investment teams' expertise as they share research and information. We'll continue to work hard to earn your trust. Thank you for your continued support. Sincerely, /s/ Jonathan Thomas Jonathan S. Thomas President and Chief Executive Officer American Century Investments 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. . . . . . . . . . . . . . . . . . 6 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 6 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 7 GLOBAL GROWTH Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 12 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 13 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 13 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 14 EMERGING MARKETS Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 19 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 20 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 20 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 21 INTERNATIONAL VALUE Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 26 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 27 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 27 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 28 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 31 FINANCIAL STATEMENTS Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 34 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 36 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 37 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 39 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 50 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 74 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 75 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 Investments or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments 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 Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments 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 Investments by third party vendors. To the best of American Century Investments' 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 RETREAT Stock performance in both developed and emerging international stock markets turned negative for the six months ended May 31, 2008. Solid results in April and May were not enough to offset the sharp downturn that occurred from December 2007, through March 2008. Global credit market woes, rising inflationary pressures and slowing economic growth rates combined to drag down stocks. Soaring prices for oil and other commodities added to investors' malaise, while a weak U.S. dollar complicated outlooks for companies that rely on exports to the United States. Meanwhile, strong performance from Latin America helped emerging markets outperform the developed markets during the six months. CREDIT CRUNCH PROMPTS CENTRAL BANK ACTION Europe couldn't escape the fallout from the U.S. credit crisis; its large banks were investors and players in the U.S. subprime credit market. But coordinated efforts between the European Central Bank (ECB) and the U.S. Federal Reserve to inject liquidity and ease conditions in short-term money markets limited the risk of a severe global credit crisis. RATES DROP IN BRITAIN In Europe, the euro continued to reach record highs versus the U.S. dollar. Despite increasingly sluggish economic growth throughout Europe, rising inflation caused the ECB to leave its key interest rate unchanged during the six-month period. On the other hand, the Bank of England responded to slower economic growth by cutting its key rate by 75 basis points. Japan's economic growth remained positive, but the government scaled back its fiscal-year growth forecast, citing rising raw materials prices and turmoil in the global financial markets as obstacles to economic expansion. Japan's benchmark interest rate remained steady at 0.5% -- the lowest among the world's major economies. VOLATILITY OFFERS OPPORTUNITY The weak U.S. economy, with its ongoing credit problems, remains an important factor in the outlook for international stocks. Nevertheless, we believe that turbulent times always present the potential for long-term investment gains, and there is no shortage of companies with accelerating earnings that may provide attractive investment opportunities in the months ahead. International Equity Total Returns For the six months ended May 31, 2008 (in U.S. dollars)* MSCI EM Index -1.52% MSCI EAFE Growth Index -3.51% MSCI Europe Index -5.74% MSCI EAFE Index -5.21% MSCI World Free Index -4.07% MSCI EAFE Value Index -6.94% MSCI Japan Index -2.64% *Total returns for periods less than one year are not annualized. - ------ 2 PERFORMANCE International Growth Total Returns as of May 31, 2008 Average Annual Returns 6 10 Since Inception months(1) 1 year 5 years years Inception Date INVESTOR CLASS -2.80% 5.05% 17.89% 6.45% 10.61% 5/9/91 MSCI EAFE INDEX -5.21% -2.53% 19.24% 6.82% 7.54%(2) -- MSCI EAFE GROWTH INDEX -3.51% 2.83% 18.32% 4.99% 5.74%(2) -- Institutional Class -2.69% 5.29% 18.09% 6.67% 8.86% 11/20/97 A Class(3) No sales charge* -2.90% 4.81% 17.58% 6.19% 9.44% With sales charge* -8.46% -1.24% 16.21% 5.56% 8.89% 10/2/96 B Class No sales charge* -3.34% 4.03% 16.71% -- 17.32% With sales charge* -8.34% 0.03% 16.60% -- 17.23% 1/31/03 C Class No sales charge* -3.29% 4.05% 16.74% -- 6.51% With sales charge* -4.20% 4.05% 16.74% -- 6.51% 6/4/01 R Class -3.00% 4.55% -- -- 16.89% 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%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. (1) Total returns for periods less than one year are not annualized. (2) Since 4/30/91, the date nearest the Investor Class's inception for which data are available. (3) Prior to December 3, 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 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 International Growth Growth of $10,000 Over 10 Years $10,000 investment made May 31, 1998
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One-Year Returns Over 10 Years Periods ended May 31 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class -2.85% 48.27% -22.48% -13.34% -15.25% 22.36% 10.36% 26.80% 26.71% 5.05% MSCI EAFE Index 4.36% 17.14% -17.23% -9.60% -12.30% 32.66% 14.62% 28.24% 26.84% -2.53% MSCI EAFE Growth Index 2.75% 20.82% -27.39% -11.58% -11.92% 27.01% 11.88% 26.83% 25.13% 2.83% 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. - ------ 4 PORTFOLIO COMMENTARY International Growth Portfolio Managers: Alex Tedder and Raj Gandhi PERFORMANCE SUMMARY International Growth returned -2.80%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -5.21%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Overall, our favorable stock selection and effective allocation decisions accounted for the portfolio's outperformance relative to the benchmark. CANADA LEADS ALL COUNTRIES From a country perspective, Canada, which was not represented in the benchmark, along with Germany and Italy made the greatest positive contributions to the portfolio's relative performance. Within each country, strong stock selection led to solid results. On the other hand, our positions in Japan, France and India detracted from relative results. Stock selection was the primary culprit in Japan and France. Our holdings in India posted a negative return for the reporting period, and the benchmark had no exposure to India. MATERIALS, INDUSTRIALS WERE TOP SECTORS The portfolio's materials sector made the greatest positive contribution to relative performance, due to our overweight to the sector and good stock selection. In particular, our stock picks in the chemicals industry -- along with an overweight -- generated strong performance. Our position in Germany's K+S AG, a producer of potash for use in fertilizers, represented the fund's top contributor for the reporting period. The company's stock benefited from the extended agriculture boom, greater-than-expected earnings and soaring demand for potash. In the industrials sector, our stock selections contributed positively to fund performance. In particular, an overweight position and good stock selection in the electrical equipment industry were effective, as the industry continued to benefit from growing worldwide demand. Our positions in Vestas Wind Systems, a Danish supplier of wind power solutions, and ALSTOM, the France-based provider of equipment and services for power generation and rail transport, led the industrials sector's performance. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 ENI SpA 2.0% 0.4% BG Group plc 2.0% 1.6% Total SA 1.8% 1.3% Tesco plc 1.8% 1.6% Rio Tinto Ltd. 1.8% 0.6% Julius Baer Holding AG 1.7% 1.8% CEZ AS 1.7% 1.1% Nintendo Co., Ltd. 1.6% 1.6% Saipem SpA 1.6% 1.6% BHP Billiton Ltd. 1.6% 1.4% *All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 5 International Growth Our health care stocks also were strong contributors to relative performance. Specifically, overweights to Denmark's Novo Nordisk AS, a pharmaceutical company specializing in insulin treatments for diabetes, and Australia's CSL Ltd., a biotechnology company specializing in vaccines, contributed favorably. CONSUMER SECTORS LAGGED The consumer discretionary and consumer staples sectors represented the largest detractors from the portfolio's relative performance, primarily due to unfavorable stock selection. In the discretionary sector, our holdings among specialty retailers and textiles, apparel and luxury goods companies generated disappointing performance. In particular, our position in Burberry Group, the British clothing company, was among the fund's largest detractors. In the staples sector, poor performance from food and staples retailers accounted for the bulk of the decline. OUTLOOK International Growth invests in companies located throughout the world exhibiting accelerating earnings and revenue growth. Our analysis indicates the long-term outlook for large-cap growth companies remains positive. The portfolio has broad exposure to high-quality growth companies in numerous markets, and although economic uncertainty and market volatility characterize the current climate, we believe these companies will deliver solid long-term returns. Types of Investments in Portfolio % of net % of net assets as of assets as of 5/31/08 11/30/07 Foreign Common Stocks & Rights 99.9% 99.6% Temporary Cash Investments 0.1% 0.4% Other Assets and Liabilities(1) --(2) --(2) (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 May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 United Kingdom 20.3% 13.0% Japan 13.4% 15.0% Switzerland 8.9% 11.4% Germany 8.2% 9.1% France 7.6% 8.7% Australia 5.7% 5.4% Italy 4.3% 2.8% Spain 3.8% 3.9% Canada 3.2% 3.5% Hong Kong 3.2% 1.9% Denmark 2.8% 2.5% Belgium 2.3% 2.2% Greece 2.2% 1.6% Other Countries 14.0% 18.6% Cash and Equivalents(3) 0.1% 0.4% (3) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 6 SCHEDULE OF INVESTMENTS International Growth MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks & Rights -- 99.9% AUSTRALIA -- 5.7% 907,414 BHP Billiton Ltd. $ 37,751,508 5,177,194 Boart Longyear Group 10,249,539 942,860 CSL Ltd. 35,889,702 451,450 QBE Insurance Group Ltd. 10,552,380 320,344 Rio Tinto Ltd.(1) 42,280,026 -------------- 136,723,155 -------------- BELGIUM -- 2.3% 203,175 KBC Groupe(1) 25,068,253 1,192,347 SES SA Fiduciary Depositary Receipt 31,533,882 -------------- 56,602,135 -------------- BERMUDA -- 0.8% 808,717 Aquarius Platinum Ltd. 13,247,099 193,380 Seadrill Ltd. 6,312,422 -------------- 19,559,521 -------------- BRAZIL -- 1.7% 1,187,900 Bolsa de Mercadorias e Futuros--BM&F SA 13,603,524 315,700 Net Servicos de Comunicacao SA(2) 4,509,446 1,069,200 Redecard SA 22,498,065 -------------- 40,611,035 -------------- CANADA -- 3.2% 78,510 Agnico-Eagle Mines Ltd. 5,549,872 133,180 EnCana Corp. 12,035,477 63,914 Potash Corp. of Saskatchewan 12,695,304 192,180 Research In Motion Ltd.(2) 26,688,036 286,270 Suncor Energy Inc. 19,539,955 -------------- 76,508,644 -------------- CZECH REPUBLIC -- 1.7% 491,480 CEZ AS 40,608,088 -------------- DENMARK -- 2.8% 538,576 Novo Nordisk AS B Shares(1) 35,042,482 232,680 Vestas Wind Systems AS(2) 32,025,526 -------------- 67,068,008 -------------- FINLAND -- 0.6% 535,200 Nokia Oyj 15,428,275 -------------- FRANCE -- 7.6% 131,170 ALSTOM Co. 33,064,031 867,165 AXA SA 30,636,893 188,240 Carrefour SA 13,198,523 189,838 Groupe Danone 16,618,274 45,600 Lafarge SA 8,246,766 Shares Value 66,076 Societe Generale(1) $ 6,866,668 24,729 Societe Generale -- new shares(2) 2,531,386 511,376 Total SA(1) 44,622,267 122,217 Ubisoft Entertainment SA(2) 11,845,285 209,000 Vinci SA(1) 15,746,593 -------------- 183,376,686 -------------- GERMANY -- 8.2% 211,100 adidas AG 14,883,463 91,640 BASF SE 13,738,926 190,340 Deutsche Boerse AG(1) 27,310,404 386,233 Fresenius Medical Care AG & Co. KGaA(1) 21,522,901 483,097 GEA Group AG 18,811,397 65,755 K+S AG 30,825,591 236,600 Linde AG(1) 35,552,752 147,268 Q-Cells AG(2) 17,904,542 124,569 SGL Carbon AG(2) 9,263,257 79,270 Siemens AG 8,992,519 -------------- 198,805,752 -------------- GREECE -- 2.2% 345,940 Coca-Cola Hellenic Bottling Co. SA 15,725,586 640,681 National Bank of Greece SA 36,379,821 -------------- 52,105,407 -------------- HONG KONG -- 3.2% 955,500 China Mobile Ltd. 14,044,358 574,500 Esprit Holdings Ltd. 6,714,175 795,100 Hang Seng Bank Ltd. 16,108,734 4,912,000 Li & Fung Ltd. 18,568,985 1,234,756 Melco PBL Entertainment (Macau) Ltd. ADR(2) 14,681,249 388,000 Sun Hung Kai Properties Ltd. 6,235,008 -------------- 76,352,509 -------------- INDIA -- 1.2% 513,826 Bharti Airtel Ltd.(2) 10,675,661 264,600 Housing Development Finance Corp. Ltd. 16,147,441 -------------- 26,823,102 -------------- IRELAND -- 0.1% 253,560 Anglo Irish Bank Corp. plc 3,313,492 -------------- ITALY -- 4.3% 1,198,429 ENI SpA(1) 48,809,887 507,840 Finmeccanica SpA 15,390,109 861,234 Saipem SpA 39,551,538 -------------- 103,751,534 -------------- - ------ 7 International Growth Shares Value JAPAN -- 13.4% 326,500 Canon, Inc. $ 17,617,686 1,710 Central Japan Railway Co. 16,702,699 273,600 Daikin Industries Ltd. 14,114,595 109,800 Fanuc Ltd. 11,922,333 64,200 FAST RETAILING CO., LTD. 5,552,432 280 INPEX Holdings Inc. 3,531,531 1,561,280 iShares MSCI Japan Index Fund 21,186,570 717,000 Japan Steel Works Ltd. (The) 14,890,754 512,700 Konami Corp. 18,718,777 959,500 Kuraray Co. Ltd. 12,110,901 1,593,000 Marubeni Corp. 14,200,284 717,700 Mitsubishi Corp. 24,774,092 1,563,000 Mitsui O.S.K. Lines, Ltd. 23,582,105 72,300 Nintendo Co., Ltd. 39,766,714 440,000 Shiseido Co., Ltd. 10,786,155 251,600 Sony Corp. 12,597,895 5,570 Sony Financial Holdings Inc. 22,765,955 456,000 Sumitomo Realty & Development Co. Ltd. 11,675,676 236,300 Terumo Corp. 11,764,580 311,000 Toyota Motor Corp. 15,837,553 -------------- 324,099,287 -------------- LUXEMBOURG -- 0.9% 192,920 Millicom International Cellular SA(1) 22,351,711 -------------- NETHERLANDS -- 0.9% 500,390 ASML Holding N.V. 14,969,723 403,740 Koninklijke KPN N.V. 7,348,750 -------------- 22,318,473 -------------- NORWAY -- 1.9% 534,480 Aker Solutions ASA 15,089,129 1,097,070 Norsk Hydro ASA(1) 17,421,661 166,190 Yara International ASA 12,609,158 -------------- 45,119,948 -------------- PEOPLE'S REPUBLIC OF CHINA -- 1.3% 2,739,000 China Communications Construction Co. Ltd. H Shares 6,023,059 5,659,500 China Merchants Bank Co., Ltd. H Shares 20,270,649 86,943 Ctrip.com International, Ltd. ADR 5,075,732 -------------- 31,369,440 -------------- RUSSIAN FEDERATION -- 0.9% 79,960 OAO LUKOIL 8,947,524 3,661,100 Sberbank 13,253,182 -------------- 22,200,706 -------------- Shares Value SINGAPORE -- 0.4% 636,000 United Overseas Bank Ltd. $ 9,426,374 -------------- SOUTH KOREA -- 0.5% 17,430 Samsung Electronics 12,560,788 -------------- SPAIN -- 3.8% 1,590,910 Banco Santander SA 33,139,964 1,151,765 Cintra Concesiones de Infraestructuras de Transporte(1) 17,720,910 365,880 Gamesa Corporacion Tecnologica SA 18,937,268 786,310 Telefonica SA 22,569,193 -------------- 92,367,335 -------------- SWEDEN -- 0.7% 126,199 Oriflame Cosmetics SA SDR 8,962,220 2,877,810 Telefonaktiebolaget LM Ericsson Cl B 7,829,470 -------------- 16,791,690 -------------- SWITZERLAND -- 8.9% 977,235 ABB Ltd.(2) 31,737,174 285,499 Compagnie Financiere Richemont SA Cl A 17,785,498 503,810 Julius Baer Holding AG 41,219,060 71,380 Nestle SA 35,087,522 420,720 Novartis AG 22,093,248 91,159 Roche Holding AG 15,711,944 9,340 SGS SA(1) 14,028,813 122,863 Syngenta AG 37,415,118 6,761 UBS AG(2) 162,767 6,761 UBS AG Rights(2) 9,014 -------------- 215,250,158 -------------- TAIWAN (REPUBLIC OF CHINA) -- 0.4% 4,785,000 AU Optronics Corp. 9,188,459 -------------- UNITED KINGDOM -- 20.3% 280,950 Admiral Group plc 4,852,485 1,129,930 AMEC plc 18,676,547 346,929 Anglo American plc 23,494,078 1,899,079 BG Group plc 47,620,664 558,040 British American Tobacco plc 20,868,250 471,394 Burberry Group plc 4,668,450 1,303,950 Cadbury plc 17,407,626 1,304,131 Capita Group plc 17,474,619 2,743,350 Compass Group plc 20,376,575 1,042,092 GlaxoSmithKline plc 22,983,438 1,976,394 HSBC Holdings plc(1) 33,355,472 932,830 ICAP plc 11,381,563 2,068,940 International Power plc 18,215,385 189,800 Johnson Matthey plc 7,575,128 - ------ 8 International Growth Shares Value 2,389,267 Man Group plc $ 29,388,335 596,393 Reckitt Benckiser Group plc 35,131,137 1,070,243 Reed Elsevier plc 13,482,121 1,288,610 Scottish and Southern Energy plc 37,570,589 522,430 Standard Chartered plc 19,412,418 5,393,509 Tesco plc 44,237,985 2,514,120 TUI Travel plc 12,162,960 9,445,050 Vodafone Group plc 30,353,423 -------------- 490,689,248 -------------- TOTAL COMMON STOCKS & RIGHTS (Cost $1,831,764,706) 2,411,370,960 -------------- Principal Amount Temporary Cash Investments -- 0.1% FHLB Discount Notes, 1.90%, 6/2/08(3) $1,600,000 (Cost $1,599,916) 1,600,000 -------------- Temporary Cash Investments -- Securities Lending Collateral(4) -- 8.3% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $40,007,667) 40,000,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $40,007,833) 40,000,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $40,007,833) 40,000,000 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $39,123,647) 39,116,150 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $40,007,667) 40,000,000 -------------- TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL (Cost $199,116,150) 199,116,150 -------------- Value TOTAL INVESTMENT SECURITIES -- 108.3% (Cost $2,032,480,772) $2,612,087,110 -------------- OTHER ASSETS AND LIABILITIES -- (8.3)% (199,647,979) -------------- TOTAL NET ASSETS -- 100.0% $2,412,439,131 ============== Market Sector Diversification (as a % of net assets) Financials 19.4% Industrials 16.5% Materials 13.3% Energy 10.2% Consumer Staples 9.0% Consumer Discretionary 8.2% Information Technology 7.2% Health Care 6.8% Telecommunication Services 4.4% Utilities 4.0% Diversified 0.9% Cash and Equivalents* 0.1% * Includes temporary cash investments, securities lending collateral and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt FHLB = Federal Home Loan Bank MSCI = Morgan Stanley Capital International SDR = Swedish Depositary Receipt (1) Security, or a portion thereof, was on loan as of May 31, 2008. (2) Non-income producing. (3) The rate indicated is the yield to maturity at purchase. (4) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 9 PERFORMANCE Global Growth Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year 5 years Inception Date INVESTOR CLASS -1.69% 6.00% 18.73% 11.83% 12/1/98 MSCI WORLD FREE INDEX -4.07% -3.68% 14.26% 5.15%(2) -- Institutional Class -1.58% 6.22% 18.93% 4.92% 8/1/00 A Class(3) No sales charge* -1.89% 5.59% 18.40% 10.48% With sales charge* -7.56% -0.47% 17.01% 9.78% 2/5/99 B Class No sales charge* -2.19% 4.95% -- 14.20% With sales charge* -7.19% 0.95% -- 13.21% 12/1/05 C Class No sales charge* -2.16% 4.91% 17.56% 11.54% With sales charge* -2.97% 4.91% 17.56% 11.54% 3/1/02 R Class -1.89% 5.47% -- 15.84% 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%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. (1) Total returns for periods less than one year are not annualized. (2) Since 11/30/98, the date nearest the Investor Class's inception for which data are available. (3) 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
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One-Year Returns Over Life of Class Periods ended May 31 1999* 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 18.60% 61.77% -15.57% -12.17% -13.86% 26.69% 12.61% 24.97% 24.97% 6.00% MSCI World Free Index 8.68% 13.56% -14.95% -12.56% -9.86% 23.60% 11.35% 17.98% 24.51% -3.68% * 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 Brent Puff Helen O'Donnell has decided to transition from portfolio manager to senior investment analyst as of July 2008. PERFORMANCE SUMMARY Global growth returned -1.69%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI World Free Index, returned -4.07%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Overall, favorable stock selection accounted for the majority of the portfolio's outperformance relative to the benchmark, while effective allocation decisions also helped. From a regional perspective, our holdings in the United States (the fund's largest country weighting), Australia and the United Kingdom made the greatest positive contributions to the portfolio's relative performance. In each country, stock selection was the overriding contributor. In contrast, our stock selection in Japan, Germany and France led to lagging relative results for those countries. ENERGY LED ALL SECTORS On an absolute basis, four of the portfolio's 10 sectors posted a positive return for the reporting period, while only two of the benchmark's sectors showed positive results. Relative to the benchmark, the fund's energy, financials and materials sectors made the greatest contributions to performance. Stock selection was particularly effective in the energy sector's oil, gas and consumable fuels industry, where our position in Southwestern Energy Co., a natural gas producer, yielded strong results and finished the reporting period as the portfolio's top contributor. The U.S.-based company benefited from rising natural gas prices, which led to strong earnings results. The financials sector struggled throughout most of the reporting period, due to credit-related issues and liquidity problems around the world. As such, our significant underweight relative to the benchmark, particularly in the insurance industry, helped performance. Overall, stock selection detracted from results in the financials sector, despite having positive effects in the capital markets industry. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Apple Inc. 1.8% 1.2% Weatherford International Ltd. 1.8% -- Julius Baer Holding AG 1.8% 1.7% SES SA Fiduciary Depositary Receipt 1.8% 0.5% Hewlett-Packard Co. 1.7% 1.5% American Tower Corp. Cl A 1.7% 1.0% Tesco plc 1.7% 1.5% Compass Group plc 1.7% 0.5% Deutsche Boerse AG 1.7% 2.5% Bank of New York Mellon Corp. (The) 1.6% 0.4% *All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 12 Global Growth The portfolio's relative performance also benefited from an overweight and strong stock selection in the materials sector. Glassmaker Owens-Illinois ranked among the portfolio's top contributors for the period, as its turnaround efforts continued to gain traction. In addition, Monsanto Co., a St. Louis-based provider of agricultural products, also ranked among the top performers, benefiting from the ongoing worldwide agriculture boom. CONSUMER, TECHNOLOGY HOLDINGS DETRACTED The fund's consumer discretionary, information technology and health care sectors detracted the most from relative performance. Poor stock selection led to the lagging results in the consumer discretionary and technology areas, while an overweight position drove the underperformance in the health care sector. A significant detractor in the consumer area was for-profit educator Apollo Group. As credit-market woes hindered the ability of some students to secure student loans, the U.S.-based company reported an earnings loss primarily due to higher marketing costs and a court settlement. We subsequently exited our position in the stock. OUTLOOK Global Growth primarily invests 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, despite the current market volatility, we believe these companies will deliver superior long-term returns. Types of Investments in Portfolio % of net % of net assets as of assets as of 5/31/08 11/30/07 Foreign Common Stocks 54.9% 57.0% Domestic Common Stocks 43.4% 41.6% TOTAL EQUITY EXPOSURE 98.3% 98.6% Temporary Cash Investments 1.5% 0.4% Other Assets and Liabilities(1) 0.2% 1.0% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 United States 43.4% 41.6% United Kingdom 9.9% 7.9% Switzerland 4.6% 5.3% Australia 4.2% 2.5% Germany 3.9% 4.9% Japan 3.6% 6.5% France 3.1% 7.0% Canada 2.8% 3.6% Belgium 2.6% 1.8% Other Countries 20.2% 17.5% Cash and Equivalents(2) 1.7% 1.4% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 13 SCHEDULE OF INVESTMENTS Global Growth MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 98.3% AUSTRALIA -- 4.2% 187,250 BHP Billiton Ltd. $ 7,790,237 666,090 Boart Longyear Group 1,318,690 115,570 CSL Ltd. 4,399,140 63,170 Rio Tinto Ltd. 8,337,378 ------------ 21,845,445 ------------ BELGIUM -- 2.6% 33,890 KBC Groupe 4,181,435 347,787 SES SA Fiduciary Depositary Receipt 9,197,888 ------------ 13,379,323 ------------ BERMUDA -- 2.3% 58,330 Covidien Ltd. 2,921,750 209,360 Weatherford International Ltd.(1) 9,553,096 ------------ 12,474,846 ------------ BRAZIL -- 2.2% 341,300 Bovespa Holding SA 5,615,294 289,100 Redecard SA 6,083,231 ------------ 11,698,525 ------------ CANADA -- 2.8% 13,890 Potash Corp. of Saskatchewan 2,765,082 114,660 Shoppers Drug Mart Corp. 6,434,441 79,442 Suncor Energy Inc. 5,422,479 ------------ 14,622,002 ------------ CHANNEL ISLANDS -- 0.5% 74,820 Amdocs Ltd.(1) 2,417,434 ------------ DENMARK -- 1.8% 2,650 FLSmidth & Co. AS B Shares 317,766 22,930 Novo Nordisk AS B Shares 1,491,942 55,825 Vestas Wind Systems AS(1) 7,683,620 ------------ 9,493,328 ------------ FRANCE -- 3.1% 28,990 ALSTOM Co. 7,307,511 30,970 Pernod-Ricard SA 3,517,142 29,950 Total SA(2) 2,613,413 34,780 Vinci SA(2) 2,620,414 ------------ 16,058,480 ------------ GERMANY -- 3.9% 61,130 Deutsche Boerse AG(2) 8,771,068 93,140 Fresenius Medical Care AG & Co. KGaA 5,190,243 25,100 Linde AG(2) 3,771,653 23,460 Q-Cells AG(1) 2,852,219 ------------ 20,585,183 ------------ Shares Value GREECE -- 1.9% 84,810 Coca-Cola Hellenic Bottling Co. SA $ 3,855,255 105,406 National Bank of Greece SA 5,985,275 ------------ 9,840,530 ------------ HONG KONG -- 1.9% 31,980 China Mobile Ltd. ADR 2,359,804 261,600 Esprit Holdings Ltd. 3,057,316 1,148,000 Li & Fung Ltd. 4,339,820 ------------ 9,756,940 ------------ INDIA -- 0.3% 74,620 Bharti Airtel Ltd.(1) 1,550,365 ------------ ITALY -- 1.5% 171,950 Saipem SpA 7,896,676 ------------ JAPAN -- 3.6% 89,000 NGK Insulators Ltd. 1,626,392 13,500 Nintendo Co., Ltd. 7,425,320 995 Sony Financial Holdings Inc. 4,066,809 141,000 Sumitomo Realty & Development Co. Ltd. 3,610,242 43,300 Terumo Corp. 2,155,761 ------------ 18,884,524 ------------ LUXEMBOURG -- 0.5% 23,600 Millicom International Cellular SA(2) 2,734,296 ------------ MEXICO -- 0.5% 41,790 America Movil, SAB de CV ADR 2,497,788 ------------ NETHERLANDS -- 1.8% 83,680 ASML Holding N.V. New York Shares 2,507,053 69,060 Schlumberger Ltd. 6,984,038 ------------ 9,491,091 ------------ NORWAY -- 0.7% 230,750 Norsk Hydro ASA(2) 3,664,350 ------------ PEOPLE'S REPUBLIC OF CHINA -- 0.3% 501,000 China Merchants Bank Co., Ltd. H Shares 1,794,433 ------------ SOUTH AFRICA -- 0.8% 100,210 Impala Platinum Holdings Ltd. 4,282,470 ------------ SPAIN -- 2.2% 424,937 Cintra Concesiones de Infraestructuras de Transporte SA(2) 6,538,027 102,150 Gamesa Corporacion Tecnologica SA 5,287,094 ------------ 11,825,121 ------------ - ------ 14 Global Growth Shares Value SWEDEN -- 0.3% 20,111 Oriflame Cosmetics SA SDR $ 1,428,214 ------------ SWITZERLAND -- 4.6% 190,790 ABB Ltd.(1) 6,196,192 112,820 Julius Baer Holding AG 9,230,334 11,540 Nestle SA 5,672,598 1,940 SGS SA 2,913,907 ------------ 24,013,031 ------------ TAIWAN (REPUBLIC OF CHINA) -- 0.7% 339,380 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 3,885,901 ------------ UNITED KINGDOM -- 9.9% 162,800 AMEC plc 2,690,912 224,720 BG Group plc 5,635,003 306,870 Cadbury plc 4,096,689 170,219 Capita Group plc 2,280,839 1,183,120 Compass Group plc 8,787,771 774,760 International Power plc 6,821,151 287,760 Man Group plc 3,539,490 109,045 Reckitt Benckiser Group plc 6,423,407 78,850 Standard Chartered plc 2,929,903 1,075,650 Tesco plc 8,822,566 ------------ 52,027,731 ------------ UNITED STATES -- 43.4% 97,770 Abbott Laboratories 5,509,340 122,520 Activision, Inc.(1) 4,135,050 61,170 Air Products and Chemicals, Inc. 6,234,447 61,860 Akamai Technologies, Inc.(1) 2,415,633 101,880 Allergan, Inc. 5,870,325 22,340 Amazon.com, Inc.(1) 1,823,390 45,040 American Express Co. 2,087,604 193,140 American Tower Corp. Cl A(1) 8,830,361 51,320 Apple Inc.(1) 9,686,650 86,270 Automatic Data Processing, Inc. 3,713,924 192,300 Bank of New York Mellon Corp. (The) 8,563,125 81,930 Becton, Dickinson & Co. 6,918,989 365,380 Charles Schwab Corp. (The) 8,104,128 Shares Value 300,270 Cisco Systems Inc.(1) $ 8,023,214 3,200 CME Group Inc. 1,376,960 68,090 Coach Inc.(1) 2,471,667 95,250 Coca-Cola Co. (The) 5,454,015 96,970 Corrections Corp. of America(1) 2,499,887 178,460 CVS/Caremark Corp. 7,636,303 44,640 Deere & Co. 3,631,018 52,180 Devon Energy Corp. 6,049,749 120,940 DIRECTV Group, Inc. (The)(1) 3,398,414 57,040 Exelon Corp. 5,019,520 48,470 FMC Technologies Inc.(1) 3,482,570 191,420 Hewlett-Packard Co. 9,008,225 284,850 Hudson City Bancorp, Inc. 5,070,330 339,150 Intel Corp. 7,861,497 5,660 Intuitive Surgical Inc.(1) 1,661,719 20,110 MasterCard Inc. Cl A 6,206,951 75,310 McDermott International, Inc.(1) 4,671,479 139,440 McDonald's Corp. 8,271,581 254,000 Microsoft Corp. 7,193,281 44,670 Monsanto Co. 5,690,958 83,230 Occidental Petroleum Corp. 7,651,334 169,810 Oracle Corp.(1) 3,878,460 109,050 Owens-Illinois Inc.(1) 6,239,841 5,520 priceline.com Inc.(1)(2) 742,606 175,630 Southwestern Energy Co.(1) 7,787,434 173,920 St. Jude Medical, Inc.(1) 7,087,240 128,480 Thermo Fisher Scientific Inc.(1) 7,582,890 54,160 Union Pacific Corp. 4,457,910 86,640 VeriSign, Inc.(1) 3,469,066 ------------ 227,469,085 ------------ TOTAL COMMON STOCKS (Cost $416,095,506) 515,617,112 ------------ Principal Amount Temporary Cash Investments -- 1.5% $7,900,000 FHLB Discount Notes, 1.90%, 6/2/08(3) (Cost $7,899,583) 7,900,000 ------------ - ------ 15 Global Growth Value Temporary Cash Investments -- Securities Lending Collateral(4) -- 4.7% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $5,501,054) $ 5,500,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $5,501,077) 5,500,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $4,634,926) 4,634,019 Repurchase Agreement, Deutsche Bank Securities Inc., collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $3,798,918) 3,798,190 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $5,501,054) 5,500,000 ------------ TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL (Cost $24,932,209) 24,932,209 ------------ TOTAL INVESTMENT SECURITIES -- 104.5% (Cost $448,927,298) 548,449,321 ------------ OTHER ASSETS AND LIABILITIES -- (4.5)% (23,821,415) ------------ TOTAL NET ASSETS -- 100.0% $524,627,906 ============ Market Sector Diversification (as a % of net assets) Information Technology 15.6% Financials 15.4% Industrials 12.1% Energy 12.0% Consumer Staples 10.2% Health Care 9.7% Materials 9.3% Consumer Discretionary 8.3% Telecommunication Services 3.4% Utilities 2.3% Cash and Equivalents* 1.7% *Includes temporary cash investments, securities lending collateral and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt FHLB = Federal Home Loan Bank SDR = Swedish Depositary Receipt (1) Non-income producing. (2) Security, or a portion thereof, was on loan as of May 31, 2008. (3) The rate indicated is the yield to maturity at purchase. (4) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 16 PERFORMANCE Emerging Markets Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year 5 years 10 years Inception Date INVESTOR CLASS -6.21% 14.66% 34.61% 15.30% 12.55% 9/30/97 MSCI EM INDEX -1.52% 22.00% 34.39% 15.44% 11.33% -- Institutional Class -6.14% 14.83% 34.82% -- 19.55% 1/28/99 A Class(2) No sales charge* -6.36% 14.29% 34.27% -- 16.17% With sales charge* -11.77% 7.71% 32.70% -- 15.42% 5/12/99 B Class No sales charge* -6.62% -- -- -- -2.63%(1) With sales charge* -11.62% -- -- -- -7.63%(1) 9/28/07 C Class No sales charge* -6.70% 13.46% 33.31% -- 22.87% With sales charge* -7.53% 13.46% 33.31% -- 22.87% 12/18/01 R Class -6.46% -- -- -- -2.38%(1) 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%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. (1) Total returns for periods less than one year are not annualized. (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. 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 May 31, 1998
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One-Year Returns Over 10 Years Periods ended May 31 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 1.88% 44.57% -22.82% -0.43% -17.03% 41.04% 23.34% 51.35% 46.65% 14.66% MSCI EM Index 3.46% 17.75% -21.60% 7.28% -6.40% 40.48% 30.99% 40.90% 38.59% 22.00% 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 returned -6.21%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI Emerging Markets Index, returned -1.52%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Emerging market stocks outperformed the developed markets, which, as measured by the MSCI EAFE Index, returned -5.21% for the reporting period. As investors sought protection from a slowing economy, the value segments of the emerging markets outperformed the growth segments, demonstrated by the MSCI Emerging Markets Value Index return of 0.57% and the MSCI Emerging Markets Growth Index return of -3.60%. As such, our focus on growth factors and growth stocks weighed significantly on the portfolio's return and accounted for the bulk of the performance shortfall relative to the benchmark. LARGEST COUNTRY WEIGHTINGS DETRACTED From a regional perspective, the portfolio's three largest-weighted countries - -- China, Brazil and Korea -- were the greatest detractors to relative performance despite underweight positions relative to the benchmark. Our growth-oriented stock selection led to lagging results in China and Korea. The portfolio's absolute return in the Brazilian market was positive, but currency effects primarily accounted for the country's poor relative performance. On the positive side, Russia, Israel and the Czech Republic had the greatest positive influence on portfolio performance. Stock selection was helpful in Russia, while overweights contributed favorably in Israel and the Czech Republic. Russia's Uralkaliy OAO, a producer of potash, was the portfolio's top contributor for the reporting period, benefiting from strong emerging-market demand for fertilizers. TECHNOLOGY, CONSUMER SECTORS LAGGED On an absolute basis, seven out of the portfolio's 10 sectors posted negative returns for the reporting period; only the materials, health care and energy sectors posted positive returns. The information technology, consumer discretionary and consumer staples sectors represented the largest detractors from relative performance, primarily due to our preference for growth stocks. In the consumer discretionary sector, stock selection and an overweight in the media industry accounted for the bulk of the shortfall. China's Focus Media was among the portfolio's largest detractors, suffering Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Petroleo Brasileiro SA ADR 5.0% 3.0% Samsung Electronics 3.5% 1.6% OAO Gazprom ADR 3.2% 0.9% Cia Vale do Rio Doce ADR 3.0% 2.1% OAO LUKOIL 2.4% 0.9% Israel Chemicals Ltd. 2.3% 0.3% China Mobile Ltd. ADR 2.3% 2.3% America Movil, SAB de CV ADR 1.8% 1.8% Uralkali GDR 1.7% 0.4% KNM Group Bhd 1.7% -- *All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 19 Emerging Markets from the general downdraft in China's equities and primarily from charges the company spammed wireless phone users. We subsequently exited our position. The portfolio's top relative contributors from a sector perspective included materials, industrials and financials. Stock selection was strong in the materials and industrials sectors, while an underweight helped the portfolio's relative performance in the troubled financials sector. Within the materials sector, stock selection in the chemicals industry was particularly strong. Similar to its position in Russia's Uralkaliy, the portfolio benefited from an overweight position in Israel Chemicals, which advanced on soaring fertilizer demand and the limited supply of potash and phosphate. The Tel Aviv-based company also realized positive results from acquisitions completed during the past year. OUTLOOK Focusing on equity securities of companies located in emerging-market countries, we will continue to seek companies exhibiting improving earnings- and revenue-growth rates. Additionally, 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 5/31/08 11/30/07 Foreign Common Stocks and Rights 97.9% 97.9% Foreign Preferred Stocks 1.3% -- TOTAL EQUITY EXPOSURE 99.2% 97.9% Temporary Cash Investments 0.3% 1.4% Other Assets and Liabilities(1) 0.5% 0.7% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Brazil 17.8% 11.7% People's Republic of China 11.4% 15.0% Russian Federation 10.8% 7.5% South Korea 10.6% 13.1% Taiwan (Republic of China) 10.3% 6.9% India 5.2% 9.2% South Africa 5.1% 7.0% Mexico 3.4% 4.7% Malaysia 3.3% 2.0% Israel 3.1% 0.6% Czech Republic 2.9% 2.1% Indonesia 2.6% 4.4% Hong Kong 2.5% 3.1% Other Countries 10.2% 10.6% Cash and Equivalents(2) 0.8% 2.1% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 20 SCHEDULE OF INVESTMENTS Emerging Markets MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 97.9% BRAZIL -- 16.5% 517,300 Banco do Brasil SA $ 10,347,907 527,800 Bolsa de Mercadorias e Futuros - BM&F SA 6,044,229 815,633 Cia Vale do Rio Doce ADR 32,445,881 364,552 Dufry South America Ltd. BDR(1) 8,656,346 232,900 GVT Holding SA(1) 5,322,774 358,540 Lojas Renner SA 8,857,218 231,464 LPS Brasil - Consultoria de Imoveis SA 4,598,849 328,300 Lupatech SA(1) 12,823,809 763,724 Petroleo Brasileiro SA ADR 53,842,543 653,400 Redecard SA 13,748,817 752,500 Rossi Residencial SA 7,359,956 571,800 Unibanco-Uniao de Bancos Brasileiros SA 8,947,439 735,203 Vivo Participacoes SA ADR(1)(2) 5,153,773 -------------- 178,149,541 -------------- CHILE -- 0.5% 709,607 Compania Cervecerias Unidas SA 5,110,293 -------------- CZECH REPUBLIC -- 2.9% 217,078 CEZ AS 17,935,873 50,689 Komercni Banka AS 13,153,255 -------------- 31,089,128 -------------- EGYPT -- 0.8% 112,116 Orascom Construction Industries 8,257,689 -------------- HONG KONG -- 2.5% 2,572,000 AAC Acoustic Technology Holdings Inc.(1) 2,330,227 329,834 China Mobile Ltd. ADR 24,338,451 -------------- 26,668,678 -------------- INDIA -- 5.2% 125,693 Aban Offshore Ltd.(1) 11,930,102 224,518 Jindal Steel & Power Ltd. 12,458,193 1,190,400 Power Finance Corp. Ltd.(1) 3,960,000 123,787 Reliance Industries Ltd. 7,056,975 1,225,000 Rolta India Ltd. 8,828,659 113,904 Sesa GOA Ltd. 11,595,865 -------------- 55,829,794 -------------- INDONESIA -- 2.6% 18,333,500 PT Bumi Resources Tbk 15,843,765 8,118,500 PT United Tractors Tbk 12,593,916 -------------- 28,437,681 -------------- Shares Value ISRAEL -- 3.1% 471,650 Delek Automotive Systems Ltd. $ 8,816,846 1,062,205 Israel Chemicals Ltd. 24,342,301 -------------- 33,159,147 -------------- LUXEMBOURG -- 1.1% 193,900 Tenaris SA ADR 11,886,070 -------------- MALAYSIA -- 3.3% 6,192,200 AMMB Holdings Bhd 7,606,468 8,435,750 KNM Group Bhd 18,095,205 22,231,700 SapuraCrest Petroleum Bhd 9,606,290 -------------- 35,307,963 -------------- MEXICO -- 3.4% 323,291 America Movil, SAB de CV ADR 19,323,103 3,157,609 Axtel, SAB de CV(1)(2) 6,329,566 2,189,803 Grupo Financiero Banorte, SAB de CV 10,629,133 -------------- 36,281,802 -------------- PAKISTAN -- 0.6% 316,053 Oil & Gas Development Co. Ltd. GDR 6,084,020 -------------- PEOPLE'S REPUBLIC OF CHINA -- 11.4% 6,808,000 Agile Property Holdings Ltd. 8,898,719 7,512,000 Asia Cement China Holdings Corp. (1) 6,815,483 37,740,000 China Gas Holdings Ltd.(2) 13,396,442 5,802,000 China High Speed Transmission Equipment Group Co., Ltd.(1) 10,186,056 3,295,500 China Merchants Bank Co., Ltd. H Shares 11,803,503 4,440,000 China Oilfield Services Ltd.(1) 8,625,613 3,562,000 China Resources Power Holdings Co. 9,882,336 1,915,500 China Shenhua Energy Co. Ltd. H Shares 8,542,189 8,505,000 CNOOC Ltd. 14,822,485 17,633,000 Industrial and Commercial Bank of China Ltd. H Shares 13,173,541 1,332,000 Parkson Retail Group Ltd.(2) 11,436,333 13,021,000 Want Want China Holdings Ltd. (2) 5,639,866 -------------- 123,222,566 -------------- PERU -- 1.0% 130,240 Credicorp Ltd. 10,869,830 -------------- PHILIPPINES -- 0.3% 48,033,000 Alliance Global Group Inc.(1) 3,754,735 -------------- - ------ 21 Emerging Markets Shares Value POLAND -- 2.0% 60,897 BRE Bank SA(1) $ 11,516,233 466,480 Powszechna Kasa Oszczednosci Bank Polski SA 10,833,361 -------------- 22,349,594 -------------- RUSSIAN FEDERATION -- 10.8% 393,022 Globaltrans Investment plc GDR (Acquired 4/30/08 - 5/7/08, Cost $5,276,084)(1)(3) 6,044,678 239,289 Mechel OAO ADR(1) 13,787,832 580,568 OAO Gazprom ADR(1) 35,066,308 230,703 OAO LUKOIL 25,815,666 205,495 OJSC Pharmstandard GDR(1) 5,959,355 311,002 Uralkali GDR (Acquired 10/15/07 - 12/7/07, Cost $7,201,603)(3) 18,722,320 311,360 X5 Retail Group N.V. GDR(1) 11,520,320 -------------- 116,916,479 -------------- SOUTH AFRICA -- 5.1% 470,572 Exxaro Resources Ltd. 9,745,254 254,334 Impala Platinum Holdings Ltd. 10,868,951 245,516 Kumba Iron Ore Ltd.(2) 10,975,706 228,504 Naspers Ltd. 5,333,087 290,703 Sasol Ltd. 18,079,947 -------------- 55,002,945 -------------- SOUTH KOREA -- 10.6% 59,035 Daelim Industrial Co., Ltd. 7,090,515 400,130 Doosan Infracore Co., Ltd. 13,152,827 51,142 MegaStudy Co., Ltd. 17,805,821 41,828 NHN Corp.(1) 8,668,657 52,919 Samsung Electronics 38,135,647 458,395 Sung Kwang Bend Co., Ltd.(1) 16,026,550 127,778 Taewoong Co. Ltd.(1) 13,980,087 -------------- 114,860,104 -------------- Shares Value SWITZERLAND -- 0.5% 36,126 Orascom Development Holding AG(1) $ 5,578,636 -------------- TAIWAN (REPUBLIC OF CHINA) -- 10.3% 7,653,409 Asia Cement Corp. 14,218,417 3,308,000 Cathay Financial Holding Co., Ltd. 8,451,512 953,000 MediaTek Inc. 11,907,604 2,011,000 Taiwan Fertilizer Co., Ltd. 9,720,247 8,152,000 Taiwan Semiconductor Manufacturing Co. Ltd. 17,583,927 6,317,000 Tung Ho Steel Enterprise Corp. 13,189,626 5,511,000 U-Ming Marine Transport Corp. 17,794,663 2,708,979 Wistron Corp. 4,631,875 15,219,000 Yuanta Financial Holding Co., Ltd.(1) 14,161,864 -------------- 111,659,735 -------------- THAILAND -- 2.2% 3,535,200 Kasikornbank PCL Receipt 9,247,330 2,062,900 PTT Chemical PCL(1) 6,983,197 4,891,400 Thoresen Thai Agencies Public Co. Ltd. 7,676,916 -------------- 23,907,443 -------------- TURKEY -- 0.8% 734,040 Enka Insaat ve Sanayi AS 8,807,515 -------------- UNITED KINGDOM -- 0.4% 329,387 Antofagasta plc 4,498,437 -------------- TOTAL COMMON STOCKS (Cost $848,241,574) 1,057,689,825 -------------- Preferred Stocks -- 1.3% BRAZIL -- 1.3% 276,000 Gerdau SA (Cost $11,602,659) 13,772,022 -------------- - ------ 22 Emerging Markets Principal Amount Value Temporary Cash Investments -- 0.3% $ 2,800,000 FHLB Discount Notes, 1.90%, 6/2/08(4) (Cost $2,799,852) $ 2,800,000 -------------- Temporary Cash Investments -- Securities Lending Collateral(5) -- 2.3% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $5,000,958) 5,000,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $5,000,979) 5,000,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $5,423,669) 5,422,607 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $4,849,621) 4,848,692 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $5,000,958) 5,000,000 -------------- TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL (Cost $25,271,299) 25,271,299 -------------- TOTAL INVESTMENT SECURITIES -- 101.8% (Cost $887,915,384) 1,099,533,146 -------------- OTHER ASSETS AND LIABILITIES -- (1.8)% (19,914,517) -------------- TOTAL NET ASSETS -- 100.0% $1,079,618,629 ============== Market Sector Diversification (as a % of net assets) Energy 22.7% Materials 19.8% Financials 16.5% Industrials 12.5% Information Technology 8.5% Consumer Discretionary 6.8% Telecommunication Services 5.6% Utilities 3.8% Consumer Staples 2.4% Health Care 0.6% Cash and Equivalents* 0.8% *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 May 31, 2008. (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 May 31, 2008 was $24,766,998, which represented 2.3% of total net assets. (4) Rate indicated is the yield to maturity at purchase. (5) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 23 PERFORMANCE International Value Total Returns as of May 31, 2008 Average Annual Returns 10 Since Inception 6 months(1) 1 year 5 years years Inception Date A CLASS(2) No sales charge* -7.02% -2.43% 18.98% 6.87% 6.68% With sales charge* -12.36% -8.06% 17.58% 6.24% 6.12% 3/31/97 MSCI EAFE INDEX -5.21% -2.53% 19.24% 6.82% 7.75% -- Investor Class -6.87% -2.18% -- -- 12.33% 4/3/06 Institutional Class -6.85% -2.08% -- -- 12.51% 4/3/06 B Class(2) No sales charge* -7.35% -3.10% 18.16% 6.15% 5.96% With sales charge* -12.35% -7.10% 18.06% 6.15% 5.96% 3/31/97 C Class No sales charge* -7.39% -3.22% -- -- 11.19% With sales charge* -8.24% -3.22% -- -- 11.19% 4/3/06 R Class -7.14% -2.80% -- -- 11.73% 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%. 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) Total returns for periods less than one year are not annualized. (2) 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 May 31, 1998*
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One-Year Returns Over 10 Years Periods ended May 31 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 A Class (no sales charge)** -3.43% 8.40% -1.91% -4.88% -16.59% 30.27% 14.87% 24.74% 31.07% -2.43% MSCI EAFE Index 4.36% 17.14% -17.23% -9.60% -12.30% 32.66% 14.62% 28.24% 26.84% -2.53% * 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 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 -7.02%* for the six months ended March 31, 2008. Its benchmark, the MSCI EAFE Index, returned -5.21%. The portfolio's performance reflected the difficult investment climate over the six months, as worries about inflation and the effect of slower U.S. growth weighed on international stock returns despite the fact that economies in Europe and Asia appeared to be relatively healthy (see the Market Perspective on page 2). In that environment, financial shares detracted most from performance on an absolute basis; only energy and materials shares contributed positively. Relative to the benchmark, the materials and health care sectors led detractors. Good stock picks and an underweight position in financials contributed most. MATERIALS DETRACTED MOST The portfolio's performance relative to the benchmark was limited by positioning among materials shares. We were significantly underweight one of only two sectors in the index to produce a positive return for the six months. Stock selection also detracted, as we had no exposure to shares of ArcelorMittal, the world's largest steel producer, which performed well. The company benefited from expansion into growing emerging-market economies; nevertheless, we were worried about a number of dilutive acquisitions, operational issues, and slower demand in North America and Europe. Similarly, we had no exposure to BHP Billiton and Rio Tinto, which benefited from takeover talk. Stock picks also detracted among paper & forest products companies, which continued to struggle with poor pricing and demand trends. The leading detractor in this space was Finnish firm Stora Enso, the world's largest paper producer, which has been hurt by rising input costs and currency effects from the weaker dollar. Norwegian paper products firm Norske Skogsindustrier was another notable detractor. HEALTH CARE UNDERPERFORMED Stock selection in the health care sector was another source of underperformance. The leading detractor in the space by far was medical imaging company AGFA-Gevaert. The company reported disappointing results amid an ongoing restructuring and cost-cutting initiative. Pharmaceuticals were another weak spot in the portfolio, led by an overweight position in Sanofi-Aventis. The stock detracted from relative results as a generic manufacturer threatened to launch a patent challenge on Lovenox, one of Sanofi's leading drugs, which accounts for about 10% of revenues. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Samsung Electronics 2.5% 1.1% Nintendo Co., Ltd. 2.4% 2.7% E.On AG 1.9% 1.8% HSBC Holdings plc 1.8% 1.3% Cia Vale do Rio Doce ADR 1.8% 1.6% Telenor ASA 1.8% 1.9% Royal Dutch Shell plc Cl B 1.5% 1.1% Telefonica SA ADR 1.5% 1.8% Repsol YPF, SA 1.5% 1.3% Novartis AG 1.4% 1.2% * 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. Total returns for periods less than one year are not annualized. - ------ 26 International Value KEY CONTRIBUTORS The leading contribution to portfolio performance at the sector level was stock selection and an underweight position in poorly-performing financials shares. We've been under-represented in these shares for some time because of concerns about earnings and valuations for companies so close to the epicenter of the credit crisis. In particular, it helped to underweight banks, diversified financial services firms, and real estate investment trusts. Information technology stocks also contributed to relative results, thanks to stock selection. Here the leading contributor was Samsung Electronic. The world's largest chip maker rode out record-low DRAM prices thanks to strength in its other business units. In terms of individual contributors to relative results, the leading source of strength was our long-held overweight position in Danish firm Vestas Windsystems. The alternative energy company -- a leading provider of wind turbines -- continues to benefit from demand as a result of the dramatic increase in oil prices. OUTLOOK "We build the International Value portfolio stock by stock, looking for companies trading at a discount to our estimate of their worth," said portfolio manager Guang Yang, explaining his investment process. "We have a long-term focus, which allows us to wait patiently for the opportunity to purchase stocks at bargain levels, and to wait for the market to reflect the fair value of a stock once it is added to our portfolio. We believe these elements of value, patience, and bottom-up stock selection are critical to successful long-term investing," said Yang. "As a result," he concluded, "our sector allocation decisions reflect where we're finding the best values. As of May 31, we saw opportunity in the telecommunication and information technology sectors, which were our largest overweight positions. Our most significant underweight positions were in materials and financials shares." Types of Investments in Portfolio % of net % of net assets as of assets as of 5/31/08 11/30/07 Foreign Common Stocks & Rights 86.1% 84.5% Foreign Preferred Stocks 2.6% 2.0% TOTAL EQUITY EXPOSURE 88.7% 86.5% Temporary Cash Investments 10.6% 12.9% Other Assets and Liabilities 0.7% 0.6% Investments by Country as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 United Kingdom 18.8% 18.3% Japan 8.2% 8.5% France 7.5% 8.2% Germany 7.2% 6.8% Switzerland 5.8% 3.8% South Korea 5.7% 4.8% Netherlands 5.1% 6.2% Spain 4.6% 4.8% Hong Kong 2.9% 3.4% Sweden 2.8% 2.8% Brazil 2.6% 2.0% Other Countries 17.5% 16.9% Cash and Equivalents(1) 11.3% 13.5% (1) Includes temporary cash investments and other assets and liabilities. - ------ 27 SCHEDULE OF INVESTMENTS International Value MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks & Rights -- 86.1% AUSTRALIA -- 2.0% 113,610 Alumina Ltd. $ 617,170 4,630 Australia and New Zealand Banking Group Ltd. 96,002 26,912 National Australia Bank Ltd. 805,877 ----------- 1,519,049 ----------- BELGIUM -- 0.5% 49,880 AGFA-Gevaert N.V.(1) 382,948 ----------- BERMUDA -- 1.1% 11,760 Ace, Ltd. 706,423 4,700 XL Capital Ltd. Cl A 164,077 ----------- 870,500 ----------- CANADA -- 0.4% 49,300 Domtar Corp.(1) 337,947 ----------- DENMARK -- 1.2% 6,874 Vestas Wind Systems AS(1) 946,121 ----------- FINLAND -- 1.1% 34,110 Stora Enso Oyj R Shares 414,437 20,660 UPM-Kymmene Oyj 401,760 ----------- 816,197 ----------- FRANCE -- 7.5% 4,160 Accor SA 317,437 24,219 AXA SA 855,656 8,110 Compagnie Generale des Etablissements Michelin Cl B 725,462 6,680 Electricite de France 723,081 21,700 France Telecom SA 658,463 12,523 Sanofi-Aventis 933,384 12,420 Suez SA 925,514 15,920 Thomson 101,296 3,880 Total SA 338,566 5,032 Valeo SA 200,639 ----------- 5,779,498 ----------- GERMANY -- 7.2% 4,310 BASF SE 646,167 15,080 Bayerische Motoren Werke AG 893,121 30,710 Deutsche Post AG 977,010 6,950 E.On AG 1,478,665 97,940 Infineon Technologies AG(1) 882,195 6,300 Siemens AG ADR 716,877 ----------- 5,594,035 ----------- Shares Value HONG KONG -- 2.9% 54,300 Cheung Kong Holdings Ltd. $ 834,309 56,900 Hutchison Whampoa Ltd. 615,043 40,500 Swire Pacific Ltd. A Shares 462,165 146,000 Swire Pacific Ltd. B Shares 334,150 ----------- 2,245,667 ----------- ISRAEL -- 0.6% 19,490 Check Point Software Technologies Ltd.(1) 483,937 ----------- ITALY -- 1.8% 21,370 ENI SpA 870,362 26,230 Mediaset SpA 213,824 42,150 UniCredito Italiano SpA 294,586 ----------- 1,378,772 ----------- JAPAN -- 8.2% 8,200 FUJIFILM Holdings Corp. 301,716 62,400 Hitachi Ltd. 448,546 6,600 Mabuchi Motor Co. Ltd. 354,253 22,000 Mitsubishi UFJ Financial Group, Inc. 224,903 9,000 Mitsubishi UFJ Financial Group, Inc. ADR 91,350 22,000 NGK Spark Plug Co., Ltd. 273,722 3,400 Nintendo Co., Ltd. 1,870,080 101 Nippon Telegraph & Telephone Corp. 490,394 17,600 Nomura Holdings, Inc. 298,925 11,900 Olympus Corp. 388,203 32,600 Sompo Japan Insurance Inc. 352,123 12,300 Sony Corp. 615,875 10,600 Takeda Pharmaceutical Co Ltd. 614,187 300 Toshiba Corp. 2,643 ----------- 6,326,920 ----------- MEXICO -- 1.2% 22,820 Telefonos de Mexico, SAB de CV ADR 940,640 ----------- NETHERLANDS -- 5.1% 4,410 Akzo Nobel N.V. 373,287 27,040 ING Groep N.V. CVA 1,032,303 23,417 Koninklijke Philips Electronics N.V. 899,088 29,199 Reed Elsevier N.V. 544,644 23,440 SBM Offshore N.V. 930,602 5,240 Wolters Kluwer N.V. 147,712 ----------- 3,927,636 ----------- - ------ 28 International Value Shares Value NORWAY -- 2.0% 23,899 Norske Skogindustrier ASA(1) $ 120,884 62,970 Telenor ASA 1,367,249 ----------- 1,488,133 ----------- PEOPLE'S REPUBLIC OF CHINA -- 2.0% 63,500 China Shenhua Energy Co. Ltd. H Shares 283,179 824,000 China Telecom Corp. Ltd. H Shares 598,712 990,000 Shanghai Electric Group Corp. H Shares(1) 586,118 ----------- 1,468,009 ----------- PORTUGAL -- 0.6% 32,950 Portugal Telecom SGPS SA 402,906 4,641 ZON Multimedia-Servicos de Telecomunicacoes e Multimedia, SGPS, SA 50,468 ----------- 453,374 ----------- RUSSIAN FEDERATION -- 0.5% 6,610 OAO Gazprom ADR(1) 399,244 ----------- SINGAPORE -- 1.1% 61,500 DBS Group Holdings Ltd. 880,798 ----------- SOUTH KOREA -- 5.7% 10,360 Hyundai Motor Company 846,331 6,890 Kookmin Bank 428,175 13,780 Korea Electric Power Corp. 446,937 19,660 KT Corp. ADR 444,513 2,630 Samsung Electronics 1,895,287 16,530 SK Telecom Co. Ltd. ADR 375,562 ----------- 4,436,805 ----------- SPAIN -- 4.6% 41,710 Banco Santander SA 868,854 27,680 Iberdrola SA 399,613 27,430 Repsol YPF, SA 1,135,098 13,460 Telefonica SA ADR 1,157,964 ----------- 3,561,529 ----------- SWEDEN -- 2.8% 50,980 Atlas Copco AB A Shares 902,982 12,900 Nordea Bank AB 209,674 47,630 Nordea Bank AB FDR 773,583 18,570 Securitas AB B Shares 232,179 18,570 Securitas Systems AB B Shares 47,984 ----------- 2,166,402 ----------- SWITZERLAND -- 5.8% 6,580 Lonza Group AG 911,329 2,030 Nestle SA 997,866 Shares Value 21,250 Novartis AG $ 1,115,900 9,307 Swiss Reinsurance 722,618 30,523 UBS AG(1) 734,824 30,523 UBS AG Rights(1) 40,693 ----------- 4,523,230 ----------- TAIWAN (REPUBLIC OF CHINA) -- 1.1% 14,585 Chunghwa Telecom Co. Ltd. ADR 361,270 302,082 Compal Electronics Inc. 335,729 148,733 Lite-On Technology Corp. 176,059 ----------- 873,058 ----------- TURKEY -- 0.3% 10,400 Turkcell Iletisim Hizmetleri AS ADR 201,864 ----------- UNITED KINGDOM -- 18.8% 69,640 Aviva plc 869,686 92,850 BAE Systems plc 833,563 54,390 BP plc 655,000 75,080 British Sky Broadcasting Group plc 807,500 30,150 Burberry Group plc 298,591 36,243 Cadbury plc 483,841 76,750 Compass Group plc 570,070 45,210 GKN plc 260,807 45,840 GlaxoSmithKline plc 1,011,006 83,400 HSBC Holdings plc 1,407,535 145,040 Kingfisher plc 394,149 32,590 Lloyds TSB Group plc 247,876 35,602 National Grid plc 526,056 195,070 Old Mutual plc 452,059 40,140 Pearson plc 542,624 139,260 Rentokil Initial plc 275,143 99,630 Rolls-Royce Group plc 834,243 74,010 Royal Bank of Scotland Group plc 334,962 45,228 Royal Bank of Scotland Group plc Rights(1) 25,307 28,585 Royal Dutch Shell plc Cl B 1,191,814 16,746 Smiths Group plc 333,678 19,350 Standard Chartered plc 719,006 18,085 Unilever plc 598,568 230,903 Vodafone Group plc 742,050 61,640 Yell Group plc 154,139 ----------- 14,569,273 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $46,870,531) 66,571,586 ----------- - ------ 29 International Value Shares Value Preferred Stocks -- 2.6% BRAZIL -- 2.6% 41,720 Cia Vale do Rio Doce ADR $ 1,373,842 16,760 Empresa Brasiliera de Aeronautica SA ADR 628,835 ----------- TOTAL PREFERRED STOCKS (Cost $742,759) 2,002,677 ----------- Principal Amount Temporary Cash Investments -- 10.6% $8,200,000 FHLB Discount Notes, 1.90%, 6/2/08(2) (Cost $8,199,567) 8,200,000 ----------- TOTAL INVESTMENT SECURITIES -- 99.3% (Cost $55,812,857) 76,774,263 ----------- OTHER ASSETS AND LIABILITIES -- 0.7% 554,029 ----------- TOTAL NET ASSETS -- 100.0% $77,328,292 =========== Market Sector Diversification (as a % of net assets) Financials 19.8% Industrials 11.4% Consumer Discretionary 10.3% Telecommunication Services 10.0% Information Technology 8.7% Energy 7.5% Health Care 6.9% Utilities 5.8% Materials 5.6% Consumer Staples 2.7% Cash and Equivalents* 11.3% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt CVA = Certificaten Van Aandelen FDR = Finnish Depository Receipt (1) Non-income producing. (2) Rate indicated is the yield to maturity at purchase. 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 December 1, 2007 to May 31, 2008. 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 Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments 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 Investments 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 12/1/07 - Expense 12/1/07 5/31/08 5/31/08 Ratio(1) International Growth ACTUAL Investor Class $1,000 $972.00 $6.36 1.29% Institutional Class $1,000 $973.10 $5.38 1.09% A Class $1,000 $971.00 $7.59 1.54% B Class $1,000 $966.60 $11.26 2.29% C Class $1,000 $967.10 $11.26 2.29% R Class $1,000 $970.00 $8.82 1.79% HYPOTHETICAL Investor Class $1,000 $1,018.55 $6.51 1.29% Institutional Class $1,000 $1,019.55 $5.50 1.09% A Class $1,000 $1,017.30 $7.77 1.54% B Class $1,000 $1,013.55 $11.53 2.29% C Class $1,000 $1,013.55 $11.53 2.29% R Class $1,000 $1,016.05 $9.02 1.79% Global Growth ACTUAL Investor Class $1,000 $983.10 $6.40 1.29% Institutional Class $1,000 $984.20 $5.41 1.09% A Class $1,000 $981.10 $7.63 1.54% B Class $1,000 $978.10 $11.32 2.29% C Class $1,000 $978.40 $11.33 2.29% R Class $1,000 $981.10 $8.87 1.79% HYPOTHETICAL Investor Class $1,000 $1,018.55 $6.51 1.29% Institutional Class $1,000 $1,019.55 $5.50 1.09% A Class $1,000 $1,017.30 $7.77 1.54% B Class $1,000 $1,013.55 $11.53 2.29% C Class $1,000 $1,013.55 $11.53 2.29% R Class $1,000 $1,016.05 $9.02 1.79% (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 366, to reflect the one-half year period. - ------ 32 Expenses Paid Beginning Ending During Account Account Period(1) Annualized Value Value 12/1/07 - Expense 12/1/07 5/31/08 5/31/08 Ratio(1) Emerging Markets ACTUAL Investor Class $1,000 $937.90 $7.90 1.63% Institutional Class $1,000 $938.60 $6.93 1.43% A Class $1,000 $936.40 $9.10 1.88% B Class $1,000 $933.80 $12.71 2.63% C Class $1,000 $933.00 $12.71 2.63% R Class $1,000 $935.40 $10.31 2.13% HYPOTHETICAL Investor Class $1,000 $1,016.85 $8.22 1.63% Institutional Class $1,000 $1,017.85 $7.21 1.43% A Class $1,000 $1,015.60 $9.47 1.88% B Class $1,000 $1,011.85 $13.23 2.63% C Class $1,000 $1,011.85 $13.23 2.63% R Class $1,000 $1,014.35 $10.73 2.13% International Value ACTUAL Investor Class $1,000 $931.30 $6.28 1.30% Institutional Class $1,000 $931.50 $5.31 1.10% A Class (after waiver)(2) $1,000 $929.80 $7.00 1.45% A Class (before waiver) $1,000 $929.80(3) $7.48 1.55% B Class (after waiver)(2) $1,000 $926.50 $10.40 2.16% B Class (before waiver) $1,000 $926.50(3) $11.08 2.30% C Class $1,000 $926.10 $11.08 2.30% R Class $1,000 $928.60 $8.68 1.80% HYPOTHETICAL Investor Class $1,000 $1,018.50 $6.56 1.30% Institutional Class $1,000 $1,019.50 $5.55 1.10% A Class (after waiver)(2) $1,000 $1,017.75 $7.31 1.45% A Class (before waiver) $1,000 $1,017.25 $7.82 1.55% B Class (after waiver)(2) $1,000 $1,014.20 $10.88 2.16% B Class (before waiver) $1,000 $1,013.50 $11.58 2.30% C Class $1,000 $1,013.50 $11.58 2.30% R Class $1,000 $1,016.00 $9.07 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 366, to reflect the one-half year period. (2) During the six months ended May 31, 2008, the class received a partial reimbursement 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. - ------ 33 STATEMENT OF ASSETS AND LIABILITIES MAY 31, 2008 (UNAUDITED) International Global Emerging International Growth Growth Markets Value ASSETS Investment securities, at value (cost of $1,833,364,622, $423,995,089, $862,644,085 and $55,812,857, respectively) -- including $190,847,779, $23,878,297, $24,546,269 and $- of securities on loan, respectively $2,412,970,960 $523,517,112 $1,074,261,847 $76,774,263 Investments made with cash collateral received for securities on loan, at value (cost of $199,116,150, $24,932,209, $25,271,299 and $-, respectively) 199,116,150 24,932,209 25,271,299 -- -------------- ------------ -------------- ------------- Total investment securities, at value (cost of $2,032,480,772, $448,927,298, $887,915,384 and $55,812,857, respectively) 2,612,087,110 548,449,321 1,099,533,146 76,774,263 Cash -- 871,320 -- 250,809 Foreign currency holdings, at value (cost of $3,739,299, $654,677, $4,438,956 and $5,533, respectively) 3,799,572 654,730 4,438,957 5,828 Receivable for investments sold 25,530,315 7,495,722 8,064,257 17,634 Receivable for capital shares sold 69,766 135,181 18,496 24,744 Dividends and interest receivable 8,108,984 1,392,966 3,212,935 342,592 -------------- ------------ -------------- ------------- 2,649,595,747 558,999,240 1,115,267,791 77,415,870 -------------- ------------ -------------- ------------- LIABILITIES Disbursements in excess of demand deposit cash 10,681,577 -- 637,314 -- Payable for collateral received for securities on loan 199,116,150 24,932,209 25,271,299 -- Payable for investments purchased 24,681,822 8,906,329 8,190,135 -- Payable for capital shares redeemed 14,976 -- 85,936 629 Accrued management fees 2,594,067 524,148 1,446,598 77,930 Distribution fees payable 6,238 2,611 6,228 2,462 Service fees (and distribution fees -- A Class and R Class) payable 61,786 6,037 11,652 6,557 -------------- ------------ -------------- ------------- 237,156,616 34,371,334 35,649,162 87,578 -------------- ------------ -------------- ------------- NET ASSETS $2,412,439,131 $524,627,906 $1,079,618,629 $77,328,292 ============== ============ ============== ============= See Notes to Financial Statements. - ------ 34 MAY 31, 2008 (UNAUDITED) International International Growth Global Growth Emerging Markets Value NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $1,791,560,857 $416,060,534 $829,585,793 $55,697,230 Accumulated undistributed net investment income (loss) 15,998,193 1,184,096 (1,815,964) 477,140 Undistributed net realized gain on investment and foreign currency transactions 25,299,737 7,862,023 41,491,896 190,116 Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies 579,580,344 99,521,253 210,356,904 20,963,806 -------------- ------------ -------------- ------------- $2,412,439,131 $524,627,906 $1,079,618,629 $77,328,292 ============== ============ ============== ============= INVESTOR CLASS, $0.01 PAR VALUE Net assets $2,053,265,839 $448,289,357 $949,099,399 $4,032,553 Shares outstanding 151,650,872 43,279,533 90,396,507 416,340 Net asset value per share $13.54 $10.36 $10.50 $9.69 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $74,776,631 $47,213,812 $74,662,386 $42,481,361 Shares outstanding 5,514,849 4,509,484 6,977,795 4,383,055 Net asset value per share $13.56 $10.47 $10.70 $9.69 A CLASS, $0.01 PAR VALUE Net assets $268,885,440 $24,446,198 $45,745,897 $26,892,468 Shares outstanding 19,893,855 2,393,232 4,467,265 2,769,324 Net asset value per share $13.52 $10.21 $10.24 $9.71 Maximum offering price (net asset value divided by 0.9425) $14.34 $10.83 $10.86 $10.30 B CLASS, $0.01 PAR VALUE Net assets $2,786,321 $850,871 $242,595 $3,207,285 Shares outstanding 208,055 84,074 23,006 339,229 Net asset value per share $13.39 $10.12 $10.54 $9.45 C CLASS, $0.01 PAR VALUE Net assets $7,004,383 $3,440,847 $9,652,217 $550,286 Shares outstanding 525,868 351,523 963,965 57,080 Net asset value per share $13.32 $9.79 $10.01 $9.64 R CLASS, $0.01 PAR VALUE Net assets $5,720,517 $386,821 $216,135 $164,339 Shares outstanding 422,593 37,681 20,541 17,010 Net asset value per share $13.54 $10.27 $10.52 $9.66 See Notes to Financial Statements. - ------ 35 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) International Global Emerging International Growth Growth Markets Value INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $3,304,191, $283,314, $813,238 and $154,475, respectively) $ 31,297,896 $ 4,266,715 $ 14,088,162 $ 1,518,897 Interest 135,305 60,112 256,490 84,694 Securities lending, net 657,062 43,395 297,695 -- ------------- ------------ ------------- ------------- 32,090,263 4,370,222 14,642,347 1,603,591 ------------- ------------ ------------- ------------- EXPENSES: Management fees 15,119,548 3,078,664 8,584,521 437,351 Distribution fees: B Class 10,797 2,821 679 13,291 C Class 25,633 10,657 34,218 1,423 Service fees: B Class 3,599 940 226 4,430 C Class 8,544 3,552 11,406 474 Distribution and service fees: A Class 324,259 25,725 50,010 30,308 A Class (old) (Note 10) 463 -- -- -- R Class 12,089 815 218 425 Directors' fees and expenses 29,149 5,555 12,384 1,143 Other expenses 144,689 13,995 20,560 305 ------------- ------------ ------------- ------------- 15,678,770 3,142,724 8,714,222 489,150 ------------- ------------ ------------- ------------- Amount waived -- -- -- (14,178) ------------- ------------ ------------- ------------- 15,678,770 3,142,724 8,714,222 474,972 ------------- ------------ ------------- ------------- NET INVESTMENT INCOME (LOSS) 16,411,493 1,227,498 5,928,125 1,128,619 ------------- ------------ ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $(190,671), $1,875, $1,124,113 and $--, respectively) (56,499,168) 323,011 35,563,698 519,371 Foreign currency transactions 92,337,150 8,987,989 4,831,485 10,646 ------------- ------------ ------------- ------------- 35,837,982 9,311,000 40,395,183 530,017 ------------- ------------ ------------- ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $1,341,551, $10,003, $2,409,879 and $--, respectively) (123,653,819) (20,050,807) (120,956,751) (8,002,080) Translation of assets and liabilities in foreign currencies (11,244,741) (160,615) (6,723,451) 1,094,305 ------------- ------------ ------------- ------------- (134,898,560) (20,211,422) (127,680,202) (6,907,775) ------------- ------------ ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (99,060,578) (10,900,422) (87,285,019) (6,377,758) ------------- ------------ ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(82,649,085) $(9,672,924) $(81,356,894) $(5,249,139) ============= ============ ============= ============= See Notes to Financial Statements. - ------ 36 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 International Growth Global Growth Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 16,411,493 $ 24,918,970 $ 1,227,498 $ 1,320,328 Net realized gain (loss) 35,837,982 585,292,428 9,311,000 88,372,880 Change in net unrealized appreciation (depreciation) (134,898,560) (39,782,254) (20,211,422) 10,750,501 -------------- -------------- ------------ ------------ Net increase (decrease) in net assets resulting from operations (82,649,085) 570,429,144 (9,672,924) 100,443,709 -------------- -------------- ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (16,396,751) (16,995,018) -- (1,907,837) Institutional Class (741,676) (1,199,068) -- (55,863) A Class (1,249,007) (1,633,677) -- (11,280) A Class (old) (Note 10) -- (140,453) -- (10,690) R Class (7,882) (5,159) -- -- From net realized gains: Investor Class (119,741,515) -- (79,511,253) (8,547,373) Institutional Class (4,054,455) -- (2,837,675) (265,718) A Class (14,778,847) -- (3,126,404) (112,783) A Class (old) (Note 10) -- -- -- (135,753) B Class (175,930) -- (115,751) (8,236) C Class (399,617) -- (473,318) (28,324) R Class (233,277) -- (56,481) (689) -------------- -------------- ------------ ------------ Decrease in net assets from distributions (157,778,957) (19,973,375) (86,120,882) (11,084,546) -------------- -------------- ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 14,924,015 (767,213,958) 100,703,734 (8,664,280) -------------- -------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (225,504,027) (216,758,189) 4,909,928 80,694,883 NET ASSETS Beginning of period 2,637,943,158 2,854,701,347 519,717,978 439,023,095 -------------- -------------- ------------ ------------ End of period $2,412,439,131 $2,637,943,158 $524,627,906 $519,717,978 ============== ============== ============ ============ Accumulated undistributed net investment income (loss) $15,998,193 $17,791,345 $1,184,096 $(41,527) ============== ============== ============ ============ See Notes to Financial Statements. - ------ 37 SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 Emerging Markets International Value Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 5,928,125 $ 8,433,399 $ 1,128,619 $ 1,368,508 Net realized gain (loss) 40,395,183 123,939,548 530,017 5,470,436 Change in net unrealized appreciation (depreciation) (127,680,202) 208,848,032 (6,907,775) 7,337,645 -------------- -------------- ----------- ------------ Net increase (decrease) in net assets resulting from operations (81,356,894) 341,220,979 (5,249,139) 14,176,589 -------------- -------------- ----------- ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (8,696,244) (6,964,184) (67,236) (14,565) Institutional Class (738,636) (1,222,688) (1,019,740) (1,222,424) A Class (227,182) (110,402) (452,102) (613,919) B Class -- -- (44,990) (112,516) C Class -- (8,637) (2,646) (1,079) R Class (93) -- (3,223) (821) From net realized gains: Investor Class (112,116,560) (77,025,838) (243,350) (145,468) Institutional Class (7,840,573) (11,255,250) (3,150,452) (11,690,344) A Class (4,290,167) (1,525,885) (1,754,896) (6,475,931) B Class (18,131) -- (284,309) (1,431,502) C Class (1,035,923) (448,699) (20,803) (13,776) R Class (3,805) -- (14,258) (9,206) -------------- -------------- ----------- ------------ Decrease in net assets from distributions (134,967,314) (98,561,583) (7,058,005) (21,731,551) -------------- -------------- ----------- ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 104,934,121 326,165,583 12,288,625 24,618,585 -------------- -------------- ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS (111,390,087) 568,824,979 (18,519) 17,063,623 NET ASSETS Beginning of period 1,191,008,716 622,183,737 77,346,811 60,283,188 -------------- -------------- ----------- ------------ End of period $1,079,618,629 $1,191,008,716 $77,328,292 $ 77,346,811 ============== ============== =========== ============= Accumulated undistributed net investment income (loss) $(1,815,964) $3,041,951 $477,140 $938,458 ============== ============== =========== ============= See Notes to Financial Statements. - ------ 38 NOTES TO FINANCIAL STATEMENTS MAY 31, 2008 (UNAUDITED) 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. 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 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 A Class (formerly Advisor Class) (see Note 10), 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, 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 Emerging Market's B Class and R Class commenced on September 28, 2007. 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 the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors, 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. - ------ 39 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. The income earned, net of any rebates or fees, is included in the Statement of Operations. 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 for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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. REDEMPTION -- The funds may impose a 2.00% redemption fee on shares held less than 60 days. The 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. - ------ 40 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) 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 Investments 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, A Class, B Class, C Class and R Class. 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 strategy assets of Emerging Markets includes the assets of NT Emerging Markets Fund, one fund in a series issued by the corporation. 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. 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. The effective annual management fee for each class of each fund for the six months ended May 31, 2008 was as follows: Investor, A, B, C & R Institutional International Growth 1.28% 1.08% Global Growth 1.28% 1.08% Emerging Markets 1.62% 1.42% International Value 1.30% 1.10% 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. Templeton has entered into a Subadvisory Agreement with Franklin Templeton Investments (Asia) Limited on behalf of International Value. - ------ 41 DISTRIBUTION AND SERVICE FEES -- 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 American Century Investment Services, Inc. (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%. The fees are computed and accrued daily based on each class's daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. ACIS 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 six months ended May 31, 2008, the A Class and B Class of International Value waived $11,641 and $2,537, respectively, of distribution and service fees. Fees incurred under the plans during the six months ended May 31, 2008, 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. 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. International Growth, Global Growth and Emerging Markets have a securities lending agreement with JPMorgan Chase Bank (JPMCB). Prior to December 12, 2007, the funds had a bank line of credit 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 six months ended May 31, 2008, were as follows: International Global Emerging International Growth Growth Markets Value Purchases $1,738,635,411 $300,173,581 $664,143,876 $8,788,629 Proceeds from sales $1,856,135,216 $286,495,747 $671,709,504 $746,567 - ------ 42 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Six months Year ended ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount International Growth INVESTOR CLASS/SHARES AUTHORIZED 1,000,000,000 1,000,000,000 ============= ============= Sold 8,816,910 $ 116,088,249 22,606,111 $ 302,364,123 Issued in reinvestment of distributions 9,115,075 121,417,039 1,168,152 14,426,682 Redeemed (18,716,603) (243,475,790)(1) (64,757,153) (860,556,588)(2) ------------- ---------------- ------------- ---------------- (784,618) (5,970,502) (40,982,890) (543,765,783) ------------- ---------------- ------------- ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 150,000,000 150,000,000 ============= ============= Sold 1,617,799 21,215,824 1,730,907 22,661,181 Issued in reinvestment of distributions 336,457 4,483,545 90,347 1,116,690 Redeemed (1,833,742) (23,750,358)(3) (6,740,406) (89,101,012)(4) ------------- ---------------- ------------- ---------------- 120,514 1,949,011 (4,919,152) (65,323,141) ------------- ---------------- ------------- ---------------- A CLASS/SHARES AUTHORIZED 125,000,000 100,000,000 ============= ============= Sold 4,384,423 56,355,534 7,416,480 98,766,265 Issued in connection with reclassification (Note 10) 2,300,787 34,138,899 -- -- Issued in reinvestment of distributions 994,597 13,237,814 120,671 1,489,085 Redeemed (4,085,528) (52,713,216)(5) (18,992,329) (259,071,470)(6) ------------- ---------------- ------------- ---------------- 3,594,279 51,019,031 (11,455,178) (158,816,120) ------------- ---------------- ------------- ---------------- A CLASS (OLD)/SHARES AUTHORIZED N/A 25,000,000 ============= ============= Sold -- -- 506,564 6,888,111 Redeemed in connection with reclassification (Note 10) (2,300,787) (34,138,899) 10,882 134,000 Redeemed -- -- (553,678) (7,489,659) ------------- ---------------- ------------- ---------------- (2,300,787) (34,138,899) (36,232) (467,548) ------------- ---------------- ------------- ---------------- B CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============= ============= Sold 12,514 160,331 32,050 425,268 Issued in reinvestment of distributions 8,547 113,065 -- -- Redeemed (39,200) (496,732) (30,115) (398,007) ------------- ---------------- ------------- ---------------- (18,139) (223,336) 1,935 27,261 ------------- ---------------- ------------- ---------------- C CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============= ============= Sold 73,702 973,720 108,359 1,470,351 Issued in reinvestment of distributions 21,431 281,955 -- -- Redeemed (70,511) (889,250) (129,074) (1,700,384) ------------- ---------------- ------------- ---------------- 24,622 366,425 (20,715) (230,033) ------------- ---------------- ------------- ---------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============= ============= Sold 186,842 2,392,641 165,196 2,252,980 Issued in reinvestment of distributions 16,312 217,298 292 3,609 Redeemed (53,432) (687,654) (66,454) (895,183)(7) ------------- ---------------- ------------- ---------------- 149,722 1,922,285 99,034 1,361,406 ------------- ---------------- ------------- ---------------- Net increase (decrease) 785,593 $ 14,924,015 (57,313,198) $(767,213,958) ============= ================ ============= ================ (1) Net of redemption fees of $112,620. (2) Net of redemption fees of $182,531. (3) Net of redemption fees of $2,096. (4) Net of redemption fees of $6,427. (5) Net of redemption fees of $4,001. (6) Net of redemption fees of $87,001. (7) Net of redemption fees of $32. - ------ 43 Six months Year ended ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount Global Growth INVESTOR CLASS/SHARES AUTHORIZED 150,000,000 150,000,000 =========== =========== Sold 3,246,394 $ 32,775,841 3,826,678 $ 44,774,309 Issued in reinvestment of distributions 7,562,705 77,627,963 962,202 10,090,119 Redeemed (5,475,449) (53,548,310)(1) (6,604,834) (75,173,166)(2) ----------- --------------- ----------- --------------- 5,333,650 56,855,494 (1,815,954) (20,308,738) ----------- --------------- ----------- --------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 35,000,000 5,000,000 =========== =========== Sold 3,209,369 32,113,770 663,656 7,441,129 Issued in reinvestment of distributions 274,955 2,837,675 30,474 321,581 Redeemed (248,832) (2,460,803)(3) (225,832) (2,605,204)(4) ----------- --------------- ----------- --------------- 3,235,492 32,490,642 468,298 5,157,506 ----------- --------------- ----------- --------------- A CLASS/SHARES AUTHORIZED 15,000,000 15,000,000 =========== =========== Sold 1,238,452 12,125,282 258,175 3,045,479 Issued in connection with reclassification (Note 10) -- -- 844,849 9,865,842 Issued in reinvestment of distributions 295,381 2,989,742 11,949 124,159 Redeemed (606,002) (5,660,358) (185,018) (2,159,416)(5) ----------- --------------- ----------- --------------- 927,831 9,454,666 929,955 10,876,064 ----------- --------------- ----------- --------------- A CLASS (OLD)/SHARES AUTHORIZED N/A N/A =========== =========== Sold 427,188 4,824,126 Issued in reinvestment of distributions 12,880 134,409 Redeemed in connections with reclassification (Note 10) (844,849) (9,865,842) Redeemed (99,736) (1,127,473) ----------- --------------- (504,517) (6,034,780) ----------- --------------- B CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 =========== =========== Sold 25,986 259,778 20,190 243,639 Issued in reinvestment of distributions 10,224 102,885 795 8,236 Redeemed (3,244) (31,848) (4,124) (46,264) ----------- --------------- ----------- --------------- 32,966 330,815 16,861 205,611 ----------- --------------- ----------- --------------- C CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 =========== =========== Sold 137,471 1,321,743 133,552 1,518,392 Issued in reinvestment of distributions 30,561 297,645 2,206 22,237 Redeemed (32,313) (293,000) (23,661) (263,194) ----------- --------------- ----------- --------------- 135,719 1,326,388 112,097 1,277,435 ----------- --------------- ----------- --------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 =========== =========== Sold 18,236 209,467 15,584 199,655 Issued in reinvestment of distributions 5,543 56,481 66 689 Redeemed (2,094) (20,219) (3,070) (37,722) ----------- --------------- ----------- --------------- 21,685 245,729 12,580 162,622 ----------- --------------- ----------- --------------- Net increase (decrease) 9,687,343 $ 100,703,734 (780,680) $ (8,664,280) =========== =============== =========== =============== (1) Net of redemption fees of $13,570. (2) Net of redemption fees of $17,554. (3) Net of redemption fees of $2,174. (4) Net of redemption fees of $2,094. (5) Net of redemption fees of $231. - ------ 44 Six months Year ended ended May 31, 2008 November 30, 2007(1) Shares Amount Shares Amount Emerging Markets INVESTOR CLASS/SHARES AUTHORIZED 235,000,000 185,000,000 ============ ============ Sold 12,575,338 $134,252,702 47,827,289 $ 504,521,421 Issued in reinvestment of distributions 10,190,898 109,760,207 8,562,770 74,867,377 Redeemed (16,703,703) (170,525,873)(2) (24,149,223) (254,670,365)(3) ------------ ---------------- ------------ ---------------- 6,062,533 73,487,036 32,240,836 324,718,433 ------------ ---------------- ------------ ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 40,000,000 40,000,000 ============ ============ Sold 880,458 9,314,905 1,338,242 13,765,385 Issued in reinvestment of distributions 783,602 8,579,209 1,404,698 12,477,840 Redeemed (484,555) (5,037,028)(4) (5,355,131) (51,169,209)(5) ------------ ---------------- ------------ ---------------- 1,179,505 12,857,086 (2,612,191) (24,925,984) ------------ ---------------- ------------ ---------------- A CLASS/SHARES AUTHORIZED 40,000,000 10,000,000 ============ ============ Sold 2,043,042 21,139,859 2,413,803 26,233,978 Issued in reinvestment of distributions 423,942 4,440,312 189,795 1,625,143 Redeemed (967,831) (9,670,189)(6) (640,659) (6,493,843)(7) ------------ ---------------- ------------ ---------------- 1,499,153 15,909,982 1,962,939 21,365,278 ------------ ---------------- ------------ ---------------- B CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 24,431 275,753 4,249 51,736 Issued in reinvestment of distributions 1,335 14,264 -- -- Redeemed (7,009) (79,177) -- -- ------------ ---------------- ------------ ---------------- 18,757 210,840 4,249 51,736 ------------ ---------------- ------------ ---------------- C CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============ ============ Sold 376,790 3,841,349 651,145 6,763,060 Issued in reinvestment of distributions 96,421 990,913 52,429 441,564 Redeemed (261,074) (2,550,209) (219,404) (2,274,103) ------------ ---------------- ------------ ---------------- 212,137 2,282,053 484,170 4,930,521 ------------ ---------------- ------------ ---------------- R CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 18,423 187,017 2,120 25,599 Issued in reinvestment of distributions 369 3,898 -- -- Redeemed (371) (3,791) -- -- ------------ ---------------- ------------ ---------------- 18,421 187,124 2,120 25,599 ------------ ---------------- ------------ ---------------- Net increase (decrease) 8,990,506 $104,934,121 32,082,123 $ 326,165,583 ============ ================ ============ ================ (1) September 28, 2007 (commencement of sale) through November 30, 2007 for the B Class and R Class. (2) Net of redemption fees of $559,430. (3) Net of redemption fees of $1,726,189. (4) Net of redemption fees of $16,337. (5) Net of redemption fees of $20,209. (6) Net of redemption fees of $217. (7) Net of redemption fees of $30,011. - ------ 45 Six months Year ended ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount International Value INVESTOR CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 187,717 $ 1,860,409 247,506 $ 2,766,272 Issued in reinvestment of distributions 30,784 306,033 16,462 156,887 Redeemed (67,305) (638,722)(1) (28,628) (313,938)(2) ---------- ------------ ---------- -------------- 151,196 1,527,720 235,340 2,609,221 ---------- ------------ ---------- -------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 50,288 504,097 158,819 1,649,947 Issued in reinvestment of distributions 417,026 4,170,192 1,354,833 12,911,767 Redeemed (20,111) (192,052)(3) (51,566) (549,566)(4) ---------- ------------ ---------- -------------- 447,203 4,482,237 1,462,086 14,012,148 ---------- ------------ ---------- -------------- A CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 779,082 7,486,473 737,020 7,784,530 Issued in reinvestment of distributions 217,383 2,174,640 696,873 6,655,394 Redeemed (365,172) (3,512,302) (681,781) (7,200,516)(5) ---------- ------------ ---------- -------------- 631,293 6,148,811 752,112 7,239,408 ---------- ------------ ---------- -------------- B CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ========== ========== Sold 13,353 125,672 54,583 547,404 Issued in reinvestment of distributions 33,502 327,311 161,195 1,505,575 Redeemed (71,296) (673,567) (157,823) (1,631,301) ---------- ------------ ---------- -------------- (24,441) (220,584) 57,955 421,678 ---------- ------------ ---------- -------------- C CLASS/SHARES AUTHORIZED 50,000,000 50,000,000 ========== ========== Sold 36,912 346,653 18,630 198,895 Issued in reinvestment of distributions 2,136 20,888 1,559 14,855 Redeemed (1,472) (14,059) (3,594) (38,189) ---------- ------------ ---------- -------------- 37,576 353,482 16,595 175,561 ---------- ------------ ---------- -------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ========== ========== Sold 4,390 42,678 18,039 188,013 Issued in reinvestment of distributions 1,753 17,481 1,052 10,027 Redeemed (6,801) (63,200)(6) (3,369) (37,471) ---------- ------------ ---------- -------------- (658) (3,041) 15,722 160,569 ---------- ------------ ---------- -------------- Net increase (decrease) 1,242,169 $12,288,625 2,539,810 $24,618,585 ========== ============ ========== ============== (1) Net of redemption fees of $884. (2) Net of redemption fees of $2,570. (3) Net of redemption fees of $26. (4) Net of redemption fees of $625. (5) Net of redemption fees of $24. (6) Net of redemption fees of $35. - ------ 46 5. SECURITIES LENDING As of May 31, 2008, securities in International Growth, Global Growth and Emerging Markets valued at $190,847,779, $23,878,297 and $24,546,269, 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 market value of all collateral received for International Growth, Global Growth and Emerging Markets, at this date, was $199,116,150, $24,932,209 and $25,271,299, 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. FAIR VALUE MEASUREMENTS The funds' securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions held by the funds. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels as follows: * Level 1 valuation inputs consist of actual quoted prices based on an active market; * Level 2 valuation inputs consist of significant direct or indirect observable market data; or * Level 3 valuation inputs consist of significant unobservable inputs such as the fund's own assumptions. The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not an indication of the risks associated with investing in these securities. The following is a summary of the valuation inputs used to determine the fair value of the funds' securities as of May 31, 2008: Value of Investment Fund/Valuation Inputs Securities INTERNATIONAL GROWTH Level 1 -- Quoted Prices $ 107,568,647 Level 2 -- Other Significant Observable Inputs 2,504,518,463 Level 3 -- Significant Unobservable Inputs -- --------------- $2,612,087,110 =============== GLOBAL GROWTH Level 1 -- Quoted Prices $266,095,327 Level 2 -- Other Significant Observable Inputs 282,353,994 Level 3 -- Significant Unobservable Inputs -- --------------- $548,449,321 =============== EMERGING MARKETS Level 1 -- Quoted Prices $ 171,647,483 Level 2 -- Other Significant Observable Inputs 927,885,663 Level 3 -- Significant Unobservable Inputs -- --------------- $1,099,533,146 =============== INTERNATIONAL VALUE Level 1 -- Quoted Prices $ 7,647,154 Level 2 -- Other Significant Observable Inputs 69,127,109 Level 3 -- Significant Unobservable Inputs -- --------------- $76,774,263 =============== - ------ 47 7. BANK LINE OF CREDIT 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. Prior to December 12, 2007, the funds, along with certain other funds managed by ACIM or ACGIM, had 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, which is subject to annual renewal, bear interest at the Federal Funds rate plus 0.40%. The funds did not borrow from the line during the six months ended May 31, 2008. 8. 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. 9. 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. As of May 31, 2008, the components of investments for federal income tax purposes were as follows: International Global Emerging International Growth Growth Markets Value Federal tax cost of investments $2,051,853,924 $449,396,036 $893,204,271 $56,424,732 ============== ============ ============ ============ Gross tax appreciation of investments $580,589,614 $104,438,347 $231,548,291 $25,215,599 Gross tax depreciation of investments (20,356,428) (5,385,062) (25,219,416) (4,866,068) -------------- ------------ ------------ ------------ Net tax appreciation (depreciation) of investments $560,233,186 $99,053,285 $206,328,875 $20,349,531 ============== ============ ============ ============ 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. Following are the currency loss deferral amounts as of November 30, 2007: International Global Emerging International Growth Growth Markets Value Currency loss deferrals $(104,419) $(5,724) $(74,949) $(11,900) The currency loss deferrals 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. - ------ 48 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 (old) shareholders of International 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 December 3, 2007. Subsequent to the reclassification, the Advisor Class was renamed A Class. 11. RECENTLY ISSUED ACCOUNTING STANDARDS The Financial Accounting Standards Board (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. The adoption of FAS 157 does not materially impact the determination of fair value. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133" (FAS 161). FAS 161 is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands disclosures about derivative instruments and hedging activities. FAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. Management is currently evaluating the impact that adopting FAS 161 will have on the financial statement disclosures. - ------ 49 FINANCIAL HIGHLIGHTS International Growth Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $14.87 $12.17 $9.75 $8.79 $7.54 $6.69 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.09 0.13 0.06 0.11 0.05 0.06 Net Realized and Unrealized Gain (Loss) (0.52) 2.66 2.54 0.94 1.26 0.85 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.43) 2.79 2.60 1.05 1.31 0.91 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.11) (0.09) (0.18) (0.09) (0.06) (0.06) From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.90) (0.09) (0.18) (0.09) (0.06) (0.06) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.54 $14.87 $12.17 $9.75 $8.79 $7.54 ======== ======== ======== ======== ======== ======== TOTAL RETURN(3) (2.80)% 23.09% 27.03% 12.09% 17.45% 13.70% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.29%(4) 1.27% 1.26% 1.23% 1.26% 1.28% Ratio of Net Investment Income (Loss) to Average Net Assets 1.41%(4) 0.94% 0.52% 1.22% 0.57% 0.84% Portfolio Turnover Rate 73% 133% 95% 89% 118% 169% Net Assets, End of Period (in thousands) $2,053,266 $2,267,093 $2,352,967 $2,249,430 $2,395,249 $2,502,831 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 50 International Growth Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $14.91 $12.20 $9.78 $8.82 $7.56 $6.71 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.10 0.17 0.07 0.13 0.06 0.07 Net Realized and Unrealized Gain (Loss) (0.52) 2.66 2.55 0.94 1.27 0.85 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.42) 2.83 2.62 1.07 1.33 0.92 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.14) (0.12) (0.20) (0.11) (0.07) (0.07) From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.93) (0.12) (0.20) (0.11) (0.07) (0.07) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.56 $14.91 $12.20 $9.78 $8.82 $7.56 ======== ======== ======== ======== ======== ======== TOTAL RETURN(3) (2.69)% 23.36% 27.19% 12.28% 17.78% 13.89% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.09%(4) 1.07% 1.06% 1.03% 1.06% 1.08% Ratio of Net Investment Income (Loss) to Average Net Assets 1.61%(4) 1.14% 0.72% 1.42% 0.77% 1.04% Portfolio Turnover Rate 73% 133% 95% 89% 118% 169% Net Assets, End of Period (in thousands) $74,777 $80,452 $125,814 $247,077 $283,330 $301,854 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 51 International Growth A Class(1) For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(2) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $14.82 $12.12 $9.72 $8.76 $7.52 $6.66 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.08 0.08 0.03 0.09 0.03 0.03 Net Realized and Unrealized Gain (Loss) (0.52) 2.68 2.52 0.94 1.25 0.87 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.44) 2.76 2.55 1.03 1.28 0.90 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.07) (0.06) (0.15) (0.07) (0.04) (0.04) From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.86) (0.06) (0.15) (0.07) (0.04) (0.04) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.52 $14.82 $12.12 $9.72 $8.76 $7.52 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (2.90)% 22.87% 26.57% 11.85% 17.07% 13.62% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.54%(5) 1.52% 1.51% 1.48% 1.51% 1.53% Ratio of Net Investment Income (Loss) to Average Net Assets 1.16%(5) 0.69% 0.27% 0.97% 0.32% 0.59% Portfolio Turnover Rate 73% 133% 95% 89% 118% 169% Net Assets, End of Period (in thousands) $268,885 $241,579 $336,497 $259,651 $275,195 $239,256 (1) Prior to December 3, 2007, the A Class was referred to as the Advisor Class. (2) Six months ended May 31, 2008 (unaudited). (3) Computed using average shares outstanding throughout the period. (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 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. See Notes to Financial Statements. - ------ 52 International Growth B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003(2) PER-SHARE DATA Net Asset Value, Beginning of Period $14.68 $12.04 $9.65 $8.70 $7.48 $6.10 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.02 --(4) (0.05) 0.02 (0.03) (0.03) Net Realized and Unrealized Gain (Loss) (0.52) 2.64 2.52 0.93 1.25 1.41 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.50) 2.64 2.47 0.95 1.22 1.38 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income -- -- (0.08) --(4) -- -- From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.79) -- (0.08) -- -- -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.39 $14.68 $12.04 $9.65 $8.70 $7.48 ======== ======== ======== ======== ======== ======== TOTAL RETURN(5) (3.34)% 21.93% 25.71% 10.97% 16.31% 22.62% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.29%(6) 2.27% 2.26% 2.23% 2.26% 2.28%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 0.41%(6) (0.06)% (0.48)% 0.22% (0.43)% (0.51)%(6) Portfolio Turnover Rate 73% 133% 95% 89% 118% 169%(7) Net Assets, End of Period (in thousands) $2,786 $3,320 $2,699 $1,676 $1,107 $513 (1) Six months ended May 31, 2008 (unaudited). (2) January 31, 2003 (commencement of sale) through November 30, 2003. (3) Computed using average shares outstanding throughout the period. (4) Per-share amount was less than $0.005. (5) 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. (6) Annualized. (7) Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2003. See Notes to Financial Statements. - ------ 53 International Growth C Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $14.60 $11.97 $9.60 $8.66 $7.45 $6.60 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.03 --(3) (0.05) 0.02 (0.03) (0.01) Net Realized and Unrealized Gain (Loss) (0.52) 2.63 2.50 0.92 1.24 0.86 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.49) 2.63 2.45 0.94 1.21 0.85 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income -- -- (0.08) --(3) -- -- From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.79) -- (0.08) -- -- -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.32 $14.60 $11.97 $9.60 $8.66 $7.45 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (3.29)% 21.97% 25.64% 10.91% 16.24% 12.88% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.29%(5) 2.27% 2.26% 2.23% 2.26% 2.28% Ratio of Net Investment Income (Loss) to Average Net Assets 0.41%(5) (0.06)% (0.48)% 0.22% (0.43)% (0.16)% Portfolio Turnover Rate 73% 133% 95% 89% 118% 169% Net Assets, End of Period (in thousands) $7,004 $7,318 $6,250 $5,246 $5,070 $1,933 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 54 International Growth R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003(2) PER-SHARE DATA Net Asset Value, Beginning of Period $14.81 $12.12 $9.71 $8.75 $7.53 $7.02 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.08 0.07 0.01 0.07 0.02 (0.01) Net Realized and Unrealized Gain (Loss) (0.54) 2.65 2.53 0.94 1.25 0.52 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.46) 2.72 2.54 1.01 1.27 0.51 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.02) (0.03) (0.13) (0.05) (0.05) -- From Net Realized Gains (0.79) -- -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (0.81) (0.03) (0.13) (0.05) (0.05) -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.54 $14.81 $12.12 $9.71 $8.75 $7.53 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (3.00)% 22.48% 26.39% 11.58% 16.92% 7.26% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.79%(5) 1.77% 1.76% 1.69%(6) 1.76% 1.78%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 0.91%(5) 0.44% 0.02% 0.76%(6) 0.07% (0.74)%(5) Portfolio Turnover Rate 73% 133% 95% 89% 118% 169%(7) Net Assets, End of Period (in thousands) $5,721 $4,042 $2,106 $1,809 $376 $3 (1) Six months ended May 31, 2008 (unaudited). (2) August 29, 2003 (commencement of sale) through November 30, 2003. (3) Computed using average shares outstanding throughout the period. (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) 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. (7) Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2003. See Notes to Financial Statements. - ------ 55 Global Growth Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.69 $10.52 $8.88 $7.49 $6.48 $5.39 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.02 0.03 --(3) --(3) (0.01) --(3) Net Realized and Unrealized Gain (Loss) (0.27) 2.41 1.70 1.41 1.02 1.09 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.25) 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 (2.08) (0.22) -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (2.08) (0.27) (0.06) (0.02) -- -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $10.36 $12.69 $10.52 $8.88 $7.49 $6.48 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (1.69)% 23.73% 19.30% 18.87% 15.59% 20.22% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.29%(5) 1.30% 1.31% 1.30% 1.30% 1.31% Ratio of Net Investment Income (Loss) to Average Net Assets 0.51%(5) 0.29% (0.05)% (0.01)% (0.12)% 0.00% Portfolio Turnover Rate 60% 108% 95% 36% 79% 152% Net Assets, End of Period (in thousands) $448,289 $481,553 $418,185 $378,976 $299,807 $250,306 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 56 Global Growth Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.79 $10.60 $8.95 $7.55 $6.52 $5.41 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.06 0.06 0.01 0.01 --(3) 0.01 Net Realized and Unrealized Gain (Loss) (0.30) 2.42 1.72 1.43 1.03 1.10 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.24) 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 (2.08) (0.22) -- -- -- -- -------- -------- -------- -------- -------- -------- Total Distributions (2.08) (0.29) (0.08) (0.04) -- -- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $10.47 $12.79 $10.60 $8.95 $7.55 $6.52 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (1.58)% 23.99% 19.50% 19.22% 15.80% 20.52% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.09%(5) 1.10% 1.11% 1.10% 1.10% 1.11% Ratio of Net Investment Income (Loss) to Average Net Assets 0.71%(5) 0.49% 0.15% 0.19% 0.08% 0.20% Portfolio Turnover Rate 60% 108% 95% 36% 79% 152% Net Assets, End of Period (in thousands) $47,214 $16,298 $8,540 $8,669 $6,774 $7,901 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 57 Global Growth A Class(1) For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(2) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.56 $10.41 $8.79 $7.41 $6.43 $5.36 ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(3) 0.02 0.01 (0.03) (0.02) (0.02) (0.02) Net Realized and Unrealized Gain (Loss) (0.29) 2.38 1.69 1.40 1.00 1.09 ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.27) 2.39 1.66 1.38 0.98 1.07 ------- ------- ------- ------- ------- ------- Distributions From Net Investment Income -- (0.02) (0.04) -- -- -- From Net Realized Gains (2.08) (0.22) -- -- -- -- ------- ------- ------- ------- ------- ------- Total Distributions (2.08) (0.24) (0.04) -- -- -- ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $10.21 $12.56 $10.41 $8.79 $7.41 $6.43 ======= ======= ======= ======= ======= ======= TOTAL RETURN(4) (1.89)% 23.47% 18.97% 18.62% 15.24% 19.96% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.54%(5) 1.55% 1.56% 1.55% 1.55% 1.56% Ratio of Net Investment Income (Loss) to Average Net Assets 0.26%(5) 0.04% (0.30)% (0.26)% (0.37)% (0.25)% Portfolio Turnover Rate 60% 108% 95% 36% 79% 152% Net Assets, End of Period (in thousands) $24,446 $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) Six months ended May 31, 2008 (unaudited). (3) Computed using average shares outstanding throughout the period. (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. See Notes to Financial Statements. - ------ 58 Global Growth B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 PER-SHARE DATA Net Asset Value, Beginning of Period $12.50 $10.42 $9.02 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) (0.02) (0.08) (0.11) Net Realized and Unrealized Gain (Loss) (0.28) 2.38 1.57 -------- -------- -------- Total From Investment Operations (0.30) 2.30 1.46 -------- -------- -------- Distributions From Net Investment Income -- -- (0.06) From Net Realized Gains (2.08) (0.22) -- -------- -------- -------- Total Distributions (2.08) (0.22) (0.06) -------- -------- -------- Net Asset Value, End of Period $10.12 $12.50 $10.42 ======== ======== ======== TOTAL RETURN(3) (2.19)% 22.51% 16.29% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.29%(4) 2.30% 2.31% Ratio of Net Investment Income (Loss) to Average Net Assets (0.49)%(4) (0.71)% (1.05)% Portfolio Turnover Rate 60% 108% 95% Net Assets, End of Period (in thousands) $851 $639 $352 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 59 Global Growth C Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.16 $10.14 $8.59 $7.29 $6.37 $5.35 ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(2) (0.02) (0.07) (0.10) (0.08) (0.08) (0.05) Net Realized and Unrealized Gain (Loss) (0.27) 2.31 1.65 1.38 1.00 1.07 ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.29) 2.24 1.55 1.30 0.92 1.02 ------- ------- ------- ------- ------- ------- Distributions From Net Realized Gains (2.08) (0.22) -- -- -- -- ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $9.79 $12.16 $10.14 $8.59 $7.29 $6.37 ======= ======= ======= ======= ======= ======= TOTAL RETURN(3) (2.16)% 22.54% 18.04% 17.83% 14.44% 19.07% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.29%(4) 2.30% 2.31% 2.30% 2.30% 2.31% Ratio of Net Investment Income (Loss) to Average Net Assets (0.49)%(4) (0.71)% (1.05)% (1.01)% (1.12)% (1.00)% Portfolio Turnover Rate 60% 108% 95% 36% 79% 152% Net Assets, End of Period (in thousands) $3,441 $2,625 $1,050 $454 $184 $56 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 60 Global Growth R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATATrtlch Net Asset Value, Beginning of Period $12.62 $10.47 $8.86 $8.37 ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(3) 0.01 0.02 (0.05) (0.02) Net Realized and Unrealized Gain (Loss) (0.28) 2.35 1.71 0.51 ------- ------- ------- ------- Total From Investment Operations (0.27) 2.37 1.66 0.49 ------- ------- ------- ------- Distributions From Net Investment Income -- -- (0.05) -- From Net Realized Gains (2.08) (0.22) -- -- ------- ------- ------- ------- Total Distributions (2.08) (0.22) (0.05) -- ------- ------- ------- ------- Net Asset Value, End of Period $10.27 $12.62 $10.47 $8.86 ======= ======= ======= ======= TOTAL RETURN(4) (1.89)% 23.08% 18.79% 5.85% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.79%(5) 1.80% 1.81% 1.80%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 0.01%(5) (0.21)% (0.55)% (0.71)%(5) Portfolio Turnover Rate 60% 108% 95% 36%(6) Net Assets, End of Period (in thousands) $387 $202 $32 $26 (1) Six months ended May 31, 2008 (unaudited). (2) July 29, 2005 (commencement of sale) through November 30, 2005. (3) Computed using average shares outstanding throughout the period. (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, 2005. See Notes to Financial Statements. - ------- 61 Emerging Markets Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.69 $10.06 $8.25 $6.28 $5.28 $3.61 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.06 0.10 0.11 0.01 (0.01) --(3) Net Realized and Unrealized Gain (Loss) (0.85) 4.06 3.11 2.05 1.00 1.66 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.79) 4.16 3.22 2.06 0.99 1.66 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.10) (0.13) (0.05) -- -- -- From Net Realized Gains (1.31) (1.42) (1.37) (0.09) -- -- -------- -------- -------- -------- -------- -------- Total Distributions (1.41) (1.55) (1.42) (0.09) -- -- -------- -------- -------- -------- -------- -------- Redemption Fees(2) 0.01 0.02 0.01 --(3) 0.01 0.01 -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $10.50 $12.69 $10.06 $8.25 $6.28 $5.28 ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (6.21)% 48.81% 46.10% 33.10% 18.94% 46.26% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.63%(5) 1.66% 1.80% 1.94% 2.00% 2.01% Ratio of Net Investment Income (Loss) to Average Net Assets 1.10%(5) 0.96% 1.31% 0.17% (0.22)% 0.03% Portfolio Turnover Rate 63% 85% 115% 153% 208% 286% Net Assets, End of Period (in thousands) $949,099 $1,070,138 $523,813 $220,720 $135,355 $103,737 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 62 Emerging Markets Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.92 $10.21 $8.36 $6.35 $5.33 $3.64 ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(2) 0.07 0.12 0.12 0.03 --(3) 0.01 Net Realized and Unrealized Gain (Loss) (0.86) 4.14 3.16 2.07 1.01 1.67 ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.79) 4.26 3.28 2.10 1.01 1.68 ------- ------- ------- ------- ------- ------- Distributions From Net Investment Income (0.13) (0.15) (0.07) -- -- -- From Net Realized Gains (1.31) (1.42) (1.37) (0.09) -- -- ------- ------- ------- ------- ------- ------- Total Distributions (1.44) (1.57) (1.44) (0.09) -- -- ------- ------- ------- ------- ------- ------- Redemption Fees(2) 0.01 0.02 0.01 --(3) 0.01 0.01 ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $10.70 $12.92 $10.21 $8.36 $6.35 $5.33 ======= ======= ======= ======= ======= ======= TOTAL RETURN(4) (6.14)% 49.21% 46.31% 33.37% 19.14% 46.43% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.43%(5) 1.46% 1.60% 1.74% 1.80% 1.81% Ratio of Net Investment Income (Loss) to Average Net Assets 1.30%(5) 1.16% 1.51% 0.37% (0.02)% 0.23% Portfolio Turnover Rate 63% 85% 115% 153% 208% 286% Net Assets, End of Period (in thousands) $74,662 $74,897 $85,886 $113,765 $92,673 $63,242 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 63 Emerging Markets A Class(1) For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(2) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.40 $9.85 $8.11 $6.19 $5.22 $3.58 ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(3) 0.05 0.07 0.11 (0.01) (0.03) --(4) Net Realized and Unrealized Gain (Loss) (0.84) 3.99 3.02 2.02 0.99 1.63 ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.79) 4.06 3.13 2.01 0.96 1.63 ------- ------- ------- ------- ------- ------- Distributions From Net Investment Income (0.07) (0.11) (0.03) -- -- -- From Net Realized Gains (1.31) (1.42) (1.37) (0.09) -- -- ------- ------- ------- ------- ------- ------- Total Distributions (1.38) (1.53) (1.40) (0.09) -- -- ------- ------- ------- ------- ------- ------- Redemption Fees(3) 0.01 0.02 0.01 --(4) 0.01 0.01 ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $10.24 $12.40 $9.85 $8.11 $6.19 $5.22 ======= ======= ======= ======= ======= ======= TOTAL RETURN(5) (6.36)% 48.61% 45.59% 32.77% 18.58% 45.81% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.88%(6) 1.91% 2.05% 2.19% 2.25% 2.26% Ratio of Net Investment Income (Loss) to Average Net Assets 0.85%(6) 0.71% 1.06% (0.08)% (0.47)% (0.22)% Portfolio Turnover Rate 63% 85% 115% 153% 208% 286% Net Assets, End of Period (in thousands) $45,746 $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) Six months ended May 31, 2008 (unaudited). (3) Computed using average shares outstanding throughout the period. (4) Per-share amount was less than $0.005. (5) 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. (6) Annualized. See Notes to Financial Statements. - ------ 64 Emerging Markets B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2007(1) 2007(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.67 $12.15 -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.03 (0.03) Net Realized and Unrealized Gain (Loss) (0.88) 0.53 -------- -------- Total From Investment Operations (0.85) 0.50 -------- -------- Distributions From Net Realized Gains (1.29) -- -------- -------- Redemption Fees(3) 0.01 0.02 -------- -------- Net Asset Value, End of Period $10.54 $12.67 ======== ======== TOTAL RETURN(4) (6.62)% 4.28% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.63%(5) 2.58%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 0.10%(5) (1.30)%(5) Portfolio Turnover Rate 63% 85%(6) Net Assets, End of Period (in thousands) $243 $54 (1) Six months ended May 31, 2008 (unaudited). (2) September 28, 2007 (commencement of sale) through November 30, 2007. (3) Computed using average shares outstanding throughout the period. (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, 2007. See Notes to Financial Statements. - ------ 65 Emerging Markets C Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $12.10 $9.64 $7.95 $6.12 $5.19 $3.58 ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(2) 0.01 (0.01) 0.03 (0.05) (0.07) (0.04) Net Realized and Unrealized Gain (Loss) (0.82) 3.90 2.99 1.97 0.99 1.64 ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.81) 3.89 3.02 1.92 0.92 1.60 ------- ------- ------- ------- ------- ------- Distributions From Net Investment Income -- (0.03) -- -- -- -- From Net Realized Gains (1.29) (1.42) (1.34) (0.09) -- -- ------- ------- ------- ------- ------- ------- Total Distributions (1.29) (1.45) (1.34) (0.09) -- -- ------- ------- ------- ------- ------- ------- Redemption Fees(2) 0.01 0.02 0.01 --(3) 0.01 0.01 ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $10.01 $12.10 $9.64 $7.95 $6.12 $5.19 ======= ======= ======= ======= ======= ======= TOTAL RETURN(4) (6.70)% 47.39% 44.59% 31.67% 17.92% 44.97% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.63%(5) 2.66% 2.80% 2.94% 3.00% 3.01% Ratio of Net Investment Income (Loss) to Average Net Assets 0.10%(5) (0.04)% 0.31% (0.83)% (1.22)% (0.97)% Portfolio Turnover Rate 63% 85% 115% 153% 208% 286% Net Assets, End of Period (in thousands) $9,652 $9,098 $2,581 $733 $521 $291 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 66 Emerging Markets R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.68 $12.15 -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.05 (0.01) Net Realized and Unrealized Gain (Loss) (0.87) 0.52 -------- -------- Total From Investment Operations (0.82) 0.51 -------- -------- Distributions From Net Investment Income (0.04) -- From Net Realized Gains (1.31) -- -------- -------- Total Distributions (1.35) -- -------- -------- Redemption Fees(3) 0.01 0.02 -------- -------- Net Asset Value, End of Period $10.52 $12.68 ======== ======== TOTAL RETURN(4) (6.46)% 4.36% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.13%(5) 2.08%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 0.60%(5) (0.68)%(5) Portfolio Turnover Rate 63% 85%(6) Net Assets, End of Period (in thousands) $216 $27 (1) Six months ended May 31, 2008 (unaudited). (2) September 28, 2007 (commencement of sale) through November 30, 2007. (3) Computed using average shares outstanding throughout the period. (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, 2007. See Notes to Financial Statements. - ------ 67 International Value Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.48 $14.36 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.22 0.15 Net Realized and Unrealized Gain (Loss) (0.92) 2.09 1.36 -------- -------- -------- Total From Investment Operations (0.77) 2.31 1.51 -------- -------- -------- Distributions From Net Investment Income (0.24) (0.47) -- From Net Realized Gains (0.78) (4.72) -- -------- -------- -------- Total Distributions (1.02) (5.19) -- -------- -------- -------- Net Asset Value, End of Period $9.69 $11.48 $14.36 ======== ======== ======== TOTAL RETURN(4) (6.87)% 23.55% 11.75% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.30%(5) 1.30% 1.30%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 3.05%(5) 1.96% 2.77%(5)(6) Portfolio Turnover Rate 1% 11% 17% Net Assets, End of Period (in thousands) $4,033 $3,044 $437 (1) Six months ended May 31, 2008 (unaudited). (2) April 3, 2006 (commencement of sale) through November 30, 2006. (3) Computed using average shares outstanding throughout the period. (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) 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. - ------ 68 International Value Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.50 $14.38 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.23 0.25 Net Realized and Unrealized Gain (Loss) (0.92) 2.10 1.28 -------- -------- -------- Total From Investment Operations (0.77) 2.33 1.53 -------- -------- -------- Distributions From Net Investment Income (0.26) (0.49) -- From Net Realized Gains (0.78) (4.72) -- -------- -------- -------- Total Distributions (1.04) (5.21) -- -------- -------- -------- Net Asset Value, End of Period $9.69 $11.50 $14.38 ======== ======== ======== TOTAL RETURN(4) (6.85)% 23.77% 11.91% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.10%(5) 1.10% 1.10%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 3.25%(5) 2.16% 2.97%(5)(6) Portfolio Turnover Rate 1% 11% 17% Net Assets, End of Period (in thousands) $42,481 $45,262 $35,574 (1) Six months ended May 31, 2008 (unaudited). (2) April 3, 2006 (commencement of sale) through November 30, 2006. (3) Computed using average shares outstanding throughout the period. (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) 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. - ------ 69 International Value A Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $11.49 $14.35 $12.70 $10.91 $9.64 $6.22 $8.70 -------- -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.15 0.20 0.25 0.18 0.13 0.10 0.07 Net Realized and Unrealized Gain (Loss) (0.94) 2.11 1.40 1.97 1.37 3.42 (2.51) -------- -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.79) 2.31 1.65 2.15 1.50 3.52 (2.44) -------- -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.21) (0.45) -- (0.15) (0.11) (0.10) (0.04) From Net Realized Gains (0.78) (4.72) -- (0.21) (0.12) -- -- -------- -------- -------- -------- -------- -------- -------- Total Distributions (0.99) (5.17) -- (0.36) (0.23) (0.10) (0.04) -------- -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $9.71 $11.49 $14.35 $12.70 $10.91 $9.64 $6.22 ======== ======== ======== ======== ======== ======== ======== TOTAL RETURN(4) (7.02)% 23.44% 12.99% 19.95% 15.58% 56.65% (28.10)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.45%(5)(6) 1.40%(5) 1.40%(5)(6) 1.35% 1.41% 1.47% 1.65%(7) Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) 1.55%(6) 1.55% 1.55%(6) 1.35% 1.41% 1.47% 1.66% Ratio of Net Investment Income (Loss) to Average Net Assets 2.90%(5)(6) 1.86%(5) 2.67%(5)(6)(8) 1.52% 1.28% 1.13% 0.89%(7) Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) 2.80%(6) 1.71% 2.52%(6)(8) 1.52% 1.28% 1.13% 0.90% Portfolio Turnover Rate 1% 11% 17% 7% 18% 10% 18% Net Assets, End of Period (in thousands) $26,892 $24,558 $19,890 $54,617 $203,215 $174,387 $105,862 (1) Six months ended May 31, 2008 (unaudited). (2) 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 was March 31. (3) Computed using average shares outstanding throughout the period. (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) During the periods ended May 31, 2008, November 30, 2007 and November 30, 2006, the distributor voluntarily waived a portion of its distribution and service fees. (6) Annualized. (7) The investment advisor voluntarily agreed to waive fees and absorb certain operating expenses. (8) 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. - ------ 70 International Value B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $11.16 $14.08 $12.51 $10.75 $9.52 $6.14 $8.61 ------- ------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(3) 0.10 0.12 0.17 0.10 0.06 0.04 0.01 Net Realized and Unrealized Gain (Loss) (0.91) 2.05 1.40 1.93 1.34 3.39 (2.48) ------- ------- ------- ------- ------- ------- ------- Total From Investment Operations (0.81) 2.17 1.57 2.03 1.40 3.43 (2.47) ------- ------- ------- ------- ------- ------- ------- Distributions From Net Investment Income (0.12) (0.37) -- (0.06) (0.05) (0.05) -- From Net Realized Gains (0.78) (4.72) -- (0.21) (0.12) -- -- ------- ------- ------- ------- ------- ------- ------- Total Distributions (0.90) (5.09) -- (0.27) (0.17) (0.05) -- ------- ------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $9.45 $11.16 $14.08 $12.51 $10.75 $9.52 $6.14 ======= ======= ======= ======= ======= ======= ======= TOTAL RETURN(4) (7.35)% 22.51% 12.55% 19.07% 14.69% 55.86% (28.69)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.16%(5)(6) 2.09%(5) 2.09%(5)(6) 2.08% 2.09% 2.11% 2.30%(7) Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) 2.30%(6) 2.30% 2.30%(6) 2.08% 2.09% 2.11% 2.31% Ratio of Net Investment Income (Loss) to Average Net Assets 2.19%(5)(6) 1.17%(5) 1.98%(5)(6)(8) 0.90% 0.61% 0.52% 0.10%(7) Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) 2.05%(6) 0.96% 1.77%(6)(8) 0.90% 0.61% 0.52% 0.09% Portfolio Turnover Rate 1% 11% 17% 7% 18% 10% 18% Net Assets, End of Period (in thousands) $3,207 $4,059 $4,313 $4,917 $5,165 $4,491 $3,011 (1) Six months ended May 31, 2008 (unaudited). (2) 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 was March 31. (3) Computed using average shares outstanding throughout the period. (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) During the periods ended May 31, 2008, November 30, 2007 and November 30, 2006, the distributor voluntarily waived a portion of its distribution and service fees. (6) Annualized. (7) The investment advisor voluntarily agreed to waive fees and absorb certain operating expenses. (8) 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. - ------ 71 International Value C Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.37 $14.27 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.14 0.12 0.14 Net Realized and Unrealized Gain (Loss) (0.97) 2.07 1.28 -------- -------- -------- Total From Investment Operations (0.83) 2.19 1.42 -------- -------- -------- Distributions From Net Investment Income (0.12) (0.37) -- From Net Realized Gains (0.78) (4.72) -- -------- -------- -------- Total Distributions (0.90) (5.09) -- -------- -------- -------- Net Asset Value, End of Period $9.64 $11.37 $14.27 ======== ======== ======== TOTAL RETURN(4) (7.39)% 22.28% 11.05% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.30%(5) 2.30% 2.30%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 2.05%(5) 0.96% 1.77%(5)(6) Portfolio Turnover Rate 1% 11% 17% Net Assets, End of Period (in thousands) $550 $222 $41 (1) Six months ended May 31, 2008 (unaudited). (2) April 3, 2006 (commencement of sale) through November 30, 2006. (3) Computed using average shares outstanding throughout the period. (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) 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. - ------ 72 International Value R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.42 $14.31 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.11 0.11 0.19 Net Realized and Unrealized Gain (Loss) (0.91) 2.14 1.27 -------- -------- -------- Total From Investment Operations (0.80) 2.25 1.46 -------- -------- -------- Distributions From Net Investment Income (0.18) (0.42) -- From Net Realized Gains (0.78) (4.72) -- -------- -------- -------- Total Distributions (0.96) (5.14) -- -------- -------- -------- Net Asset Value, End of Period $9.66 $11.42 $14.31 ======== ======== ======== TOTAL RETURN(4) (7.14)% 22.91% 11.36% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.80%(5) 1.80% 1.80%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 2.55%(5) 1.46% 2.27%(5)(6) Portfolio Turnover Rate 1% 11% 17% Net Assets, End of Period (in thousands) $164 $202 $28 (1) Six months ended May 31, 2008 (unaudited). (2) April 3, 2006 (commencement of sale) through November 30, 2006. (3) Computed using average shares outstanding throughout the period. (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) 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 ADDITIONAL 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., 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 Investments' 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. - ------ 74 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 EM (EMERGING MARKETS) GROWTH INDEX represents the gross performance of growth stocks in global emerging market countries. The MSCI EM (EMERGING MARKETS) VALUE INDEX represents the gross performance of value 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. - ------ 75 NOTES - ------ 76 [back cover] [american century investments logo and text logo ®] 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 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. 0807 CL-SAN-60825S-SUP
[front cover] SEMIANNUAL REPORT MAY 31, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS INTERNATIONAL STOCK FUND INTERNATIONAL DISCOVERY FUND INTERNATIONAL OPPORTUNITIES FUND PRESIDENT'S LETTER JONATHAN THOMAS [photo of Jonathan Thomas] Dear Investor, At American Century Investments®, we are committed to helping you reach your financial goals. Your success is the ultimate measure of our performance. That's why we focus on achieving superior investment results and building long-term relationships with investors like you. Part of that relationship is to clearly communicate investment results and what influenced them. To help you monitor your investment with us, we take pride in providing you with the semiannual report for the American Century® International Stock, International Discovery and International Opportunities funds for the six months ended May 31, 2008. We also recommend americancentury.com, where we provide company news, quarterly portfolio commentaries, investment views, and other useful information. As noted on the website, 2008 marks the 50th anniversary of American Century Investments. Since 1958, we've worked to make wise decisions with your interests as our guide. Fifty years also means that we've met the challenges of previous economic downturns. As we've crossed those hurdles and earned your trust, our assets under management have grown to nearly $100 billion, putting us in the top 5% of our industry. This growth has given us the resources to offer a wide array of financial products and services, including a well-diversified line-up of portfolios that provide you with many choices in these uncertain times. Though our offerings are diverse, they share several key qualities, including our disciplined investment approach and active, team-based management. Strict adherence to our processes and long-term strategies allows us to stay focused during volatile periods. Investors in our portfolios also benefit from the sum of our investment teams' expertise as they share research and information. We'll continue to work hard to earn your trust. Thank you for your continued support. Sincerely, /s/Jonathan S. Thomas Jonathan S. Thomas President and Chief Executive Officer American Century Investments 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. . . . . . . . . . . . . . . . . . 6 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 6 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 7 INTERNATIONAL DISCOVERY Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 13 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 14 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 14 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 15 INTERNATIONAL OPPORTUNITIES Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 20 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 21 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 21 Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 22 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 25 FINANCIAL STATEMENTS Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 27 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 29 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 30 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 32 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 39 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 45 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 46 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 Investments or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments 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 Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments 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 Investments by third party vendors. To the best of American Century Investments' 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 RETREAT Stock performance in both developed and emerging international stock markets turned negative for the six months ended May 31, 2008. Solid results in April and May were not enough to offset the sharp downturn that occurred from December 2007 through March 2008. Global credit market woes, rising inflationary pressures and slowing economic growth rates combined to drag down stocks. Soaring prices for oil and other commodities added to investors' malaise, while a weak U.S. dollar complicated outlooks for companies that rely on exports to the United States. Meanwhile, strong performance from Latin America helped emerging markets outperform the developed markets during the six months. CREDIT CRUNCH PROMPTS CENTRAL BANK ACTION Europe couldn't escape the fallout from the U.S. credit crisis; its large banks were investors and players in the U.S. subprime credit market. But coordinated efforts between the European Central Bank (ECB) and the U.S. Federal Reserve to inject liquidity and ease conditions in short-term money markets limited the risk of a severe global credit crisis. RATES DROP IN BRITAIN In Europe, the euro continued to reach record highs versus the U.S. dollar. Despite increasingly sluggish economic growth throughout Europe, rising inflation caused the ECB to leave its key interest rate unchanged during the six-month period. On the other hand, the Bank of England responded to slower economic growth by cutting its key rate by 75 basis points. Japan's economic growth remained positive, but the government scaled back its fiscal-year growth forecast, citing rising raw materials prices and turmoil in the global financial markets as obstacles to economic expansion. Japan's benchmark interest rate remained steady at 0.5%--the lowest among the world's major economies. VOLATILITY OFFERS OPPORTUNITY The weak U.S. economy, with its ongoing credit problems, remains an important factor in the outlook for international stocks. Nevertheless, we believe that turbulent times always present the potential for long-term investment gains, and there is no shortage of companies with accelerating earnings that may provide attractive investment opportunities in the months ahead. International Equity Total Returns For the six months ended May 31, 2008 (in U.S. dollars)* MSCI EM Index -1.52% MSCI EAFE Growth Index -3.51% MSCI Europe Index -5.74% MSCI EAFE Index -5.21% MSCI World Free Index -4.07% MSCI EAFE Value Index -6.94% MSCI Japan Index -2.64% * Total returns for periods less than one year are not annualized. - ------ 2 PERFORMANCE International Stock Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date INVESTOR CLASS -2.98% 4.34% 16.45% 3/31/05 MSCI EAFE INDEX -5.21% -2.53% 14.82% -- (1) 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. 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
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One-Year Returns Over Life of Class Periods ended May 31 2005* 2006 2007 2008 Investor Class -2.10% 25.91% 25.99% 4.34% MSCI EAFE Index -2.30% 28.24% 26.84% -2.53% * 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 Raj Gandhi PERFORMANCE SUMMARY International Stock returned -2.98%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -5.21%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Overall, our favorable stock selection and effective allocation decisions accounted for the portfolio's outperformance relative to the benchmark. CANADA LED ALL COUNTRIES From a geographic perspective, our out-of-benchmark position in Canada made the greatest positive contribution to the portfolio's relative performance, led by holdings in Suncor Energy, an oil and natural gas company, and Research In Motion, maker of the BlackBerry handheld device. Both stocks were among the portfolio's top contributors for the reporting period. Stock selection in Germany and Italy also boosted the portfolio's relative performance. Countries detracting from relative performance included Japan, India and China. Stock selection was a negative factor in Japan and China, while our small, out-of-benchmark position in India lagged primarily due to poor performance from Bharat Heavy Electricals. The stock of the engineering and manufacturing company declined in the wake of rising raw materials costs. MATERIALS POSTED TOP RESULTS The portfolio's materials, health care and energy holdings made the greatest positive contributions to relative performance from a sector perspective. On an absolute basis, these were the only sectors posting positive returns for the reporting period. In particular, our stock picks in the chemicals industry--along with an overweight--generated strong performance for the materials sector. Our position in Germany's K+S AG, a producer of potash for use in fertilizers, represented the fund's top contributor for the reporting period. The company's stock benefited from the extended agriculture boom, greater-than-expected earnings and soaring demand for potash. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 ENI SpA 2.0% 0.4% Saipem SpA 1.9% 1.6% BG Group plc 1.9% 1.5% Total SA 1.9% 1.3% Tesco plc 1.8% 1.4% Julius Baer Holding AG 1.8% 1.7% Rio Tinto Ltd. 1.8% 0.7% Syngenta AG 1.5% 1.3% CEZ AS 1.5% 1.1% CSL Ltd. 1.5% 1.0% * Total returns for periods less than one year are not annualized. - ------ 5 International Stock Our health care stocks also were strong contributors to relative performance. Specifically, overweights to Denmark's Novo Nordisk AS, a pharmaceutical company specializing in insulin treatments for diabetes, and Australia's CSL Limited, a biotechnology company specializing in vaccines, contributed favorably. CONSUMER SECTORS LAGGED Stock selection led to poor relative performance for the portfolio's consumer discretionary and consumer staples sectors. In the discretionary sector, our holdings among specialty retailers and textiles, apparel and luxury goods companies generated disappointing performance. In particular, our positions in Burberry Group, the high-end British clothing company, and Esprit Holdings, the Hong Kong-based fashion retailer, were among the fund's largest detractors. In the staples sector, poor performance from food and staples retailers, including the United Kingdom's Tesco plc, accounted for the bulk of the decline. OUTLOOK International Stock invests in companies located throughout the world, excluding the United States, exhibiting accelerating growth characteristics. Our analysis indicates the long-term outlook for large-cap growth companies remains positive. The portfolio has broad exposure to high-quality growth companies in numerous markets, and we believe our focus on company fundamentals, rather than economic developments, should help deliver solid long-term performance. Types of Investments in Portfolio % of net % of net assets as assets of as of 5/31/08 11/30/07 Foreign Common Stocks & Rights 98.5% 99.9% Temporary Cash Investments 1.0% -- Other Assets and Liabilities(1) 0.5% 0.1% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of May 31, 2008 % of net % of net assets assets as of as of 5/31/08 11/30/07 United Kingdom 19.8% 13.6% Japan 12.4% 15.5% Switzerland 9.5% 10.8% France 8.5% 8.6% Germany 7.8% 10.0% Australia 5.3% 5.4% Italy 4.9% 2.7% Spain 3.6% 3.9% Canada 3.1% 3.7% Hong Kong 3.0% 1.5% Denmark 2.7% 2.2% Belgium 2.3% 2.1% Greece 2.1% 1.7% Other Countries 13.5% 18.2% Cash and Equivalents(2) 1.5% 0.1% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 6 SCHEDULE OF INVESTMENTS International Stock MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks & Rights -- 98.5% AUSTRALIA -- 5.3% 43,013 BHP Billiton Ltd. $ 1,789,487 137,157 Boart Longyear Group 271,536 52,912 CSL Ltd. 2,014,081 24,514 QBE Insurance Group Ltd. 573,000 17,786 Rio Tinto Ltd.(1) 2,347,453 ----------- 6,995,557 ----------- BELGIUM -- 2.3% 11,033 KBC Groupe 1,361,280 64,746 SES SA Fiduciary Depositary Receipt 1,712,331 ----------- 3,073,611 ----------- BERMUDA -- 0.8% 43,993 Aquarius Platinum Ltd. 720,622 10,502 Seadrill Ltd. 342,812 ----------- 1,063,434 ----------- BRAZIL -- 1.6% 65,100 Bolsa de Mercadorias e Futuros - BM&F SA 745,508 17,100 Net Servicos de Comunicacao SA(2) 244,256 53,000 Redecard SA 1,115,224 ----------- 2,104,988 ----------- CANADA -- 3.1% 8,014 EnCana Corp. 724,225 4,202 Potash Corp. of Saskatchewan 834,648 10,446 Research In Motion Ltd.(2) 1,450,636 15,559 Suncor Energy Inc. 1,062,012 ----------- 4,071,521 ----------- CZECH REPUBLIC -- 1.5% 24,385 CEZ AS 2,014,788 ----------- DENMARK -- 2.7% 29,298 Novo Nordisk AS B Shares 1,906,276 12,504 Vestas Wind Systems AS(2) 1,721,021 ----------- 3,627,297 ----------- FINLAND -- 0.6% 29,062 Nokia Oyj 837,774 ----------- FRANCE -- 8.5% 7,113 ALSTOM Co. 1,792,975 33,181 AXA SA 1,172,283 10,240 Carrefour SA 717,982 10,308 Groupe Danone 902,354 2,479 Lafarge SA 448,327 Shares Value 3,296 Schneider Electric SA $ 414,001 3,320 Societe Generale(1) 345,017 1,327 Societe Generale - new shares(2) 135,838 17,627 Suez SA 1,313,529 28,485 Total SA(1) 2,485,579 6,637 Ubisoft Entertainment SA(2) 643,259 11,358 Vinci SA(1) 855,741 ----------- 11,226,885 ----------- GERMANY -- 7.8% 12,934 adidas AG 911,903 4,387 BASF SE 657,711 10,348 Deutsche Boerse AG(1) 1,484,754 20,957 Fresenius Medical Care AG & Co. KGaA(1) 1,167,832 25,919 GEA Group AG 1,009,264 3,571 K+S AG 1,674,067 9,422 Linde AG(1) 1,415,798 8,000 Q-Cells AG(2) 972,624 6,730 SGL Carbon AG(2) 500,459 4,299 Siemens AG 487,686 ----------- 10,282,098 ----------- GREECE -- 2.1% 18,793 Coca-Cola Hellenic Bottling Co. SA 854,284 34,783 National Bank of Greece SA 1,975,105 ----------- 2,829,389 ----------- HONG KONG -- 3.0% 43,000 China Mobile Ltd. 632,033 31,200 Esprit Holdings Ltd. 364,634 43,100 Hang Seng Bank Ltd. 873,207 244,000 Li & Fung Ltd. 922,401 67,045 Melco PBL Entertainment (Macau) Ltd. ADR(2) 797,165 22,000 Sun Hung Kai Properties Ltd. 353,531 ----------- 3,942,971 ----------- INDIA -- 0.7% 4,116 Bharat Heavy Electricals Ltd. 162,360 22,346 Bharti Airtel Ltd.(2) 464,278 3,723 Housing Development Finance Corp. Ltd. 227,199 ----------- 853,837 ----------- IRELAND -- 0.2% 18,928 Anglo Irish Bank Corp. plc 247,349 ----------- - ------ 7 International Stock Shares Value ITALY -- 4.9% 65,066 ENI SpA $ 2,650,022 19,905 Fiat SpA(1) 443,436 27,587 Finmeccanica SpA 836,025 54,432 Saipem SpA 2,499,750 ----------- 6,429,233 ----------- JAPAN -- 12.4% 17,800 Canon, Inc. 960,474 93 Central Japan Railway Co. 908,392 14,900 Daikin Industries Ltd. 768,668 5,300 Daito Trust Construction Co., Ltd. 272,916 5,900 Fanuc Ltd. 640,635 3,400 FAST RETAILING CO. LTD. 294,054 39,210 iShares MSCI Japan Index Fund 532,080 21,000 Japan Steel Works Ltd. (The) 436,131 96,000 Kobe Steel Ltd. 315,903 24,600 Konami Corp. 898,151 52,000 Kuraray Co. Ltd. 656,349 86,000 Marubeni Corp. 766,619 17,600 Mitsubishi Corp. 607,530 33,000 Mitsubishi Electric Corp. 373,343 76,000 Mitsui O.S.K. Lines, Ltd. 1,146,666 3,600 Nintendo Co., Ltd. 1,980,085 23,000 Shiseido Co., Ltd. 563,822 11,200 Sony Corp. 560,797 302 Sony Financial Holdings Inc. 1,234,348 25,000 Sumitomo Realty & Development Co. Ltd. 640,114 14,800 Terumo Corp. 736,842 16,900 Toyota Motor Corp. 860,626 2,880 Yamada Denki Co. Ltd. 223,681 ----------- 16,378,226 ----------- LUXEMBOURG -- 0.8% 8,654 Millicom International Cellular SA(1) 1,002,652 ----------- MALAYSIA -- 0.1% 66,700 Bumiputra - Commerce Holdings Bhd 195,571 ----------- NETHERLANDS -- 0.9% 27,134 ASML Holding N.V. 811,744 21,924 Koninklijke KPN N.V. 399,054 ----------- 1,210,798 ----------- NORWAY -- 1.9% 33,649 Aker Solutions ASA 949,959 59,580 Norsk Hydro ASA(1) 946,140 7,836 Yara International ASA 594,533 ----------- 2,490,632 ----------- Shares Value PEOPLE'S REPUBLIC OF CHINA -- 1.3% 148,000 China Communications Construction Co. Ltd. H Shares $ 325,452 307,500 China Merchants Bank Co., Ltd. H Shares 1,101,374 4,722 Ctrip.com International, Ltd. ADR 275,670 ----------- 1,702,496 ----------- RUSSIAN FEDERATION -- 0.9% 4,338 OAO LUKOIL 485,422 199,159 Sberbank 720,956 ----------- 1,206,378 ----------- SINGAPORE -- 0.5% 38,000 Keppel Corp. Ltd. 338,262 24,000 United Overseas Bank Ltd. 355,712 ----------- 693,974 ----------- SOUTH KOREA -- 0.5% 995 Samsung Electronics 717,039 ----------- SPAIN -- 3.6% 71,511 Banco Santander SA 1,489,633 61,741 Cintra Concesiones de Infraestructuras de Transporte SA(1) 949,939 19,486 Gamesa Corporacion Tecnologica SA 1,008,559 45,989 Telefonica SA 1,320,007 ----------- 4,768,138 ----------- SWEDEN -- 0.8% 6,847 Oriflame Cosmetics SA SDR 486,250 218,817 Telefonaktiebolaget LM Ericsson Cl B 595,321 ----------- 1,081,571 ----------- SWITZERLAND -- 9.5% 43,597 ABB Ltd.(2) 1,415,878 12,148 Actelion Ltd.(2) 663,561 15,503 Compagnie Financiere Richemont SA Cl A 965,778 28,956 Julius Baer Holding AG 2,369,026 3,874 Nestle SA 1,904,302 22,886 Novartis AG 1,201,812 4,955 Roche Holding AG 854,032 507 SGS SA(1) 761,521 3,367 Sonova Holding AG(1) 305,988 6,681 Syngenta AG 2,034,546 504 UBS AG(2) 12,134 504 UBS AG Rights(2) 672 ----------- 12,489,250 ----------- - ------ 8 International Stock Shares Value TAIWAN (REPUBLIC OF CHINA) -- 0.4% 260,000 AU Optronics Corp. $ 499,268 ----------- UNITED KINGDOM -- 19.8% 15,274 Admiral Group plc 263,808 67,912 AMEC plc 1,122,513 18,845 Anglo American plc 1,276,186 99,371 BG Group plc 2,491,794 30,302 British American Tobacco plc 1,133,162 37,160 Burberry Group plc 368,014 58,745 Cadbury plc 784,241 85,084 Capita Group plc 1,140,078 148,967 Compass Group plc 1,106,470 56,543 GlaxoSmithKline plc 1,247,061 95,130 HSBC Holdings plc(1) 1,605,503 40,417 ICAP plc 493,132 114,230 International Power plc 1,005,705 10,310 Johnson Matthey plc 411,483 129,846 Man Group plc 1,597,125 32,429 Reckitt Benckiser Group plc 1,910,263 57,285 Reed Elsevier plc 721,634 57,479 Scottish and Southern Energy plc 1,675,853 28,364 Standard Chartered plc 1,053,948 292,874 Tesco plc 2,402,176 136,671 TUI Travel plc 661,195 513,014 Vodafone Group plc 1,648,666 ----------- 26,120,010 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $104,716,687) 130,156,735 ----------- Principal Amount Value Temporary Cash Investments -- 1.0% $1,300,000 FHLB Discount Notes, 1.90%, 6/2/08(3) (Cost $1,299,931) $1,300,000 ------------ Temporary Cash Investments - Securities Lending Collateral(4) -- 8.5% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $2,500,479) 2,500,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $2,500,490) 2,500,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $1,234,917) 1,234,675 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $2,427,258) 2,426,793 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $2,500,479) 2,500,000 ------------ TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL (Cost $11,161,468) 11,161,468 ------------ TOTAL INVESTMENT SECURITIES -- 108.0% (Cost $117,178,086) 142,618,203 ------------ OTHER ASSETS AND LIABILITIES -- (8.0)% (10,592,121) ------------ TOTAL NET ASSETS -- 100.0% $132,026,082 ============ - ------ 9 International Stock Market Sector Diversification (as a % of net assets) Financials 17.9% Industrials 16.1% Materials 12.6% Energy 10.4% Consumer Discretionary 8.9% Consumer Staples 8.8% Health Care 7.6% Information Technology 7.1% Utilities 4.6% Telecommunication Services 4.1% Diversified 0.4% Cash and Equivalents* 1.5% *Includes temporary cash investments, securities lending collateral and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt FHLB = Federal Home Loan Bank MSCI = Morgan Stanley Capital International SDR = Swedish Depositary Receipt (1) Security, or a portion thereof, was on loan as of May 31, 2008. (2) Non-income producing. (3) The rate indicated is the yield to maturity at purchase. (4) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 10 PERFORMANCE International Discovery Total Returns as of May 31, 2008 Average Annual Returns 6 10 Since Inception months(1) 1 year 5 years years Inception Date INVESTOR CLASS -5.20% 2.43% 26.52% 13.49% 16.35% 4/1/94 MSCI AC WORLD EX-US MID CAP GROWTH INDEX(2) -4.55% -3.15% 23.17% 6.93% N/A(3) -- S&P/CITIGROUP EMI GROWTH WORLD EX-US -5.17% -7.44% 22.35% 7.93% 7.23%(4) -- Institutional Class -5.12% 2.67% 26.76% 13.70% 16.17% 1/2/98 Advisor Class -5.25% 2.27% 26.23% 13.21% 13.82% 4/28/98 (1) Total returns for periods less than one year are not annualized. (2) In February of 2008, the fund's benchmark changed from the S&P/Citigroup EMI Growth World ex-US to the MSCI AC World ex-US Mid Cap Growth Index. The fund's investment advisor believes this index better represents the fund's portfolio composition. (3) Benchmark data first available June 1994. (4) 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 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. - ------ 11 International Discovery Growth of $10,000 Over 10 Years $10,000 investment made May 31, 1998
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One-Year Returns Over 10 Years Periods ended May 31 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class -0.37% 63.12% -20.05% -7.80% -8.75% 40.25% 9.25% 58.75% 30.29% 2.43% MSCI AC World ex-US Mid Cap Growth Index -0.41% 25.69% -30.23% -9.66% -12.63% 39.90% 16.88% 35.21% 32.39% -3.15% S&P/ Citigroup EMI Growth World ex-US -1.85% 21.21% -21.65% -8.01% -8.73% 42.23% 18.57% 35.69% 29.45% -7.44% 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. - ------ 12 PORTFOLIO COMMENTARY International Discovery Portfolio Managers: Mark Kopinski and Brian Brady PERFORMANCE SUMMARY International Discovery returned -5.20%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI AC World ex-US Mid Cap Growth Index, returned -4.55%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Overall, our stock selection accounted for the portfolio's underperformance relative to the benchmark. CHINA LED DETRACTORS From a regional perspective, investments in China, Japan and Australia represented the biggest detractors from relative performance. Equities in China struggled, as signs of strength in the Chinese yuan versus the U.S. dollar stoked concerns regarding future corporate profits. In addition, a glut of initial public offerings helped sap broader demand for equities. A portfolio holding caught in the downdraft was advertising company Focus Media, which also faced charges of spamming wireless phone users. We subsequently exited our position. Japan's Ngk Insulators, a manufacturer of electrical insulators and industrial ceramic products, was the portfolio's largest detractor for the reporting period. The stock declined on sagging profit and sales forecasts. On a positive note, stock selection led to good relative results in the United Kingdom, Korea and Germany. In addition, an underweight in Korea and an overweight in Germany helped performance. Our position in Germany's K+S AG, a producer of potash for use in fertilizers, represented the fund's top contributor for the reporting period. The company's stock benefited from the extended agriculture boom, greater-than-expected earnings and soaring demand for potash. Top Ten Holdings as of May 31, 2008 % of net % of net assets assets as of as of 5/31/08 11/30/07 Lonza Group AG 2.7% 1.9% CSL Ltd. 2.6% 3.1% FLSmidth & Co. AS B Shares 2.5% 1.9% Nokian Renkaat Oyj 2.2% 1.8% Millicom International Cellular SA 2.1% 2.0% Japan Steel Works Ltd. (The) 2.0% 1.3% Tecnicas Reunidas SA 2.0% 1.6% Fugro N.V. CVA 1.8% 1.4% United Internet AG 1.8% 1.5% K+S AG 1.8% 1.2% * All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 13 International Discovery FINANCIALS LAGGED On an absolute basis, most sectors in the benchmark and portfolio generated negative returns during the reporting period. Stock selection in the financials, consumer discretionary and utilities sectors led to lagging results for the portfolio. Within the beleaguered financials sector, the diversified financial services industry accounted for the bulk of the performance shortfall, with our overweight position in Australia's Babcock & Brown Limited leading the decline. In the consumer discretionary sector, stock selection in the media industry was the primary performance detractor. The portfolio realized positive absolute and relative performance in the materials, health care and energy sectors. In the materials sector, stock selection and an overweight in the chemicals industry contributed strongly to performance. In particular, surging worldwide crop prices served as a catalyst for agrichemical companies, including K+S AG and Australia's Incitec Pivot. Our health care stocks also were strong contributors to relative performance. Specifically, our out-of-benchmark position in Australia's CSL Limited, a biotechnology company specializing in vaccines, contributed favorably due to strong profits and soaring royalties for its cervical cancer vaccine, Gardasil. 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 net % of net assets assets as of as of 5/31/08 11/30/07 Foreign Common Stocks 98.5% 96.9% Temporary Cash Investments 1.4% 3.6% Other Assets and Liabilities(1) 0.1% (0.5)% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of May 31, 2008 % of net % of net assets assets as of as of 5/31/08 11/30/07 Japan 15.0% 10.6% United Kingdom 12.3% 15.1% Canada 9.2% 5.6% Germany 8.1% 6.6% Australia 5.7% 12.4% Switzerland 5.3% 4.0% Netherlands 3.4% 1.4% Hong Kong 3.3% 2.5% Bermuda 3.3% 0.6% Denmark 2.9% 1.9% Spain 2.8% 3.5% Greece 2.6% 1.5% Italy 2.6% 1.4% Finland 2.2% 2.2% Norway 2.1% 2.8% Luxembourg 2.1% 2.0% Other Countries 15.6% 22.8% Cash and Equivalents(2) 1.5% 3.1% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 14 SCHEDULE OF INVESTMENTS International Discovery MAY 31, 2008 (UNAUDITED Shares Value Common Stocks -- 98.5% AUSTRALIA -- 5.7% 7,384,700 Boart Longyear Group $14,619,869 1,251,500 CSL Ltd. 47,637,997 67,600 Incitec Pivot Ltd. 11,249,559 1,846,200 OneSteel Ltd. 12,748,395 5,551,000 Oxiana Ltd.(1) 16,404,737 ------------- 102,660,557 ------------- AUSTRIA -- 0.5% 140,500 Andritz AG 9,505,864 ------------- BELGIUM -- 0.3% 27,600 Bekaert SA 4,431,561 ------------- BERMUDA -- 3.3% 1,433,900 Aquarius Platinum Ltd. 23,487,840 85,100 Central European Media Enterprises Ltd. Cl A(2) 9,052,938 826,200 Seadrill Ltd. 26,969,298 ------------- 59,510,076 ------------- BRAZIL -- 1.7% 841,000 GVT Holding SA(2) 19,220,495 471,300 Lojas Renner SA 11,642,792 ------------- 30,863,287 ------------- CANADA -- 9.2% 176,000 Agnico-Eagle Mines Ltd. 12,463,234 256,100 Agrium Inc. 22,388,262 310,800 Fording Canadian Coal Trust 24,864,000 512,500 Gildan Activewear Inc.(2) 15,141,049 575,400 Oilexco Inc.(2) 9,099,133 626,300 Open Text Corp.(1)(2) 22,490,433 249,100 Petrobank Energy & Resources Ltd.(2) 14,392,612 1,101,100 Precision Drilling Trust 29,349,366 203,900 Timminco Ltd.(2) 6,259,953 202,800 TSX Group Inc. 9,184,128 ------------- 165,632,170 ------------- CAYMAN ISLANDS(3) 9,762 Herbalife Ltd. 376,227 ------------- DENMARK -- 2.9% 375,200 FLSmidth & Co. AS B Shares(1) 44,990,824 143,500 Genmab AS(2) 7,690,920 ------------- 52,681,744 ------------- FINLAND -- 2.2% 764,700 Nokian Renkaat Oyj 39,282,038 ------------- Shares Value FRANCE -- 1.6% 206,500 Nexans SA $28,170,592 ------------- GERMANY -- 8.1% 113,100 ElringKlinger AG(2) 12,773,946 67,500 K+S AG 31,643,638 324,800 Kloeckner & Co. AG 19,600,252 258,800 SGL Carbon AG(2) 19,245,005 263,500 SolarWorld AG(1) 13,601,376 1,497,300 United Internet AG 32,797,243 116,600 Vossloh AG(1) 16,887,839 ------------- 146,549,299 ------------- GREECE -- 2.6% 1,052,700 Intralot SA 19,947,008 804,000 Piraeus Bank SA 27,016,908 ------------- 46,963,916 ------------- HONG KONG -- 3.3% 3,722,500 Kingboard Chemical Holdings Ltd. 17,220,656 7,275,000 Link Real Estate Investment Trust (The) 18,235,162 5,820,000 Melco International Development Ltd. 7,308,981 9,916,000 Pacific Basin Shipping Ltd. (Acquired 5/8/08-5/30/08, Cost $17,339,681)(4) 17,179,914 ------------- 59,944,713 ------------- INDIA -- 0.7% 394,100 Sun Pharmaceutical Industries Ltd.(2) 13,112,051 ------------- IRELAND -- 1.4% 341,700 ICON plc ADR(2) 24,089,850 ------------- ITALY -- 2.6% 140,300 Danieli & C. Officine Meccaniche SpA 5,816,755 408,100 ERG SpA(1) 9,332,753 1,180,800 Prysmian SpA 31,228,499 ------------- 46,378,007 ------------- JAPAN -- 15.0% 465,000 AEON Mall Co., Ltd. 15,036,984 698,000 Capcom Co. Ltd. 23,167,377 610,500 Hosiden Corp. 13,113,158 404,900 iShares MSCI Japan Index Fund 5,494,493 1,754,000 Japan Steel Works Ltd. (The) 36,427,312 - ------ 15 International Discovery Shares Value 665,000 JGC Corp. $14,662,162 5,513 Jupiter Telecommunications Co.(2) 4,647,754 1,480,000 Kawasaki Kisen Kaisha, Ltd. 16,350,877 596,300 Konami Corp. 21,771,029 1,532,000 Kuraray Co. Ltd. 19,337,051 241,400 Kurita Water Industries Ltd. 8,905,130 270,200 Mitsumi Electric Co., Ltd. 7,840,797 171,700 Nitori Co. Ltd. 8,987,994 3,953,000 Oki Electric Industry Co., Ltd.(2) 6,935,088 251,700 Shimano Inc. 12,030,043 1,586,000 Tokyo Steel Manufacturing Co. Ltd. 21,973,883 1,768,000 Tokyo Tatemono Co. Ltd. 15,039,318 238,800 Toyo Tanso Co. Ltd.(1) 18,433,685 ------------- 270,154,135 ------------- LUXEMBOURG -- 2.1% 328,600 Millicom International Cellular SA(1) 38,071,596 ------------- MALAYSIA -- 0.6% 4,908,250 KNM Group Bhd 10,528,499 ------------- NETHERLANDS -- 3.4% 213,600 ASML Holding N.V. New York Shares 6,399,456 375,500 Fugro N.V. CVA 33,069,600 412,400 Qiagen N.V.(2) 8,186,442 327,100 SBM Offshore N.V.(1) 12,986,349 ------------- 60,641,847 ------------- NORWAY -- 2.1% 2,194,500 Pronova BioPharma AS(2) 7,443,067 1,326,600 Sevan Marine ASA(2) 21,131,659 339,900 Subsea 7 Inc.(2) 9,729,135 ------------- 38,303,861 ------------- PEOPLE'S REPUBLIC OF CHINA -- 1.2% 4,862,000 China High Speed Transmission Equipment Group Co., Ltd.(2) 8,535,782 7,595,500 KWG Property Holding Ltd. 7,241,642 6,425,500 Sino-Ocean Land Holdings Ltd. 5,722,681 ------------- 21,500,105 ------------- SINGAPORE -- 1.7% 16,414,320 Noble Group Ltd. 30,139,033 ------------- SOUTH KOREA -- 1.1% 254,800 Hyundai Steel Co. 20,493,032 ------------- Shares Value SPAIN -- 2.8% 506,100 Enagas $16,101,098 421,800 Tecnicas Reunidas SA 35,270,441 ------------- 51,371,539 ------------- SWEDEN -- 1.1% 593,000 SSAB Svenskt Stal AB Series A 20,562,131 ------------- SWITZERLAND -- 5.3% 116,847 Basilea Pharmaceutica AG(2) 18,716,141 349,000 Lonza Group AG 48,336,467 56,800 Orascom Development Holding AG(2) 8,771,149 65,900 Sulzer AG 8,855,352 367,400 Temenos Group AG(2) 11,294,044 ------------- 95,973,153 ------------- TAIWAN (REPUBLIC OF CHINA) -- 1.8% 9,282,000 Quanta Computer Inc. 14,649,766 19,475,000 Yuanta Financial Holding Co., Ltd.(2) 18,122,236 ------------- 32,772,002 ------------- THAILAND -- 1.1% 7,171,100 Bank of Ayudhya PCL(2) 5,903,275 905,000 Banpu PCL 13,368,210 89,500 Banpu PCL NVDR 1,322,050 ------------- 20,593,535 ------------- UNITED ARAB EMIRATES -- 0.8% 1,370,821 Lamprell plc 14,254,722 ------------- UNITED KINGDOM -- 12.3% 1,980,600 Aggreko plc 23,714,381 855,900 AVEVA Group plc 25,276,642 275,400 Dana Petroleum plc(2) 9,982,371 282,700 Expro International Group plc 9,048,693 2,415,400 Ferrexpo plc 18,407,143 253,600 Homeserve plc 9,172,099 1,046,700 Imperial Energy Corp. plc(2) 20,317,347 453,900 Intertek Group plc 9,197,176 191,700 Johnson Matthey plc 7,650,959 690,300 Rotork plc 15,518,596 2,954,500 Serco Group plc 26,129,083 1,797,900 VT Group plc 23,289,597 888,000 Wellstream Holdings plc(2) 23,973,285 ------------- 221,677,372 ------------- TOTAL COMMON STOCKS (Cost $1,406,303,182) 1,777,188,514 ------------- - ------ 16 International Discovery Principal Amount Value Temporary Cash Investments -- 1.4% $25,300,000 FHLB Discount Notes, 1.90%, 6/2/08(5) $25,300,000 (Cost $25,298,665) ------------- Temporary Cash Investments - Securities Lending Collateral(6) -- 5.3% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $22,504,313) 22,500,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $18,003,525) 18,000,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $20,003,917) 20,000,000 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $18,003,450) 18,000,000 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $17,818,427) 17,815,012 -------------- TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL (Cost $96,315,012) 96,315,012 -------------- TOTAL INVESTMENT SECURITIES -- 105.2% (Cost $1,527,916,859) 1,898,803,526 -------------- OTHER ASSETS AND LIABILITIES -- (5.2)% (94,451,739) -------------- TOTAL NET ASSETS -- 100.0% $1,804,351,787 ============== Market Sector Diversification (as a % of net assets) Industrials 26.3% Materials 16.1% Energy 14.9% Information Technology 12.1% Health Care 9.7% Consumer Discretionary 7.9% Financials 5.7% Telecommunication Services 3.2% Real Estate Investment Trusts (REITs) 1.4% Utilities 0.9% Diversified 0.3% Cash and Equivalents* 1.5% *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 FHLB = Federal Home Loan Bank MSCI = Morgan Stanley Capital International NVDR = Non-Voting Depositary Receipt (1) Security, or a portion thereof, was on loan as of May 31, 2008. (2) Non-income producing. (3) Investments in country were less than 0.05% of total net assets. (4) 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 May 31, 2008 was $17,179,914, which represented 1.0% of total net assets. (5) The rate indicated is the yield to maturity at purchase. (6) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 17 PERFORMANCE International Opportunities Total Returns as of May 31, 2008 Average Annual Returns 6 1 Since Inception months(1) year 5 years Inception Date INVESTOR CLASS -13.03% -9.36% 28.63% 21.15% 6/1/01 MSCI AC WORLD EX-US SMALL CAP GROWTH INDEX(2) -5.92% -5.56% 23.24% 13.19%(3) -- S&P/CITIGROUP EMI GROWTH WORLD EX-US -5.17% -7.44% 22.35% 12.65%(3) -- Institutional Class -13.00% -9.27% 28.90% 29.44% 1/9/03 (1) Total returns for periods less than one year are not annualized. (2) In February of 2008, the fund's benchmark changed from the S&P/Citigroup EMI Growth World ex-US to the MSCI AC World ex-US Small Cap Growth Index. The fund's investment advisor believes this index better represents the fund's portfolio composition. (3) Since 5/31/01, the date nearest the Investor Class's inception for which data is 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 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. - ------ 18 International Opportunities Growth of $10,000 Over Life of Class $10,000 investment made June 1, 2001
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One-Year Returns Over Life of Class Periods ended May 31 2002* 2003 2004 2005 2006 2007 2008 Investor Class 15.00% -5.48% 62.50% 22.00% 46.95% 33.53% -9.36% MSCI AC World ex-US Small Cap Growth Index -7.33% -9.59% 42.23% 18.57% 37.89% 29.43% -5.56% S&P/Citigroup EMI Growth World ex-US -8.01% -8.73% 42.23% 18.57% 35.69% 29.45% -7.44% * 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 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. - ------ 19 PORTFOLIO COMMENTARY International Opportunities Portfolio Managers: Federico Laffan and Trevor Gurwich PERFORMANCE SUMMARY International Opportunities returned -13.03%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI AC World ex-US Small Cap Growth Index returned -5.92%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. The first quarter of 2008 was a particularly challenging period for the portfolio, as liquidity concerns and higher energy costs caused market sentiment to turn quickly. Investors indiscriminately sold the quality-growth names that had performed strongly in the second half of 2007, and replaced them with market laggards. Such periods of market transition have proven to be challenging for our investment style. HONG KONG STOCKS LAG Hong Kong, Australia and Canada represented the largest detractors from relative performance from a regional perspective. Stock selection was negative in each market, while an overweight in Hong Kong and underweights in Australia and Canada added to the negative results. Australia's Bradken Limited, a manufacturer of mining and freight components, Hong Kong's Midland Holdings, a property brokerage and leasing company, and Canada's Jaguar Mining, a gold mining operation, were among the largest detractors from the fund's relative performance. The portfolio realized positive relative performance from Spain, Italy and Korea, with stock selection driving the positive results. Blood plasma processor Grifols SA of Spain was among the portfolio's top contributors, due to improved margins and cash flow and the announcement it would build 10 new plasma collection centers in the United States. SECTOR RETURNS BROADLY NEGATIVE Sector results were negative for the benchmark and the portfolio during the reporting period, with the health care, financials and consumer staples sectors representing the largest detractors from the fund's relative performance. In each sector, stock selection was the primary culprit. Top Ten Holdings as of May 31, 2008 % of net % of net assets assets as of as of 5/31/08 11/30/07 Grifols SA 2.6% 1.8% Smit Internationale N.V. 2.1% 1.1% Songa Offshore ASA 2.1% -- Hosiden Corp. 1.9% 2.2% Mount Gibson Iron Ltd. 1.9% 1.6% TREVI - Finanziaria Industriale SpA 1.8% -- Vossloh AG 1.8% 0.5% Tubacex SA 1.8% 1.9% So-net Entertainment Corp. 1.7% 1.4% PT Timah Tbk 1.7% 0.2% * All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 20 International Opportunities Southern Cross Healthcare Group, a United Kingdom-based provider of care homes for the elderly, was the portfolio's poorest-performing security for the reporting period. The company's stock price slid on higher operating costs. In the financials sector, the diversified financial services industry was the worst performer, led by our overweighted position in Japanese financial market operator Osaka Securities Exchange. The company sought to expand its footprint by acquiring Jasdaq Securities Exchange, but negotiations stopped in late March when Jasdaq officials announced their opposition to the deal. On an absolute basis, only the portfolio's telecommunication services sector posted a positive return. Relative to the benchmark, telecommunication services and information technology were the only positive contributors to performance. Germany's Wire Card AG, a provider of electronic payment and risk management applications, was among the portfolio's top contributors for the reporting period. The company's stock advanced on growing revenues and earnings and due to a significant increase in the company's core business and successful new-product launches. OUTLOOK We remain committed to our investment strategy of seeking the stocks of small, high-quality foreign companies that have a high likelihood of growing earnings and revenues at an improving rate. Although the portfolio recently has underperformed, its strong long-term results versus its peers and benchmark remain intact. History indicates previous periods of strong underperformance have led to attractive opportunities. We hope to take advantage of such opportunities by selectively adding exposure to companies in which we believe fundamentals remain solid. Types of Investments in Portfolio % of net % of net assets assets as of as of 5/31/08 11/30/07 Foreign Common Stocks 98.3% 96.9% Foreign Preferred Stocks -- 0.6% TOTAL EQUITY EXPOSURE 98.3% 97.5% Temporary Cash Investments 0.5% 2.1% Other Assets and Liabilities(1) 1.2% 0.4% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of May 31, 2008 % of net % of net assets assets as of as of 5/31/08 11/30/07 United Kingdom 14.3% 11.0% Japan 13.2% 11.5% Canada 6.6% 5.7% Germany 6.5% 6.7% Spain 6.0% 4.7% Australia 5.4% 5.2% Italy 5.2% 0.9% Netherlands 4.7% 2.8% Norway 4.1% 3.7% France 3.8% 3.3% Sweden 2.7% 1.1% Indonesia 2.2% 2.3% Taiwan (Republic of China) 2.1% 0.9% Other Countries 21.5% 37.7% Cash and Equivalents(2) 1.7% 2.5% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 21 SCHEDULE OF INVESTMENTS International Opportunities MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 98.3% AUSTRALIA -- 5.4% 1,023,980 Mount Gibson Iron Ltd.(1) $3,202,424 127,595 Nufarm Ltd. 2,056,260 1,460,426 Pan Australian Resources Ltd.(1) 1,487,540 353,076 Platinum Australia Ltd.(1) 918,495 164,420 Western Areas NL(1)(2) 1,583,520 ------------ 9,248,239 ------------ BELGIUM -- 1.2% 20,980 EVS Broadcast Equipment SA(2) 1,979,530 ------------ BERMUDA -- 0.7% 75,582 Aquarius Platinum Ltd. 1,238,063 ------------ BRAZIL -- 1.6% 1,600 Brasil Brokers Participacoes SA(1) 1,612,091 110,800 Drogasil SA 1,027,880 ------------ 2,639,971 ------------ BRITISH VIRGIN ISLANDS -- 0.9% 136,851 Playtech Ltd. 1,490,834 ------------ CANADA -- 6.6% 114,636 5N Plus Inc.(1) 1,228,923 27,547 AG Growth Income Fund 798,030 69,687 Alamos Gold Inc.(1) 464,370 241,281 Compton Petroleum Corp.(1) 2,756,594 197,240 Gran Tierra Energy Inc.(1) 1,131,681 27,333 Labrador Iron Ore Royalty Income Fund 1,582,009 7,699 Major Drilling Group International Inc.(1) 426,237 18,562 Petrobank Energy & Resources Ltd.(1)(2) 1,072,484 129,267 Trinidad Drilling Ltd. 1,808,657 ------------ 11,268,985 ------------ DENMARK -- 0.6% 14,255 East Asiatic Co. Ltd. AS (The) 1,061,277 ------------ FINLAND -- 0.8% 19,203 Outotec Oyj 1,312,071 ------------ FRANCE -- 3.8% 138,152 Altran Technologies SA(1) 1,259,449 7,478 bioMerieux 805,738 48,262 Etablissements Maurel et Prom 1,205,804 Shares Value 12,743 Nexans SA $1,738,392 16,467 Sechilienne-Sidec 1,391,298 150 Virbac SA 13,892 ------------ 6,414,573 ------------ GERMANY -- 6.5% 15,678 Bauer AG 1,645,367 25,643 Demag Cranes AG 1,482,018 22,134 Medion AG(2) 471,744 26,260 Nordex AG(1) 1,194,532 12,716 Stada Arzneimittel AG(2) 833,823 20,712 Vossloh AG(2) 2,999,837 126,881 Wire Card AG(1) 2,487,099 ------------ 11,114,420 ------------ GREECE -- 1.8% 509,756 Alapis SA 1,665,357 25,016 Sarantis SA 467,008 84,680 Thessaloniki Water Supply and Sewerage Co. SA 885,270 ------------ 3,017,635 ------------ HONG KONG -- 1.0% 910,000 Huabao International Holdings Ltd. 921,247 722,000 Peace Mark Holdings Ltd. 832,698 ------------ 1,753,945 ------------ INDIA -- 1.4% 56,916 Everest Kanto Cylinder Ltd.(1) 424,845 93,064 ICSA India Ltd.(1) 896,094 41,595 Tulip Telecom Ltd. 1,011,461 ------------ 2,332,400 ------------ INDONESIA -- 2.2% 2,136,000 PT Sampoerna Agro Tbk 928,696 792,000 PT Timah Tbk(1) 2,886,570 ------------ 3,815,266 ------------ IRELAND -- 0.5% 145,736 United Drug plc 879,679 ------------ ISRAEL -- 0.8% 67,427 Delek Automotive Systems Ltd. 1,260,455 ------------ ITALY -- 5.2% 58,276 Ansaldo STS SpA 895,721 181,456 Astaldi SpA 1,697,981 65,991 Danieli & C. Officine Meccaniche SpA 1,729,857 220,441 Maire Tecnimont SpA 1,443,778 117,132 TREVI - Finanziaria Industriale SpA 3,006,666 ------------ 8,774,003 ------------ - ------ 22 International Opportunities Shares Value JAPAN -- 13.2% 78,000 Capcom Co. Ltd. $2,588,905 151,400 Hosiden Corp.(2) 3,251,976 315 Kakaku.com, Inc. 1,795,306 14,500 Mandom Corp. 378,141 151,000 Nippon Synthetic Chemical Industry Co., Ltd. (The) 860,607 220,000 Nisshin Oillio Group, Ltd. (The) 1,022,286 304 Osaka Securities Exchange Co. Ltd.(2) 1,703,784 106,500 Shinko Plantech Co. Ltd.(2) 1,799,744 753 So-net Entertainment Corp. 2,949,161 205,000 Tokai Carbon Co. Ltd.(2) 2,389,237 13,772 Toyo Tanso Co. Ltd.(2) 1,063,102 68,500 Tsumura & Co. 1,688,952 41,500 Yushin Precision Equipment Co., Ltd. 948,459 ------------ 22,439,660 ------------ MALAYSIA -- 1.6% 1,437,800 Alliance Financial Group Bhd 1,393,423 318,400 Asiatic Development Bhd 815,654 415,400 IJM Plantations Bhd 505,147 ------------ 2,714,224 ------------ NETHERLANDS -- 4.7% 57,420 Draka Holding N.V. 2,218,022 8,236 Koninklijke Vopak N.V. 599,893 31,468 Smit Internationale N.V. 3,519,847 132,759 Super De Boer N.V.(1) 883,962 29,919 Unit 4 Agresso N.V. 810,814 ------------ 8,032,538 ------------ NORWAY -- 4.1% 500,549 Deep Sea Supply plc 2,011,735 61,579 Golden Ocean Group Ltd.(2) 406,849 61,401 ODIM ASA(1) 1,056,313 219,489 Songa Offshore ASA(1)(2) 3,485,523 ------------ 6,960,420 ------------ PAPUA-NEW GUINEA -- 0.6% 81,071 New Britain Palm Oil Ltd. 987,551 ------------ PEOPLE'S REPUBLIC OF CHINA -- 0.6% 144,500 Li Ning Co. Ltd. 406,453 1,544,000 Shenzhen Investment Ltd. 637,105 ------------ 1,043,558 ------------ SINGAPORE -- 1.6% 923,000 Straits Asia Resources Ltd.(2) 2,772,627 ------------ Shares Value SOUTH AFRICA -- 1.5% 2,665,097 Merafe Resources Ltd.(1) $1,331,628 131,014 Northam Platinum Ltd.(2) 1,178,829 ------------ 2,510,457 ------------ SOUTH KOREA -- 1.1% 5,209 MegaStudy Co., Ltd. 1,813,588 ------------ SPAIN -- 6.0% 152,068 Grifols SA 4,367,123 28,166 Prosegur Cia de Seguridad SA 1,241,360 263,603 Tubacex SA 2,997,737 69,811 Viscofan SA 1,646,451 ------------ 10,252,671 ------------ SWEDEN -- 2.7% 126,026 Intrum Justitia AB 2,195,465 44,575 Kungsleden AB(2) 414,273 28,050 Oriflame Cosmetics SA SDR 1,992,015 ------------ 4,601,753 ------------ SWITZERLAND -- 1.6% 1,213 Bank Sarasin & Compagnie AG B Shares 59,684 5,449 Bucher Industries AG 1,425,489 1,181 Galenica Holding AG 420,248 13,538 PSP Swiss Property AG 834,926 ------------ 2,740,347 ------------ TAIWAN (REPUBLIC OF CHINA) -- 2.1% 113,000 Huaku Development Co., Ltd.(1) 427,291 233,000 Hung Poo Real Estate Development Corp. 370,042 1,311,000 Tung Ho Steel Enterprise Corp. 2,737,312 ------------ 3,534,645 ------------ THAILAND -- 1.6% 1,134,800 BEC World PCL 1,047,669 11,698,600 Quality Houses PCL 936,032 1,004,500 TISCO Bank PCL 744,990 ------------ 2,728,691 ------------ UNITED KINGDOM -- 14.3% 314,791 888 Holdings plc 916,555 825,226 Aegis Group plc 2,051,328 77,555 ASOS plc(1) 497,323 217,952 Babcock International Group plc 2,693,792 35,532 Chemring Group plc 1,720,748 146,993 Connaught plc 1,239,567 92,186 Croda International plc 1,203,287 15,927 Dana Petroleum plc(1) 577,303 ------------ - ------ 23 International Opportunities Shares Value 91,877 Hikma Pharmaceuticals plc $ 864,864 133,560 IG Group Holdings plc 1,011,213 431,586 International Personal Finance plc 2,203,356 76,107 Intertek Group plc 1,542,123 317,090 John Wood Group plc 2,801,149 96,246 MITIE Group plc 440,366 198,762 Regal Petroleum plc(1) 1,133,821 44,293 Shaftesbury plc 401,809 39,843 Wellstream Holdings plc(1) 1,075,639 95,572 WSP Group plc 1,075,221 172,919 Xchanging Ltd. 839,983 ------------ 24,289,447 ------------ TOTAL COMMON STOCKS (Cost $138,912,456) 167,023,523 ------------ Principal Amount Temporary Cash Investments -- 0.5% $900,000 FHLB Discount Notes, 1.90%, 6/2/08(3) 900,000 (Cost $899,953) ------------ Temporary Cash Investments - Securities Lending Collateral(4) -- 11.5% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $4,000,767) 4,000,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $4,000,783) 4,000,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $4,816,376) 4,815,433 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $2,726,075) 2,725,553 Value Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $4,000,767) $ 4,000,000 ------------ TOTAL TEMPORARY CASH INVESTMENTS - SECURITIES LENDING COLLATERAL (Cost $19,540,986) 19,540,986 ------------ TOTAL INVESTMENT SECURITIES -- 110.3% (Cost $159,353,395) 187,464,509 ------------ OTHER ASSETS AND LIABILITIES -- (10.3)% (17,448,068) ------------ TOTAL NET ASSETS -- 100.0% $170,016,441 ============ Market Sector Diversification (as a % of net assets) Industrials 25.5% Materials 17.6% Energy 13.9% Information Technology 12.7% Consumer Staples 7.9% Financials 6.8% Consumer Discretionary 6.0% Health Care 5.8% Utilities 1.3% Telecommunication Services 0.6% Real Estate Investment Trusts (REITs) 0.2% Cash and Equivalents* 1.7% *Includes temporary cash investments, securities lending collateral and other assets and liabilities. Notes to Schedule of Investments FHLB = Federal Home Loan Bank SDR = Swedish Depositary Receipt (1) Non-income producing. (2) Security, or a portion thereof, was on loan as of May 31, 2008. (3) The rate indicated is the yield to maturity at purchase. (4) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 24 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 December 1, 2007 to May 31, 2008. 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 Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments 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 Investments 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. - ------ 25 Expenses Paid Beginning Ending During Period* Annualized Account Account Value 12/1/07 - Expense Value 12/1/07 5/31/08 5/31/08 Ratio* International Stock ACTUAL Investor Class $1,000 $970.20 $7.44 1.51% HYPOTHETICAL Investor Class $1,000 $1,017.45 $7.62 1.51% International Discovery ACTUAL Investor Class $1,000 $948.00 $6.57 1.35% Institutional Class $1,000 $948.80 $5.60 1.15% Advisor Class $1,000 $947.50 $7.79 1.60% HYPOTHETICAL Investor Class $1,000 $1,018.25 $6.81 1.35% Institutional Class $1,000 $1,019.25 $5.81 1.15% Advisor Class $1,000 $1,017.00 $8.07 1.60% International Opportunities ACTUAL Investor Class $1,000 $869.70 $8.60 1.84% Institutional Class $1,000 $870.00 $7.67 1.64% HYPOTHETICAL Investor Class $1,000 $1,015.80 $9.27 1.84% Institutional Class $1,000 $1,016.80 $8.27 1.64% * 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 366, to reflect the one-half year period. - ------ 26 STATEMENT OF ASSETS AND LIABILITIES MAY 31, 2008 (UNAUDITED) International International International Stock Discovery Opportunities ASSETS Investment securities, at value (cost of $106,016,618, $1,431,601,847 and $139,812,409, respectively) - including $10,663,580, $97,173,340 and $18,616,215 of securities on loan, respectively $131,456,735 $1,802,488,514 $167,923,523 Investments made with cash collateral received for securities on loan, at value (cost of $11,161,468, $96,315,012 and $19,540,986, respectively) 11,161,468 96,315,012 19,540,986 ------------- -------------- ------------- Total investment securities, at value (cost of $117,178,086, $1,527,916,859 and $159,353,395, respectively) 142,618,203 1,898,803,526 187,464,509 Cash 188,678 1,402,014 -- Cash collateral received for securities on loan -- 2,105,000 -- Foreign currency holdings, at value (cost of $78, $5,106,331 and $114,613, respectively) 78 5,120,837 114,595 Receivable for investments sold 1,164,682 20,928,996 4,476,629 Dividends and interest receivable 461,064 3,554,320 822,997 ------------- -------------- ------------- 144,432,705 1,931,914,693 192,878,730 ------------- -------------- ------------- LIABILITIES Disbursements in excess of demand deposit cash -- -- 46,789 Payable for collateral received for securities on loan 11,161,468 98,420,012 19,540,986 Payable for investments purchased 1,078,222 27,139,832 3,003,807 Accrued management fees 166,933 1,999,392 270,707 Distribution and service fees payable -- 3,670 -- ------------- -------------- ------------- 12,406,623 127,562,906 22,862,289 ------------- -------------- ------------- NET ASSETS $132,026,082 $1,804,351,787 $170,016,441 ============== ============== ============= See Notes to Financial Statements. - ------ 27 MAY 31, 2008 (UNAUDITED) International International International Stock Discovery Opportunities NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $108,055,790 $1,493,265,826 $151,560,839 Undistributed net investment income 670,393 3,495,139 852,679 Accumulated net realized loss on investment and foreign currency transactions (2,139,038) (63,277,125) (10,496,039) Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies 25,438,937 370,867,947 28,098,962 ------------- --------------- -------------- $132,026,082 $1,804,351,787 $170,016,441 ============== =============== ============== INVESTOR CLASS, $0.01 PAR VALUE Net assets $132,026,082 $1,636,606,703 $164,254,933 Shares outstanding 8,663,230 122,783,978 22,241,446 Net asset value per share $15.24 $13.33 $7.39 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets N/A $149,113,784 $5,761,508 Shares outstanding N/A 11,061,206 775,659 Net asset value per share N/A $13.48 $7.43 ADVISOR CLASS, $0.01 PAR VALUE Net assets N/A $18,631,300 N/A Shares outstanding N/A 1,426,026 N/A Net asset value per share N/A $13.07 N/A See Notes to Financial Statements. - ------ 28 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) International International International Stock Discovery Opportunities INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $183,104, $1,250,403 and $190,260, respectively) $1,751,505 $14,637,539 $2,279,311 Interest 12,798 420,703 79,971 Securities lending, net 30,796 338,174 163,155 ------------- -------------- -------------- 1,795,099 15,396,416 2,522,437 ------------- -------------- -------------- EXPENSES: Management fees 968,977 11,607,026 1,649,526 Distribution and service fees -- Advisor Class -- 12,681 -- Directors' fees and expenses 1,416 19,258 2,031 Other expenses 7,001 9,822 1,795 ------------- -------------- -------------- 977,394 11,648,787 1,653,352 ------------- -------------- -------------- NET INVESTMENT INCOME (LOSS) 817,705 3,747,629 869,085 ------------- -------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $(416), $1,154 and $-, respectively) (6,770,623) (107,491,039) (15,820,410) Foreign currency transactions 5,231,510 48,653,273 6,935,998 ------------- -------------- -------------- (1,539,113) (58,837,766) (8,884,412) ------------- -------------- -------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $12,541, $571,796 and $55,966, respectively) (4,068,089) (31,773,137) (17,625,372) Translation of assets and liabilities in foreign currencies (308,810) (13,127,822) (2,652,689) ------------- -------------- -------------- (4,376,899) (44,900,959) (20,278,061) ------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (5,916,012) (103,738,725) (29,162,473) ------------- -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(5,098,307) $(99,991,096) $(28,293,388) ============= ============== ============== See Notes to Financial Statements. - ------ 29 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 International Stock International Discovery Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 817,705 $ 1,071,359 $ 3,747,629 $ 5,449,656 Net realized gain (loss) (1,539,113) 5,989,515 (58,837,766) 430,556,176 Change in net unrealized appreciation (depreciation) (4,376,899) 17,434,439 (44,900,959) 35,680,142 ------------ ------------ -------------- -------------- Net increase (decrease) in net assets resulting from operations (5,098,307) 24,495,313 (99,991,096) 471,685,974 ------------ ------------ -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (1,082,682) (320,168) (6,356,563) -- Institutional Class -- -- (874,387) -- Advisor Class -- -- (6,979) -- From net realized gains: Investor Class (5,805,544) -- (394,844,373) (348,487,918) Institutional Class -- -- (32,915,911) (25,425,423) Advisor Class -- -- (1,442,399) (2,581) ------------ ------------ -------------- -------------- Decrease in net assets from distributions (6,888,226) (320,168) (436,440,612) (373,915,922) ------------ ------------ -------------- -------------- CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions (799,438) 30,456,260 434,231,499 255,971,291 ------------ ------------ -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS (12,785,971) 54,631,405 (102,200,209) 353,741,343 NET ASSETS Beginning of period 144,812,053 90,180,648 1,906,551,996 1,552,810,653 ------------ ------------ -------------- -------------- End of period $132,026,082 $144,812,053 $1,804,351,787 $1,906,551,996 ============ ============ ============== ============== Undistributed net investment income $670,393 $934,954 $3,495,139 $6,986,593 ============ ============ ============== ============== See Notes to Financial Statements. - ------ 30 SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 International Opportunities Increase (Decrease) in Net Assets 2008 2007 OPERATIONS Net investment income (loss) $ 869,085 $ 410,877 Net realized gain (loss) (8,884,412) 49,869,818 Change in net unrealized appreciation (depreciation) (20,278,061) 7,884,112 ------------ ------------ Net increase (decrease) in net assets resulting from operations (28,293,388) 58,164,807 ------------ ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income: Investor Class (1,005,979) (45,647) Institutional Class (33,311) (2,514) From net realized gains: Investor Class (48,940,313) (52,245,138) Institutional Class (1,080,457) (352,248) ------------ ------------ Decrease in net assets from distributions (51,060,060) (52,645,547) ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions 32,699,716 29,319,513 ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (46,653,732) 34,838,773 ------------ ------------ NET ASSETS Beginning of period 216,670,173 181,831,400 ------------ ------------ End of period $170,016,441 $216,670,173 ============ ============ Undistributed net investment income $852,679 $1,022,884 ============ ============ See Notes to Financial Statements. - ------ 31 NOTES TO FINANCIAL STATEMENTS MAY 31, 2008 (UNAUDITED) 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 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. 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 the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors, 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 income earned, net of any rebates or fees, is included in the Statement of Operations. 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. - ------ 32 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 for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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 than 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. 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. - ------ 33 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) 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 Investments 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 the 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. The effective annual management fee for each class of each fund for the six months ended May 31, 2008, was as follows: Investor Institutional Advisor International Stock 1.50% N/A N/A International Discovery 1.35% 1.15% 1.35% International Opportunities 1.84% 1.64% 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. DISTRIBUTION AND SERVICE FEES -- 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%. The fees are computed and accrued daily based on the Advisor Class's daily net assets and paid monthly in arrears. The fees are used to pay financial intermediaries for distribution and individual shareholder services. Fees incurred under the plan during the six months ended May 31, 2008, 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. 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 securities lending agreement with JPMorgan Chase Bank (JPMCB). Prior to December 12, 2007, the funds had a bank line of credit agreement with JPMCB. JPMCB is a custodian of the funds and a wholly owned subsidiary of JPM. - ------ 34 3. INVESTMENT TRANSACTIONS Investment transactions, excluding short-term investments, for the six months ended May 31, 2008, were as follows: International International International Stock Discovery Opportunities Purchases $66,606,569 $1,534,082,884 $174,355,745 Proceeds from sales $75,335,514 $1,501,228,908 $189,320,245 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Six months ended Year ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount International Stock INVESTOR CLASS/SHARES AUTHORIZED 50,000,000 100,000,000 =========== =========== Sold 841,475 $ 12,424,647 4,667,303 $ 69,025,896 Issued in reinvestment of distributions 450,577 6,757,448 22,704 314,002 Redeemed (1,387,814) (19,981,533)(1) (2,576,619) (38,883,638)(2) ----------- --------------- ----------- --------------- Net increase (decrease) (95,762) (799,438) 2,113,388 30,456,260 =========== =============== =========== =============== International Discovery INVESTOR CLASS/SHARES AUTHORIZED 400,000,000 400,000,000 =========== =========== Sold 9,012,028 120,955,669 8,720,352 151,608,309 Issued in reinvestment of distributions 28,325,967 386,169,151 22,034,751 328,726,897 Redeemed (10,134,881) (134,620,642)(3) (15,512,121) (258,448,133)(4) ----------- --------------- ----------- --------------- 27,203,114 372,504,178 15,242,982 221,887,073 ----------- --------------- ----------- --------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 75,000,000 75,000,000 =========== =========== Sold 2,781,189 36,915,290 1,808,129 31,398,024 Issued in reinvestment of distributions 2,453,486 33,751,832 1,690,068 25,425,423 Redeemed (2,014,149) (26,102,722)(5) (1,485,143) (25,231,865)(6) ----------- --------------- ----------- --------------- 3,220,526 44,564,400 2,013,054 31,591,582 ----------- --------------- ----------- --------------- ADVISOR CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 =========== =========== Sold 1,250,021 16,622,724 141,592 2,568,299 Issued in reinvestment of distributions 109,343 1,447,972 177 2,581 Redeemed (71,270) (907,775)(7) (4,218) (78,244)(8) ----------- --------------- ----------- --------------- 1,288,094 17,162,921 137,551 2,492,636 ----------- --------------- ----------- --------------- Net increase (decrease) 31,711,734 $434,231,499 17,393,587 $255,971,291 =========== =============== =========== =============== (1) Net of redemption fees of $13,011. (2) Net of redemption fees of $30,038. (3) Net of redemption fees of $239,877. (4) Net of redemption fees of $101,600. (5) Net of redemption fees of $20,710. (6) Net of redemption fees of $22,764. (7) Net of redemption fees of $5,166. (8) Net of redemption fees of $1,595. - ------ 35 Six months ended Year ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount International Opportunities INVESTOR CLASS/SHARES AUTHORIZED 100,000,000 100,000,000 ============ ============ Sold 696,847 $5,025,002 108,195 $ 1,144,613 Issued in reinvestment of distributions 6,031,614 48,303,707 5,744,532 51,241,065 Redeemed (3,139,526) (23,592,572) (2,526,820) (26,038,993)(1) ------------ ------------ ------------ --------------- 3,588,935 29,736,137 3,325,907 26,346,685 ------------ ------------ ------------ --------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 242,328 1,849,811 261,114 2,618,066 Issued in reinvestment of distributions 138,903 1,113,768 40,239 354,762 ------------ ------------ ------------ --------------- 381,231 2,963,579 301,353 2,972,828 ------------ ------------ ------------ --------------- Net increase (decrease) 3,970,166 $32,699,716 3,627,260 $29,319,513 ============ ============ ============ =============== (1) Net of redemption fees of $610. 5. SECURITIES LENDING As of May 31, 2008, securities in International Stock, International Discovery and International Opportunities valued at $10,663,580, $97,173,340 and $18,616,215, 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 market value of all collateral received, at this date, was $11,161,468, $98,420,012 and $19,540,986, 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. FAIR VALUE MEASUREMENTS The funds' securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions held by the funds. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels as follows: * Level 1 valuation inputs consist of actual quoted prices based on an active market; * Level 2 valuation inputs consist of significant direct or indirect observable market data; or * Level 3 valuation inputs consist of significant unobservable inputs such as the fund's own assumptions. The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not an indication of the risks associated with investing in these securities or other financial instruments. - ------ 36 The following is a summary of the valuation inputs used to determine the fair value of the funds' securities as of May 31, 2008: Value of Fund/Valuation Inputs Investment Securities INTERNATIONAL STOCK Level 1 -- Quoted Prices $4,782,428 Level 2 -- Other Significant Observable Inputs 137,835,775 Level 3 -- Significant Unobservable Inputs -- -------------- $142,618,203 ============== INTERNATIONAL DISCOVERY Level 1 -- Quoted Prices $153,227,255 Level 2 -- Other Significant Observable Inputs 1,745,576,271 Level 3 -- Significant Unobservable Inputs -- -------------- $1,898,803,526 ============== INTERNATIONAL OPPORTUNITIES Level 1 -- Quoted Prices -- Level 2 -- Other Significant Observable Inputs $187,464,509 Level 3 -- Significant Unobservable Inputs -- -------------- $187,464,509 ============== 7. BANK LINE OF CREDIT 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. Prior to December 12, 2007, the funds, along with certain other funds managed by ACIM or ACGIM, had 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, which is subject to annual renewal, bear interest at the Federal Funds rate plus 0.40%. The funds did not borrow from the line during the six months ended May 31, 2008. 8. 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. 9. 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. - ------ 37 As of May 31, 2008, the components of investments for federal income tax purposes were as follows: International International International Stock Discovery Opportunities Federal tax cost of investments $117,702,232 $1,534,701,201 $160,170,244 ============= ============== ============= Gross tax appreciation of investments $26,608,507 $389,020,528 $30,146,497 Gross tax depreciation of investments (1,692,536) (24,918,203) (2,852,232) ------------- -------------- ------------- Net tax appreciation (depreciation) of investments $24,915,971 $364,102,325 $27,294,265 ============= ============== ============= 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. As of November 30, 2007, International Stock had capital loss deferrals of $(233,039) and International Discovery had currency loss deferrals of $(377,932). These capital and currency loss 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. 10. RECENTLY ISSUED ACCOUNTING STANDARDS The Financial Accounting Standards Board (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. The adoption of FAS 157 does not materially impact the determination of fair value. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133" (FAS 161). FAS 161 is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands disclosures about derivative instruments and hedging activities. FAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. Management is currently evaluating the impact that adopting FAS 161 will have on the financial statement disclosures. - ------ 38 FINANCIAL HIGHLIGHTS International Stock Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005(2) PER-SHARE DATA Net Asset Value, Beginning of Period $16.53 $13.57 $10.84 $10.00 -------- -------- ------- -------- Income From Investment Operations Net Investment Income (Loss) 0.09 0.13 0.06 0.06(3) Net Realized and Unrealized Gain (Loss) (0.60) 2.88 2.74 0.78 -------- -------- ------- -------- Total From Investment Operations (0.51) 3.01 2.80 0.84 -------- -------- ------- -------- Distributions From Net Investment Income (0.12) (0.05) (0.08) -- From Net Realized Gains (0.66) -- -- -- -------- -------- ------- -------- Total Distributions (0.78) (0.05) (0.08) -- -------- -------- ------- -------- Redemption Fees(3) --(4) --(4) 0.01 -- -------- -------- ------- -------- Net Asset Value, End of Period $15.24 $16.53 $13.57 $10.84 ======== ======== ======= ======== TOTAL RETURN(5) (2.98)% 22.22% 26.07% 8.40% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.51%(6) 1.50% 1.50% 1.50%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 1.27%(6) 0.83% 0.40% 0.91%(6) Portfolio Turnover Rate 52% 103% 109% 109% Net Assets, End of Period (in thousands) $132,026 $144,812 $90,181 $20,342 (1) Six months ended May 31, 2008 (unaudited). (2) March 31, 2005 (fund inception) through November 30, 2005. (3) Computed using average shares outstanding throughout the period. (4) Per-share amount was less than $0.005. (5) 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. (6) Annualized. See Notes to Financial Statements. - ------ 39 International Discovery Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $18.40 $18.01 $15.94 $15.11 $12.75 $9.32 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.03 0.05 (0.02) 0.14 (0.01) 0.03 Net Realized and Unrealized Gain (Loss) (0.99) 4.60 5.00 2.97 2.40 3.42 -------- -------- -------- -------- -------- -------- Total From Investment Operations (0.96) 4.65 4.98 3.11 2.39 3.45 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.06) -- (0.13) -- (0.03) (0.02) From Net Realized Gains (4.05) (4.26) (2.78) (2.28) -- -- -------- -------- -------- -------- -------- -------- Total Distributions (4.11) (4.26) (2.91) (2.28) (0.03) (0.02) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.33 $18.40 $18.01 $15.94 $15.11 $12.75 ======== ======== ======== ======== ======== ======== TOTAL RETURN(3) (5.20)% 32.18% 36.41% 24.30% 18.76% 37.05% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.35%(4) 1.36% 1.41% 1.47% 1.49% 1.57% Ratio of Net Investment Income (Loss) to Average Net Assets 0.42%(4) 0.30% (0.11)% 1.02% (0.06)% 0.27% Portfolio Turnover Rate 88% 162% 148% 145% 201% 215% Net Assets, End of $1,636,607 $1,758,335 $1,446,955 $1,145,623 $1,112,870 $1,028,934 Period (in thousands) (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 40 International Discovery Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $18.59 $18.16 $16.06 $15.21 $12.84 $9.39 ------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.04 0.09 0.04 0.17 0.02 0.05 Net Realized and Unrealized Gain (Loss) (1.00) 4.64 5.00 2.99 2.40 3.43 ------- -------- -------- -------- -------- -------- Total From Investment Operations (0.96) 4.73 5.04 3.16 2.42 3.48 ------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.10) -- (0.16) -- (0.05) (0.03) From Net Realized Gains (4.05) (4.30) (2.78) (2.31) -- -- ------- -------- -------- -------- -------- -------- Total Distributions (4.15) (4.30) (2.94) (2.31) (0.05) (0.03) ------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $13.48 $18.59 $18.16 $16.06 $15.21 $12.84 ======= ======== ======== ======== ======== ======== TOTAL RETURN(3) (5.12)% 32.45% 36.65% 24.56% 18.94% 37.25% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.15%(4) 1.16% 1.21% 1.27% 1.29% 1.37% Ratio of Net Investment Income (Loss) to Average Net Assets 0.62%(4) 0.50% 0.09% 1.22% 0.14% 0.47% Portfolio Turnover Rate 88% 162% 148% 145% 201% 215% Net Assets, End of Period (in thousands) $149,114 $145,723 $105,849 $205,406 $165,600 $147,531 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 41 International Discovery Advisor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $18.08 $17.76 $15.75 $14.95 $12.63 $9.23 -------- ------ ------- ------ ------- ------ Income From Investment Operations Net Investment Income (Loss)(2) 0.05 0.07 (0.08) 0.10 (0.05) 0.01 Net Realized and Unrealized Gain (Loss) (1.00) 4.46 4.96 2.95 2.37 3.39 -------- ------ ------- ------ ------- ------ Total From Investment Operations (0.95) 4.53 4.88 3.05 2.32 3.40 -------- ------ ------- ------ ------- ------ Distributions From Net Investment Income (0.01) -- (0.09) -- -- -- From Net Realized Gains (4.05) (4.21) (2.78) (2.25) -- -- -------- ------ ------- ------ ------- ------ Total Distributions (4.06) (4.21) (2.87) (2.25) -- -- -------- ------ ------- ------ ------- ------ Net Asset Value, End of Period $13.07 $18.08 $17.76 $15.75 $14.95 $12.63 ======== ====== ======= ====== ======= ====== TOTAL RETURN(3) (5.25)% 31.83% 36.08% 24.01% 18.37% 36.84% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.60%(4) 1.61% 1.66% 1.72% 1.74% 1.82% Ratio of Net Investment Income (Loss) to Average Net Assets 0.17%(4) 0.05% (0.36)% 0.77% (0.31)% 0.02% Portfolio Turnover Rate 88% 162% 148% 145% 201% 215% Net Assets, End of Period (in thousands) $18,631 $2,494 $7 $70 $201 $161 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 42 International Opportunities Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $11.37 $11.79 $12.27 $9.35 $7.62 $4.73 -------- -------- -------- -------- -------- ------- Income From Investment Operations Net Investment Income (Loss)(2) 0.04 0.02 (0.01) 0.02 (0.05) (0.01) Net Realized and Unrealized Gain (Loss) (1.36) 2.94 2.53 3.19 2.03 2.90 -------- -------- -------- -------- -------- ------- Total From Investment Operations (1.32) 2.96 2.52 3.21 1.98 2.89 -------- -------- -------- -------- -------- ------- Distributions From Net Investment Income (0.05) --(3) (0.01) -- -- (0.01) From Net Realized Gains (2.61) (3.38) (2.99) (0.29) (0.27) -- -------- -------- -------- -------- -------- ------- Total Distributions (2.66) (3.38) (3.00) (0.29) (0.27) (0.01) -------- -------- -------- -------- -------- ------- Redemption Fees(2) -- --(3) --(3) --(3) 0.02 0.01 -------- -------- -------- -------- -------- ------- Net Asset Value, End of Period $7.39 $11.37 $11.79 $12.27 $9.35 $7.62 ======== ======== ======== ======== ======== ======= TOTAL RETURN(4) (13.03)% 33.73% 25.37% 35.28% 27.14% 61.54% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.84%(5) 1.81% 1.85% 1.91% 1.97% 2.00% Ratio of Net Investment Income (Loss) to Average Net Assets 0.96%(5) 0.19% (0.06)% 0.20% (0.63)% (0.23)% Portfolio Turnover Rate 99% 149% 160% 112% 139% 219% Net Assets, End of Period (in thousands) $164,255 $212,157 $180,732 $198,197 $176,100 $72,008 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 43 International Opportunities Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003(2) PER-SHARE DATA Net Asset Value, Beginning of Period $11.44 $11.85 $12.32 $9.37 $7.63 $4.80 -------- ------ ------ ------ ------- -------- Income From Investment Operations Net Investment Income (Loss)(3) 0.05 0.06 0.02 0.10 (0.03) 0.01 Net Realized and Unrealized Gain (Loss) (1.37) 2.94 2.54 3.14 2.04 2.81 -------- ------ ------ ------ ------- -------- Total From Investment Operations (1.32) 3.00 2.56 3.24 2.01 2.82 -------- ------ ------ ------ ------- -------- Distributions From Net Investment Income (0.08) (0.03) (0.04) -- -- -- From Net Realized Gains (2.61) (3.38) (2.99) (0.29) (0.29) -- -------- ------ ------ ------ ------- -------- Total Distributions (2.69) (3.41) (3.03) (0.29) (0.29) -- -------- ------ ------ ------ ------- -------- Redemption Fees(3) -- --(4) --(4) --(4) 0.02 0.01 -------- ------ ------ ------ ------- -------- Net Asset Value, End of Period $7.43 $11.44 $11.85 $12.32 $9.37 $7.63 ======== ====== ====== ====== ======= ======== TOTAL RETURN(5) (13.00)% 33.97% 25.66% 35.53% 27.50% 58.96% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.64%(6) 1.61% 1.65% 1.71% 1.77% 1.80%(6) Ratio of Net Investment Income (Loss) to Average Net Assets 1.16%(6) 0.39% 0.14% 0.40% (0.43)% 0.18%(6) Portfolio Turnover Rate 99% 149% 160% 112% 139% 219%(7) Net Assets, End of Period (in thousands) $5,762 $4,513 $1,099 $31 $10,868 $8,523 (1) Six months ended May 31, 2008 (unaudited). (2) January 9, 2003 (commencement of sale) through November 30, 2003. (3) Computed using average shares outstanding throughout the period. (4) Per-share amount was less than $0.005. (5) 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. (6) Annualized. (7) 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 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 Investments' 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. - ------ 45 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 EX-US INDEX comprises the entire developed world, excluding the United States. The designation of a country as developed arises primarily as a measurement of GDP per capita. There are 21 countries within this index. The MSCI AC (ALL COUNTRY) WORLD EX-US MID CAP GROWTH INDEX represents the performance of mid cap growth stocks in developed countries, excluding the United States. The MSCI AC (ALL COUNTRY) WORLD EX-US SMALL CAP GROWTH INDEX represents the performance of small cap growth stocks in developed countries, excluding the United States. 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. - ------ 46 NOTES - ------ 47 NOTES - ------ 48 [blank page] [american century investments logo and text logo ®] CONTACT US AMERICANCENTURY.COM 1-800-345-8765 AUTOMATED INFORMATION LINE . . . . . . . . . . . . . . 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 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. PRSRT STD American Century Investments U.S. POSTAGE PAID P.O. Box 419200 AMERICAN CENTURY Kansas City, MO 64141-6200 COMPANIES American Century Investment Services, Inc., Distributor ©2008 American Century Proprietary Holdings, Inc. All rights reserved. 0807 CL-SAN-60826S
[front cover] SEMIANNUAL REPORT MAY 31, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS LIFE SCIENCES FUND TECHNOLOGY FUND PRESIDENT'S LETTER JONATHAN THOMAS [photo of Jonathan Thomas] Dear Investor, At American Century Investments®, we are committed to helping you reach your financial goals. Your success is the ultimate measure of our performance. That's why we focus on achieving superior investment results and building long-term relationships with investors like you. Part of that relationship is to clearly communicate investment results and what influenced them. To help you monitor your investment with us, we take pride in providing you with the semiannual report for the American Century® Life Sciences and Technology funds for the six months ended May 31, 2008. We also recommend americancentury.com, where we provide company news, quarterly portfolio commentaries, investment views, and other useful information. As noted on the website, 2008 marks the 50th anniversary of American Century Investments. Since 1958, we've worked to make wise decisions with your interests as our guide. Fifty years also means that we've met the challenges of previous economic downturns. As we've crossed those hurdles and earned your trust, our assets under management have grown to nearly $100 billion, putting us in the top 5% of our industry. This growth has given us the resources to offer a wide array of financial products and services, including a well-diversified line-up of portfolios that provide you with many choices in these uncertain times. Though our offerings are diverse, they share several key qualities, including our disciplined investment approach and active, team-based management. Strict adherence to our processes and long-term strategies allows us to stay focused during volatile periods. Investors in our portfolios also benefit from the sum of our investment teams' expertise as they share research and information. We'll continue to work hard to earn your trust. Thank you for your continued support. Sincerely, /s/Jonathan S. Thomas Jonathan S. Thomas President and Chief Executive Officer American Century Investments 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. . . . . . . . . . . . . . . . . . . . . . . . . 26 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 30 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 31 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 Investments or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments 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 Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments 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 Investments by third party vendors. To the best of American Century Investments' 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 ECONOMIC AND SUBPRIME TURMOIL WEIGHED ON STOCKS The broad U.S. equity indexes declined for the six months ended May 31, 2008, in an increasingly volatile market environment. Stocks began the period on a downward trajectory as continuing fallout from the subprime lending meltdown and a liquidity crunch in the credit markets threatened to tip the U.S. economy into recession. These events triggered exceptionally high levels of financial market volatility, leading to the worst quarterly performance for the major stock indexes in nearly six years in the first quarter of 2008. The Federal Reserve (the Fed) responded by cutting short-term interest rates aggressively, lowering its federal funds rate target from 4.5% to 2.0% during the six-month period. The Fed's efforts to inject liquidity into the financial system provided some relief to the credit markets, but the Fed's game plan was complicated by persistently high energy and food prices, which led to concerns about rising inflation. The stock market hit its low point for the period in mid-March when Bear Stearns, a major investment bank, narrowly averted bankruptcy when the Fed intervened to broker a buyout by JPMorgan Chase. The Bear Stearns rescue, as well as improving economic data and better-than-expected corporate earnings reports, helped restore a measure of investor confidence, easing credit and economic fears. Consequently, stocks staged an uneven but solid recovery during the last two months of the period. INTERNATIONAL STOCKS RETREATED Returns for both developed and emerging international markets were negative for the six months. Global credit market woes, rising inflation and slowing economic growth rates combined to drag stocks down. In spite of negative pressures, strong performance from Latin America helped emerging markets outperform developed foreign markets during the six months. Market Returns For the six months ended May 31, 2008* U.S. STOCKS Russell 1000 Index (Large-Cap) -3.78% Russell Midcap Index 0.14% Russell 2000 Index (Small-Cap) -1.87% FOREIGN STOCKS MSCI EAFE Index -5.21% MSCI EM Index -1.52% * Total returns for periods less than one year are not annualized. - ------ 2 PERFORMANCE Life Sciences Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year 5 years Inception Date INVESTOR CLASS -7.00% -4.12% 7.98% 1.73% 6/30/00 S&P COMPOSITE 1500 HEALTH CARE INDEX -10.31% -9.69% 5.23% 1.24% -- S&P 500 INDEX(2) -4.47% -6.70% 9.77% 1.24% -- Institutional Class -6.73% -3.89% 8.19% 1.31% 7/17/00 (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. - A Reuters Company. ©2008 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. 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
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One-Year Returns Over Life of Class Periods ended May 31 2001* 2002 2003 2004 2005 2006 2007 2008 Investor Class 2.62% -6.60% -18.63% 24.74% 7.17% -0.79% 15.48% -4.12% S&P Composite 1500 Health Care Index -1.85% -8.21% -5.16% 12.59% 4.31% -0.36% 22.10% -9.69% S&P 500 Index -12.71% -13.85% -8.06% 18.33% 8.24% 8.64% 22.79% -6.70% * 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 -7.00%* for the six months ended May 31, 2008. The portfolio's benchmark, the S&P Composite 1500 Health Care Index, returned - -10.31%. The broader equity market, represented by the S&P 500 Index, returned - -4.47%. U.S. equities struggled throughout most of the six-month period, as turbulence in the credit markets and fears of recession sapped investor enthusiasm. Mounting inflationary pressures, soaring oil prices and a falling U.S. dollar added to the malaise, despite aggressive Federal Reserve action. STOCK SELECTION HELPED Stock selection throughout most of the health care industry accounted for the majority of the portfolio's outperformance compared to the benchmark. Additionally, overweights in health care equipment and life sciences tools and services and an underweight in health care providers contributed positively to the portfolio's relative performance. Small, out-of-benchmark allocations to chemicals companies and food and staples retailers also helped relative performance. Our underweight in the biotechnology segment of the health care industry detracted slightly from relative results. Our stock selection in the pharmaceuticals industry was a negative influence on performance, but our underweight to the area helped offset the negative effects from the lagging stocks. SLEEP DISORDER COMPANY WAS TOP STOCK In the health care equipment category, our overweight position in Respironics (a manufacturer of respiratory products that treat sleep disorders) and our out-of-benchmark position in Alcon (a producer of ophthalmic pharmaceutical products), boosted performance. Respironics, which reported record earnings and revenue growth before being acquired by Royal Philips Electronics, was the portfolio's top contributor for the reporting period. Top Ten Holdings as of May 31, 2008 % of % of net assets net assets as of as of 5/31/08 11/30/07 Thermo Fisher Scientific Inc. 6.6% 5.6% Johnson & Johnson 5.7% 5.1% Abbott Laboratories 5.5% 4.3% Gilead Sciences, Inc. 5.1% 3.7% Baxter International Inc. 4.2% 3.6% iShares Dow Jones U.S. Healthcare Sector Index Fund 3.9% 1.0% Medtronic, Inc. 3.7% 2.2% Alcon, Inc. 3.5% 2.7% Teva Pharmaceutical Industries Ltd. ADR 3.3% 2.0% Becton, Dickinson & Co. 3.1% 2.3% * All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 5 Life Sciences In the chemicals segment, Sigma-Aldrich, a supplier of biochemicals and organic chemicals to the life sciences industry, was a top contributor to relative performance. The company reported improved margins, cash flow and sales combined with a steady increase in its emerging-markets business. 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 soaring earnings in April 2008 and raised its full-year expectations. DRUG COMPANY UNDERWEIGHT EFFECTIVE The pharmaceuticals industry continued to represent the largest sector weighting in the portfolio. But the industry struggled during the reporting period, and the fund's underweighted position of 31% compared with the benchmark's 47% was a positive influence on relative performance. Stock selection detracted, though, as three of our pharmaceutical stocks--Johnson & Johnson, Shire Ltd. and Schering-Plough--were among the portfolio's 10 worst performers for the period. OUTLOOK Regardless of the macroeconomic 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 May 31, 2008 % of % of net assets net assets as of as of 5/31/08 11/30/07 Pharmaceuticals 30.7% 34.8% Health Care Equipment & Supplies 27.1% 24.1% Biotechnology 11.7% 8.3% Health Care Providers & Services 11.4% 16.8% Life Sciences Tools & Services 10.6% 9.9% Types of Investments in Portfolio % of % of net assets net assets as of as of 5/31/08 11/30/07 Domestic Common Stocks 81.9% 82.6% Foreign Common Stocks(1) 17.2% 16.2% TOTAL COMMON STOCKS 99.1% 98.8% Temporary Cash Investments 1.3% 1.4% Other Assets and Liabilities (0.4)% (0.2)% (1) Includes depositary shares, dual listed securities and foreign ordinary shares. - ------ 6 SCHEDULE OF INVESTMENTS Life Sciences MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 99.1% BIOTECHNOLOGY -- 11.7% 7,000 Alexion Pharmaceuticals Inc.(1) $ 499,450 16,800 Biogen Idec Inc.(1) 1,054,200 37,500 Celgene Corp.(1) 2,282,250 12,000 Genzyme Corp.(1) 821,520 82,542 Gilead Sciences, Inc.(1) 4,566,223 6,200 ImClone Systems Inc.(1) 270,196 13,250 OSI Pharmaceuticals Inc.(1) 467,725 18,200 Vertex Pharmaceuticals Inc.(1) 521,066 ----------- 10,482,630 ----------- CHEMICALS -- 1.0% 15,250 Sigma-Aldrich Corp. 896,090 ----------- FOOD & STAPLES RETAILING -- 2.6% 54,000 CVS/Caremark Corp. 2,310,660 ----------- HEALTH CARE EQUIPMENT & SUPPLIES -- 27.1% 20,000 Alcon, Inc. 3,140,000 7,500 Arthrocare Corp.(1) 330,825 62,068 Baxter International Inc. 3,792,354 20,000 Beckman Coulter, Inc. 1,387,800 33,359 Becton, Dickinson & Co. 2,817,168 10,000 C.R. Bard, Inc. 912,000 5,600 Cooper Companies, Inc. (The) 226,520 41,122 Covidien Ltd. 2,059,801 8,500 DENTSPLY International Inc. 344,590 22,000 Hospira Inc.(1) 922,680 28,000 Inverness Medical Innovations, Inc.(1) 1,023,680 65,000 Medtronic, Inc. 3,293,550 26,323 Smith & Nephew plc ADR 1,417,494 45,000 St. Jude Medical, Inc.(1) 1,833,750 11,000 Wright Medical Group, Inc.(1) 326,590 6,250 Zimmer Holdings Inc.(1) 455,000 ----------- 24,283,802 ----------- HEALTH CARE PROVIDERS & SERVICES -- 11.4% 40,000 Aetna Inc. 1,886,399 16,250 AmerisourceBergen Corp. 671,613 24,000 Express Scripts, Inc.(1) 1,730,640 6,500 Laboratory Corp. of America Holdings(1) 479,635 Shares Value 16,700 McKesson Corp. $ 962,755 22,200 Owens & Minor Inc. 1,054,056 24,317 Psychiatric Solutions, Inc.(1) 886,841 33,000 Skilled Healthcare Group Inc. Cl A(1) 444,180 60,000 Sun Healthcare Group, Inc.(1) 861,600 47,000 Sunrise Senior Living, Inc.(1) 1,244,560 ----------- 10,222,279 ----------- LIFE SCIENCES TOOLS & SERVICES -- 10.6% 15,000 Charles River Laboratories(1) 964,200 17,500 Covance Inc.(1) 1,434,650 10,000 Invitrogen Corp.(1) 459,600 3,000 Millipore Corp.(1) 217,950 100,000 Thermo Fisher Scientific Inc.(1) 5,902,000 8,100 Waters Corp.(1) 498,312 ----------- 9,476,712 ----------- MULTI-INDUSTRY -- 3.9% 54,500 iShares Dow Jones U.S. Healthcare Sector Index Fund 3,528,875 ----------- PHARMACEUTICALS -- 30.7% 87,500 Abbott Laboratories 4,930,625 33,480 Allergan, Inc. 1,929,118 71,005 Bristol-Myers Squibb Co. 1,618,204 50,873 Elan Corp. plc ADR(1) 1,273,860 76,500 Johnson & Johnson 5,105,610 72,277 Merck & Co., Inc. 2,815,912 26,500 Novartis AG ADR 1,387,275 13,000 Pharmaceutical HOLDRsSM Trust 922,220 11,250 Roche Holding AG ORD 1,939,023 62,833 Schering-Plough Corp. 1,281,793 4,600 Sciele Pharma Inc. 100,786 22,500 Shire Ltd. ADR 1,160,100 64,994 Teva Pharmaceutical Industries Ltd. ADR 2,972,176 ----------- 27,436,702 ----------- TOTAL COMMON STOCKS (Cost $79,692,129) 88,637,750 ----------- - ------ 7 Life Sciences Principal Amount Temporary Cash Investments -- 1.3% $1,200,000 FHLB Discount Notes, 1.90%, 6/2/08(2) $ 1,200,000 (Cost $1,199,810) ----------- TOTAL INVESTMENT SECURITIES -- 100.4% (Cost $80,891,939) 89,837,750 ----------- OTHER ASSETS AND LIABILITIES -- (0.4)% (371,770) ----------- TOTAL NET ASSETS -- 100.0% $89,465,980 =========== Forward Foreign Currency Exchange Contracts Contracts to Sell Settlement Date Value Unrealized Gain (Loss) 990,000 CHF for USD 6/30/08 $949,775 $4,672 ========= ============== (Value on Settlement Date $954,447) Notes to Schedule of Investments ADR = American Depositary Receipt CHF = Swiss Franc FHLB = Federal Home Loan Bank HOLDRs = Holding Company Depositary Receipts ORD = Foreign Ordinary Share USD = United States Dollar (1) Non-income producing. (2) The rate indicated is the yield to maturity at purchase. See Notes to Financial Statements. - ------ 8 PERFORMANCE Technology Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year 5 years Inception Date INVESTOR CLASS -7.70% -0.55% 9.10% -9.03% 6/30/00 S&P COMPOSITE 1500 TECHNOLOGY INDEX -2.78% 1.34% 9.50% -7.50% -- S&P 500 INDEX(2) -4.47% -6.70% 9.77% 1.24% -- Institutional Class -7.61% -0.37% 9.31% -10.05% 7/14/00 (1) Total returns for periods less than one year are not annualized. (2) Data provided by Lipper Inc. - A Reuters Company. ©2008 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. 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
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One-Year Returns Over Life of Class Periods ended May 31 2001* 2002 2003 2004 2005 2006 2007 2008 Investor Class -50.80% -30.49% -10.64% 19.44% -7.12% 21.47% 15.40% -0.55% S&P Composite 1500 Technology Index -49.39% -27.13% -7.11% 22.54% 0.36% 2.77% 22.91% 1.34% S&P 500 Index -12.71% -13.85% -8.06% 18.33% 8.24% 8.64% 22.79% -6.70% * 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 -7.70%* for the six months ended May 31, 2008. The portfolio's benchmark, the S&P Composite 1500 Technology Index, returned - -2.78%. The broader equity market, represented by the S&P 500 Index, returned - -4.47%. U.S. equities struggled throughout most of the six-month period, as turbulence in the credit markets and fears of recession sapped investor enthusiasm. Mounting inflationary pressures, soaring oil prices and a falling U.S. dollar added to the malaise, despite aggressive Federal Reserve action. The technology sector, which was particularly hard-hit early in the reporting period, rebounded later in the period on signs of better-than-expected economic growth and renewed market optimism. STOCK SELECTION HINDERED RESULTS Stock selection throughout most of the information technology sector accounted for the bulk of the portfolio's underperformance relative to the benchmark. Specifically, our overweight to smaller-cap technology stocks had a negative influence on relative performance. As is typical of challenging equity markets, smaller-cap stocks suffered more than larger-cap stocks during the reporting period. For example, the technology stocks in the Russell 1000 Index of large-cap stocks returned -1.58% for the six months, while the technology stocks in the small-cap Russell 2000 Index returned -8.58%. IBM UNDERWEIGHT DETRACTED Additionally, an underweight to the IT services industry detracted from results. In particular, our significant underweight to International Business Machines (IBM), the benchmark's top contributor to performance during the period, made IBM the portfolio's largest detractor in terms of relative performance. The company posted healthy gains due to its stable business model, solid earnings reports and the announcement of a stock repurchase plan. Our holdings in the software industry, the portfolio's largest weighting, also hurt relative performance, as earnings disappointments and lower profit estimates caused stock prices to decline. Top Ten Holdings as of May 31, 2008 % of % of net assets net assets as of as of 5/31/08 11/30/07 Research In Motion Ltd. 6.9% 8.0% Intel Corp. 4.6% 5.4% Cisco Systems Inc. 4.5% 4.5% Corning Inc. 3.7% 3.2% MEMC Electronic Materials Inc. 3.7% 3.3% Google Inc. Cl A 3.3% 6.4% Apple Inc. 3.2% 3.1% High Tech Computer Corp. ORD 3.1% 1.9% International Business Machines Corp. 3.0% 1.4% Syniverse Holdings, Inc. 3.0% -- * All fund returns referenced in this commentary are for Investor Class shares. Total returns for periods less than one year are not annualized. - ------ 11 Technology In the electronic equipment industry, our overweighted position in Brightpoint, a distributor of wireless devices and accessories, dragged down performance. Despite showing a jump in fourth-quarter 2007 profits, the company's results missed analysts' expectations. RIM KEEPS TOP SPOT Stock selection in the computers and peripherals and communications equipment industries contributed positively to the portfolio's relative performance. Once again, Canada's Research in Motion (RIM), the maker of the BlackBerry handheld device, drove performance in the communications equipment area and finished the reporting period as the portfolio's top-contributing stock and largest overweight. RIM's stock continued to benefit from multiple new product cycles, expanding market share and robust subscriber growth. Among our computers and peripherals holdings, Taiwan's High Tech Computer Corp., a designer and manufacturer of mobile computing devices, performed well, ending the reporting period as one of the portfolio's top contributors. Growing demand for the company's new line of smart phones drove solid financial results and stock performance. OUTLOOK 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. As recent results demonstrate, sector funds can show strong volatility to the up- and downsides. 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 May 31, 2008 % of % of net assets net assets as of as of 5/31/08 11/30/07 Semiconductors & Semiconductor Equipment 30.3% 15.6% Communications Equipment 17.0% 21.4% Software 13.2% 21.4% Internet Software & Services 11.6% 8.8% IT Services 9.3% 2.7% Types of Investments in Portfolio % of % of net assets net assets as of as of 5/31/08 11/30/07 Domestic Common Stocks 72.7% 73.9% Foreign Common Stocks(1) 24.6% 23.2% TOTAL COMMON STOCKS 97.3% 97.1% Temporary Cash Investments 1.6% 3.2% Other Assets and Liabilities 1.1% (0.3)% (1) Includes depositary shares, dual listed securities and foreign ordinary shares. - ------ 12 SCHEDULE OF INVESTMENTS Technology MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 97.3% COMMERCIAL SERVICES & SUPPLIES -- 1.3% 29,500 Nissha Printing Co., Ltd. ORD $1,521,860 ------------ COMMUNICATIONS EQUIPMENT -- 17.0% 73,832 Adtran, Inc. 1,837,678 40,020 BigBand Networks, Inc.(1) 212,106 194,868 Cisco Systems Inc.(1) 5,206,873 156,763 Corning Inc. 4,285,900 10,089 Nokia Oyj ADR 286,528 57,769 Research In Motion Ltd.(1) 8,022,381 ------------ 19,851,466 ------------ COMPUTERS & PERIPHERALS -- 6.7% 19,804 Apple Inc.(1) 3,738,004 137,900 High Tech Computer Corp. ORD 3,668,265 577,000 Micro-Star International Co. Ltd. ORD 436,367 ------------ 7,842,636 ------------ ELECTRONIC EQUIPMENT & INSTRUMENTS -- 3.9% 202,141 Celestica Inc.(1) 1,795,012 73,677 Cognex Corp. 2,052,641 812,000 Yosun Industrial Corp. ORD 787,637 ------------ 4,635,290 ------------ INTERNET & CATALOG RETAIL -- 1.0% 8,510 priceline.com Inc.(1) 1,144,850 ------------ INTERNET SOFTWARE & SERVICES -- 11.6% 132,108 AsiaInfo Holdings, Inc.(1) 1,816,485 19,481 Equinix Inc.(1) 1,860,241 6,502 Google Inc. Cl A(1) 3,808,871 75,582 Netease.com ADR(1) 1,719,491 50,703 VeriSign, Inc.(1) 2,030,148 127,998 Websense Inc.(1) 2,251,485 ------------ 13,486,721 ------------ IT SERVICES -- 9.3% 46,621 Accenture Ltd. Cl A 1,903,069 31,769 Affiliated Computer Services Inc. Cl A(1) 1,721,880 31,526 Alliance Data Systems Corp.(1) 1,892,821 27,368 International Business Machines Corp. 3,542,241 74,732 Western Union Co. (The) 1,766,664 ------------ 10,826,675 ------------ Shares Value SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 30.3% 78,208 Altera Corp. $1,809,733 146,345 Amkor Technology Inc.(1) 1,560,038 52,598 Analog Devices, Inc. 1,846,716 59,916 ASML Holding N.V. New York Shares 1,795,083 223 Axell Corp. ORD 879,734 82,765 Eagle Test Systems Inc.(1) 954,280 229,457 Intel Corp. 5,318,814 62,084 MEMC Electronic Materials Inc.(1) 4,262,687 56,753 Microchip Technology Inc. 2,090,781 25,200 Micronics Japan Co. Ltd. ORD 929,616 69,745 MKS Instruments, Inc.(1) 1,643,192 78,979 Monolithic Power Systems, Inc.(1) 1,913,661 48,393 Netlogic Microsystems Inc.(1) 1,827,320 118,330 Pericom Semiconductor Corp.(1) 2,217,504 67,758 Semtech Corp.(1) 1,187,120 74,740 Ultratech, Inc.(1) 1,196,587 31,317 Varian Semiconductor Equipment Associates, Inc.(1) 1,190,986 110,348 Volterra Semiconductor Corp.(1) 1,754,533 33,133 Xilinx, Inc. 901,218 ------------ 35,279,603 ------------ SOFTWARE -- 13.2% 57,873 Activision, Inc.(1) 1,953,214 50,654 Amdocs Ltd.(1) 1,636,631 33,700 Hitachi Software Engineering Co., Ltd. ORD 827,719 2,410,000 Kingdee International Software Group Co. Ltd. ORD 639,286 117,035 Microsoft Corp. 3,314,431 115,529 Oracle Corp.(1) 2,638,682 65,540 Sybase, Inc.(1) 2,098,591 102,212 Symantec Corp.(1) 2,221,067 ------------ 15,329,621 ------------ WIRELESS TELECOMMUNICATION SERVICES -- 3.0% 161,998 Syniverse Holdings, Inc.(1) 3,492,677 ------------ TOTAL COMMON STOCKS (Cost $96,873,464) 113,411,399 ------------ - ------ 13 Technology Value Temporary Cash Investments -- 1.6% Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 6.125%, 11/15/27, valued at $1,939,528), in a joint trading account at 2.20%, dated 5/30/08, due 6/2/08 (Delivery value $1,900,348) (Cost $1,900,000) $1,900,000 ------------ TOTAL INVESTMENT SECURITIES -- 98.9% (Cost $98,773,464) 115,311,399 ------------ OTHER ASSETS AND LIABILITIES -- 1.1% 1,254,607 ------------ TOTAL NET ASSETS -- 100.0% $116,566,006 ============ Notes to Schedule of Investments ADR = American Depositary Receipt ORD = Foreign Ordinary Share (1) Non-income producing. 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 December 1, 2007 to May 31, 2008. 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 Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments 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 Investments 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 12/1/07 - Expense Value 12/1/07 5/31/08 5/31/08 Ratio* Life Sciences ACTUAL Investor Class $1,000 $930.00 $6.51 1.35% Institutional Class $1,000 $932.70 $5.56 1.15% HYPOTHETICAL Investor Class $1,000 $1,018.25 $6.81 1.35% Institutional Class $1,000 $1,019.25 $5.81 1.15% Technology ACTUAL Investor Class $1,000 $923.00 $7.21 1.50% Institutional Class $1,000 $923.90 $6.25 1.30% HYPOTHETICAL Investor Class $1,000 $1,017.50 $7.57 1.50% Institutional Class $1,000 $1,018.50 $6.56 1.30% * 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 366, to reflect the one-half year period. - ------ 16 STATEMENT OF ASSETS AND LIABILITIES MAY 31, 2008 (UNAUDITED) Life Sciences Technology ASSETS Investment securities, at value (cost of $80,891,939 and $98,773,464, respectively) $89,837,750 $115,311,399 Cash 25,673 138,937 Foreign currency holdings, at value (cost of $- and $86, respectively) -- 85 Receivable for investments sold 219,287 1,138,105 Receivable for forward foreign currency exchange contracts 4,672 -- Dividends and interest receivable 84,058 123,535 ----------- ------------- 90,171,440 116,712,061 ----------- ------------- LIABILITIES Payable for investments purchased 604,706 -- Accrued management fees 100,754 146,055 ----------- ------------- 705,460 146,055 ----------- ------------- NET ASSETS $89,465,980 $116,566,006 =========== ============= NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $87,126,524 $304,957,070 Accumulated net investment loss (95,078) (552,891) Accumulated net realized loss on investment and foreign currency transactions (6,517,559) (204,374,044) Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies 8,952,093 16,535,871 ----------- ------------- $89,465,980 $116,566,006 =========== ============= INVESTOR CLASS, $0.01 PAR VALUE Net assets $87,304,246 $111,486,855 Shares outstanding 15,634,630 4,718,392 Net asset value per share $5.58 $23.63 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $2,161,734 $5,079,151 Shares outstanding 380,851 211,331 Net asset value per share $5.68 $24.03 See Notes to Financial Statements. - ------ 17 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) Life Sciences Technology INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $23,657 and $6,118, respectively) $ 550,135 $ 290,421 Interest 27,863 27,243 ------------ ------------- 577,998 317,664 ------------ ------------- EXPENSES: Management fees 639,406 868,716 Directors' fees and expenses 1,052 1,285 Other expenses 105 554 ------------ ------------- 640,563 870,555 ------------ ------------- NET INVESTMENT INCOME (LOSS) (62,565) (552,891) ------------ ------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions 3,114,782 (8,358,750) Foreign currency transactions (115,557) 5,641 ------------ ------------- 2,999,225 (8,353,109) ------------ ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (10,176,881) (2,046,120) Translation of assets and liabilities in foreign currencies (8,185) (3,149) ------------ ------------- (10,185,066) (2,049,269) ------------ ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (7,185,841) (10,402,378) ------------ ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(7,248,406) $(10,955,269) ============ ============= See Notes to Financial Statements. - ------ 18 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 Life Sciences Technology Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $(62,565) $(419,188) $(552,891) $(1,103,646) Net realized gain (loss) 2,999,225 7,543,213 (8,353,109) 22,515,205 Change in net unrealized appreciation (depreciation) (10,185,066) 7,704,876 (2,049,269) 1,098,503 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (7,248,406) 14,828,901 (10,955,269) 22,510,062 ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions (5,850,642) (27,830,419) (9,177,863) (13,354,560) NET INCREASE (DECREASE) IN NET ASSETS (13,099,048) (13,001,518) (20,133,132) 9,155,502 NET ASSETS Beginning of period 102,565,028 115,566,546 136,699,138 127,543,636 ------------ ------------ ------------ ------------ End of period $89,465,980 $102,565,028 $116,566,006 $136,699,138 ============ ============ ============ ============ Accumulated net investment loss $(95,078) $(32,513) $(552,891) -- ============ ============ ============ ============ See Notes to Financial Statements. - ------ 19 NOTES TO FINANCIAL STATEMENTS MAY 31, 2008 (UNAUDITED) 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 nondiversified 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 -- The funds are authorized to issue the Investor Class and the Institutional Class. Prior to December 3, 2007, the funds were authorized to issue the Advisor Class and Life Sciences was authorized to issue the C Class (see Note 9). 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 the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors, 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. - ------ 20 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 for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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. - ------ 21 2. FEES AND TRANSACTIONS WITH RELATED PARTIES 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 Investments 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. The annual management fee schedule for Technology ranges from 1.20% to 1.50% for Investor Class. The Institutional Class is 0.20% less at each point within the range. Prior to December 3, 2007, the Advisor Class was 0.25% less at each point within the range for the funds and the C Class was the same as Investor Class for Life Sciences. The effective annual management fee for each class of each fund for the six months ended May 31, 2008, was as follows: Investor Institutional Life Sciences 1.35% 1.15% Technology 1.50% 1.30% 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. 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. 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. Prior to December 12, 2007, the funds had a bank line of credit 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 six months ended May 31, 2008, were as follows: Life Sciences Technology Purchases $29,269,802 $91,737,404 Proceeds from sales $34,851,384 $100,037,152 - ------ 22 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Six months Year ended ended May 31, 2008 November 30, 2007 Shares Amount Shares Amount Life Sciences INVESTOR CLASS/SHARES AUTHORIZED 110,000,000 100,000,000 ============ ============ Sold 1,078,993 $6,217,643 1,584,191 $8,866,913 Issued in connection with reclassification (Note 9) 23,433 136,104 -- -- Redeemed (2,165,273) (12,082,191) (6,459,895) (35,850,490) ------------ ------------ ------------ ------------ (1,062,847) (5,728,444) (4,875,704) (26,983,577) ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============ ============ Sold 37,635 219,589 107,059 588,684 Redeemed (35,943) (205,683) (246,509) (1,377,285) ------------ ------------ ------------ ------------ 1,692 13,906 (139,450) (788,601) ------------ ------------ ------------ ------------ ADVISOR CLASS/SHARES AUTHORIZED N/A 5,000,000 ============ ============ Sold -- -- 5,964 32,965 Redeemed in connection with reclassification (Note 9) (15,724) (92,570) -- -- Redeemed -- -- (17,468) (95,202) ------------ ------------ ------------ ------------ (15,724) (92,570) (11,504) (62,237) ------------ ------------ ------------ ------------ C CLASS/SHARES AUTHORIZED N/A 5,000,000 ============ ============ Sold -- -- 750 3,996 Redeemed in connection with reclassification (Note 9) (7,709) (43,534) -- -- ------------ ------------ ------------ ------------ (7,709) (43,534) 750 3,996 ------------ ------------ ------------ ------------ Net increase (decrease) (1,084,588) $(5,850,642) (5,025,908) $(27,830,419) ============ ============ ============ ============= Technology INVESTOR CLASS/SHARES AUTHORIZED 50,000,000 100,000,000 ============ ============ Sold 608,017 $13,758,202 1,561,495 $38,575,501 Issued in connection with reclassification (Note 9) 14,547 364,793 -- -- Redeemed (1,015,826) (22,968,360) (2,249,110) (51,673,565) ------------ ------------ ------------ ------------ (393,262) (8,845,365) (687,615) (13,098,064) ------------ ------------ ------------ ------------ INSTITUTIONAL CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============ ============ Sold 36,107 815,251 80,907 2,000,214 Redeemed (35,464) (782,956) (106,292) (2,480,039) ------------ ------------ ------------ ------------ 643 32,295 (25,385) (479,825) ------------ ------------ ------------ ------------ ADVISOR CLASS/SHARES AUTHORIZED N/A 10,000,000 ============ ============ Sold -- -- 15,122 393,853 Redeemed in connection with reclassification (Note 9) (14,547) (364,793) -- -- Redeemed -- -- (7,302) (170,524) ------------ ------------ ------------ ------------ (14,547) (364,793) 7,820 223,329 ------------ ------------ ------------ ------------ Net increase (decrease) (407,166) $(9,177,863) (705,180) $(13,354,560) ============ ============ ============ ============= - ------ 23 5. FAIR VALUE MEASUREMENTS The funds' securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions held by the funds. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels as follows: * Level 1 valuation inputs consist of actual quoted prices based on an active market; * Level 2 valuation inputs consist of significant direct or indirect observable market data; or * Level 3 valuation inputs consist of significant unobservable inputs such as the fund's own assumptions. The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not an indication of the risks associated with investing in these securities or other financial instruments. The following is a summary of the valuation inputs used to determine the fair value of the funds' securities and other financial instruments as of May 31, 2008: Unrealized Gain Value of (Loss) on Other Investment Financial Fund/Valuation Inputs Securities Instruments* LIFE SCIENCES Level 1 -- Quoted Prices $86,698,727 -- Level 2 -- Other Significant Observable Inputs 3,139,023 $4,672 Level 3 -- Significant Unobservable Inputs -- -- ------------- ----------- $89,837,750 $4,672 ============= =========== TECHNOLOGY Level 1 -- Quoted Prices $103,720,915 -- Level 2 -- Other Significant Observable Inputs 11,590,484 -- Level 3 -- Significant Unobservable Inputs -- -- ------------- ----------- $115,311,399 -- ============= =========== * Includes forward foreign currency exchange contracts. 6. BANK LINE OF CREDIT 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. Prior to December 12, 2007, the funds, along with certain other funds managed by ACIM or ACGIM, had 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, which is subject to annual renewal, bear interest at the Federal Funds rate plus 0.40%. The funds did not borrow from the line during the six months ended May 31, 2008. 7. 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. - ------ 24 8. 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. As of May 31, 2008, the components of investments for federal income tax purposes were as follows: Life Sciences Technology Federal tax cost of investments $80,907,736 $98,844,874 ============ ============ Gross tax appreciation of investments $13,012,753 $18,401,853 Gross tax depreciation of investments (4,082,739) (1,935,328) ------------ ------------ Net tax appreciation (depreciation) of investments $8,930,014 $16,466,525 ============ ============ 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. As of November 30, 2007, Life Sciences and Technology had accumulated capital losses of $(9,361,643) and $(195,624,136), respectively, which 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) As of November 30, 2007, Life Sciences had capital and currency loss deferrals of $(134,074) and $(18,958), respectively, which represent net capital and foreign currency losses incurred in the one-month period ended November 30, 2007. Life Sciences has elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes. 9. 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. 10. RECENTLY ISSUED ACCOUNTING STANDARDS The Financial Accounting Standards Board (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. The adoption of FAS 157 does not materially impact the determination of fair value. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133" (FAS 161). FAS 161 is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands disclosures about derivative instruments and hedging activities. FAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. Management is currently evaluating the impact that adopting FAS 161 will have on the financial statement disclosures. - ------ 25 FINANCIAL HIGHLIGHTS Life Sciences Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $6.00 $5.22 $5.32 $4.69 $4.36 $3.54 ---------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) --(3) (0.02) (0.04) (0.04) (0.04) (0.03) Net Realized and Unrealized Gain (Loss) (0.42) 0.80 (0.06) 0.67 0.37 0.85 ---------- -------- -------- -------- -------- -------- Total From Investment Operations (0.42) 0.78 (0.10) 0.63 0.33 0.82 ---------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $5.58 $6.00 $5.22 $5.32 $4.69 $4.36 ========== ======== ======== ======== ======== ======== TOTAL RETURN(4) (7.00)% 14.94% (1.88)% 13.43% 7.57% 23.16% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.35%(5) 1.35% 1.46% 1.50% 1.50% 1.50% Ratio of Net Investment Income (Loss) to Average Net Assets (0.13)%(5) (0.39)% (0.67)% (0.81)% (0.85)% (0.89)% Portfolio Turnover Rate 32% 73% 151% 162% 215% 138% Net Assets, End of Period (in thousands) $87,304 $100,120 $112,648 $155,835 $155,530 $160,187 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 26 Life Sciences Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003 PER-SHARE DATA Net Asset Value, Beginning of Period $6.09 $5.29 $5.38 $4.74 $4.40 $3.56 -------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(2) --(3) (0.01) (0.02) (0.03) (0.03) (0.03) Net Realized and Unrealized Gain (Loss) (0.41) 0.81 (0.07) 0.67 0.37 0.87 -------- ------- ------- ------- ------- ------- Total From Investment Operations (0.41) 0.80 (0.09) 0.64 0.34 0.84 -------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $5.68 $6.09 $5.29 $5.38 $4.74 $4.40 ======== ======= ======= ======= ======= ======= TOTAL RETURN(4) (6.73)% 15.12% (1.67)% 13.50% 7.73% 23.60% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.15%(5) 1.15% 1.26% 1.30% 1.30% 1.30% Ratio of Net Investment Income (Loss) to Average Net Assets 0.07%(5) (0.19)% (0.47)% (0.61)% (0.65)% (0.69)% Portfolio Turnover Rate 32% 73% 151% 162% 215% 138% Net Assets, End of Period (in thousands) $2,162 $2,309 $2,744 $3,953 $3,510 $4,019 (1) Six months ended May 31, 2008 (unaudited). (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. See Notes to Financial Statements. - ------ 27 Technology Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003(2) PER-SHARE DATA Net Asset Value, Beginning of Period $25.60 $21.10 $19.61 $18.20 $19.58 $14.40 ---------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(3) (0.11) (0.21) (0.24) (0.19) (0.24) (0.19) Net Realized and Unrealized Gain (Loss) (1.86) 4.71 1.73 1.60 (1.14) 5.37 ---------- -------- -------- -------- -------- -------- Total From Investment Operations (1.97) 4.50 1.49 1.41 (1.38) 5.18 ---------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $23.63 $25.60 $21.10 $19.61 $18.20 $19.58 ========== ======== ======== ======== ======== ======== TOTAL RETURN(4) (7.70)% 21.33% 7.60% 7.75% (7.05)% 35.97% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.50%(5) 1.51% 1.51% 1.51% 1.50% 1.50% Ratio of Net Investment Income (Loss) to Average Net Assets (0.95)%(5) (0.91)% (1.15)% (1.06)% (1.30)% (1.25)% Portfolio Turnover Rate 80% 260% 385% 388% 279% 218% Net Assets, End of Period (in thousands) $111,487 $130,854 $122,353 $137,710 $166,986 $202,884 (1) Six months ended May 31, 2008 (unaudited). (2) 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. (3) Computed using average shares outstanding throughout the period. (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. See Notes to Financial Statements. - ------ 28 Technology Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006 2005 2004 2003(2) PER-SHARE DATA Net Asset Value, Beginning of Period $26.01 $21.40 $19.84 $18.38 $19.74 $14.50 ---------- ------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(3) (0.09) (0.17) (0.20) (0.15) (0.20) (0.16) Net Realized and Unrealized Gain (Loss) (1.89) 4.78 1.76 1.61 (1.16) 5.40 ---------- ------- ------- ------- ------- ------- Total From Investment Operations (1.98) 4.61 1.56 1.46 (1.36) 5.24 ---------- ------- ------- ------- ------- ------- Net Asset Value, End of Period $24.03 $26.01 $21.40 $19.84 $18.38 $19.74 ========== ======= ======= ======= ======= ======= TOTAL RETURN(4) (7.61)% 21.54% 7.86% 7.94% (6.89)% 36.14% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.30%(5) 1.31% 1.31% 1.31% 1.30% 1.30% Ratio of Net Investment Income (Loss) to Average Net Assets (0.75)%(5) (0.71)% (0.95)% (0.86)% (1.10)% (1.05)% Portfolio Turnover Rate 80% 260% 385% 388% 279% 218% Net Assets, End of Period (in thousands) $5,079 $5,481 $5,051 $6,099 $7,805 $10,191 (1) Six months ended May 31, 2008 (unaudited). (2) 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. (3) Computed using average shares outstanding throughout the period. (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. See Notes to Financial Statements. - ------ 29 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 Investments' 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. - ------ 30 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 gross 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 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. - ------ 31 NOTES - ------ 32 [blank page] [american century investments logo and text logo ®] 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 AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. INVESTMENT ADVISOR: American Century Investment Management, Inc. Kansas City, Missouri 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. PRSRT STD American Century Investments U.S. POSTAGE PAID P.O. Box 419200 AMERICAN CENTURY Kansas City, MO 64141-6200 COMPANIES American Century Investment Services, Inc., Distributor ©2008 American Century Proprietary Holdings, Inc. All rights reserved. 0807 CL-SAN-60824S
[front cover] SEMIANNUAL REPORT MAY 31, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS NT INTERNATIONAL GROWTH FUND NT EMERGING MARKETS FUND PRESIDENT'S LETTER [photo of Jonathan Thomas] JONATHAN THOMAS Dear Investor, At American Century Investments®, we are committed to helping you reach your financial goals. Your success is the ultimate measure of our performance. That's why we focus on achieving superior investment results and building long-term relationships with investors like you. Part of that relationship is to clearly communicate investment results and what influenced them. To help you monitor your investment with us, we take pride in providing you with the semiannual report for the American Century® NT International Growth and NT Emerging Markets funds for the six months ended May 31, 2008. We also recommend americancentury.com, where we provide company news, quarterly portfolio commentaries, investment views, and other useful information. As noted on the website, 2008 marks the 50th anniversary of American Century Investments. Since 1958, we've worked to make wise decisions with your interests as our guide. Fifty years also means that we've met the challenges of previous economic downturns. As we've crossed those hurdles and earned your trust, our assets under management have grown to nearly $100 billion, putting us in the top 5% of our industry. This growth has given us the resources to offer a wide array of financial products and services, including a well-diversified line-up of portfolios that provide you with many choices in these uncertain times. Though our offerings are diverse, they share several key qualities, including our disciplined investment approach and active, team-based management. Strict adherence to our processes and long-term strategies allows us to stay focused during volatile periods. Investors in our portfolios also benefit from the sum of our investment teams' expertise as they share research and information. We'll continue to work hard to earn your trust. Thank you for your continued support. Sincerely, /s/ Jonathan Thomas Jonathan S. Thomas President and Chief Executive Officer American Century Investments 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 OTHER INFORMATION Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 28 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 29 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 Investments or any other person in the American Century Investments organization. Any such opinions are subject to change at any time based upon market or other conditions and American Century Investments 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 Investments funds are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of any American Century Investments 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 Investments by third party vendors. To the best of American Century Investments' 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 RETREAT Stock performance in both developed and emerging international stock markets turned negative for the six months ended May 31, 2008. Solid results in April and May were not enough to offset the sharp downturn that occurred from December 2007 through March 2008. Global credit market woes, rising inflationary pressures and slowing economic growth rates combined to drag down stocks. Soaring prices for oil and other commodities added to investors' malaise, while a weak U.S. dollar complicated outlooks for companies that rely on exports to the United States. Meanwhile, strong performance from Latin America helped emerging markets outperform the developed markets during the six months. CREDIT CRUNCH PROMPTS CENTRAL BANK ACTION Europe couldn't escape the fallout from the U.S. credit crisis; its large banks were investors and players in the U.S. subprime credit market. But coordinated efforts between the European Central Bank (ECB) and the U.S. Federal Reserve to inject liquidity and ease conditions in short-term money markets limited the risk of a severe global credit crisis. RATES DROP IN BRITAIN In Europe, the euro continued to reach record highs versus the U.S. dollar. Despite increasingly sluggish economic growth throughout Europe, rising inflation caused the ECB to leave its key interest rate unchanged during the six-month period. On the other hand, the Bank of England responded to slower economic growth by cutting its key rate by 75 basis points. Japan's economic growth remained positive, but the government scaled back its fiscal-year growth forecast, citing rising raw materials prices and turmoil in the global financial markets as obstacles to economic expansion. Japan's benchmark interest rate remained steady at 0.5% -- the lowest among the world's major economies. VOLATILITY OFFERS OPPORTUNITY The weak U.S. economy, with its ongoing credit problems, remains an important factor in the outlook for international stocks. Nevertheless, we believe that turbulent times always present the potential for long-term investment gains, and there is no shortage of companies with accelerating earnings that may provide attractive investment opportunities in the months ahead. International Equity Total Returns For the six months ended May 31, 2008* (in U.S. dollars) MSCI EM Index -1.64% MSCI EAFE Growth Index -3.51% MSCI Europe Index -5.74% MSCI EAFE Index -5.21% MSCI World Free Index -4.07% MSCI EAFE Value Index -6.94% MSCI Japan Index -2.64% *Total returns for periods less than one year are not annualized. - ------ 2 PERFORMANCE NT International Growth Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date INSTITUTIONAL CLASS -2.92% 5.36% 10.98% 5/12/06 MSCI EAFE INDEX -5.21% -2.53% 7.81% -- MSCI EAFE GROWTH INDEX -3.51% 2.83% 9.68% -- (1) Total returns for periods less than one year are not annualized. Growth of $10,000 Over Life of Class $10,000 investment made May 12, 2006
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One-Year Returns Over Life of Class Periods ended May 31 2006* 2007 2008 Institutional Class -6.60% 25.87% 5.36% MSCI EAFE Index -5.59% 26.84% -2.53% MSCI EAFE Growth Index -6.04% 25.13% 2.83% *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 Raj Gandhi PERFORMANCE SUMMARY NT International Growth returned -2.92%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -5.21%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Overall, our favorable stock selection and effective allocation decisions accounted for the portfolio's outperformance relative to the benchmark. CANADA LED ALL COUNTRIES From a country perspective, Canada (which was not represented in the benchmark), along with Germany and Italy made the greatest positive contributions to the portfolio's relative performance. Within each country, strong stock selection led to solid results. On the other hand, our positions in Japan, India and France detracted from relative results. Stock selection was the primary culprit in Japan and France. Our small position in India posted a negative return for the reporting period, and the benchmark had no exposure to India. MATERIALS, HEALTH CARE WERE TOP SECTORS The portfolio's materials sector made the greatest positive contribution to relative performance, due to our overweight to the sector and good stock selection. In particular, our stock picks in the chemicals industry -- along with an overweight -- generated strong performance. Our position in Germany's K+S AG, a producer of potash for use in fertilizers, represented the fund's top contributor for the reporting period. The company's stock benefited from the extended agriculture boom, greater-than-expected earnings and soaring demand for potash. Our health care stocks also were strong contributors to relative performance. Specifically, overweights to Denmark's Novo Nordisk AS, a pharmaceutical company specializing in insulin treatments for diabetes, and Australia's CSL Limited, a biotechnology company specializing in vaccines, contributed favorably. Stock selection and an overweight also led to good relative performance in the energy sector. In particular, Italy's Saipem, an oil field services company, was the energy sector's top contributor, advancing on rising offshore revenues stemming from increased activity in the Middle East. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Tesco plc 1.9% 1.3% BG Group plc 1.8% 1.5% ENI SpA 1.8% 0.4% Total SA 1.8% 1.3% Rio Tinto Ltd. 1.7% 0.8% CEZ AS 1.7% 1.0% Nintendo Co., Ltd. 1.6% 1.7% Saipem SpA 1.6% 1.6% Julius Baer Holding AG 1.5% 1.7% Scottish and Southern Energy plc 1.5% 1.1% *Total returns for periods less than one year are not annualized. - ------ 4 NT International Growth CONSUMER SECTORS LAGGED The consumer discretionary and consumer staples sectors represented the largest detractors from the portfolio's relative performance despite underweight positions, primarily due to unfavorable stock selection. In the discretionary sector, our holdings among specialty retailers and textiles, apparel and luxury goods companies generated disappointing performance. In particular, our position in Burberry Group, the British high-end clothing company, and Hong Kong's Esprit Holdings, a fashion retailer, were among the fund's largest detractors. In the staples sector, poor performance from food and staples retailers accounted for the bulk of the decline. OUTLOOK NT International Growth invests in companies located throughout the world exhibiting accelerating earnings and revenue growth. Our analysis indicates the long-term outlook for large-cap growth companies remains positive. The portfolio has broad exposure to high-quality growth companies in numerous markets, and although economic uncertainty and market volatility characterize the current climate, we believe these companies will deliver solid long-term returns. Investments by Country as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 United Kingdom 19.3% 13.6% Japan 12.5% 13.3% Germany 8.9% 10.5% Switzerland 8.2% 10.3% France 7.6% 8.7% Australia 5.2% 5.8% Italy 3.9% 3.3% Spain 3.5% 3.4% Canada 3.1% 3.6% Hong Kong 3.1% 1.5% Denmark 2.6% 2.2% Belgium 2.3% 2.0% Norway 2.1% 2.0% Greece 2.1% 1.6% Other Countries 12.7% 17.6% Cash and Equivalents(1) 2.9% 0.6% (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 5/31/08 11/30/07 Foreign Common Stocks & Rights 97.1% 99.0% Foreign Preferred Stocks -- 0.4% TOTAL EQUITY EXPOSURE 97.1% 99.4% Temporary Cash Investments 2.2% 1.2% Other Assets and Liabilities(2) 0.7% (0.6)% (2) Includes securities lending collateral and other assets and liabilities. - ------ 5 SCHEDULE OF INVESTMENTS NT International Growth MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks & Rights -- 97.1% AUSTRALIA -- 5.2% 20,931 BHP Billiton Ltd. $ 870,801 125,234 Boart Longyear Group 247,932 23,200 CSL Ltd. 883,102 48,600 Oxiana Ltd.(1) 143,626 9,723 QBE Insurance Group Ltd. 227,269 9,546 Rio Tinto Ltd.(1) 1,259,911 8,400 Westpac Banking Corp. 186,785 ----------- 3,819,426 ----------- BELGIUM -- 2.3% 6,055 KBC Groupe 747,081 37,230 SES SA Fiduciary Depositary Receipt 984,630 ----------- 1,731,711 ----------- BRAZIL -- 1.7% 37,000 Bolsa de Mercadorias e Futuros -- BM&F SA 423,714 10,200 Net Servicos de Comunicacao SA(2) 145,696 34,400 Redecard SA 723,843 ----------- 1,293,253 ----------- CANADA -- 3.1% 2,300 Agnico-Eagle Mines Ltd. 162,587 4,600 EnCana Corp. 415,702 2,200 Potash Corp. of Saskatchewan 436,988 3,700 Research In Motion Ltd.(2) 513,819 10,800 Suncor Energy Inc. 737,177 ----------- 2,266,273 ----------- CZECH REPUBLIC -- 1.7% 14,900 CEZ AS 1,231,099 ----------- DENMARK -- 2.6% 15,900 Novo Nordisk AS B Shares 1,034,535 6,200 Vestas Wind Systems AS(2) 853,353 ----------- 1,887,888 ----------- FINLAND -- 0.6% 16,000 Nokia Oyj 461,234 ----------- FRANCE -- 7.6% 3,700 ALSTOM Co. 932,659 14,165 AXA SA 500,449 6,000 Carrefour SA 420,692 5,982 Groupe Danone 523,660 1,400 Lafarge SA 253,190 1,600 Schneider Electric SA 200,972 Shares Value 1,778 Societe Generale(1) $ 184,771 744 Societe Generale -- new shares(2) 76,160 5,000 Suez SA 372,590 14,924 Total SA 1,302,256 3,980 Ubisoft Entertainment SA(2) 385,742 6,200 Vinci SA(1) 467,124 ----------- 5,620,265 ----------- GERMANY -- 8.9% 7,000 adidas AG 493,530 1,100 Allianz SE(1) 208,244 2,600 BASF SE 389,799 5,640 Deutsche Boerse AG(1) 809,240 9,270 Fresenius Medical Care AG & Co. KGaA(1) 516,572 12,843 GEA Group AG 500,096 3,700 Hochtief AG 428,253 1,983 K+S AG 929,620 7,100 Linde AG(1) 1,066,883 4,744 Q-Cells AG(1)(2) 576,766 3,777 SGL Carbon AG(2) 280,867 3,200 Siemens AG 363,013 ----------- 6,562,883 ----------- GREECE -- 2.1% 11,000 Coca-Cola Hellenic Bottling Co. SA 500,033 18,884 National Bank of Greece SA 1,072,291 ----------- 1,572,324 ----------- HONG KONG -- 3.1% 29,500 China Mobile Ltd. 433,604 18,300 Esprit Holdings Ltd. 213,872 25,600 Hang Seng Bank Ltd. 518,656 116,000 Li & Fung Ltd. 438,518 37,471 Melco PBL Entertainment (Macau) Ltd. ADR(2) 445,530 13,000 Sun Hung Kai Properties Ltd. 208,905 ----------- 2,259,085 ----------- INDIA -- 1.3% 2,400 Bharat Heavy Electricals Ltd. 94,671 15,900 Bharti Airtel Ltd.(2) 330,351 8,500 Housing Development Finance Corp. Ltd. 518,720 ----------- 943,742 ----------- IRELAND -- 0.1% 8,093 Anglo Irish Bank Corp. plc 105,758 ----------- - ------ 6 NT International Growth Shares Value ITALY -- 3.9% 32,011 ENI SpA $ 1,303,751 15,000 Finmeccanica SpA 454,576 25,262 Saipem SpA(1) 1,160,139 ----------- 2,918,466 ----------- JAPAN -- 12.5% 9,700 Canon, Inc. 523,404 8,800 Daikin Industries Ltd. 453,978 3,500 Fanuc Ltd. 380,037 2,100 FAST RETAILING CO. LTD. 181,622 29,000 iShares MSCI Japan Index Fund 393,530 13,000 Japan Steel Works Ltd. (The) 269,986 14,500 Konami Corp. 529,398 30,500 Kuraray Co. Ltd. 384,974 51,000 Marubeni Corp. 454,623 23,500 Mitsubishi Corp. 811,190 19,000 Mitsubishi Electric Corp. 214,955 41,000 Mitsui O.S.K. Lines, Ltd. 618,596 2,200 Nintendo Co., Ltd. 1,210,052 14,000 Shiseido Co., Ltd. 343,196 6,600 Sony Corp.(1) 330,469 224 Sony Financial Holdings Inc. 915,544 15,000 Sumitomo Realty & Development Co. Ltd. 384,068 7,400 Terumo Corp. 368,421 10,000 Toyota Motor Corp. 509,246 ----------- 9,277,289 ----------- LUXEMBOURG -- 0.8% 5,400 Millicom International Cellular SA(1) 625,644 ----------- MULTI-NATIONAL -- 1.2% 11,100 iShares MSCI EAFE Index Fund 852,480 ----------- NETHERLANDS -- 0.9% 15,500 ASML Holding N.V. 463,699 13,000 Koninklijke KPN N.V. 236,622 ----------- 700,321 ----------- NORWAY -- 2.1% 17,690 Aker Solutions ASA 499,414 34,800 Norsk Hydro ASA(1) 552,630 6,200 Seadrill Ltd. 202,384 4,400 Yara International ASA 333,837 ----------- 1,588,265 ----------- Shares Value PEOPLE'S REPUBLIC OF CHINA -- 1.2% 88,000 China Communications Construction Co. Ltd. H Shares $ 193,512 162,500 China Merchants Bank Co., Ltd. H Shares 582,027 2,768 Ctrip.com International, Ltd. ADR 161,596 ----------- 937,135 ----------- RUSSIAN FEDERATION -- 1.0% 2,600 OAO LUKOIL 290,940 117,200 Sberbank 424,264 ----------- 715,204 ----------- SINGAPORE -- 0.7% 35,000 Keppel Corp. Ltd. 311,557 14,000 United Overseas Bank Ltd. 207,499 ----------- 519,056 ----------- SOUTH KOREA -- 0.4% 400 Samsung Electronics 288,257 ----------- SPAIN -- 3.5% 45,900 Banco Santander SA 956,135 31,230 Cintra Concesiones de Infraestructuras de Transporte SA(1) 480,501 10,300 Gamesa Corporacion Tecnologica SA 533,109 21,700 Telefonica SA 622,848 ----------- 2,592,593 ----------- SWEDEN -- 0.7% 4,000 Oriflame Cosmetics SA SDR 284,066 87,900 Telefonaktiebolaget LM Ericsson Cl B 239,144 ----------- 523,210 ----------- SWITZERLAND -- 8.2% 22,615 ABB Ltd.(2) 734,456 8,331 Compagnie Financiere Richemont SA Cl A 518,989 14,000 Julius Baer Holding AG 1,145,405 2,200 Nestle SA 1,081,431 12,465 Novartis AG 654,574 2,866 Roche Holding AG 493,977 200 SGS SA 300,403 3,607 Syngenta AG 1,098,429 245 UBS AG(2) 5,898 245 UBS AG Rights(2) 327 ----------- 6,033,889 ----------- - ------ 7 NT International Growth Shares Value TAIWAN (REPUBLIC OF CHINA) -- 0.4% 147,000 AU Optronics Corp. $ 282,279 ----------- UNITED KINGDOM -- 19.3% 9,000 Admiral Group plc 155,445 14,900 Aggreko plc 178,403 35,500 AMEC plc 586,777 10,299 Anglo American plc 697,450 25,878 Aquarius Platinum Ltd. 423,892 54,031 BG Group plc 1,354,864 23,786 Burberry Group plc 235,565 34,900 Cadbury plc 465,912 42,201 Capita Group plc 565,469 71,000 Compass Group plc 527,362 30,972 GlaxoSmithKline plc 683,090 61,208 HSBC Holdings plc(1) 1,033,004 20,600 ICAP plc 251,343 83,200 International Power plc 732,510 43,514 Man Group plc 535,229 18,108 Reckitt Benckiser Group plc 1,066,670 29,098 Reed Elsevier plc 366,555 38,600 Scottish and Southern Energy plc 1,125,418 15,400 Standard Chartered plc 572,233 173,982 Tesco plc 1,427,014 77,800 TUI Travel plc 376,385 281,900 Vodafone Group plc 905,938 ----------- 14,266,528 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $59,524,061) 71,875,557 ----------- Temporary Cash Investments -- 2.2% Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized by various U.S. Treasury obligations, 2.00%, 1/15/16, valued at $1,633,060), in a joint trading account at 2.20%, dated 5/30/08, due 6/2/08 (Delivery value $1,600,293) (Cost $1,600,000) 1,600,000 ----------- Value Temporary Cash Investments -- Securities Lending Collateral(3) -- 6.1% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $1,000,192) $ 1,000,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $1,000,196) 1,000,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $1,000,196) 1,000,000 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $558,875) 558,768 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $1,000,192) 1,000,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL (Cost $4,558,768) 4,558,768 ----------- TOTAL INVESTMENT SECURITIES -- 105.4% (Cost $65,682,829) 78,034,325 ----------- OTHER ASSETS AND LIABILITIES -- (5.4)% (4,004,505) ----------- TOTAL NET ASSETS -- 100.0% $74,029,820 =========== - ------ 8 NT International Growth Market Sector Diversification (as a % of net assets) Financials 18.5% Industrials 16.5% Materials 12.5% Energy 9.8% Consumer Staples 8.2% Consumer Discretionary 8.0% Information Technology 6.6% Health Care 6.3% Utilities 4.7% Telecommunication Services 4.3% Diversified 1.7% Cash and Equivalents* 2.9% *Includes temporary cash investments, securities lending collateral and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt EAFE = Europe, Australasia, and Far East MSCI = Morgan Stanley Capital International SDR = Swedish Depositary Receipt (1) Security, or a portion thereof, was on loan as of May 31, 2008. (2) Non-income producing. (3) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. See Notes to Financial Statements. - ------ 9 PERFORMANCE NT Emerging Markets Total Returns as of May 31, 2008 Average Annual Returns Since Inception 6 months(1) 1 year Inception Date INSTITUTIONAL CLASS -6.09% 14.15% 23.09% 5/12/06 MSCI EM INDEX -1.64% 21.67% 20.85% -- (1) Total returns for periods less than one year are not annualized. Growth of $10,000 Over Life of Class $10,000 investment made May 12, 2006
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One-Year Returns Over Life of Class Periods ended May 31 2006* 2007 2008 NT Emerging Markets -8.50% 46.74% 14.15% MSCI EM Index -12.21% 38.16% 21.67% *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 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 returned -6.09%* for the six months ended May 31, 2008. The portfolio's benchmark, the MSCI EM Index, returned -1.64%. The combination of rising inflationary pressures (triggered by soaring oil and food prices), ongoing global credit-market concerns and slowing economic growth rates led to a sharp downturn among most international stock markets. Emerging-market stocks outperformed the developed markets, which, as measured by the MSCI EAFE Index, returned -5.21% for the reporting period. As investors sought protection from a slowing economy, the value segments of the emerging markets outperformed the growth segments: the MSCI Emerging Markets Value Index returned 0.41%, while the MSCI Emerging Markets Growth Index returned -3.69%. As such, our focus on growth factors and growth stocks weighed significantly on the portfolio's return and accounted for the bulk of the performance shortfall relative to the benchmark. LARGEST COUNTRY WEIGHTINGS DETRACTED From a regional perspective, three of the portfolio's largest-weighted countries -- China, Brazil and Korea -- were the greatest detractors from relative performance despite underweight positions relative to the benchmark. Our growth-oriented stock selection led to lagging results in China and Korea. The portfolio's absolute return in the Brazilian market was positive, but currency effects and an underweight primarily accounted for the country's poor relative performance. On the positive side, Russia, Israel and the Czech Republic had the greatest positive influence on portfolio performance. Stock selection was helpful in Russia, while overweights contributed favorably in Israel and the Czech Republic. Russia's Uralkali, a producer of potash, was the portfolio's top contributor for the reporting period, benefiting from strong emerging-market demand for fertilizers. TECHNOLOGY, CONSUMER SECTORS LAGGED On an absolute basis, seven out of the portfolio's 10 sectors posted negative returns for the reporting period; only the materials, health care and energy sectors posted positive returns. The information technology, consumer discretionary and consumer staples sectors represented the largest detractors from relative performance, primarily due to our preference for growth stocks. In the consumer discretionary sector, stock selection and an overweight in the media industry accounted for the bulk of the shortfall. Top Ten Holdings as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Petroleo Brasileiro SA ADR 4.7% 3.0% Samsung Electronics 3.5% 1.5% OAO Gazprom ADR 3.2% 0.9% Cia Vale do Rio Doce ADR 3.0% 2.1% OAO LUKOIL 2.3% 0.9% China Mobile Ltd. ADR 2.3% 2.3% Israel Chemicals Ltd. 2.2% 0.3% Uralkali GDR 1.7% 0.4% MegaStudy Co., Ltd. 1.7% 1.3% Sasol Ltd. 1.7% -- *Total returns for periods less than one year are not annualized. - ------ 11 NT Emerging Markets China's Focus Media was among the portfolio's largest detractors, suffering from the general downdraft in China's equities, and primarily from charges that the company spammed wireless phone users. We subsequently exited our position. The portfolio's top relative contributors from a sector perspective included industrials, materials and financials. Stock selection was strong in the industrials and materials sectors, while an underweight helped the portfolio's relative performance in the troubled financials sector. Within the materials sector, stock selection in the chemicals industry was particularly strong. Similar to its position in Russia's Uralkali, the portfolio benefited from an overweight position in Israel Chemicals, which advanced on soaring fertilizer demand and the limited supply of potash and phosphate. The Tel Aviv-based company also realized positive results from acquisitions completed during the past year. OUTLOOK Focusing on equity securities of companies located in emerging-market countries, we will continue to seek companies exhibiting improving earnings and revenue growth rates. Additionally, we will continue to select stocks based on extensive company-level research that focuses on identifying accelerating growth characteristics. Investments by Country as of May 31, 2008 % of net % of net assets as of assets as of 5/31/08 11/30/07 Brazil 17.0% 11.5% People's Republic of China 10.9% 14.6% Russian Federation 10.6% 7.4% South Korea 10.5% 12.9% Taiwan (Republic of China) 10.2% 6.8% South Africa 5.0% 6.8% India 5.0% 9.0% Malaysia 3.1% 2.0% Isreal 3.0% 0.6% Czech Republic 2.9% 2.1% Mexico 2.9% 4.7% Indonesia 2.5% 4.3% Hong Kong 2.5% 3.0% Thailand 2.1% -- Poland 2.0% 0.7% Other Countries 5.6% 9.7% Cash and Equivalents(1) 4.2% 3.9% (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 5/31/08 11/30/07 Foreign Common Stocks 94.6% 96.1% Foreign Preferred Stocks 1.2% -- TOTAL EQUITY EXPOSURE 95.8% 96.1% Temporary Cash Investments 2.8% 3.5% Other Assets and Liabilities(2) 1.4% 0.4% (2) Includes securities lending collateral and other assets and liabilities. - ------ 12 SCHEDULE OF INVESTMENTS NT Emerging Markets MAY 31, 2008 (UNAUDITED) Shares Value Common Stocks -- 94.6% BRAZIL -- 15.8% 12,400 Banco do Brasil SA $ 248,046 13,500 Bolsa de Mercadorias e Futuros -- BM&F SA 154,599 21,800 Cia Vale do Rio Doce ADR 867,203 8,449 Dufry South America Ltd. BDR(1) 200,623 5,600 GVT Holding SA(1) 127,985 9,600 Lojas Renner SA 237,154 5,921 LPS Brasil -- Consultoria de Imoveis SA 117,642 8,800 Lupatech SA(1) 343,739 19,328 Petroleo Brasileiro SA ADR 1,362,624 17,550 Redecard SA 369,286 18,000 Rossi Residencial SA 176,052 14,400 Unibanco-Uniao de Bancos Brasileiros SA 225,329 18,800 Vivo Participacoes SA ADR(1)(2) 131,788 ----------- 4,562,070 ----------- CHILE -- 0.4% 16,400 Compania Cervecerias Unidas SA 118,106 ----------- CZECH REPUBLIC -- 2.9% 5,800 CEZ AS 479,220 1,400 Komercni Banka AS 363,285 ----------- 842,505 ----------- EGYPT -- 0.7% 2,700 Orascom Construction Industries 198,863 ----------- HONG KONG -- 2.5% 62,000 AAC Acoustic Technology Holdings Inc.(1) 56,172 8,900 China Mobile Ltd. ADR 656,738 ----------- 712,910 ----------- INDIA -- 5.0% 3,300 Aban Offshore Ltd.(1) 313,218 5,800 Jindal Steel & Power Ltd. 321,834 29,400 Power Finance Corp. Ltd.(1) 97,802 3,000 Reliance Industries Ltd. 171,027 32,800 Rolta India Ltd. 236,392 3,000 Sesa GOA Ltd. 305,412 ----------- 1,445,685 ----------- INDONESIA -- 2.5% 449,500 PT Bumi Resources Tbk 388,457 214,000 PT United Tractors Tbk 331,970 ----------- 720,427 ----------- Shares Value ISRAEL -- 3.0% 12,700 Delek Automotive Systems Ltd. $ 237,409 27,800 Israel Chemicals Ltd. 637,086 ----------- 874,495 ----------- LUXEMBOURG -- 1.0% 4,900 Tenaris SA ADR(2) 300,370 ----------- MALAYSIA -- 3.1% 161,900 AMMB Holdings Bhd 198,877 209,875 KNM Group Bhd 450,195 596,000 SapuraCrest Petroleum Bhd 257,531 ----------- 906,603 ----------- MEXICO -- 2.9% 7,000 America Movil, SAB de CV ADR 418,390 62,561 Axtel, SAB de CV(1) 125,406 58,700 Grupo Financiero Banorte, SAB de CV(2) 284,925 ----------- 828,721 ----------- PAKISTAN -- 0.5% 7,327 Oil & Gas Development Co. Ltd. GDR 141,045 ----------- PEOPLE'S REPUBLIC OF CHINA -- 10.9% 172,000 Agile Property Holdings Ltd.(2) 224,820 197,000 Asia Cement China Holdings Corp.(1) 178,734 916,000 China Gas Holdings Ltd. 325,149 148,000 China High Speed Transmission Equipment Group Co., Ltd.(1) 259,830 83,500 China Merchants Bank Co., Ltd. H Shares 299,072 112,000 China Oilfield Services Ltd.(1) 217,583 90,000 China Resources Power Holdings Co. 249,694 51,000 China Shenhua Energy Co. Ltd. H Shares(2) 227,435 227,000 CNOOC Ltd. 395,615 444,000 Industrial and Commercial Bank of China Ltd. H Shares 331,711 35,000 Parkson Retail Group Ltd.(2) 300,505 321,000 Want Want China Holdings Ltd.(2) 139,037 ----------- 3,149,185 ----------- PERU -- 1.0% 3,300 Credicorp Ltd. 275,418 ----------- PHILIPPINES -- 0.3% 957,000 Alliance Global Group Inc.(1) 74,809 ----------- - ------ 13 NT Emerging Markets Shares Value POLAND -- 2.0% 1,600 BRE Bank SA(1) $ 302,576 12,200 Powszechna Kasa Oszczednosci Bank Polski SA 283,328 ----------- 585,904 ----------- RUSSIAN FEDERATION -- 10.6% 10,183 Globaltrans Investment plc GDR (Acquired 4/30/08-5/7/08, Cost $136,710)(1)(3) 156,615 6,300 Mechel OAO ADR(1) 363,006 15,100 OAO Gazprom ADR(1) 912,039 6,000 OAO LUKOIL 671,400 5,401 OJSC Pharmstandard GDR(1) 156,629 8,100 Uralkali GDR (Acquired 10/15/07-1/30/08, Cost $209,278)(3) 487,620 8,173 X5 Retail Group N.V. GDR(1) 302,401 ----------- 3,049,710 ----------- SOUTH AFRICA -- 5.0% 11,300 Exxaro Resources Ltd. 234,016 6,900 Impala Platinum Holdings Ltd. 294,871 6,566 Kumba Iron Ore Ltd.(2) 293,531 6,000 Naspers Ltd. 140,035 7,800 Sasol Ltd. 485,112 ----------- 1,447,565 ----------- SOUTH KOREA -- 10.5% 1,400 Daelim Industrial Co., Ltd. 168,150 10,600 Doosan Infracore Co., Ltd. 348,437 1,400 MegaStudy Co., Ltd. 487,430 1,100 NHN Corp.(1) 227,970 1,400 Samsung Electronics 1,008,899 12,000 Sung Kwang Bend Co., Ltd.(1) 419,548 3,400 Taewoong Co. Ltd.(1) 371,991 ----------- 3,032,425 ----------- SWITZERLAND -- 0.5% 840 Orascom Development Holding AG(1) 129,714 ----------- TAIWAN (REPUBLIC OF CHINA) -- 10.2% 204,611 Asia Cement Corp. 380,124 88,000 Cathay Financial Holding Co., Ltd. 224,829 24,000 MediaTek Inc. 299,877 Shares Value 53,000 Taiwan Fertilizer Co., Ltd. $ 256,178 215,000 Taiwan Semiconductor Manufacturing Co. Ltd. 463,756 166,000 Tung Ho Steel Enterprise Corp. 346,601 147,000 U-Ming Marine Transport Corp. 474,654 86,565 Wistron Corp. 148,011 374,000 Yuanta Financial Holding Co., Ltd.(1) 348,021 ----------- 2,942,051 ----------- THAILAND -- 2.1% 89,200 Kasikornbank PCL Receipt 233,328 54,400 PTT Chemical PCL(1) 184,151 128,100 Thoresen Thai Agencies PCL 201,049 ----------- 618,528 ----------- TURKEY -- 0.8% 18,665 Enka Insaat ve Sanayi AS 223,955 ----------- UNITED KINGDOM -- 0.4% 7,900 Antofagasta plc 107,890 ----------- TOTAL COMMON STOCKS (Cost $22,547,120) 27,288,954 ----------- Preferred Stocks -- 1.2% BRAZIL -- 1.2% 7,200 Gerdau SA 359,270 (Cost $302,718) ----------- Temporary Cash Investments -- 2.8% Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized by various U.S. Treasury obligations, 2.00%, 1/15/16, valued at $816,530), in a joint trading account at 2.20%, dated 5/30/08, due 6/2/08 (Delivery value $800,147) (Cost $800,000) 800,000 ----------- - ------ 14 NT Emerging Markets Value Temporary Cash Investments -- Securities Lending Collateral(4) -- 4.4% Repurchase Agreement, Barclays Capital Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $250,048) $ 250,000 Repurchase Agreement, BNP Paribas Securities Corp., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $250,049) 250,000 Repurchase Agreement, Credit Suisse Securities USA LLC, (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.35%, dated 5/30/08, due 6/2/08 (Delivery value $246,604) 246,556 Repurchase Agreement, Deutsche Bank Securities Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $260,594) 260,544 Repurchase Agreement, Lehman Brothers Inc./Lehman Brothers Commercial Paper Inc., (collateralized by various U.S. Government Agency obligations in a pooled account at the lending agent), 2.30%, dated 5/30/08, due 6/2/08 (Delivery value $250,048) 250,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS -- SECURITIES LENDING COLLATERAL (Cost $1,257,100) 1,257,100 ----------- TOTAL INVESTMENT SECURITIES -- 103.0% (Cost $24,906,938) 29,705,324 ----------- OTHER ASSETS AND LIABILITIES -- (3.0)% (852,240) ----------- TOTAL NET ASSETS -- 100.0% $28,853,084 =========== \ Market Sector Diversification (as a % of net assets) Energy 21.8% Materials 19.5% Financials 15.9% Industrials 12.1% Information Technology 8.5% Consumer Discretionary 6.6% Telecommunication Services 5.1% Utilities 3.6% Consumer Staples 2.2% Health Care 0.5% Cash and Equivalents* 4.2% *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 May 31, 2008. (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 May 31, 2008 was $644,235, which represented 2.2% of total net assets. (4) Investments represent purchases made by the lending agent with cash collateral received through securities lending transactions. 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 December 1, 2007 to May 31, 2008. 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 Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments 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 Investments 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 Investments 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 12/1/07 - Annualized 12/1/07 5/31/08 5/31/08 Expense Ratio* NT International Growth -- Institutional Class Actual $1,000 $970.80 $5.42 1.10% Hypothetical $1,000 $1,019.50 $5.55 1.10% NT Emerging Markets -- Institutional Class Actual $1,000 $939.10 $7.42 1.53% Hypothetical $1,000 $1,017.35 $7.72 1.53% *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 366, to reflect the one-half year period. - ------ 17 STATEMENT OF ASSETS AND LIABILITIES MAY 31, 2008 (UNAUDITED) NT International NT Emerging Growth Markets ASSETS Investment securities, at value (cost of $61,124,061 and $23,649,838, respectively) -- including $4,344,354 and $1,232,581 of securities on loan, respectively $73,475,557 $28,448,224 Investments made with cash collateral received for securities on loan, at value (cost of $4,558,768 and $1,257,100, respectively) 4,558,768 1,257,100 ----------- ----------- Total investment securities, at value (cost of $65,682,829 and $24,906,938, respectively) 78,034,325 29,705,324 Cash -- 281,235 Foreign currency holdings, at value (cost of $232,271 and $87,997, respectively) 232,271 87,999 Receivable for investments sold 4,590,937 188,476 Dividends and interest receivable 333,819 83,514 ----------- ----------- 83,191,352 30,346,548 ----------- ----------- LIABILITIES Disbursements in excess of demand deposit cash 4,323,976 -- Payable for collateral received for securities on loan 4,558,768 1,257,100 Payable for investments purchased 208,802 202,951 Accrued management fees 69,986 33,413 ----------- ----------- 9,161,532 1,493,464 ----------- ----------- NET ASSETS $74,029,820 $28,853,084 =========== =========== INSTITUTIONAL CLASS CAPITAL SHARES, $0.01 PAR VALUE Authorized 50,000,000 50,000,000 =========== =========== Outstanding 6,205,659 2,295,745 =========== =========== NET ASSET VALUE PER SHARE $11.93 $12.57 =========== =========== NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $62,091,569 $22,564,388 Undistributed net investment income 608,490 55,949 Accumulated undistributed net realized gain (loss) on investment and foreign currency transactions (1,006,215) 1,453,852 Net unrealized appreciation on investments and translation of assets and liabilities in foreign currencies 12,335,976 4,778,895 ----------- ----------- $74,029,820 $28,853,084 =========== =========== See Notes to Financial Statements. - ------ 18 STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) NT International NT Emerging Growth Markets INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $102,686 and $18,776, respectively) $ 975,973 $ 334,090 Interest 14,507 12,016 Securities lending, net 13,003 8,362 ----------- ----------- 1,003,483 354,468 ----------- ----------- EXPENSES: Management fees 354,881 172,923 Custody fees 7,329 12,892 Directors' fees and expenses 702 265 Other expenses 98 36 ----------- ----------- 363,010 186,116 ----------- ----------- NET INVESTMENT INCOME (LOSS) 640,473 168,352 ----------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $15,904 and $38,252, respectively) (3,099,230) 1,284,545 Foreign currency transactions 2,331,512 156,896 ----------- ----------- (767,718) 1,441,441 ----------- ----------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $51,314 and $63,246, respectively) (357,275) (2,333,826) Translation of assets and liabilities in foreign currencies 7,583 (190,241) ----------- ----------- (349,692) (2,524,067) ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) (1,117,410) (1,082,626) ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(476,937) $(914,274) =========== =========== See Notes to Financial Statements. - ------ 19 STATEMENT OF CHANGES IN NET ASSETS SIX MONTHS ENDED MAY 31, 2008 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2007 NT International Growth NT Emerging Markets Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 640,473 $ 643,847 $ 168,352 $ 249,461 Net realized gain (loss) (767,718) 2,689,810 1,441,441 3,942,328 Change in net unrealized appreciation (depreciation) (349,692) 8,697,350 (2,524,067) 5,011,164 ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from operations (476,937) 12,031,007 (914,274) 9,202,953 ------------ ------------ ----------- ------------ DISTRIBUTIONS TO SHAREHOLDERS From net investment income (585,193) (138,053) (292,689) (132,946) From net realized gains (1,418,391) -- (3,880,783) -- ------------ ------------ ----------- ------------ Decrease in net assets from distributions (2,003,584) (138,053) (4,173,472) (132,946) ------------ ------------ ----------- ------------ CAPITAL SHARE TRANSACTIONS Proceeds from shares sold 21,325,478 25,863,755 11,023,791 10,699,873 Payments for shares redeemed (12,518,049) (16,433,430) (5,461,332) (11,235,649) ------------ ------------ ----------- ------------ Net increase (decrease) in net assets from capital share transactions 8,807,429 9,430,325 5,562,459 (535,776) ------------ ------------ ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS 6,326,908 21,323,279 474,713 8,534,231 NET ASSETS Beginning of period 67,702,912 46,379,633 28,378,371 19,844,140 ------------ ------------ ----------- ------------ End of period $74,029,820 $67,702,912 $28,853,084 $28,378,371 ============ ============ =========== ============ Undistributed net investment income $608,490 $569,114 $55,949 $218,538 ============ ============ =========== ============ TRANSACTIONS IN SHARES OF THE FUNDS Sold 1,900,657 2,284,414 884,509 836,418 Redeemed (1,018,211) (1,444,625) (341,221) (886,517) ------------ ------------ ----------- ------------ Net increase (decrease) in shares of the funds 882,446 839,789 543,288 (50,099) ============ ============ =========== ============ See Notes to Financial Statements. - ------ 20 NOTES TO FINANCIAL STATEMENTS MAY 31, 2008 (UNAUDITED) 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 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 the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors, 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 income earned, net of any rebates or fees, is included in the Statement of Operations. 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 for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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. - ------ 22 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 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 Investments 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 six months ended May 31, 2008 was 1.08% and 1.42%, 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. OTHER EXPENSES -- The impact of total other expenses, including custody fees and directors' fees and expenses, to the annualized ratio of operating expenses to average net assets was 0.02% for NT International Growth and 0.11% for NT Emerging Markets. 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, in aggregate, by various funds in a series issued by American Century Asset Allocation Portfolios, Inc. (ACAAP). ACAAP does not invest in the funds for the purpose of exercising management or control. 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 securities lending agreement with JPMorgan Chase Bank (JPMCB). Prior to December 12, 2007, the funds had a bank line of credit 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 six months ended May 31, 2008, were as follows: NT International Growth NT Emerging Markets Purchases $47,166,194 $22,533,357 Proceeds from sales $41,516,604 $21,104,511 4. SECURITIES LENDING As of May 31, 2008, securities in NT International Growth and NT Emerging Markets valued at $4,344,354 and $1,232,581, 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 - ------ 23 by the member firms no later than the close of business on the next business day. The total market value of all collateral received, at this date, was $4,558,768 and $1,257,100, 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. 5. FAIR VALUE MEASUREMENTS The funds' securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions held by the funds. In conformity with accounting principles generally accepted in the United States of America, the inputs used to determine a valuation are classified into three broad levels as follows: * Level 1 valuation inputs consist of actual quoted prices based on an active market; * Level 2 valuation inputs consist of significant direct or indirect observable market data; or * Level 3 valuation inputs consist of significant unobservable inputs such as the fund's own assumptions. The level classification is based on the lowest level input that is significant to the fair valuation measurement. The valuation inputs are not an indication of the risks associated with investing in these securities or other financial instruments. The following is a summary of the valuation inputs used to determine the fair value of the funds' securities as of May 31, 2008: Value of Investment Fund/Valuation Inputs Securities NT INTERNATIONAL GROWTH Level 1 -- Quoted Prices $ 3,570,888 Level 2 -- Other Significant Observable Inputs 74,463,437 Level 3 -- Significant Unobservable Inputs -- ----------- $78,034,325 =========== NT EMERGING MARKETS Level 1 -- Quoted Prices $ 4,375,537 Level 2 -- Other Significant Observable Inputs 25,329,787 Level 3 -- Significant Unobservable Inputs -- ----------- $29,705,324 =========== 6. BANK LINE OF CREDIT 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. Prior to December 12, 2007, the funds, along with certain other funds managed by ACIM or ACGIM, had 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, which is subject to annual renewal, bear interest at the Federal Funds rate plus 0.40%. The funds did not borrow from the line during the six months ended May 31, 2008. 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. 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 assets grow. - ------ 24 8. 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. As of May 31, 2008, the components of investments for federal income tax purposes were as follows: NT International NT Emerging Growth Markets Federal tax cost of investments $66,036,615 $24,994,695 =========== =========== Gross tax appreciation of investments $12,775,740 $5,286,184 Gross tax depreciation of investments (778,030) (575,555) ----------- ----------- Net tax appreciation (depreciation) of investments $11,997,710 $4,710,629 =========== =========== 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. As of November 30, 2007, NT International Growth had capital loss deferrals of $(61,065) and NT Emerging Markets had currency loss deferrals of $(4,715). These capital and currency loss 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. 9. RECENTLY ISSUED ACCOUNTING STANDARDS The Financial Accounting Standards Board (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. The adoption of FAS 157 does not materially impact the determination of fair value. In March 2008, the FASB issued Statement of Financial Accounting Standards No. 161, "Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133" (FAS 161). FAS 161 is effective for fiscal years beginning after November 15, 2008. FAS 161 amends and expands disclosures about derivative instruments and hedging activities. FAS 161 requires qualitative disclosures about the objectives and strategies of derivative instruments, quantitative disclosures about the fair value amounts of and gains and losses on derivative instruments, and disclosures of credit-risk-related contingent features in hedging activities. Management is currently evaluating the impact that adopting FAS 161 will have on the financial statement disclosures. - ------ 25 FINANCIAL HIGHLIGHTS NT International Growth For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $12.72 $10.34 $10.00 -------- ------- -------- Income From Investment Operations Net Investment Income (Loss) 0.11 0.12 0.03 Net Realized and Unrealized Gain (Loss) (0.49) 2.29 0.31 -------- ------- -------- Total From Investment Operations (0.38) 2.41 0.34 -------- ------- -------- Distributions From Net Investment Income (0.12) (0.03) -- From Net Realized Gains (0.29) -- -- -------- ------- -------- Total Distributions (0.41) (0.03) -- -------- ------- -------- Net Asset Value, End of Period $11.93 $12.72 $10.34 ======== ======= ======== TOTAL RETURN(3) (2.92)% 23.40% 3.40% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.10%(4) 1.07% 1.07%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.94%(4) 1.15% 0.59%(4) Portfolio Turnover Rate 64% 104% 65% Net Assets, End of Period (in thousands) $74,030 $67,703 $46,380 (1) Six months ended May 31, 2008 (unaudited). (2) May 12, 2006 (fund inception) through November 30, 2006. (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. (4) Annualized. See Notes to Financial Statements. - ------ 26 NT Emerging Markets For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008(1) 2007 2006(2) PER-SHARE DATA Net Asset Value, Beginning of Period $16.19 $11.01 $10.00 -------- ------- -------- Income From Investment Operations Net Investment Income (Loss) 0.10 0.15 0.07 Net Realized and Unrealized Gain (Loss) (1.06) 5.12 0.94 -------- ------- -------- Total From Investment Operations (0.96) 5.27 1.01 -------- ------- -------- Distributions From Net Investment Income (0.20) (0.09) -- From Net Realized Gains (2.46) -- -- -------- ------- -------- Total Distributions (2.66) (0.09) -- -------- ------- -------- Net Asset Value, End of Period $12.57 $16.19 $11.01 ======== ======= ======== TOTAL RETURN(3) (6.09)% 48.22% 10.10% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.53%(4) 1.46% 1.60%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.38%(4) 1.12% 1.68%(4) Portfolio Turnover Rate 90% 113% 59% Net Assets, End of Period (in thousands) $28,853 $28,378 $19,844 (1) Six months ended May 31, 2008 (unaudited). (2) May 12, 2006 (fund inception) through November 30, 2006. (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. (4) Annualized. See Notes to Financial Statements. - ------ 27 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 Investments' 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. - ------ 28 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 EM GROWTH INDEX represents the net performance of growth stocks in global emerging market countries. The MSCI EM VALUE INDEX represents the net performance of value 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. - ------ 29 NOTES - ------ 30 NOTES - ------ 31 NOTES - ------ 32 [back cover] [american century investments logo and text logo ®] 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 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. 0807 CL-SAN-60822N
ITEM 2. CODE OF ETHICS. Not applicable for semiannual report filings. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semiannual report filings. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semiannual report filings. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. INVESTMENTS. (a) The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. (b) Not applicable. 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) Not applicable for semiannual report filings. (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: July 30, 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: July 30, 2008 By: /s/ Robert J. Leach --------------------------------------------------- Name: Robert J. Leach Title: Vice President, Treasurer, and Chief Financial Officer (principal financial officer) Date: July 30, 2008