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 811-06247 --------------------------------------------- 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: 11-30-2008 -------------------------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS. [front cover] ANNUAL REPORT NOVEMBER 30, 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 JONATHAN THOMAS [photo of Jonathan Thomas] Dear Investor: Thank you for taking time to review the following discussions, from our experienced portfolio management team, of the fund reporting period ended November 30, 2008. It was a time of enormous upheaval and change. We understand and appreciate the challenges you have faced during this historic period, and share your concerns about the economy, the markets, and fund holdings. To help address these issues, I'd like to provide my perspective on how we have managed--and continue to manage--your investments in these uncertain times. As a company, American Century Investments® is well positioned to deal with market turmoil. We are financially strong and privately held, which allows us to align our resources with your long-term investment interests. In addition, our actively managed, team-based approach allows our portfolio teams to identify attractive investment opportunities regardless of market conditions. Our seasoned investment professionals have substantial experience and have successfully navigated previous market crises. These portfolio managers and analysts continue to use a team approach and follow disciplined investment processes designed to produce the best possible long-term results for you. For example, our equity investment teams are working closely with our fixed income group to monitor and assess credit crisis developments. The fixed income team anticipated dislocation in the credit markets and--through its disciplined processes and teamwork--helped reduce our exposure to investments that suffered substantial losses. How soon a sustainable recovery will occur is uncertain. But I am certain of this: Since 1958, we've demonstrated a consistent ability to execute solid, long-term investment strategies and the discipline to remain focused during times of volatility or shifts in the markets. We've stayed true to our principles, especially our belief that your success is the ultimate measure of our success. Thank you for your continued confidence in us. 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 GLOBAL GROWTH Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 9 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 10 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 10 EMERGING MARKETS Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 13 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 14 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 14 INTERNATIONAL VALUE Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 17 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 18 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 18 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 19 FINANCIAL STATEMENTS Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 22 Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 33 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 35 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 36 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 38 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 50 Report of Independent Registered Public Accounting Firm . . . . . . . 74 OTHER INFORMATION Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Approval of Management Agreements for International Growth, Global Growth, Emerging Markets and International Value. . . . . . . 78 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 83 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 84 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 Kopinski, Chief Investment Officer, International Equity CREDIT CRISIS DEMONSTRATES ITS SCOPE What started as a credit crisis in the U.S. subprime mortgage market eventually exploded into a worldwide financial sector meltdown in 2008. Frozen credit markets and slowing economic growth led to plunging international stock returns for the 12-month period ended November 30, 2008. Stock investors had no where to hide, as developed and emerging markets plunged. For much of the period, soaring oil and commodity prices caused inflation to spike, which added to investors' woes. After peaking at $147 a barrel in July, however, oil prices quickly descended on waning global demand. Other commodity prices followed suit, and near-term inflationary pressures subsided. JOINT EFFORT PROMPTS RATE CUTS At the urging of the U.S. Federal Reserve, global central banks launched a coordinated response to combat the mounting credit crisis and restore worldwide market liquidity. Rate cuts represented a key component of this strategy. The Bank of England, which had been steadily cutting rates since December 2007, slashed its key lending rate by 275 basis points during the period to 3.0%. Citing sluggish economic growth and severe financial sector strain, Japan implemented its first rate cut in seven years. In early October, Japan's central bank cut the nation's key lending rate to 0.3% from 0.5%. In Europe, action on the monetary policy front was mixed. As late as July 2008, the European Central Bank (ECB) hiked its key interest rate to combat the effects of rising inflation and a record-high euro. But, as economic conditions worsened and inflationary pressures eased, the ECB finally cut its key lending rate by 150 basis points late in the period to 3.25%. CONCENTRATING ON OPPORTUNITY The recent negative financial and economic news makes it difficult to see the opportunities that exist in the current market environment. For example, given their current prices and expected rates of economic growth, certain emerging markets appear attractive on a long-term basis. With our disciplined investment approach, we are as focused as ever on finding and capitalizing on the best international investment opportunities. International Equity Total Returns For the 12 months ended November 30, 2008 (in U.S. dollars) MSCI EM Index -56.42% MSCI EAFE Growth Index -47.28% MSCI Europe Index -49.99% MSCI EAFE Index -47.79% MSCI World Free Index -43.30% MSCI EAFE Value Index -48.33% MSCI Japan Index -37.12% - ------ 2 PERFORMANCE International Growth Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years 10 years Inception Date INVESTOR CLASS -48.67% 1.11% 0.84% 6.35% 5/9/91 MSCI EAFE INDEX -47.79% 2.00% 0.60% 3.74%(1) -- MSCI EAFE GROWTH INDEX -47.28% 1.53% -1.36% 2.01%(1) -- Institutional Class -48.55% 1.32% 1.04% 2.36% 11/20/97 A Class(2) No sales charge* -48.79% 0.84% 0.58% 3.45% With sales charge* -51.73% -0.35% -0.01% 2.95% 10/2/96 B Class No sales charge* -49.18% 0.11% -- 3.65% With sales charge* -53.18% -0.09% -- 3.51% 1/31/03 C Class -49.18% 0.08% -- -2.67% 6/4/01 R Class -48.92% 0.62% -- 1.94% 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) Since 4/30/91, the date nearest the Investor Class's inception for which data are available. (2) 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 November 30, 1998
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One-Year Returns Over 10 Years Periods ended November 30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 43.22% -2.47% -24.18% -14.54% 13.70% 17.45% 12.09% 27.03% 23.09% -48.67% MSCI EAFE Index 21.10% -9.67% -19.13% -12.50% 24.22% 24.19% 13.25% 28.20% 17.30% -47.79% MSCI EAFE Growth Index 23.18% -17.66% -23.61% -13.53% 20.63% 19.07% 12.14% 25.29% 22.32% -47.28% 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 -48.67%* for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -47.79%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which increasingly restricted corporate access to operating capital and fueled economic anxieties. Within the benchmark and the portfolio, every country and sector posted double-digit declines for the period. JAPAN LED DETRACTORS From a regional perspective, exposure in Japan, the portfolio's second-largest country weighting, detracted the most from relative results. The Japanese market outperformed MSCI EAFE during the 12-month period, boosted by a surge in the value of the yen versus the U.S. dollar. Our underweight exposure to the Japanese market detracted significantly from overall performance. Stock-specific exposure to Greece and France also weighed on returns. At the opposite end of the performance spectrum, the Netherlands, followed by the United Kingdom, the portfolio's largest country weighting, and Ireland, made the greatest contributions to the portfolio's relative performance. Within each country, stock selection accounted for the outperformance compared with the benchmark. UTILITIES, INDUSTRIALS SECTORS LAGGED The utilities industry represented the portfolio's smallest sector weighting, yet it had the largest negative impact on relative performance. This was due to the portfolio's underweight to the sector combined with unfavorable stock selection. Our position in Finland's state-owned electric utility Fortum Oyj was the sector's poorest performer, mainly due to concerns about the company's exposure to Russia's energy market. The industrials sector was among the portfolio's top performers in the first half of the period, but slumping worldwide demand landed the sector among the worst contributors--for the portfolio and the benchmark--for the full 12 months. Our overweight to electrical equipment companies accounted for the bulk of the sector's relative underperformance. Q-Cells, the German manufacturer of solar cells, was the sector's weakest stock, tumbling on weak economic data and slowing demand for solar projects. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 BG Group plc 2.4% 2.0% ENI SpA 2.2% 2.0% Nestle SA 2.1% 1.5% Total SA 2.0% 1.8% Nintendo Co. Ltd. 1.8% 1.6% Reckitt Benckiser Group plc 1.7% 1.5% CSL Ltd. 1.7% 1.5% Novartis AG 1.7% 0.9% iShares MSCI Japan Index Fund 1.7% 0.9% Koninklijke Ahold NV 1.7% -- *All fund returns referenced in this commentary are for Investor Class shares. - ------ 5 International Growth PORTFOLIO'S FINANCIALS BEAT BENCHMARK Despite the barrage of negative news within the financials industry, the portfolio's financials sector contributed positively to relative performance. Our underweight combined with favorable stock selection helped the portfolio's results outpace those of the benchmark. The portfolio's materials sector also contributed positively to relative performance. In particular, rising demand for agrichemical products from consumers and the alternative energy industry fueled gains in Germany's K+S AG. The company, which produces potash, a key fertilizer ingredient, ranked among the portfolio's top performers during the 12-month period. The portfolio's health care stocks also were top contributors to relative performance, aided by an overweight position and favorable stock selection. In particular, Denmark's Novo Nordisk AS, a pharmaceutical company specializing in insulin treatments for diabetes, was among the portfolio's top contributors. OUTLOOK International Growth primarily invests in companies located in developed countries around the world (excluding the United States). Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies with sustainable growth characteristics. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks & Rights 99.4% 99.9% Temporary Cash Investments 0.3% 0.1% Other Assets and Liabilities(1) 0.3% --(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 November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 United Kingdom 23.1% 20.3% Japan 14.4% 13.4% Switzerland 9.8% 8.9% France 7.2% 7.6% Germany 7.2% 8.2% Australia 4.3% 5.7% Spain 4.1% 3.8% Italy 4.0% 4.3% Canada 3.8% 3.2% Netherlands 3.5% 0.9% Belgium 2.2% 2.3% Brazil 2.2% 1.7% Others Countries 13.6% 19.6% Cash and Equivalents(3) 0.6% 0.1% (3) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 6 PERFORMANCE Global Growth Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years Inception Date INVESTOR CLASS -44.01% 2.57% 5.12% 12/1/98 MSCI WORLD FREE INDEX -43.30% 0.08% -0.49%(1) -- Institutional Class -43.88% 2.79% -2.20% 8/1/00 A Class(2) No sales charge* -44.17% 2.31% 3.79% With sales charge* -47.40% 1.11% 3.17% 2/5/99 B Class No sales charge* -44.62% -- -7.60% With sales charge* -48.62% -- -8.78% 12/1/05 C Class -44.64% 1.55% 1.70% 3/1/02 R Class -44.40% -- -4.39% 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) Since 11/30/98, the date nearest the Investor Class's inception for which data are available. (2) Prior to September 4, 2007, the A Class was referred to as the Advisor Class. Performance, with sales charge, prior to that date has been adjusted to reflect the A Class's current sales charge. Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund's total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not. - ------ 7 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 November 30 1999* 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 66.60% 8.81% -23.62% -12.78% 20.22% 15.59% 18.87% 19.30% 23.73% -44.01% MSCI World Free Index 21.11% -7.64% -16.01% -15.27% 19.17% 17.43% 11.20% 20.28% 12.71% -43.30% * 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. - ------ 8 PORTFOLIO COMMENTARY Global Growth Portfolio Managers: Keith Creveling and Brent Puff PERFORMANCE SUMMARY Global growth returned -44.01%* for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI World Free Index, returned -43.30%. Decelerating economic growth rates and global financial market distress battered equities during the 12-month period. Every sector in the portfolio and benchmark posted double-digit declines. Similarly, every benchmark country and most portfolio countries posted double-digit losses. Put simply, there was no safe haven in 2008. As the fallout from the U.S. subprime mortgage market meltdown spread throughout the global financial system, investor confidence wavered, access to capital for corporations and individuals tightened, and demand for goods and services suffered. COMMODITIES AND INDUSTRIALS PLUNGED ON SLOWING DEMAND The sharp deterioration in global economic growth fueled a severe and dramatic sell-off in the price of most major commodities, reversing a multi-year period of sustained strength. As a result, our investments in commodity producers and in industrial companies whose products and services were in part driven by high commodity prices suffered. With oil and natural gas prices down more than 50% from their mid-year highs, most of the portfolio's investments in the energy sector suffered. Specifically, our investments in global energy service providers Schlumberger, Weatherford International, and Saipem detracted from performance, as customers adjusted downward their spending budgets. Likewise, our investments in agriculture equipment manufacturer John Deere and mining equipment manufacturer Joy Global detracted from performance, as the price of corn, coal, and copper plunged. Investments in companies that manufacture power generation equipment also detracted from performance, as utility customers slowed capital spending plans due to softening demand and rising financing costs. FINANCIALS, CONSUMER DISCRETIONARY WERE TOP SECTORS The portfolio's relative investment performance in the financials sector was strong in 2008 due to solid stock selection and our decision to underweight the sector given the sharp deterioration in operating fundamentals. U.S.-based savings and loan institution Hudson City Bancorp was among the portfolio's top performers, benefiting from diminished competition, conservative lending policies, and its strong capital position. U.S.-based discount broker Charles Schwab Corp. also ranked among the top relative performers. The company steadily attracted new assets under management as key competitors stumbled. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 McDonald's Corp. 2.5% 1.6% Reckitt Benckiser Group plc 2.4% 1.2% DIRECTV Group, Inc. (The) 2.4% 0.6% Wal-Mart Stores, Inc. 2.2% -- Nestle SA 2.1% 1.1% Hewlett-Packard Co. 2.1% 1.7% CVS/Caremark Corp. 2.1% 1.5% Koninklijke KPN NV 1.9% -- CSL Ltd. 1.9% 0.8% MasterCard, Inc., Class A 1.9% 1.2% *All fund returns referenced in this commentary are for Investor Class shares. - ------ 9 Global Growth The portfolio's consumer discretionary sector also contributed favorably to relative performance, led by U.S.-based McDonald's Corp., which was among the portfolio's top-performing stocks. Sustained strong revenue and earnings growth, driven by menu innovation, overseas expansion, and consumer "trade down," enabled McDonald's to materially outperform its peers and avoid the brunt of the global economic slowdown. OUTLOOK Global Growth primarily invests in companies located in developed countries throughout the world, including the United States. We remain focused on identifying companies with the ability to grow sustainably over time. In the current environment, we are focused on identifying companies that have the financial capacity to endure the global recession, a management team focused on protecting profit margins and simultaneously investing for future growth, and a competitive position in the marketplace that likely will be enhanced as weaker players go bankrupt or are acquired. Although we expect continued economic difficulties and market volatility in the short term, we also believe great challenges breed great opportunities. We remain committed to identifying and exploiting those opportunities in the portfolio and helping our shareholders build value over time. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Domestic Common Stocks 51.6% 54.9% Foreign Common Stocks 47.0% 43.4% TOTAL EQUITY EXPOSURE 98.6% 98.3% Temporary Cash Investments 1.4% 1.5% Other Assets and Liabilities(1) --(2) 0.2% (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 November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 United States 51.6% 43.4% United Kingdom 10.5% 9.9% Switzerland 6.0% 4.6% Germany 5.7% 3.9% Japan 4.3% 3.6% Australia 3.8% 4.2% Canada 2.7% 2.8% Netherlands 2.4% 1.8% Belgium 2.2% 2.6% Other Countries 9.4% 21.5% Cash and Equivalents(3) 1.4% 1.7% (3) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 10 PERFORMANCE Emerging Markets Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years 10 years Inception Date INVESTOR CLASS -62.66% 5.14% 7.25% 3.10% 9/30/97 MSCI EM INDEX -56.42% 7.90% 8.33% 3.00% -- Institutional Class -62.63% 5.32% -- 7.89% 1/28/99 A Class(1) No sales charge* -62.78% 4.86% -- 4.66% With sales charge* -64.93% 3.62% -- 4.02% 5/12/99 B Class No sales charge* -63.09% -- -- -55.62% With sales charge* -67.09% -- -- -59.58% 9/28/07 C Class -63.09% 4.07% -- 5.95% 12/18/01 R Class -62.92% -- -- -55.42% 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) 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. - ------ 11 Emerging Markets Growth of $10,000 Over 10 Years $10,000 investment made November 30, 1998
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One-Year Returns Over 10 Years Periods ended November 30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 61.03% -16.73% -10.28% -10.86% 46.26% 18.94% 33.10% 46.10% 48.81% -62.66% MSCI EM Index 45.49% -23.63% -7.37% 4.95% 40.87% 28.88% 33.13% 34.38% 45.57% -56.42% 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. - ------ 12 PORTFOLIO COMMENTARY Emerging Markets Portfolio Managers: Patricia Ribeiro and Mark On* PERFORMANCE SUMMARY Emerging Markets returned -62.66%** for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI Emerging Markets Index, returned - -56.42%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which increasingly restricted corporate access to operating capital and fueled economic anxieties. Plummeting commodity prices late in the period also weighed prominently on the natural resources-rich developing markets. Emerging market stocks underperformed the developed markets, which, as measured by the MSCI EAFE Index and the portfolio, returned -47.79% for the reporting period. Within the MSCI Emerging Markets Index and the portfolio, every sector posted double-digit declines for the period. Similarly, every benchmark country and most countries in the portfolio posted double-digit losses. Overall, stock selection accounted for the portfolio's underperformance relative to the benchmark. CHINA, MEXICO AMONG TOP DETRACTORS From a regional perspective, the portfolio's largest detractors to performance included Indonesia, China, which was the fund's largest-weighted country, and Mexico. In each country, stock selection primarily accounted for the portfolio's poor relative performance. China was home to several of the portfolio's worst-performing stocks, including Suntech Power Holdings and China High Speed Transmission Equipment Group in the electrical equipment industry and China Construction Bank in the financials sector. Although their absolute returns were negative, the Czech Republic, India, and Israel had the greatest positive influence on the portfolio's relative performance. An overweight was helpful in the Czech Republic, while stock selection contributed favorably in India and Israel. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 iShares MSCI Emerging Markets Index Fund 3.8% -- Petroleo Brasileiro SA ADR 3.4% 5.0% China Mobile Ltd. ADR 3.1% 2.3% Industrial & Commercial Bank of China Ltd. H Shares 2.6% 1.2% Sasol Ltd. 2.3% 1.7% Samsung Electronics Co. Ltd. 2.2% 3.5% OAO Gazprom ADR 2.1% 3.2% Taiwan Semiconductor Manufacturing Co. Ltd. 2.1% 1.6% Samsung Fire & Marine Insurance Co. Ltd. 2.0% -- CNOOC Ltd. 2.0% 1.4% * Effective December 19, 2008, Mark On is no longer with American Century Investments. ** All fund returns referenced in this commentary are for Investor Class shares. - ------ 13 Emerging Markets INDUSTRIALS LED DETRACTORS On an absolute basis, all of the portfolio's 10 sectors posted sharply negative returns for the reporting period. The period's widespread losses were most severe in the industrials sector, the largest detractor to the portfolio's relative performance. Globaltrans Investment PLC, a Russian freight rail operator not represented in the benchmark, was the portfolio's largest performance detractor. Stock selection also contributed to poor relative results in the portfolio's energy and consumer discretionary sectors. On a relative basis, only the financials sector made a positive contribution to performance. India's Power Finance Corp., which was not represented in the benchmark, was among the top contributors. The state-owned company provides financing for power projects. Although China and the industrials sector were overall performance detractors, they were home to the portfolio's leading contributor, China South Locomotive and Rolling Stock, a manufacturer of rail vehicles. The company's stock, which the benchmark did not own, advanced strongly due to government stimulus measures focused on China's infrastructure. OUTLOOK Emerging Markets primarily invests in companies located in emerging market countries. Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies we believe have a high likelihood of growing earnings and revenues. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks 97.7% 99.2% Temporary Cash Investments 1.2% 0.3% Other Assets and Liabilities(1) 1.1% 0.5% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 People's Republic of China 15.7% 11.4% Brazil 12.9% 17.8% South Korea 10.6% 10.6% South Africa 7.5% 5.1% Taiwan (Republic of China) 7.1% 10.3% India 6.5% 5.2% Hong Kong 5.1% 2.5% Russian Federation 4.4% 10.8% Czech Republic 4.2% 2.9% Poland 4.0% 2.0% Mexico 3.1% 3.4% Turkey 2.1% 0.8% Other Countries 14.5% 16.4% Cash and Equivalents(2) 2.3% 0.8% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 14 PERFORMANCE International Value Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years 10 years Inception Date A CLASS(1) No sales charge* -47.53% 2.24% 1.76% 1.30% With sales charge* -50.54% 1.04% 1.16% 0.79% 3/31/97 MSCI EAFE INDEX -47.79% 2.00% 0.60% 2.05% -- Investor Class -47.43% -- -- -11.34% 4/3/06 Institutional Class -47.32% -- -- -11.16% 4/3/06 B Class(1) No sales charge* -47.84% 1.55% 1.07% 0.63% With sales charge* -51.84% 1.37% 1.07% 0.63% 3/31/97 C Class -47.93% -- -- -12.20% 4/3/06 R Class -47.61% -- -- -11.74% 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) 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. - ------ 15 International Value Growth of $10,000 Over 10 Years $10,000 investment made November 30, 1998*
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One-Year Returns Over 10 Years Periods ended November 30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 A Class (no sales charge)** 11.54% 0.00% -11.24% -10.87% 20.77% 21.40% 10.68% 28.36% 23.44% -47.53% MSCI EAFE Index 21.10% -9.67% -19.13% -12.50% 24.22% 24.19% 13.25% 28.20% 17.30% -47.79% * 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. - ------ 16 PORTFOLIO COMMENTARY International Value Portfolio Managers: Gary Motyl and Guang Yang PERFORMANCE SUMMARY International Value returned -47.53%* for the 12 months ended November 30, 2008. By comparison, its benchmark, the MSCI EAFE Index, returned -47.79%. (Please see page 2 for additional performance comparisons.) The portfolio's performance reflected the unprecedented turmoil impacting the global economy and financial markets. Deleveraging, a flight from risk assets, fear of recession, and major concerns about the health of the financial system itself made for the worst year in the history of the EAFE Index. In that environment, no sector contributed positively to the portfolio's absolute results. Looking at performance compared with the benchmark, an underweight position and stock selection made the financials sector a key contributor to relative results, though this was largely offset by positioning among utilities shares, among other sectors. NOTABLE DETRACTORS The portfolio's return relative to the benchmark was hurt most by positioning among utilities shares. We were underrepresented in the space, which was among a handful of sectors to hold up better than the broad index. In addition, the utilities stocks we did hold underperformed. It was a similar story in energy, consumer staples, and health care, where a combination of stock selection and/or allocation decisions limited the portfolio's performance compared with the index. Among individual companies, some of the largest detractors were semiconductor-firm Infineon Technologies and medical device firm Agfa Gevaert. German chipmaker Infineon was impacted by a bleak economic outlook, and fell further near the end of the period because of the poor prospects and need for government aid for one of its business units. Agfa continued to suffer from the disappointing performance of its medical imaging business and announced restructuring plans. UNDERWEIGHT FINANCIALS BENEFITED The leading contribution to portfolio performance at the sector level came from an underweight position in financials, the poorest-performing slice of the index. Our investment process focuses on undervalued companies, which requires a judgment about corporate balance sheets, earnings, and security valuations. But several companies in the finance sector have opaque financial statements, making valuation assessments difficult. Because of this lack of transparency and what we believe were optimistic earnings expectations by Wall Street, we were significantly underweight financial stocks. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Nintendo Co. Ltd. 2.4% 2.4% Novartis AG 2.3% 1.4% HSBC Holdings plc 2.1% 1.8% France Telecom SA 2.0% 0.9% Telefonica SA ADR 1.9% 1.5% Sanofi-Aventis 1.8% 1.2% GlaxoSmithKline plc 1.8% 1.3% Royal Dutch Shell plc, Class B 1.7% 1.5% E.ON AG 1.7% 1.9% Nestle SA 1.7% 1.3% * 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. - ------ 17 International Value Stock selection had a positive effect in the sector, which was home to the largest contributor to relative return, global property and casualty insurer ACE Limited. The stock performed relatively well during an otherwise brutal period for financial shares, as the firm beat analyst earnings estimates and increased its dividend payout. OTHER CONTRIBUTORS In terms of individual companies, four of the top-10 contributors to relative results came from the telecommunication services sector, including France Telecom, Telefonos de Mexico, Nippon Telephone and Telegraph, and Chunghwa Telecom. These traditionally defensive-oriented stocks generally held up well because of their strong financial position, steady cash flow, and lack of liquidity or credit problems. However, the telecommunications sector was also home to the single largest detractor from relative results in the form of Telenor. We hold an overweight position in the stock, which stumbled after announcing lower-than-expected profits as a result of increased competition and difficult economic conditions. OUTLOOK "We believe the unprecedented events sweeping global financial markets will offer patient, long-term investors compelling returns when we return to some semblance of normal, functioning markets," said portfolio manager Guang Yang. "Certainly, it is impossible to know when that will happen; in the meantime, we are finding no shortage of high-quality companies trading at what we believe are very attractive levels." "Because we build the International Value portfolio stock by stock from the bottom up, the portfolio's sector and industry selection as well as capitalization range allocations reflect where we are finding superior individual securities at a given time," said Yang. "As of November 30, 2008, we found opportunity in the telecommunication services and information technology sectors, the portfolio's largest overweight positions," he added. "The most notable sector underweights were in financials and consumer staples shares." Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks & Rights 91.1% 88.7% Temporary Cash Investments 8.4% 10.6% Other Assets and Liabilities 0.5% 0.7% Investments by Country as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 United Kingdom 19.1% 18.8% Japan 9.2% 8.2% France 9.0% 7.5% Germany 8.5% 7.2% Switzerland 8.2% 5.8% Netherlands 5.3% 5.1% Spain 4.4% 4.6% South Korea 4.2% 5.7% Hong Kong 2.9% 2.9% People's Republic of China 2.3% 2.0% Taiwan (Republic of China) 2.3% 1.1% Sweden 2.3% 2.8% Other Countries 13.4% 17.0% Cash and Equivalents(1) 8.9% 11.3% (1) Includes temporary cash investments and other assets and liabilities. - ------ 18 SHAREHOLDER FEE EXAMPLES (UNAUDITED) Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2008 to November 30, 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. - ------ 19 Beginning Ending Expenses Paid Account Account During Period* Annualized Value Value 6/1/08 - Expense 6/1/08 11/30/08 11/30/08 Ratio* International Growth ACTUAL Investor Class $1,000 $528.10 $5.08 1.33% Institutional Class $1,000 $528.80 $4.32 1.13% A Class $1,000 $527.40 $6.03 1.58% B Class $1,000 $525.80 $8.89 2.33% C Class $1,000 $525.50 $8.89 2.33% R Class $1,000 $526.60 $6.98 1.83% HYPOTHETICAL Investor Class $1,000 $1,018.35 $6.71 1.33% Institutional Class $1,000 $1,019.35 $5.70 1.13% A Class $1,000 $1,017.10 $7.97 1.58% B Class $1,000 $1,013.35 $11.73 2.33% C Class $1,000 $1,013.35 $11.73 2.33% R Class $1,000 $1,015.85 $9.22 1.83% Global Growth ACTUAL Investor Class $1,000 $569.50 $4.83 1.23% Institutional Class $1,000 $570.20 $4.04 1.03% A Class $1,000 $569.00 $5.81 1.48% B Class $1,000 $566.20 $8.73 2.23% C Class $1,000 $565.90 $8.73 2.23% R Class $1,000 $566.70 $6.78 1.73% HYPOTHETICAL Investor Class $1,000 $1,018.85 $6.21 1.23% Institutional Class $1,000 $1,019.85 $5.20 1.03% A Class $1,000 $1,017.60 $7.47 1.48% B Class $1,000 $1,013.85 $11.23 2.23% C Class $1,000 $1,013.85 $11.23 2.23% R Class $1,000 $1,016.35 $8.72 1.73% * 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. - ------ 20 Beginning Ending Expenses Paid Account Account During Period* Annualized Value Value 6/1/08 - Expense 6/1/08 11/30/08 11/30/08 Ratio* Emerging Markets ACTUAL Investor Class $1,000 $398.10 $6.01 1.72% Institutional Class $1,000 $398.10 $5.31 1.52% A Class $1,000 $397.50 $6.88 1.97% B Class $1,000 $395.30 $9.49 2.72% C Class $1,000 $395.60 $9.49 2.72% R Class $1,000 $396.40 $7.75 2.22% HYPOTHETICAL Investor Class $1,000 $1,016.40 $8.67 1.72% Institutional Class $1,000 $1,017.40 $7.67 1.52% A Class $1,000 $1,015.15 $9.92 1.97% B Class $1,000 $1,011.40 $13.68 2.72% C Class $1,000 $1,011.40 $13.68 2.72% R Class $1,000 $1,013.90 $11.18 2.22% International Value ACTUAL Investor Class $1,000 $564.50 $5.12 1.31% Institutional Class $1,000 $565.50 $4.34 1.11% A Class $1,000 $564.40 $6.10 1.56% B Class $1,000 $563.00 $9.03 2.31% C Class $1,000 $562.20 $9.02 2.31% R Class $1,000 $564.20 $7.08 1.81% HYPOTHETICAL Investor Class $1,000 $1,018.45 $6.61 1.31% Institutional Class $1,000 $1,019.45 $5.60 1.11% A Class $1,000 $1,017.20 $7.87 1.56% B Class $1,000 $1,013.45 $11.63 2.31% C Class $1,000 $1,013.45 $11.63 2.31% R Class $1,000 $1,015.95 $9.12 1.81% * 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. - ------ 21 SCHEDULE OF INVESTMENTS International Growth NOVEMBER 30, 2008 Shares Value Common Stocks & Rights -- 99.4% AUSTRALIA -- 4.3% 647,534 BHP Billiton Ltd. $ 13,013,322 897,452 CSL Ltd. 20,662,535 319,714 Rio Tinto Ltd. 9,859,071 3,124,420 Telstra Corp. Ltd. 8,340,789 -------------- 51,875,717 -------------- BELGIUM -- 2.2% 312,537 Anheuser-Busch Inbev NV 5,143,721 166,785 KBC Groep NV 5,060,328 935,143 SES SA Fiduciary Depositary Receipt 16,387,489 -------------- 26,591,538 -------------- BERMUDA -- 0.5% 190,461 Lazard Ltd., Class A 5,953,811 -------------- BRAZIL -- 2.2% 911,500 Cia Vale do Rio Doce, preference shares 9,819,696 1,422,000 Redecard SA 16,516,678 -------------- 26,336,374 -------------- CANADA -- 3.8% 297,350 Canadian National Railway Co. 10,484,692 169,700 EnCana Corp. 7,943,657 317,620 Gildan Activewear, Inc.(1) 5,375,620 387,480 Research In Motion Ltd.(1) 16,456,276 148,260 Shoppers Drug Mart Corp. 5,282,704 -------------- 45,542,949 -------------- CZECH REPUBLIC -- 0.8% 233,800 CEZ AS 9,280,848 -------------- DENMARK -- 1.9% 379,686 Novo Nordisk AS B Shares 19,404,484 73,520 Vestas Wind Systems AS(1) 3,343,025 -------------- 22,747,509 -------------- FINLAND -- 1.4% 447,570 Fortum Oyj 8,992,238 231,990 Nokia Oyj 3,282,412 584,280 Stora Enso Oyj R Shares 4,766,542 -------------- 17,041,192 -------------- FRANCE -- 7.2% 192,770 ALSTOM SA 10,283,874 597,395 AXA SA 11,438,441 224,050 BNP Paribas 12,421,397 113,980 Compagnie Generale des Etablissements Michelin, Class B 5,471,012 Shares Value 80,940 Essilor International SA $3,239,451 77,218 Groupe Danone 4,451,381 460,776 Total SA 24,182,985 251,754 Ubisoft Entertainment SA(1) 5,802,275 342,280 Vivendi 9,703,748 -------------- 86,994,564 -------------- GERMANY -- 7.2% 76,420 adidas AG 2,391,264 170,170 Bayer AG 8,845,425 124,140 Deutsche Boerse AG 8,927,883 732,253 Deutsche Telekom AG 10,193,583 447,023 Fresenius Medical Care AG & Co. KGaA 19,536,498 107,243 K+S AG 4,863,231 89,570 Linde AG 6,575,155 142,480 Muenchener Rueckversicherungs AG 19,465,595 17,974 Q-Cells AG(1) 605,500 153,040 SAP AG 5,259,445 -------------- 86,663,579 -------------- GREECE -- 1.5% 139,410 Coca Cola Hellenic Bottling Co. SA 2,169,593 840,941 National Bank of Greece SA 16,066,357 -------------- 18,235,950 -------------- HONG KONG -- 1.4% 259,000 China Mobile Ltd. 2,374,491 265,700 Hang Seng Bank Ltd. 3,400,254 1,298,000 Li & Fung Ltd. 2,362,718 4,628,000 Link Real Estate Investment Trust (The) 8,738,317 -------------- 16,875,780 -------------- INDIA -- 0.9% 474,366 Bharti Airtel Ltd.(1) 6,405,204 153,838 Housing Development Finance Corp. Ltd. 4,537,439 -------------- 10,942,643 -------------- IRELAND -- 1.0% 450,969 Ryanair Holdings plc ADR(1) 11,842,446 -------------- ISRAEL -- 1.2% 339,740 Teva Pharmaceutical Industries Ltd. ADR 14,659,781 -------------- ITALY -- 4.0% 1,156,979 ENI SpA 26,252,530 184,144 Finmeccanica SpA 2,306,843 1,865,260 Intesa Sanpaolo SpA 5,640,263 922,494 Saipem SpA 14,381,018 -------------- 48,580,654 -------------- - ------ 22 International Growth Shares Value JAPAN -- 14.4% 174,000 Benesse Corp. $7,363,081 140,500 Canon, Inc. 4,180,605 1,281 Central Japan Railway Co. 10,841,773 270,800 FamilyMart Co. Ltd. 11,032,675 93,400 FAST RETAILING CO. LTD. 10,721,489 298,000 Honda Motor Co. Ltd. 6,550,120 2,332,310 iShares MSCI Japan Index Fund 20,197,805 657,000 Japan Steel Works Ltd. (The) 6,753,295 350,400 Konami Corp. 7,941,869 312,300 Kurita Water Industries Ltd. 7,392,000 223,200 Mitsubishi Corp. 2,776,103 68,200 Nintendo Co. Ltd. 21,110,670 18,520 Rakuten, Inc. 10,131,795 155,000 Shiseido Co. Ltd. 2,882,809 6,350 Sony Financial Holdings, Inc. 18,782,115 950 Sumitomo Mitsui Financial Group, Inc. 3,485,025 190,600 Terumo Corp. 8,851,379 1,001,000 Tokyo Gas Co. Ltd. 4,509,458 115,400 Unicharm Corp. 7,967,565 -------------- 173,471,631 -------------- LUXEMBOURG -- 0.2% 66,300 Millicom International Cellular SA 2,541,279 -------------- NETHERLANDS -- 3.5% 124,410 ASML Holding NV 1,898,039 1,781,610 Koninklijke Ahold NV 19,887,479 1,287,900 Koninklijke KPN NV 17,811,910 102,040 Unilever NV CVA 2,386,073 -------------- 41,983,501 -------------- PEOPLE'S REPUBLIC OF CHINA -- 1.1% 3,320,000 China Communications Construction Co. Ltd. H Shares 3,556,854 6,369,500 China Merchants Bank Co. Ltd. H Shares 10,228,861 -------------- 13,785,715 -------------- SINGAPORE -- 0.5% 758,000 United Overseas Bank Ltd. 6,583,117 -------------- SOUTH KOREA -- 0.4% 149,990 Hyundai Motor Co. 4,242,408 -------------- SPAIN -- 4.1% 1,688,803 Banco Santander SA(1) 13,890,023 906,113 Cintra Concesiones de Infraestructuras de Transporte SA(1) 7,242,440 Shares Value 618,190 Indra Sistemas SA $ 12,644,077 752,190 Telefonica SA 15,275,666 -------------- 49,052,206 -------------- SWEDEN -- 0.2% 55,090 H & M Hennes & Mauritz AB B Shares 2,028,574 -------------- SWITZERLAND -- 9.8% 523,545 ABB Ltd.(1) 6,764,863 110,920 Credit Suisse Group AG 3,255,812 162,610 EFG International AG 2,597,681 409,020 Julius Baer Holding AG 13,512,468 71,800 Lonza Group AG 5,939,520 689,050 Nestle SA 24,924,712 439,220 Novartis AG 20,531,462 115,829 Roche Holding AG 16,285,664 7,730 SGS SA 6,621,664 95,463 Syngenta AG 16,980,212 -------------- 117,414,058 -------------- TAIWAN (REPUBLIC OF CHINA) -- 0.6% 2,168,800 Hon Hai Precision Industry Co. Ltd. 4,212,661 391,840 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 2,801,656 -------------- 7,014,317 -------------- UNITED KINGDOM -- 23.1% 620,847 Admiral Group plc 9,428,634 359,230 Aggreko plc 2,487,805 386,720 AMEC plc 3,142,334 77,069 Anglo American plc 1,832,842 473,860 AstraZeneca plc 17,905,970 558,957 Autonomy Corp. plc(1) 8,055,554 688,120 BAE Systems plc 3,782,459 1,995,259 BG Group plc 28,573,220 438,978 British American Tobacco plc 11,504,041 1,934,523 British Sky Broadcasting Group plc 13,189,267 354,730 Cadbury plc 3,006,890 1,108,090 Capita Group plc (The) 11,881,569 2,959,616 Cobham plc 8,124,336 2,699,520 Compass Group plc 12,803,946 844,532 GlaxoSmithKline plc 14,630,598 948,394 HSBC Holdings plc 10,192,908 620,290 International Power plc 2,469,424 1,775,201 Man Group plc 6,913,403 362,610 Next plc 6,216,391 487,613 Reckitt Benckiser Group plc 20,694,356 1,448,043 Reed Elsevier plc 12,040,395 1,075,570 Scottish and Southern Energy plc 18,233,977 - ------ 23 International Growth Shares Value 1,779,720 Stagecoach Group plc $4,809,809 460,740 Standard Chartered plc 6,023,250 151,892 Standard Chartered plc Rights(1) 957,770 3,568,259 Tesco plc 16,193,379 2,202,670 TUI Travel plc 7,201,756 8,073,620 Vodafone Group plc 15,773,241 -------------- 278,069,524 -------------- TOTAL COMMON STOCKS & RIGHTS (Cost $1,423,149,578) 1,196,351,665 -------------- Temporary Cash Investments -- 0.3% Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $4,278,542), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $4,200,070) (Cost $4,200,000) 4,200,000 -------------- TOTAL INVESTMENT SECURITIES -- 99.7% (Cost $1,427,349,578) 1,200,551,665 -------------- OTHER ASSETS AND LIABILITIES -- 0.3% 3,307,031 -------------- TOTAL NET ASSETS -- 100.0% $1,203,858,696 ============== Market Sector Diversification (as a % of net assets) Financials 18.5% Health Care 13.0% Consumer Staples 11.4% Consumer Discretionary 11.2% Industrials 10.1% Energy 8.7% Information Technology 7.8% Materials 6.9% Telecommunication Services 6.5% Utilities 3.6% Diversified 1.7% Cash and Equivalents* 0.6% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt CVA = Certificaten Van Aandelen MSCI = Morgan Stanley Capital International (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 24 Global Growth NOVEMBER 30, 2008 Shares Value Common Stocks -- 98.6% AUSTRALIA -- 3.8% 226,080 BHP Billiton Ltd. $ 4,543,471 265,345 CSL Ltd. 6,109,185 23,510 Rio Tinto Ltd. 724,982 465,240 Telstra Corp. Ltd. 1,241,980 ------------ 12,619,618 ------------ BELGIUM -- 2.2% 41,280 KBC Groep NV 1,252,453 342,527 SES SA Fiduciary Depositary Receipt 6,002,459 ------------ 7,254,912 ------------ BERMUDA -- 1.1% 52,830 Accenture Ltd., Class A 1,636,673 60,171 Lazard Ltd., Class A 1,880,945 ------------ 3,517,618 ------------ BRAZIL -- 0.8% 231,700 Redecard SA 2,691,220 ------------ CANADA -- 2.7% 79,460 Canadian National Railway Co. 2,798,581 37,182 Gildan Activewear, Inc.(1) 633,581 43,630 Research In Motion Ltd.(1) 1,852,966 96,710 Shoppers Drug Mart Corp. 3,445,908 ------------ 8,731,036 ------------ CHANNEL ISLANDS -- 0.6% 111,130 Amdocs Ltd.(1) 2,088,133 ------------ DENMARK -- 0.5% 31,630 Novo Nordisk AS B Shares 1,616,504 ------------ FRANCE -- 1.6% 53,050 ALSTOM SA 2,830,106 40,720 Pernod-Ricard SA 2,405,421 ------------ 5,235,527 ------------ GERMANY -- 5.7% 64,480 Deutsche Boerse AG 4,637,264 114,790 Fresenius Medical Care AG & Co. KGaA 5,016,732 33,310 Linde AG 2,445,221 38,240 Muenchener Rueckversicherungs AG 5,224,343 40,420 SAP AG ADR 1,379,939 ------------ 18,703,499 ------------ GREECE -- 0.7% 127,396 National Bank of Greece SA 2,433,928 ------------ Shares Value HONG KONG -- 1.0% 606,000 Li & Fung Ltd. $ 1,103,087 1,123,500 Link Real Estate Investment Trust (The) 2,121,327 ------------ 3,224,414 ------------ INDIA -- 0.6% 135,890 Bharti Airtel Ltd.(1) 1,834,877 ------------ IRELAND -- 0.6% 69,500 Ryanair Holdings plc ADR(1) 1,825,070 ------------ ITALY -- 0.6% 131,120 Saipem SpA 2,044,067 ------------ JAPAN -- 4.3% 210 Central Japan Railway Co. 1,777,340 42,400 FamilyMart Co. Ltd. 1,727,420 40,300 Kurita Water Industries Ltd. 953,883 15,900 Nintendo Co. Ltd. 4,921,696 5,182 Rakuten, Inc. 2,834,933 676 Sony Financial Holdings, Inc. 1,999,482 ------------ 14,214,754 ------------ NETHERLANDS -- 2.4% 153,900 Koninklijke Ahold NV 1,717,931 447,270 Koninklijke KPN NV 6,185,832 ------------ 7,903,763 ------------ SPAIN -- 1.3% 547,162 Cintra Concesiones de Infraestructuras de Transporte SA 4,373,393 ------------ SWITZERLAND -- 6.0% 63,730 ACE Ltd. 3,329,893 115,079 EFG International AG 1,838,377 83,140 Julius Baer Holding AG 2,746,630 34,050 Lonza Group AG 2,816,722 192,680 Nestle SA 6,969,731 2,360 SGS SA 2,021,621 ------------ 19,722,974 ------------ UNITED KINGDOM -- 10.5% 163,915 Admiral Group plc 2,489,333 319,330 BG Group plc 4,572,983 131,000 British Sky Broadcasting Group plc 893,137 370,529 Capita Group plc (The) 3,973,022 1,155,530 Compass Group plc 5,480,731 898,250 International Power plc 3,576,005 183,765 Reckitt Benckiser Group plc 7,799,009 653,283 Stagecoach Group plc 1,765,540 849,020 Tesco plc 3,853,000 ------------ 34,402,760 ------------ - ------ 25 Global Growth Shares Value UNITED STATES -- 51.6% 90,890 Abbott Laboratories $ 4,761,727 294,470 Activision Blizzard, Inc.(1) 3,445,299 30,100 Air Products & Chemicals, Inc. 1,437,576 62,080 Allergan, Inc. 2,339,174 87,660 American Express Co. 2,043,355 166,170 American Tower Corp., Class A(1) 4,526,471 98,200 AON Corp. 4,448,460 24,650 Apollo Group, Inc., Class A(1) 1,894,106 54,420 Apple, Inc.(1) 5,043,101 93,150 Bank of New York Mellon Corp. (The) 2,814,061 51,220 Baxter International, Inc. 2,709,538 46,470 Becton, Dickinson & Co. 2,952,239 43,950 Celgene Corp.(1) 2,289,795 251,110 Charles Schwab Corp. (The) 4,602,846 45,650 Chevron Corp. 3,606,807 15,220 Church & Dwight Co., Inc. 904,677 349,480 Cisco Systems, Inc.(1) 5,780,399 81,310 Colgate-Palmolive Co. 5,290,842 117,220 Corrections Corp. of America(1) 2,120,510 159,830 Covidien Ltd. 5,889,735 233,090 CVS/Caremark Corp. 6,743,294 46,450 Devon Energy Corp. 3,360,193 353,090 DIRECTV Group, Inc. (The)(1) 7,771,511 37,490 FMC Technologies, Inc.(1) 1,029,850 7,220 Google, Inc., Class A(1) 2,115,171 193,090 Hewlett-Packard Co. 6,812,215 158,220 Hudson City Bancorp., Inc. 2,643,856 67,870 Juniper Networks, Inc.(1) 1,179,581 42,040 MasterCard, Inc., Class A 6,108,412 140,530 McDonald's Corp. 8,256,138 181,600 Microsoft Corp. 3,671,952 42,900 Monsanto Co. 3,397,680 97,210 Occidental Petroleum Corp. 5,262,949 338,680 Oracle Corp.(1) 5,449,361 35,260 Raytheon Co. 1,720,688 129,380 SAIC, Inc.(1) 2,302,964 150,100 Southwest Airlines Co. 1,298,365 126,525 Southwestern Energy Co.(1) 4,348,664 171,970 St. Jude Medical, Inc.(1) 4,820,319 143,530 Thermo Fisher Scientific, Inc.(1) 5,121,150 30,240 U.S. Bancorp. 815,875 120,480 Union Pacific Corp. 6,028,819 Shares Value 128,930 Wal-Mart Stores, Inc. $ 7,204,608 237,800 Western Union Co. (The) 3,155,606 ------------ 169,519,939 ------------ TOTAL COMMON STOCKS (Cost $403,497,292) 323,958,006 ------------ Temporary Cash Investments -- 1.4% 32,181 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares 32,181 Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $4,584,152), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $4,500,075) 4,500,000 ------------ TOTAL TEMPORARY CASH INVESTMENTS (Cost $4,532,181) 4,532,181 ------------ TOTAL INVESTMENT SECURITIES -- 100.0% (Cost $408,029,473) 328,490,187 ------------ OTHER ASSETS AND LIABILITIES(2) 94,190 ------------ TOTAL NET ASSETS -- 100.0% $328,584,377 ============ Market Sector Diversification (as a % of net assets) Information Technology 17.4% Financials 15.2% Consumer Staples 14.6% Health Care 14.1% Consumer Discretionary 10.6% Industrials 10.2% Energy 7.4% Telecommunication Services 4.2% Materials 3.8% Utilities 1.1% Cash and Equivalents* 1.4% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt (1) Non-income producing. (2) Category is less than 0.05% of total net assets. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 26 Emerging Markets NOVEMBER 30, 2008 Shares Value Common Stocks -- 97.7% BRAZIL -- 12.9% 450,100 ALL - America Latina Logistica SA $ 2,188,357 400,000 Banco Bradesco SA, preference shares 4,248,797 253,552 Dufry South America Ltd. BDR 1,399,164 232,900 Global Village Telecom Holding SA(1) 2,634,763 328,300 Lupatech SA(1) 2,622,488 405,000 Natura Cosmeticos SA 3,672,359 584,301 Petroleo Brasileiro SA ADR 12,235,263 498,300 Redecard SA 5,787,806 478,400 Tractebel Energia SA 3,999,147 571,800 Unibanco-Uniao de Bancos Brasileiros SA 3,646,662 379,208 Vivo Particpacoes SA ADR, preference shares(1) 4,705,971 ------------ 47,140,777 ------------ CHILE -- 0.6% 368,859 Cia Cervecerias Unidas SA 2,063,566 ------------ CZECH REPUBLIC -- 4.2% 115,063 CEZ AS 4,567,503 36,422 Komercni Banka AS 5,473,151 242,019 Telefonica O2 Czech Republic AS 5,265,756 ------------ 15,306,410 ------------ HONG KONG -- 5.1% 250,063 China Mobile Ltd. ADR 11,460,387 8,817,000 CNOOC Ltd. 7,220,369 ------------ 18,680,756 ------------ HUNGARY -- 1.7% 1,280,919 Magyar Telekom Telecommuncations plc 3,791,143 16,775 Richter Gedeon Nyrt 2,254,596 ------------ 6,045,739 ------------ INDIA -- 6.5% 447,633 Dr. Reddys Laboratories Ltd. 3,845,041 3,118,626 Power Finance Corp. Ltd. 6,954,068 3,733,362 Power Grid Corp. of India Ltd. 5,525,681 1,270,614 Rolta India Ltd. 4,377,786 177,449 United Spirits Ltd.(1) 3,037,315 ------------ 23,739,891 ------------ INDONESIA -- 1.8% 19,446,000 PT Bank Central Asia Tbk 4,379,287 11,342,000 PT Bumi Resources Tbk 931,041 7,299,000 PT Perusahaan Gas Negara 1,122,863 ------------ 6,433,191 ------------ Shares Value ISRAEL -- 1.9% 160,569 Teva Pharmaceutical Industries Ltd. ADR $ 6,928,552 ------------ LUXEMBOURG -- 0.3% 51,843 Tenaris SA ADR 1,090,258 ------------ MALAYSIA -- 0.6% 10,557,600 SapuraCrest Petroleum Bhd 2,134,393 ------------ MEXICO -- 3.1% 144,121 America Movil, SAB de CV ADR, Series L 4,323,630 305,775 Desarrolladora Homex SAB de CV(1) 826,728 2,644,055 Grupo Financiero Banorte, SAB de CV, Class O 4,115,476 743,314 Grupo Modelo SAB de CV 1,887,570 ------------ 11,153,404 ------------ MULTI-NATIONAL -- 3.8% 604,298 iShares MSCI Emerging Markets Index Fund 13,874,682 ------------ PEOPLE'S REPUBLIC OF CHINA -- 15.7% 12,227,500 Asia Cement China Holdings Corp.(1) 5,379,407 5,306,000 China Construction Bank Corp., H Shares 2,772,763 4,533,000 China High Speed Transmission Equipment Group Co. Ltd. 3,582,517 1,773,500 China Merchants Bank Co. Ltd. H Shares 2,848,086 1,826,500 China Railway Construction Corp., H Shares(1) 2,478,594 15,017,428 China South Locomotive & Rolling Stock Corp. H Shares(1) 6,336,712 4,374,000 China Yurun Food Group Ltd. 4,868,067 19,156,000 Industrial & Commercial Bank of China Ltd. H Shares 9,421,737 235,929 Mindray Medical International Ltd. ADR 4,265,596 104,760 New Oriental Education & Technology Group ADR(1) 5,406,664 2,388,000 Parkson Retail Group Ltd. 2,211,089 545,200 Tencent Holdings Ltd. 3,001,936 11,575,000 Want Want China Holdings Ltd. 4,711,716 ------------ 57,284,884 ------------ PERU -- 1.7% 142,767 Credicorp Ltd. 6,238,918 ------------ - ------ 27 Emerging Markets Shares Value POLAND -- 4.0% 2,627,719 Polskie Gornictwo Naftowe I Gazownictwo SA $ 3,124,845 466,480 Powszechna Kasa Oszczednosci Bank Polski SA 5,068,856 992,525 Telekomunikacja Polska SA 6,511,010 ------------ 14,704,711 ------------ RUSSIAN FEDERATION -- 4.4% 693,919 Globaltrans Investment plc GDR(1) 1,549,472 443,717 OAO Gazprom ADR 7,791,295 80,906 OAO LUKOIL 2,612,118 299,707 OJSC Pharmstandard GDR(1) 2,844,859 225,238 X5 Retail Group NV GDR(1) 1,228,410 ------------ 16,026,154 ------------ SINGAPORE -- 1.2% 2,396,000 Wilmar International Ltd. 4,379,134 ------------ SOUTH AFRICA -- 7.5% 1,085,040 Aspen Pharmacare Holdings Ltd.(1) 4,048,007 141,295 MTN Group Ltd. 1,476,944 358,434 Naspers Ltd., Class N 5,520,708 290,703 Sasol Ltd. 8,348,360 535,464 Shoprite Holdings Ltd. 2,410,285 231,374 Tiger Brands Ltd. 3,130,738 787,596 Truworths International Ltd. 2,480,230 ------------ 27,415,272 ------------ SOUTH KOREA -- 10.6% 19,539 DC Chemical Co. Ltd. 2,682,954 33,029 Hite Brewery Co. Ltd.(1) 4,069,097 140,840 Korean Reinsurance Co. 858,484 158,200 KT Freetel Co. Ltd.(1) 3,070,087 16,076 LG Household & Health Care Ltd. 1,830,731 31,606 Nong Shim Co. Ltd. 4,853,834 24,637 Samsung Electronics Co. Ltd. 8,149,078 55,038 Samsung Fire & Marine Insurance Co. Ltd. 7,264,795 39,787 Yuhan Corp. 5,784,459 ------------ 38,563,519 ------------ Shares Value TAIWAN (REPUBLIC OF CHINA) -- 7.1% 1,682,000 Acer, Inc. $ 2,146,760 2,739,673 Asia Cement Corp. 2,221,879 1,054,200 Hon Hai Precision Industry Co. Ltd. 2,047,670 819,350 MediaTek, Inc. 5,460,281 2,159,000 President Chain Store Corp. 5,087,871 6,220,100 Taiwan Semiconductor Manufacturing Co. Ltd. 7,676,945 2,035,000 Wistron Corp. 1,355,040 ------------ 25,996,446 ------------ THAILAND -- 0.5% 1,507,500 Kasikornbank PCL NVDR 1,824,861 ------------ TURKEY -- 2.1% 615,200 Anadolu Efes Biracilik Ve Malt 4,846,997 1,957,679 Turkiye Garanti Bankasi AS(1) 2,881,030 ------------ 7,728,027 ------------ UNITED KINGDOM -- 0.4% 211,668 Antofagasta plc 1,417,807 ------------ TOTAL COMMON STOCKS (Cost $515,578,435) 356,171,352 ------------ Temporary Cash Investments -- 1.2% Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $4,584,152), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $4,500,075) (Cost $4,500,000) 4,500,000 ------------ TOTAL INVESTMENT SECURITIES -- 98.9% (Cost $520,078,435) 360,671,352 ------------ OTHER ASSETS AND LIABILITIES -- 1.1% 3,836,562 ------------ TOTAL NET ASSETS -- 100.0% $364,507,914 ============ - ------ 28 Emerging Markets Market Sector Diversification (as a % of net assets) Financials 20.2% Consumer Staples 14.3% Energy 12.5% Telecommunication Services 11.9% Information Technology 9.4% Health Care 8.2% Industrials 5.1% Consumer Discretionary 4.9% Utilities 4.2% Diversified 3.8% Materials 3.2% Cash and Equivalents* 2.3% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt BDR = Brazilian Depositary Receipt GDR = Global Depositary Receipt MSCI = Morgan Stanley Capital International NVDR = Non-Voting Depositary Receipts OJSC = Open Joint Stock Company (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 29 International Value NOVEMBER 30, 2008 Shares Value Common Stocks & Rights -- 91.1% AUSTRALIA -- 1.2% 113,610 Alumina Ltd. $ 95,363 4,630 Australia & New Zealand Banking Group Ltd. 45,481 26,912 National Australia Bank Ltd. 357,609 ----------- 498,453 ----------- AUSTRIA -- 0.5% 16,860 Telekom Austria AG 225,823 ----------- BELGIUM -- 0.4% 49,880 AGFA-Gevaert NV(1) 151,743 ----------- BRAZIL -- 1.7% 41,720 Cia Vale do Rio Doce ADR, preference shares 454,331 18,780 Empresa Brasileira de Aeronautica SA ADR, preference shares 291,653 ----------- 745,984 ----------- DENMARK -- 0.7% 6,874 Vestas Wind Systems AS(1) 312,567 ----------- FINLAND -- 1.3% 34,110 Stora Enso Oyj R Shares 278,269 20,660 UPM-Kymmene Oyj 298,068 ----------- 576,337 ----------- FRANCE -- 9.0% 4,160 Accor SA 160,283 24,219 AXA SA 463,726 8,110 Compagnie Generale des Etablissements Michelin, Class B 389,278 6,680 Electricite de France 387,879 33,620 France Telecom SA 867,939 11,844 GDF Suez 476,754 14,343 Sanofi-Aventis 795,880 3,105 Suez Environnement SA(1) 53,487 15,920 Thomson(1) 16,987 3,880 Total SA 203,635 5,032 Valeo SA 63,360 ----------- 3,879,208 ----------- GERMANY -- 8.5% 8,620 BASF SE 277,252 15,080 Bayerische Motoren Werke AG 380,060 42,330 Deutsche Post AG 610,295 20,850 E.ON AG 735,243 Shares Value 97,940 Infineon Technologies AG(1) $ 232,671 6,980 Merck KGaA 586,645 11,810 SAP AG 405,868 7,490 Siemens AG ADR 447,153 ----------- 3,675,187 ----------- HONG KONG -- 2.9% 54,300 Cheung Kong Holdings Ltd. 507,305 56,900 Hutchison Whampoa Ltd. 283,681 40,500 Swire Pacific Ltd. A Shares 272,559 146,000 Swire Pacific Ltd. B Shares 188,857 ----------- 1,252,402 ----------- ISRAEL -- 0.9% 19,490 Check Point Software Technologies(1) 401,689 ----------- ITALY -- 1.9% 21,370 ENI SpA 484,898 26,230 Mediaset SpA 142,526 90,660 UniCredit SpA 208,449 ----------- 835,873 ----------- JAPAN -- 9.2% 10,200 FUJIFILM Holdings Corp. 246,653 62,400 Hitachi Ltd. 289,240 6,600 Mabuchi Motor Co. Ltd. 282,222 22,000 Mitsubishi UFJ Financial Group, Inc. 120,271 9,000 Mitsubishi UFJ Financial Group, Inc. ADR 49,320 22,000 NGK Spark Plug Co. Ltd. 184,433 3,400 Nintendo Co. Ltd. 1,052,438 101 Nippon Telegraph & Telephone Corp. 439,444 17,600 Nomura Holdings, Inc. 127,068 11,900 Olympus Corp. 246,903 32,600 Sompo Japan Insurance, Inc. 188,954 12,300 Sony Corp. 238,714 10,600 Takeda Pharmaceutical Co. Ltd. 512,150 300 Toshiba Corp. 1,098 ----------- 3,978,908 ----------- MEXICO -- 1.4% 22,820 Telefonos de Mexico SAB de CV ADR 396,155 22,820 Telmex Internacional SAB de CV ADR 221,126 ----------- 617,281 ----------- - ------ 30 International Value Shares Value NETHERLANDS -- 5.3% 4,410 Akzo Nobel NV $ 150,703 27,040 ING Groep NV CVA 227,118 23,417 Koninklijke Philips Electronics NV 382,070 29,199 Reed Elsevier NV 343,241 28,585 Royal Dutch Shell plc, Class B 756,758 23,440 SBM Offshore NV 366,200 5,240 Wolters Kluwer NV 88,308 ----------- 2,314,398 ----------- NORWAY -- 0.8% 62,970 Telenor ASA 343,352 ----------- PEOPLE'S REPUBLIC OF CHINA -- 2.3% 145,000 Byd Co. Ltd. H Shares 221,748 63,500 China Shenhua Energy Co. Ltd. H Shares 117,172 824,000 China Telecom Corp. Ltd. H Shares 313,231 990,000 Shanghai Electric Group Co. Ltd. H Shares(1) 349,913 ----------- 1,002,064 ----------- PORTUGAL -- 0.7% 39,220 Portugal Telecom SGPS SA 290,567 4,641 Zon Multimedia Servicos de Telecomunicacoes e Multimedia SGPS SA 22,752 ----------- 313,319 ----------- RUSSIA -- 0.7% 16,680 OAO Gazprom ADR 292,887 ----------- SINGAPORE -- 0.9% 61,500 DBS Group Holdings Ltd. 380,750 ----------- SOUTH KOREA -- 4.2% 10,360 Hyundai Motor Co. 293,029 6,890 KB Financial Group, Inc.(1) 141,646 13,780 Korea Electric Power Corp. 259,074 19,660 KT Corp ADR 222,944 1,950 Samsung Electronics Co. Ltd. 644,993 16,530 SK Telecom Co. Ltd. ADR 267,951 ----------- 1,829,637 ----------- SPAIN -- 4.4% 41,710 Banco Santander SA 343,055 27,680 Iberdrola SA 206,322 27,430 Repsol YPF SA 532,264 13,460 Telefonica SA ADR 821,598 ----------- 1,903,239 ----------- Shares Value SWEDEN -- 2.3% 50,980 Atlas Copco AB A Shares $ 360,362 18,570 Niscayah Group AB 18,410 12,900 Nordea Bank AB 92,763 47,630 Nordea Bank AB FDR 341,496 18,570 Securitas AB B Shares 175,583 ----------- 988,614 ----------- SWITZERLAND -- 8.2% 11,760 ACE Ltd. 614,460 6,580 Lonza Group AG 544,318 20,300 Nestle SA 734,303 21,250 Novartis AG 993,337 9,307 Swiss Reinsurance 383,351 20,605 UBS AG(1) 259,582 ----------- 3,529,351 ----------- TAIWAN (REPUBLIC OF CHINA) -- 2.3% 17,647 Chunghwa Telecom Co. Ltd. ADR 275,999 303,592 Compal Electronics, Inc. 157,928 149,476 Lite-On Technology Corp. 106,006 368,000 Taiwan Semiconductor Manufacturing Co. Ltd. 454,191 ----------- 994,124 ----------- TURKEY -- 0.3% 10,400 Turkcell Iletisim Hizmet AS ADR 143,312 ----------- UNITED KINGDOM -- 19.1% 69,640 Aviva plc 431,450 92,850 BAE Systems plc 510,378 84,470 BP plc 683,908 75,080 British Sky Broadcasting Group plc 511,883 30,150 Burberry Group plc 95,992 69,413 Cadbury plc 588,384 76,750 Compass Group plc 364,029 45,210 GKN plc 57,517 45,840 GlaxoSmithKline plc 794,128 83,400 HSBC Holdings plc 896,345 145,040 Kingfisher plc 266,317 32,590 Lloyds TSB Group plc 85,041 35,602 National Grid plc 370,216 40,140 Pearson plc 384,860 139,260 Rentokil Initial plc 76,510 99,630 Rolls-Royce Group plc(1) 481,511 5,698,836 Rolls-Royce Group plc C Shares(1) 8,765 - ------ 31 International Value Shares Value 122,218 Royal Bank of Scotland Group plc $ 104,140 16,746 Smiths Group plc 216,458 19,350 Standard Chartered plc 252,962 6,379 Standard Chartered plc Rights(1) 40,224 18,085 Unilever plc 416,510 294,863 Vodafone Group plc 576,067 61,640 Yell Group plc 56,361 ----------- 8,269,956 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $50,382,117) 39,456,458 ----------- Temporary Cash Investments -- 8.4% 34,045 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares 34,045 Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $2,139,271), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $2,100,035) 2,100,000 Repurchase Agreement, Deutsche Bank Securities, Inc., (collateralized by various U.S. Treasury obligations, 4.00%, 8/31/09, valued at $1,530,154), in a joint trading account at 0.15%, dated 11/28/08, due 12/1/08 (Delivery value $1,500,019) 1,500,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,634,045) 3,634,045 ----------- TOTAL INVESTMENT SECURITIES -- 99.5% (Cost $54,016,162) 43,090,503 ----------- OTHER ASSETS AND LIABILITIES -- 0.5% 223,516 ----------- TOTAL NET ASSETS -- 100.0% $43,314,019 =========== Market Sector Diversification (as a % of net assets) Financials 16.4% Telecommunication Services 12.5% Industrials 11.0% Health Care 10.7% Information Technology 9.9% Consumer Discretionary 9.4% Energy 7.9% Utilities 5.7% Consumer Staples 4.0% Materials 3.6% Cash and Equivalents* 8.9% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt CVA = Certificaten Van Aandelen FDR = Finnish Depositary Receipt (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 32 STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 2008 International Global Emerging International Growth Growth Markets Value ASSETS Investment securities, at value (cost of $1,427,349,578, $408,029,473, $520,078,435 and $54,016,162, respectively) $1,200,551,665 $328,490,187 $360,671,352 $43,090,503 Cash -- 78,088 133,141 25,036 Foreign currency holdings, at value (cost of $3,163,235, $5,012, $3,353,442 and $22,948, respectively) 3,117,961 4,530 3,352,758 21,370 Receivable for investments sold 33,430,249 -- 6,992,025 6,358 Receivable for capital shares sold 1,592,324 255,418 125,099 13,949 Dividends and interest receivable 3,754,201 417,147 1,112,509 206,583 Other assets 206,841 -- 241,943 -- -------------- ------------ ------------ ------------- 1,242,653,241 329,245,370 372,628,827 43,363,799 -------------- ------------ ------------ ------------- LIABILITIES Disbursements in excess of demand deposit cash 283,885 -- -- -- Payable for investments purchased 36,603,943 -- 7,428,310 -- Payable for capital shares redeemed 483,329 321,258 141,243 3,145 Accrued management fees 1,389,477 332,819 545,044 42,012 Distribution fees payable 2,779 1,792 2,071 1,177 Service fees (and distribution fees - -- A Class and R Class) payable 31,132 5,124 4,245 3,446 -------------- ------------ ------------ ------------- 38,794,545 660,993 8,120,913 49,780 -------------- ------------ ------------ ------------- NET ASSETS $1,203,858,696 $328,584,377 $364,507,914 $43,314,019 ============== ============ ============ ============= See Notes to Financial Statements. - ------ 33 NOVEMBER 30, 2008 International Global Emerging International Growth Growth Markets Value NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $1,695,518,987 $467,342,904 $ 716,152,196 $ 55,109,252 Undistributed net investment income 20,902,820 112,816 2,112,146 828,692 Accumulated net realized loss on investment and foreign currency transactions (285,699,471) (59,332,601) (194,287,656) (1,694,063) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (226,863,640) (79,538,742) (159,468,772) (10,929,862) -------------- ------------ ------------- ------------- $1,203,858,696 $328,584,377 $ 364,507,914 $ 43,314,019 ============== ============ ============= ============= INVESTOR CLASS, $0.01 PAR VALUE Net assets $1,018,752,848 $274,598,703 $316,694,501 $2,511,858 Shares outstanding 142,495,966 46,579,792 75,857,545 458,916 Net asset value per share $7.15 $5.90 $4.17 $5.47 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $37,159,636 $28,477,194 $27,234,804 $23,846,827 Shares outstanding 5,184,783 4,773,470 6,394,197 4,349,400 Net asset value per share $7.17 $5.97 $4.26 $5.48 A CLASS, $0.01 PAR VALUE Net assets $140,798,235 $22,447,128 $17,104,945 $15,014,751 Shares outstanding 19,753,093 3,865,763 4,204,434 2,739,225 Net asset value per share $7.13 $5.81 $4.07 $5.48 Maximum offering price (net asset value divided by 0.9425) $7.56 $6.16 $4.32 $5.81 B CLASS, $0.01 PAR VALUE Net assets $1,211,176 $425,828 $112,725 $1,525,635 Shares outstanding 172,027 74,308 27,018 286,980 Net asset value per share $7.04 $5.73 $4.17 $5.32 C CLASS, $0.01 PAR VALUE Net assets $3,210,012 $2,382,176 $3,217,203 $336,517 Shares outstanding 458,716 429,773 812,095 62,079 Net asset value per share $7.00 $5.54 $3.96 $5.42 R CLASS, $0.01 PAR VALUE Net assets $2,726,789 $253,348 $143,736 $78,431 Shares outstanding 382,437 43,495 34,439 14,403 Net asset value per share $7.13 $5.82 $4.17 $5.45 See Notes to Financial Statements. - ------ 34 STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 2008 International Global Emerging International Growth Growth Markets Value INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $4,371,931, $404,780, $1,973,351 and $196,432, respectively) $ 50,199,018 $ 7,515,562 $ 23,010,626 $ 2,221,378 Interest and other income 226,594 115,138 302,125 130,469 Securities lending, net 1,526,249 157,605 427,041 -- ---------------- -------------- -------------- ------------- 51,951,861 7,788,305 23,739,792 2,351,847 ---------------- -------------- -------------- ------------- EXPENSES: Management fees 26,993,106 5,806,750 14,314,834 797,063 Distribution fees: B Class 18,374 5,225 1,344 22,047 C Class 45,182 22,457 56,933 3,222 Service fees: B Class 6,125 1,742 448 7,349 C Class 15,061 7,485 18,979 1,074 Distribution and service fees: A Class 580,618 56,863 88,187 56,523 A Class (old) (Note 11) 463 -- -- -- R Class 23,035 1,625 712 782 Directors' fees and expenses 64,838 13,835 25,662 2,655 Other expenses 162,194 17,833 25,574 492 ---------------- -------------- -------------- ------------- 27,908,996 5,933,815 14,532,673 891,207 ---------------- -------------- -------------- ------------- Amount waived -- -- -- (14,178) ---------------- -------------- -------------- ------------- 27,908,996 5,933,815 14,532,673 877,029 ---------------- -------------- -------------- ------------- NET INVESTMENT INCOME (LOSS) 24,042,865 1,854,490 9,207,119 1,474,818 ---------------- -------------- -------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $(187,906), $1,975, $977,438 and $-, respectively) (319,522,947) (60,287,088) (169,521,071) (1,073,294) Foreign currency transactions 41,634,065 705,094 (25,214,412) (276,508) ---------------- -------------- -------------- ------------- (277,888,882) (59,581,994) (194,735,483) (1,349,802) ---------------- -------------- -------------- ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $1,341,551, $10,103, $3,620,164 and $-, respectively) (721,319,821) (165,497,302) (425,575,897) (31,450,989) Translation of assets and liabilities in foreign currencies (220,022,723) (33,774,015) (71,929,981) (7,350,455) ---------------- -------------- -------------- ------------- (941,342,544) (199,271,317) (497,505,878) (38,801,444) ---------------- -------------- -------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (1,219,231,426) (258,853,311) (692,241,361) (40,151,246) ---------------- -------------- -------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(1,195,188,561) $(256,998,821) $(683,034,242) $(38,676,428) ================ ============== ============== ============= See Notes to Financial Statements. - ------ 35 STATEMENT OF CHANGES IN NET ASSETS YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 International Growth Global Growth Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 24,042,865 $ 24,918,970 $ 1,854,490 $ 1,320,328 Net realized gain (loss) (277,888,882) 585,292,428 (59,581,994) 88,372,880 Change in net unrealized appreciation (depreciation) (941,342,544) (39,782,254) (199,271,317) 10,750,501 --------------- --------------- ------------- ------------ Net increase (decrease) in net assets resulting from operations (1,195,188,561) 570,429,144 (256,998,821) 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 11) -- (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 11) -- -- -- (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 (81,116,944) (767,213,958) 151,986,102 (8,664,280) --------------- --------------- ------------- ------------ NET INCREASE (DECREASE) IN NET ASSETS (1,434,084,462) (216,758,189) (191,133,601) 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 $ 1,203,858,696 $ 2,637,943,158 $ 328,584,377 $519,717,978 =============== =============== ============= ============ Accumulated undistributed net investment income (loss) $20,902,820 $17,791,345 $112,816 $(41,527) =============== =============== ============= ============ See Notes to Financial Statements. - ------ 36 YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 Emerging Markets International Value Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 9,207,119 $ 8,433,399 $ 1,474,818 $ 1,368,508 Net realized gain (loss) (194,735,483) 123,939,548 (1,349,802) 5,470,436 Change in net unrealized appreciation (depreciation) (497,505,878) 208,848,032 (38,801,444) 7,337,645 ------------- -------------- ------------ ------------ Net increase (decrease) in net assets resulting from operations (683,034,242) 341,220,979 (38,676,428) 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 (8,499,246) 326,165,583 11,701,641 24,618,585 ------------- -------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (826,500,802) 568,824,979 (34,032,792) 17,063,623 NET ASSETS Beginning of period 1,191,008,716 622,183,737 77,346,811 60,283,188 ------------- -------------- ------------ ------------ End of period $ 364,507,914 $1,191,008,716 $ 43,314,019 $ 77,346,811 ============= ============== ============ ============ Undistributed net investment income $2,112,146 $3,041,951 $828,692 $938,458 ============= ============== ============ ============ See Notes to Financial Statements. - ------ 37 NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 2008 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 11), 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 11), 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. 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. - ------ 38 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. 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. 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 have adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" during the current fiscal year. The funds are no longer subject to examination by tax authorities for years prior to 2005. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for 7 years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and 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. - ------ 39 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. 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 each fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). 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 year ended November 30, 2008 was as follows: Investor, A & C Institutional B R International Growth 1.30% 1.10% 1.30% 1.30% Global Growth 1.25% 1.04% 1.25% 1.25% Emerging Markets 1.65% 1.45% 1.66% 1.68% International Value 1.30% 1.10% 1.30% 1.30% ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on behalf of International Growth, Global Growth and Emerging Markets. The subadvisor makes investment decisions for the cash portion of International Growth, Global Growth and Emerging Markets in accordance with their investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM pays all costs associated with retaining ACIM as the subadvisor of International Growth, Global Growth and Emerging Markets. ACGIM has entered into a Subadvisory Agreement with Templeton Investment Counsel, LLC (Templeton) on behalf of International Value. Templeton makes investment decisions for International Value in accordance with its investment objectives, policies, and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM pays all costs associated with retaining Templeton as the subadvisor of International Value. Templeton has entered into a Subadvisory Agreement with Franklin Templeton Investments (Asia) Limited on behalf of International Value. - ------ 40 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 year ended November 30, 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 year ended November 30, 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 year ended November 30, 2008, were as follows: International Global Emerging International Growth Growth Markets Value Purchases $3,024,837,508 $630,942,749 $1,049,747,881 $14,961,083 Proceeds from sales $3,238,657,418 $561,551,791 $1,163,975,955 $2,254,740 - ------ 41 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Year ended November 30, 2008 Year ended November 30, 2007 Shares Amount Shares Amount International Growth INVESTOR CLASS/SHARES AUTHORIZED 1,000,000,000 1,000,000,000 ============= ============= Sold 16,346,524 $ 188,343,865 22,606,111 $ 302,364,123 Issued in reinvestment of distributions 9,115,075 121,417,039 1,168,152 14,426,682 Redeemed (35,401,123) (406,466,004)(1) (64,757,153) (860,556,588)(2) ------------- ---------------- ------------- ---------------- (9,939,524) (96,705,100) (40,982,890) (543,765,783) ------------- ---------------- ------------- ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 150,000,000 150,000,000 ============= ============= Sold 2,270,167 28,658,822 1,730,907 22,661,181 Issued in reinvestment of distributions 336,456 4,483,545 90,347 1,116,690 Redeemed (2,816,175) (33,255,557)(3) (6,740,406) (89,101,012)(4) ------------- ---------------- ------------- ---------------- (209,552) (113,190) (4,919,152) (65,323,141) ------------- ---------------- ------------- ---------------- A CLASS/SHARES AUTHORIZED 125,000,000 100,000,000 ============= ============= Sold 7,835,854 89,842,720 7,416,480 98,766,265 Issued in connection with reclassification (Note 11) 2,300,787 34,138,899 -- -- Issued in reinvestment of distributions 994,597 13,237,814 120,671 1,489,085 Redeemed (7,677,721) (88,327,633) (18,992,329) (259,071,470)(5) ------------- ---------------- ------------- ---------------- 3,453,517 48,891,800 (11,455,178) (158,816,120) ------------- ---------------- ------------- ---------------- A CLASS (OLD)/SHARES AUTHORIZED N/A 25,000,000 ============= ============= Sold -- -- 506,564 6,888,111 Issued in reinvestment of distributions -- -- 10,882 134,000 Redeemed in connection with reclassification (Note 11) (2,300,787) (34,138,899) -- -- 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 18,577 222,018 32,050 425,268 Issued in reinvestment of distributions 8,548 113,065 -- -- Redeemed (81,292) (889,519) (30,115) (398,007) ------------- ---------------- ------------- ---------------- (54,167) (554,436) 1,935 27,261 ------------- ---------------- ------------- ---------------- C CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============= ============= Sold 90,230 1,157,701 108,359 1,470,351 Issued in reinvestment of distributions 21,431 281,955 -- -- Redeemed (154,191) (1,633,948) (129,074) (1,700,384) ------------- ---------------- ------------- ---------------- (42,530) (194,292) (20,715) (230,033) ------------- ---------------- ------------- ---------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============= ============= Sold 252,014 3,075,164 165,196 2,252,980 Issued in reinvestment of distributions 16,313 217,298 292 3,609 Redeemed (158,761) (1,595,289)(6) (66,454) (895,183)(7) ------------- ---------------- ------------- ---------------- 109,566 1,697,173 99,034 1,361,406 ------------- ---------------- ------------- ---------------- Net increase (decrease) (8,983,477) $ (81,116,944) (57,313,198) $ (767,213,958) ============= ================ ============= ================ (1) Net of redemption fees of $133,577. (5) Net of redemption fees of $87,001. (2) Net of redemption fees of $182,531. (6) Net of redemption fees of $36. (3) Net of redemption fees of $4,072. (7) Net of redemption fees of $32. (4) Net of redemption fees of $6,427. - ------ 42 Year ended November 30, 2008 Year ended November 30, 2007 Shares Amount Shares Amount Global Growth INVESTOR CLASS/SHARES AUTHORIZED 150,000,000 150,000,000 ============ =========== Sold 12,903,489 $ 117,137,528 3,826,678 $ 44,774,309 Issued in reinvestment of distributions 7,562,700 77,627,909 962,202 10,090,119 Redeemed (11,832,280) (100,451,544)(1) (6,604,834) (75,173,166)(2) ------------ ---------------- ----------- --------------- 8,633,909 94,313,893 (1,815,954) (20,308,738) ------------ ---------------- ----------- --------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 35,000,000 5,000,000 ============ =========== Sold 6,292,500 53,627,417 663,656 7,441,129 Issued in reinvestment of distributions 274,954 2,837,675 30,474 321,581 Redeemed (3,067,976) (22,933,004)(3) (225,832) (2,605,204)(4) ------------ ---------------- ----------- --------------- 3,499,478 33,532,088 468,298 5,157,506 ------------ ---------------- ----------- --------------- A CLASS/SHARES AUTHORIZED 15,000,000 15,000,000 ============ =========== Sold 3,419,298 29,258,859 258,175 3,045,479 Issued in connection with reclassification (Note 11) -- -- 844,849 9,865,842 Issued in reinvestment of distributions 295,381 2,989,742 11,949 124,159 Redeemed (1,314,317) (10,733,547) (185,018) (2,159,416)(5) ------------ ---------------- ----------- --------------- 2,400,362 21,515,054 929,955 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 connection with reclassification (Note 11) (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 42,324 388,905 20,190 243,639 Issued in reinvestment of distributions 10,224 102,885 795 8,236 Redeemed (29,348) (240,661) (4,124) (46,264) ------------ ---------------- ----------- --------------- 23,200 251,129 16,861 205,611 ------------ ---------------- ----------- --------------- C CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ =========== Sold 296,297 2,601,972 133,552 1,518,392 Issued in reinvestment of distributions 30,561 297,645 2,206 22,237 Redeemed (112,889) (819,667) (23,661) (263,194) ------------ ---------------- ----------- --------------- 213,969 2,079,950 112,097 1,277,435 ------------ ---------------- ----------- --------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============ =========== Sold 26,269 272,639 15,584 199,655 Issued in reinvestment of distributions 5,543 56,481 66 689 Redeemed (4,313) (35,132)(6) (3,070) (37,722) ------------ ---------------- ----------- --------------- 27,499 293,988 12,580 162,622 ------------ ---------------- ----------- --------------- Net increase (decrease) 14,798,417 $ 151,986,102 (780,680) $ (8,664,280) ============ ================ =========== =============== (1) Net of redemption fees of $38,958. (2) Net of redemption fees of $17,554. (3) Net of redemption fees of $10,749. (4) Net of redemption fees of $2,094. (5) Net of redemption fees of $231. (6) Net of redemption fees of $14. - ------ 43 Year ended Year ended November 30, 2008 November 30, 2007(1) Shares Amount Shares Amount Emerging Markets INVESTOR CLASS/SHARES AUTHORIZED 235,000,000 185,000,000 ============ ============ Sold 20,955,762 $ 186,101,096 47,827,289 $ 504,521,421 Issued in reinvestment of distributions 10,190,892 109,760,155 8,562,770 74,867,377 Redeemed (39,623,083) (329,408,602)(2) (24,149,223) (254,670,365)(3) ------------ ---------------- ------------ ---------------- (8,476,429) (33,547,351) 32,240,836 324,718,433 ------------ ---------------- ------------ ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 40,000,000 40,000,000 ============ ============ Sold 1,154,823 11,251,167 1,338,242 13,765,385 Issued in reinvestment of distributions 783,601 8,579,209 1,404,698 12,477,840 Redeemed (1,342,517) (10,979,038)(4) (5,355,131) (51,169,209)(5) ------------ ---------------- ------------ ---------------- 595,907 8,851,338 (2,612,191) (24,925,984) ------------ ---------------- ------------ ---------------- A CLASS/SHARES AUTHORIZED 40,000,000 10,000,000 ============ ============ Sold 3,262,064 29,194,767 2,413,803 26,233,978 Issued in reinvestment of distributions 423,941 4,440,300 189,795 1,625,143 Redeemed (2,449,683) (19,187,483)(6) (640,659) (6,493,843)(7) ------------ ---------------- ------------ ---------------- 1,236,322 14,447,584 1,962,939 21,365,278 ------------ ---------------- ------------ ---------------- B CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 29,032 308,820 4,249 51,736 Issued in reinvestment of distributions 1,335 14,264 -- -- Redeemed (7,598) (83,381) -- -- ------------ ---------------- ------------ ---------------- 22,769 239,703 4,249 51,736 ------------ ---------------- ------------ ---------------- C CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ============ ============ Sold 487,010 4,542,960 651,145 6,763,060 Issued in reinvestment of distributions 96,421 990,913 52,429 441,564 Redeemed (523,164) (4,321,726) (219,404) (2,274,103) ------------ ---------------- ------------ ---------------- 60,267 1,212,147 484,170 4,930,521 ------------ ---------------- ------------ ---------------- R CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 41,643 357,176 2,120 25,599 Issued in reinvestment of distributions 369 3,898 -- -- Redeemed (9,693) (63,741)(8) -- -- ------------ --------------- ------------ --------------- 32,319 297,333 2,120 25,599 ------------ --------------- ------------ --------------- Net increase (decrease) (6,528,845) $ (8,499,246) 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 redemption fees of $790,067. (3) Net redemption fees of $1,726,189. (4) Net redemption fees of $30,813. (5) Net redemption fees of $20,209. (6) Net redemption fees of $1,714. (7) Net redemption fees of $30,011. (8) Net redemption fees of $13. - ------ 44 Year ended Year ended November 30, 2008 November 30, 2007 Shares Amount Shares Amount International Value INVESTOR CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 336,549 $ 2,927,576 247,506 $ 2,766,272 Issued in reinvestment of distributions 30,784 306,033 16,462 156,887 Redeemed (173,561) (1,437,908)(1) (28,628) (313,938)(2) ---------- -------------- ---------- -------------- 193,772 1,795,701 235,340 2,609,221 ---------- -------------- ---------- -------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 60,908 582,254 158,819 1,649,947 Issued in reinvestment of distributions 417,025 4,170,192 1,354,833 12,911,767 Redeemed (64,385) (530,218)(3) (51,566) (549,566)(4) ---------- -------------- ---------- -------------- 413,548 4,222,228 1,462,086 14,012,148 ---------- -------------- ---------- -------------- A CLASS/SHARES AUTHORIZED 55,000,000 55,000,000 ========== ========== Sold 1,272,162 11,190,952 737,020 7,784,530 Issued in reinvestment of distributions 217,383 2,174,640 696,873 6,655,394 Redeemed (888,351) (7,481,603)(5) (681,781) (7,200,516)(6) ---------- -------------- ---------- -------------- 601,194 5,883,989 752,112 7,239,408 ---------- -------------- ---------- -------------- B CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ========== ========== Sold 21,765 194,567 54,583 547,404 Issued in reinvestment of distributions 33,502 327,311 161,195 1,505,575 Redeemed (131,957) (1,128,036) (157,823) (1,631,301) ---------- -------------- ---------- -------------- (76,690) (606,158) 57,955 421,678 ---------- -------------- ---------- -------------- C CLASS/SHARES AUTHORIZED 50,000,000 50,000,000 ========== ========== Sold 60,519 534,931 18,630 198,895 Issued in reinvestment of distributions 2,136 20,888 1,559 14,855 Redeemed (20,080) (138,670) (3,594) (38,189) ---------- -------------- ---------- -------------- 42,575 417,149 16,595 175,561 ---------- -------------- ---------- -------------- R CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 ========== ========== Sold 11,311 96,932 18,039 188,013 Issued in reinvestment of distributions 1,753 17,481 1,052 10,027 Redeemed (16,329) (125,681)(7) (3,369) (37,471) ---------- -------------- ---------- -------------- (3,265) (11,268) 15,722 160,569 ---------- -------------- ---------- -------------- Net increase (decrease) 1,171,134 $11,701,641 2,539,810 $24,618,585 ========== ============== ========== ============== (1) Net redemption fees of $1,002. (2) Net redemption fees of $2,570. (3) Net redemption fees of $129. (4) Net redemption fees of $625. (5) Net redemption fees of $18. (6) Net redemption fees of $24. (7) Net redemption fees of $35 - ------ 45 5. SECURITIES LENDING As of November 30, 2008, International Growth, Global Growth and Emerging Markets did not have any securities on loan. 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 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. Investments made with cash collateral may decline in value. 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. The following is a summary of the valuation inputs used to determine the fair value of the funds' securities as of November 30, 2008: Value of Investment Fund/Valuation Inputs Securities INTERNATIONAL GROWTH Level 1 - Quoted Prices $ 82,396,711 Level 2 - Other Significant Observable Inputs 1,118,154,954 Level 3 - Significant Unobservable Inputs -- -------------- $1,200,551,665 ============== GLOBAL GROWTH Level 1 - Quoted Prices $186,977,904 Level 2 - Other Significant Observable Inputs 141,512,283 Level 3 - Significant Unobservable Inputs -- -------------- $328,490,187 ============== EMERGING MARKETS Level 1 - Quoted Prices $ 65,823,950 Level 2 - Other Significant Observable Inputs 294,847,402 Level 3 - Significant Unobservable Inputs -- -------------- $360,671,352 ============== INTERNATIONAL VALUE Level 1 - Quoted Prices $ 4,641,736 Level 2 - Other Significant Observable Inputs 38,448,767 Level 3 - Significant Unobservable Inputs -- -------------- $43,090,503 ============== - ------ 46 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 line expired December 10, 2008, and was not renewed. The funds did not borrow from either line during the year ended November 30, 2008. 8. INTERFUND LENDING The fund, along with certain other funds managed by ACIM or ACGIM, may participate in an interfund lending program, pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC). This program provides an alternative credit facility allowing the fund to borrow from or lend to other funds in the American Century Investments family of funds that permit such transactions. During the year ended November 30, 2008, the fund did not utilize the program. 9. 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. 10. FEDERAL TAX INFORMATION On December 16, 2008, International Growth and International Value declared and paid the following per-share distributions from net investment income to shareholders of record on December 15, 2008: Investor Institutional A B C R International Growth $0.1285 $0.1431 $0.1102 $0.0554 $0.0554 $0.0919 International Value $0.1288 $0.1400 $0.1148 $0.0727 $0.0727 $0.1007 The tax character of distributions paid during the years ended November 30, 2008 and November 30, 2007 were as follows: International Growth Global Growth 2008 2007 2008 2007 DISTRIBUTIONS PAID FROM Ordinary income $18,406,727 $19,973,375 $25,787,587 $1,985,871 Long-term capital gains $139,372,230 -- $60,333,295 $9,098,675 Emerging Markets International Value 2008 2007 2008 2007 DISTRIBUTIONS PAID FROM Ordinary income $64,849,516 $64,773,334 $2,515,592 $3,184,945 Long-term capital gains $70,117,798 $33,788,249 $4,542,413 $18,546,606 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. - ------ 47 As of November 30, 2008, the components of distributable earnings on a tax-basis and the federal tax cost of investments were as follows: International Global Emerging International Growth Growth Markets Value Federal tax cost of investments $1,510,010,519 $415,417,160 $523,944,149 $54,497,544 ============== ============= ============== ============= Gross tax appreciation of investments $ 68,818,050 $ 10,295,533 $ 9,242,863 $ 5,629,415 Gross tax depreciation of investments (378,276,904) (97,222,506) (172,515,660) (17,036,456) -------------- ------------- -------------- ------------- Net tax appreciation (depreciation) of investments $(309,458,854) $(86,926,973) $(163,272,797) $(11,407,041) ============== ============= ============== ============= Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies $ (72,294) $544 $ (61,689) $ (4,202) -------------- ------------- -------------- ------------- Net tax appreciation (depreciation) $(309,531,148) $(86,926,429) $(163,334,486) $(11,411,243) ============== ============= ============== ============= Undistributed ordinary income $21,035,069 $121,951 $2,206,469 $1,002,781 Accumulated capital losses $(131,091,099) $(40,260,034) $(150,745,366) $(684,213) Capital loss deferrals $(72,036,444) $(11,678,863) $(39,676,576) $(686,290) Currency loss deferrals $(36,669) $(15,152) $(94,323) $(16,268) The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and on investments in passive foreign investment companies. The accumulated capital losses listed above represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers expire in 2016. The capital and currency loss deferrals listed above represent net capital and foreign currency losses incurred in the one month period ended November 30, 2008. The funds have elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes. 11. 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. 12. RECENTLY ISSUED ACCOUNTING STANDARDS The FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157), in September 2006, which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands the required financial statement disclosures about fair value measurements. The adoption of FAS 157 did 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 interim periods 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. - ------ 48 13. OTHER TAX INFORMATION (UNAUDITED) The following information is provided pursuant to provisions of the Internal Revenue Code. The funds hereby designate up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2008. For corporate taxpayers, the funds hereby designate the following ordinary income distributions paid during the fiscal year ended November 30, 2008, or up to the maximum amount allowable, as qualified for the corporate dividends received deduction. International Growth Global Growth Emerging Markets International Value $25,774 $2,608,557 $234,823 $27,708 The funds hereby designate the following long-term capital gain distributions or up to the maximum amount allowable, for the fiscal year ended November 30, 2008. International Growth Global Growth Emerging Markets International Value $139,372,230 $60,333,295 $70,117,798 $4,542,413 The funds hereby designate the following distributions as qualified short-term capital gains for purposes of Internal Revenue Code Section 871. International Growth Global Growth Emerging Markets International Value -- $24,420,888 $55,175,173 $924,641 As of November 30, 2008, the funds designate the following as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possession of the United States. International Growth Global Growth Emerging Markets International Value $4,371,931 -- $1,973,351 $196,432 - ------ 49 FINANCIAL HIGHLIGHTS International Growth Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.87 $12.17 $9.75 $8.79 $7.54 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.14 0.13 0.06 0.11 0.05 Net Realized and Unrealized Gain (Loss) (6.96) 2.66 2.54 0.94 1.26 -------- -------- -------- -------- -------- Total From Investment Operations (6.82) 2.79 2.60 1.05 1.31 -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.11) (0.09) (0.18) (0.09) (0.06) From Net Realized Gains (0.79) -- -- -- -- -------- -------- -------- -------- -------- Total Distributions (0.90) (0.09) (0.18) (0.09) (0.06) -------- -------- -------- -------- -------- Net Asset Value, End of Period $7.15 $14.87 $12.17 $9.75 $8.79 ======== ======== ======== ======== ======== TOTAL RETURN(2) (48.67)% 23.09% 27.03% 12.09% 17.45% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.31% 1.27% 1.26% 1.23% 1.26% Ratio of Net Investment Income (Loss) to Average Net Assets 1.18% 0.94% 0.52% 1.22% 0.57% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $1,018,753 $2,267,093 $2,352,967 $2,249,430 $2,395,249 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 50 International Growth Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.91 $12.20 $9.78 $8.82 $7.56 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.15 0.17 0.07 0.13 0.06 Net Realized and Unrealized Gain (Loss) (6.96) 2.66 2.55 0.94 1.27 -------- -------- -------- -------- -------- Total From Investment Operations (6.81) 2.83 2.62 1.07 1.33 -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.14) (0.12) (0.20) (0.11) (0.07) From Net Realized Gains (0.79) -- -- -- -- -------- -------- -------- -------- -------- Total Distributions (0.93) (0.12) (0.20) (0.11) (0.07) -------- -------- -------- -------- -------- Net Asset Value, End of Period $7.17 $14.91 $12.20 $9.78 $8.82 ======== ======== ======== ======== ======== TOTAL RETURN(2) (48.55)% 23.36% 27.19% 12.28% 17.78% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.11% 1.07% 1.06% 1.03% 1.06% Ratio of Net Investment Income (Loss) to Average Net Assets 1.38% 1.14% 0.72% 1.42% 0.77% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $37,160 $80,452 $125,814 $247,077 $283,330 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 51 International Growth A Class(1) For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.82 $12.12 $9.72 $8.76 $7.52 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.11 0.08 0.03 0.09 0.03 Net Realized and Unrealized Gain (Loss) (6.94) 2.68 2.52 0.94 1.25 -------- -------- -------- -------- -------- Total From Investment Operations (6.83) 2.76 2.55 1.03 1.28 -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.07) (0.06) (0.15) (0.07) (0.04) From Net Realized Gains (0.79) -- -- -- -- -------- -------- -------- -------- -------- Total Distributions (0.86) (0.06) (0.15) (0.07) (0.04) -------- -------- -------- -------- -------- Net Asset Value, End of Period $7.13 $14.82 $12.12 $9.72 $8.76 ======== ======== ======== ======== ======== TOTAL RETURN(3) (48.79)% 22.87% 26.57% 11.85% 17.07% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.56% 1.52% 1.51% 1.48% 1.51% Ratio of Net Investment Income (Loss) to Average Net Assets 0.93% 0.69% 0.27% 0.97% 0.32% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $140,798 $241,579 $336,497 $259,651 $275,195 (1) Prior to December 3, 2007, the A Class was referred to as the Advisor Class. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 52 International Growth B Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.68 $12.04 $9.65 $8.70 $7.48 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.02 --(2) (0.05) 0.02 (0.03) Net Realized and Unrealized Gain (Loss) (6.87) 2.64 2.52 0.93 1.25 -------- -------- -------- -------- -------- Total From Investment Operations (6.85) 2.64 2.47 0.95 1.22 -------- -------- -------- -------- -------- Distributions From Net Investment Income -- -- (0.08) --(2) -- From Net Realized Gains (0.79) -- -- -- -- -------- -------- -------- -------- -------- Total Distributions (0.79) -- (0.08) --(2) -- -------- -------- -------- -------- -------- Net Asset Value, End of Period $7.04 $14.68 $12.04 $9.65 $8.70 ======== ======== ======== ======== ======== TOTAL RETURN(3) (49.18)% 21.93% 25.71% 10.97% 16.31% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.31% 2.27% 2.26% 2.23% 2.26% Ratio of Net Investment Income (Loss) to Average Net Assets 0.18% (0.06)% (0.48)% 0.22% (0.43)% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $1,211 $3,320 $2,699 $1,676 $1,107 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 53 International Growth C Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.60 $11.97 $9.60 $8.66 $7.45 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.02 --(2) (0.05) 0.02 (0.03) Net Realized and Unrealized Gain (Loss) (6.83) 2.63 2.50 0.92 1.24 -------- -------- -------- -------- -------- Total From Investment Operations (6.81) 2.63 2.45 0.94 1.21 -------- -------- -------- -------- -------- Distributions From Net Investment Income -- -- (0.08) --(2) -- From Net Realized Gains (0.79) -- -- -- -- -------- -------- -------- -------- -------- Total Distributions (0.79) -- (0.08) --(2) -- -------- -------- -------- -------- -------- Net Asset Value, End of Period $7.00 $14.60 $11.97 $9.60 $8.66 ======== ======== ======== ======== ======== TOTAL RETURN(3) (49.18)% 21.97% 25.64% 10.91% 16.24% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.31% 2.27% 2.26% 2.23% 2.26% Ratio of Net Investment Income (Loss) to Average Net Assets 0.18% (0.06)% (0.48)% 0.22% (0.43)% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $3,210 $7,318 $6,250 $5,246 $5,070 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 54 International Growth R Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $14.81 $12.12 $9.71 $8.75 $7.53 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.09 0.07 0.01 0.07 0.02 Net Realized and Unrealized Gain (Loss) (6.96) 2.65 2.53 0.94 1.25 -------- -------- -------- -------- -------- Total From Investment Operations (6.87) 2.72 2.54 1.01 1.27 -------- -------- -------- -------- -------- 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 $7.13 $14.81 $12.12 $9.71 $8.75 ======== ======== ======== ======== ======== TOTAL RETURN(2) (48.92)% 22.48% 26.39% 11.58% 16.92% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.81% 1.77% 1.76% 1.69%(3) 1.76% Ratio of Net Investment Income (Loss) to Average Net Assets 0.68% 0.44% 0.02% 0.76%(3) 0.07% Portfolio Turnover Rate 144% 133% 95% 89% 118% Net Assets, End of Period (in thousands) $2,727 $4,042 $2,106 $1,809 $376 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (3) 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. See Notes to Financial Statements. - ------ 55 Global Growth Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.69 $10.52 $8.88 $7.49 $6.48 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.04 0.03 --(2) --(2) (0.01) Net Realized and Unrealized Gain (Loss) (4.75) 2.41 1.70 1.41 1.02 -------- -------- -------- -------- -------- Total From Investment Operations (4.71) 2.44 1.70 1.41 1.01 -------- -------- -------- -------- -------- 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 $5.90 $12.69 $10.52 $8.88 $7.49 ======== ======== ======== ======== ======== TOTAL RETURN(3) (44.01)% 23.73% 19.30% 18.87% 15.59% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.26% 1.30% 1.31% 1.30% 1.30% Ratio of Net Investment Income (Loss) to Average Net Assets 0.40% 0.29% (0.05)% (0.01)% (0.12)% Portfolio Turnover Rate 121% 108% 95% 36% 79% Net Assets, End of Period (in thousands) $274,599 $481,553 $418,185 $378,976 $299,807 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 56 Global Growth Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.79 $10.60 $8.95 $7.55 $6.52 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.07 0.06 0.01 0.01 --(2) Net Realized and Unrealized Gain (Loss) (4.81) 2.42 1.72 1.43 1.03 -------- -------- -------- -------- -------- Total From Investment Operations (4.74) 2.48 1.73 1.44 1.03 -------- -------- -------- -------- -------- 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 $5.97 $12.79 $10.60 $8.95 $7.55 ======== ======== ======== ======== ======== TOTAL RETURN(3) (43.88)% 23.99% 19.50% 19.22% 15.80% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.05% 1.10% 1.11% 1.10% 1.10% Ratio of Net Investment Income (Loss) to Average Net Assets 0.61% 0.49% 0.15% 0.19% 0.08% Portfolio Turnover Rate 121% 108% 95% 36% 79% Net Assets, End of Period (in thousands) $28,477 $16,298 $8,540 $8,669 $6,774 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 57 Global Growth A Class(1) For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.56 $10.41 $8.79 $7.41 $6.43 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.01 0.01 (0.03) (0.02) (0.02) Net Realized and Unrealized Gain (Loss) (4.68) 2.38 1.69 1.40 1.00 -------- -------- -------- -------- -------- Total From Investment Operations (4.67) 2.39 1.66 1.38 0.98 -------- -------- -------- -------- -------- 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 $5.81 $12.56 $10.41 $8.79 $7.41 ======== ======== ======== ======== ======== TOTAL RETURN(3) (44.17)% 23.47% 18.97% 18.62% 15.24% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.51% 1.55% 1.56% 1.55% 1.55% Ratio of Net Investment Income (Loss) to Average Net Assets 0.15% 0.04% (0.30)% (0.26)% (0.37)% Portfolio Turnover Rate 121% 108% 95% 36% 79% Net Assets, End of Period (in thousands) $22,447 $18,402 $5,571 $3,664 $2,475 (1) Prior to September 4, 2007, the A Class was referred to as the Advisor Class. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 58 Global Growth B Class For a Share Outstanding Throughout the Years Ended November 30 2008 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)(1) (0.05) (0.08) (0.11) Net Realized and Unrealized Gain (Loss) (4.64) 2.38 1.57 -------- -------- -------- Total From Investment Operations (4.69) 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 $5.73 $12.50 $10.42 ======== ======== ======== TOTAL RETURN(2) (44.62)% 22.51% 16.29% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.26% 2.30% 2.31% Ratio of Net Investment Income (Loss) to Average Net Assets (0.60)% (0.71)% (1.05)% Portfolio Turnover Rate 121% 108% 95% Net Assets, End of Period (in thousands) $426 $639 $352 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 59 Global Growth C Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.16 $10.14 $8.59 $7.29 $6.37 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) (0.05) (0.07) (0.10) (0.08) (0.08) Net Realized and Unrealized Gain (Loss) (4.49) 2.31 1.65 1.38 1.00 -------- -------- -------- -------- -------- Total From Investment Operations (4.54) 2.24 1.55 1.30 0.92 -------- -------- -------- -------- -------- Distributions From Net Realized Gains (2.08) (0.22) -- -- -- -------- -------- -------- -------- -------- Net Asset Value, End of Period $5.54 $12.16 $10.14 $8.59 $7.29 ======== ======== ======== ======== ======== TOTAL RETURN(2) (44.64)% 22.54% 18.04% 17.83% 14.44% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.26% 2.30% 2.31% 2.30% 2.30% Ratio of Net Investment Income (Loss) to Average Net Assets (0.60)% (0.71)% (1.05)% (1.01)% (1.12)% Portfolio Turnover Rate 121% 108% 95% 36% 79% Net Assets, End of Period (in thousands) $2,382 $2,625 $1,050 $454 $184 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 60 Global Growth R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006 2005(1) PER-SHARE DATA Net Asset Value, Beginning of Period $12.62 $10.47 $8.86 $8.37 -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) (0.01) 0.02 (0.05) (0.02) Net Realized and Unrealized Gain (Loss) (4.71) 2.35 1.71 0.51 -------- -------- -------- -------- Total From Investment Operations (4.72) 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 $5.82 $12.62 $10.47 $8.86 ======== ======== ======== ======== TOTAL RETURN(3) (44.40)% 23.08% 18.79% 5.85% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.76% 1.80% 1.81% 1.80%(4) Ratio of Net Investment Income (Loss) to Average Net Assets (0.10)% (0.21)% (0.55)% (0.71)%(4) Portfolio Turnover Rate 121% 108% 95% 36%(5) Net Assets, End of Period (in thousands) $253 $202 $32 $26 (1) July 29, 2005 (commencement of sale) through November 30, 2005. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2005. See Notes to Financial Statements. - ------ 61 Emerging Markets Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.69 $10.06 $8.25 $6.28 $5.28 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.09 0.10 0.11 0.01 (0.01) Net Realized and Unrealized Gain (Loss) (7.21) 4.06 3.11 2.05 1.00 -------- -------- -------- -------- -------- Total From Investment Operations (7.12) 4.16 3.22 2.06 0.99 -------- -------- -------- -------- -------- 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(1) 0.01 0.02 0.01 --(2) 0.01 -------- -------- -------- -------- -------- Net Asset Value, End of Period $4.17 $12.69 $10.06 $8.25 $6.28 ======== ======== ======== ======== ======== TOTAL RETURN(3) (62.66)% 48.81% 46.10% 33.10% 18.94% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.66% 1.66% 1.80% 1.94% 2.00% Ratio of Net Investment Income (Loss) to Average Net Assets 1.06% 0.96% 1.31% 0.17% (0.22)% Portfolio Turnover Rate 121% 85% 115% 153% 208% Net Assets, End of Period (in thousands) $316,695 $1,070,138 $523,813 $220,720 $135,355 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 62 Emerging Markets Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.92 $10.21 $8.36 $6.35 $5.33 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.12 0.12 0.12 0.03 --(2) Net Realized and Unrealized Gain (Loss) (7.35) 4.14 3.16 2.07 1.01 -------- -------- -------- -------- -------- Total From Investment Operations (7.23) 4.26 3.28 2.10 1.01 -------- -------- -------- -------- -------- 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(1) 0.01 0.02 0.01 --(2) 0.01 -------- -------- -------- -------- -------- Net Asset Value, End of Period $4.26 $12.92 $10.21 $8.36 $6.35 ======== ======== ======== ======== ======== TOTAL RETURN(3) (62.63)% 49.21% 46.31% 33.37% 19.14% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.46% 1.46% 1.60% 1.74% 1.80% Ratio of Net Investment Income (Loss) to Average Net Assets 1.26% 1.16% 1.51% 0.37% (0.02)% Portfolio Turnover Rate 121% 85% 115% 153% 208% Net Assets, End of Period (in thousands) $27,235 $74,897 $85,886 $113,765 $92,673 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 63 Emerging Markets A Class(1) For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.40 $9.85 $8.11 $6.19 $5.22 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.07 0.07 0.11 (0.01) (0.03) Net Realized and Unrealized Gain (Loss) (7.03) 3.99 3.02 2.02 0.99 -------- -------- -------- -------- -------- Total From Investment Operations (6.96) 4.06 3.13 2.01 0.96 -------- -------- -------- -------- -------- 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(2) 0.01 0.02 0.01 --(3) 0.01 -------- -------- -------- -------- -------- Net Asset Value, End of Period $4.07 $12.40 $9.85 $8.11 $6.19 ======== ======== ======== ======== ======== TOTAL RETURN(4) (62.78)% 48.61% 45.59% 32.77% 18.58% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.91% 1.91% 2.05% 2.19% 2.25% Ratio of Net Investment Income (Loss) to Average Net Assets 0.81% 0.71% 1.06% (0.08)% (0.47)% Portfolio Turnover Rate 121% 85% 115% 153% 208% Net Assets, End of Period (in thousands) $17,105 $36,795 $9,905 $1,773 $1,178 (1) Prior to September 4, 2007, the A Class was referred to as the Advisor Class. (2) Computed using average shares outstanding throughout the period. (3) Per-share amount was less than $0.005. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 64 Emerging Markets B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007(1) PER-SHARE DATA Net Asset Value, Beginning of Period $12.67 $12.15 -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.02 (0.03) Net Realized and Unrealized Gain (Loss) (7.24) 0.53 -------- -------- Total From Investment Operations (7.22) 0.50 -------- -------- Distributions From Net Realized Gains (1.29) -- -------- -------- Redemption Fees(2) 0.01 0.02 -------- -------- Net Asset Value, End of Period $4.17 $12.67 ======== ======== TOTAL RETURN(3) (63.09)% 4.28% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.67% 2.58%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 0.05% (1.30)%(4) Portfolio Turnover Rate 121% 85%(5) Net Assets, End of Period (in thousands) $113 $54 (1) September 28, 2007 (commencement of sale) through November 30, 2007. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. See Notes to Financial Statements. - ------ 65 Emerging Markets C Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $12.10 $9.64 $7.95 $6.12 $5.19 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.01 (0.01) 0.03 (0.05) (0.07) Net Realized and Unrealized Gain (Loss) (6.87) 3.90 2.99 1.97 0.99 -------- -------- -------- -------- -------- Total From Investment Operations (6.86) 3.89 3.02 1.92 0.92 -------- -------- -------- -------- -------- 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(1) 0.01 0.02 0.01 --(2) 0.01 -------- -------- -------- -------- -------- Net Asset Value, End of Period $3.96 $12.10 $9.64 $7.95 $6.12 ======== ======== ======== ======== ======== TOTAL RETURN(3) (63.09)% 47.39% 44.59% 31.67% 17.92% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.66% 2.66% 2.80% 2.94% 3.00% Ratio of Net Investment Income (Loss) to Average Net Assets 0.06% (0.04)% 0.31% (0.83)% (1.22)% Portfolio Turnover Rate 121% 85% 115% 153% 208% Net Assets, End of Period (in thousands) $3,217 $9,098 $2,581 $733 $521 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 66 Emerging Markets R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007(1) PER-SHARE DATA Net Asset Value, Beginning of Period $12.68 $12.15 -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.05 (0.01) Net Realized and Unrealized Gain (Loss) (7.22) 0.52 -------- -------- Total From Investment Operations (7.17) 0.51 -------- -------- Distributions From Net Investment Income (0.04) -- From Net Realized Gains (1.31) -- -------- -------- Total Distributions (1.35) -- -------- -------- Redemption Fees(2) 0.01 0.02 -------- -------- Net Asset Value, End of Period $4.17 $12.68 ======== ======== TOTAL RETURN(3) (62.92)% 4.36% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.19% 2.08%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 0.53% (0.68)%(4) Portfolio Turnover Rate 121% 85%(5) Net Assets, End of Period (in thousands) $144 $27 (1) September 28, 2007 (commencement of sale) through November 30, 2007. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. See Notes to Financial Statements. - ------ 67 International Value Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $11.48 $14.36 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.19 0.22 0.15 Net Realized and Unrealized Gain (Loss) (5.18) 2.09 1.36 -------- -------- -------- Total From Investment Operations (4.99) 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 $5.47 $11.48 $14.36 ======== ======== ======== TOTAL RETURN(3) (47.43)% 23.55% 11.75% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.31% 1.30% 1.30%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 2.20% 1.96% 2.77%(4)(5) Portfolio Turnover Rate 4% 11% 17% Net Assets, End of Period (in thousands) $2,512 $3,044 $437 (1) April 3, 2006 (commencement of sale) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. See Notes to Financial Statements. - ------ 68 International Value Institutional Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $11.50 $14.38 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.21 0.23 0.25 Net Realized and Unrealized Gain (Loss) (5.19) 2.10 1.28 -------- -------- -------- Total From Investment Operations (4.98) 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 $5.48 $11.50 $14.38 ======== ======== ======== TOTAL RETURN(3) (47.32)% 23.77% 11.91% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.11% 1.10% 1.10%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 2.40% 2.16% 2.97%(4)(5) Portfolio Turnover Rate 4% 11% 17% Net Assets, End of Period (in thousands) $23,847 $45,262 $35,574 (1) April 3, 2006 (commencement of sale) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. See Notes to Financial Statements. - ------ 69 International Value A Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $11.49 $14.35 $12.70 $10.91 $9.64 $6.22 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.18 0.20 0.25 0.18 0.13 0.10 Net Realized and Unrealized Gain (Loss) (5.20) 2.11 1.40 1.97 1.37 3.42 -------- -------- -------- -------- -------- -------- Total From Investment Operations (5.02) 2.31 1.65 2.15 1.50 3.52 -------- -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.21) (0.45) -- (0.15) (0.11) (0.10) From Net Realized Gains (0.78) (4.72) -- (0.21) (0.12) -- -------- -------- -------- -------- -------- -------- Total Distributions (0.99) (5.17) -- (0.36) (0.23) (0.10) -------- -------- -------- -------- -------- -------- Net Asset Value, End of Period $5.48 $11.49 $14.35 $12.70 $10.91 $9.64 ======== ======== ======== ======== ======== ======== TOTAL RETURN(3) (47.53)% 23.44% 12.99% 19.95% 15.58% 56.65% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.51%(4) 1.40%(4) 1.40%(4)(5) 1.35% 1.41% 1.47% Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) 1.56% 1.55% 1.55%(5) 1.35% 1.41% 1.47% Ratio of Net Investment Income (Loss) to Average Net Assets 2.00%(4) 1.86%(4) 2.67%(4)(5)(6) 1.52% 1.28% 1.13% Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) 1.95% 1.71% 2.52%(5)(6) 1.52% 1.28% 1.13% Portfolio Turnover Rate 4% 11% 17% 7% 18% 10% Net Assets, End of Period (in thousands) $15,015 $24,558 $19,890 $54,617 $203,215 $174,387 (1) April 1, 2006 through November 30, 2006. The fund's fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund's fiscal year end was March 31. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) The distributor voluntarily waived a portion of its distribution and service fees from April 1, 2006 through March 31, 2008. (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. - ------ 70 International Value B Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $11.16 $14.08 $12.51 $10.75 $9.52 $6.14 -------- -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.11 0.12 0.17 0.10 0.06 0.04 Net Realized and Unrealized Gain (Loss) (5.05) 2.05 1.40 1.93 1.34 3.39 -------- -------- -------- -------- -------- -------- Total From Investment Operations (4.94) 2.17 1.57 2.03 1.40 3.43 -------- -------- -------- -------- -------- -------- 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 $5.32 $11.16 $14.08 $12.51 $10.75 $9.52 ======== ======== ======== ======== ======== ======== TOTAL RETURN(3) (47.84)% 22.51% 12.55% 19.07% 14.69% 55.86% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.22%(4) 2.09%(4) 2.09%(4)(5) 2.08% 2.09% 2.11% Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) 2.31% 2.30% 2.30%(5) 2.08% 2.09% 2.11% Ratio of Net Investment Income (Loss) to Average Net Assets 1.29%(4) 1.17%(4) 1.98%(4)(5)(6) 0.90% 0.61% 0.52% Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) 1.20% 0.96% 1.77%(5)(6) 0.90% 0.61% 0.52% Portfolio Turnover Rate 4% 11% 17% 7% 18% 10% Net Assets, End of Period (in thousands) $1,526 $4,059 $4,313 $4,917 $5,165 $4,491 (1) April 1, 2006 through November 30, 2006. The fund's fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund's fiscal year end was March 31. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) The distributor voluntarily waived a portion of its distribution and service fees from April 1, 2006 through March 31, 2008. (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. - ------ 71 International Value C Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $11.37 $14.27 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.12 0.12 0.14 Net Realized and Unrealized Gain (Loss) (5.17) 2.07 1.28 -------- -------- -------- Total From Investment Operations (5.05) 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 $5.42 $11.37 $14.27 ======== ======== ======== TOTAL RETURN(3) (47.93)% 22.28% 11.05% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 2.31% 2.30% 2.30%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.20% 0.96% 1.77%(4)(5) Portfolio Turnover Rate 4% 11% 17% Net Assets, End of Period (in thousands) $337 $222 $41 (1) April 3, 2006 (commencement of sale) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any, and does not reflect applicable sales charges. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. See Notes to Financial Statements. - ------ 72 International Value R Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $11.42 $14.31 $12.85 -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(2) 0.13 0.11 0.19 Net Realized and Unrealized Gain (Loss) (5.14) 2.14 1.27 -------- -------- -------- Total From Investment Operations (5.01) 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 $5.45 $11.42 $14.31 ======== ======== ======== TOTAL RETURN(3) (47.61)% 22.91% 11.36% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.81% 1.80% 1.80%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.70% 1.46% 2.27%(4)(5) Portfolio Turnover Rate 4% 11% 17% Net Assets, End of Period (in thousands) $78 $202 $28 (1) April 3, 2006 (commencement of sale) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. (4) Annualized. (5) Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. See Notes to Financial Statements. - ------ 73 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders, American Century World Mutual Funds, Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of International Growth Fund, Global Growth Fund and Emerging Markets Fund, three of the funds constituting American Century World Mutual Funds, Inc. (the "Corporation"), as of November 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. We have also audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Value Fund, one of the funds constituting the Corporation, as of November 30, 2008, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended, and for the period April 1, 2006 through November 30, 2006. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of International Value Fund for each of the periods ended March 31, 2006 and prior were audited by other auditors whose report, dated May 1, 2006, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the respective financial positions of International Growth Fund, Global Growth Fund, Emerging Markets Fund and International Value Fund, four of the funds constituting American Century World Mutual Funds, Inc., as of November 30, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended (except as noted above in reference to the report of other auditors), in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Kansas City, Missouri January 14, 2009 - ------ 74 MANAGEMENT The individuals listed below serve as directors or officers of the funds. Each director serves until his or her successor is duly elected and qualified or until he or she retires. Mandatory retirement age for independent directors is 72. Those listed as interested directors are "interested" primarily by virtue of their engagement as directors and/or officers of, or ownership interest in, American Century Companies, Inc. (ACC) or its wholly owned, direct or indirect, subsidiaries, including the funds' investment advisor, American Century Global Investment Management, Inc. (ACGIM) or American Century Investment Management, Inc. (ACIM); the funds' principal underwriter, American Century Investment Services, Inc. (ACIS); and the funds' transfer agent, American Century Services, LLC (ACS). The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACGIM, ACIM, ACIS and ACS. The directors serve in this capacity for seven registered investment companies in the American Century Investments family of funds. All persons named as officers of the funds also serve in similar capacities for the other 14 investment companies in the American Century Investments family of funds advised by ACGIM or ACIM, unless otherwise noted. Only officers with policy-making functions are listed. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. INTERESTED DIRECTORS JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1924 POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1963 POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: President, Chief Executive Officer and Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM, ACGIM, ACIS and other ACC subsidiaries. Managing Director, Morgan Stanley (March 2000 to November 2005) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 111 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None - ------ 75 INDEPENDENT DIRECTORS THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1940 POSITION(S) HELD WITH FUNDS: Director (since 1980) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated Investments, LLC (real estate investment company); Managing Member, Brown Cascade Properties, LLC (real estate investment company); Retired, Area Vice President, Applied Industrial Technologies (bearings and power transmission company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1997) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the President, Midwest Research Institute (not-for-profit, contract research organization) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1942 POSITION(S) HELD WITH FUNDS: Director (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Saia, Inc. and Entertainment Properties Trust DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1937 POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board (since 2005) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company); Retired Chairman of the Board, Butler Manufacturing Company (metal buildings producer) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1943 POSITION(S) HELD WITH FUNDS: Director (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive Officer and Founder, Sayers40, Inc. (technology products and services provider) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1994) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice President, Sprint Corporation (telecommunications company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: DST Systems, Inc.; Euronet Worldwide, Inc. and Charming Shoppes, Inc. - ------ 76 JOHN R. WHITTEN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1946 POSITION(S) HELD WITH FUNDS: Director (since 2008) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Project Consultant, Celanese Corp. (industrial chemical company) (September 2004 to January 2005); Chief Financial Officer, Vice President and Treasurer, Applied Industrial Technologies, Inc. (bearings and power transmission company) (1995 to 2003) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Rudolph Technologies, Inc. OFFICERS BARRY FINK, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1955 POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Director, ACC, ACS, ACIS and other ACC subsidiaries MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1956 POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior Vice President (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM, ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century Investments funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1957 POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice President (since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present); General Counsel, ACC (March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1966 POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial Officer (all since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February 2000 to present); Controller, various American Century Investments funds (1997 to September 2006) JON ZINDEL, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1967 POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October 2001 to present); Vice President, certain ACC subsidiaries (October 2001 to August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006). Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief Accounting Officer and Senior Vice President, ACIS The SAI has additional information about the funds' directors and is available without charge, upon request, by calling 1-800-345-2021. - ------ 77 APPROVAL OF MANAGEMENT AGREEMENTS International Growth, Global Growth, Emerging Markets and International Value Under Section 15(c) of the Investment Company Act, contracts for investment advisory services (including subadvisory services) are required to be reviewed, evaluated and approved by a majority of a fund's independent directors or trustees (the "Directors") each year. At American Century Investments, this process is referred to as the "15(c) Process." As a part of this process, the board reviews fund performance, shareholder services, audit and compliance information, and a variety of other reports from the advisor concerning fund operations. In addition to this annual review, the board of directors oversees and evaluates on a continuous basis at its quarterly meetings the nature and quality of significant services performed by the advisor and each subadvisor, fund performance, audit and compliance information, and a variety of other reports relating to fund operations. The board, or committees of the board, also holds special meetings as needed. Under a Securities and Exchange Commission rule, each fund is required to disclose in its annual or semiannual report, as appropriate, the material factors and conclusions that formed the basis for the board's approval or renewal of any advisory agreements within the fund's most recently completed fiscal half-year period. ANNUAL CONTRACT REVIEW PROCESS As part of the annual 15(c) Process undertaken during the most recent fiscal half-year period, the Directors reviewed extensive data and information compiled by the advisor and certain independent providers of evaluative data (the "15(c) Providers") concerning International Growth, Global Growth, Emerging Markets, and International Value (the "Funds") and the services provided to the Funds under the management and subadvisory agreements. The information considered and the discussions held at the meetings included, but were not limited to: * the nature, extent and quality of investment management, shareholder services and other services provided to the Funds; * reports on the wide range of programs and services the advisor provides to the Funds and their shareholders on a routine and non-routine basis; * information about the compliance policies, procedures, and regulatory experience of both the advisor and each subadvisor; * data comparing the cost of owning the Funds to the cost of owning a similar fund; * data comparing the Funds' performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies; * financial data showing the profitability of the Funds to the advisor and the overall profitability of the advisor; and * data comparing services provided and charges to other investment management clients of the advisor. In keeping with its practice, the Funds' board of directors held two in-person meetings and one telephonic meeting to review and discuss the information provided. The board also had the benefit of the advice of its independent counsel throughout the period. - ------ 78 FACTORS CONSIDERED The Directors considered all of the information provided by the advisor, the 15(c) Providers, and the board's independent counsel, and evaluated such information for each fund for which the board has responsibility. In connection with their review of the Funds, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management and subadvisory agreements under the terms ultimately determined by the board to be appropriate, the Directors' decision was based on the following factors. NATURE, EXTENT AND QUALITY OF SERVICES--GENERALLY. Under the management agreement, the advisor is responsible for providing or arranging for all services necessary for the operation of the Funds. The board noted that under the management agreement, the advisor provides or arranges at its own expense a wide variety of services including: * Fund construction and design * portfolio security selection * initial capitalization/funding * securities trading * custody of Fund assets * daily valuation of the each Fund's portfolio * shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping and communications * legal services * regulatory and portfolio compliance * financial reporting * marketing and distribution The Directors noted that many of the services provided by the advisor have expanded over time both in terms of quantity and complexity in response to shareholder demands, competition in the industry and the changing regulatory environment. The directors specifically noted that with respect to the Funds, the advisor had retained subadvisors to provide the day-to-day cash management services and, with respect to International Value, security selection. Under the applicable subadvisory agreement, a subadvisor for International Value is responsible for managing the investment operations and composition of the Fund, including the purchase, retention, and disposition of the investments contained in the Fund. In performing their evaluation, the Directors considered information received in connection with the annual review, as well as information provided on an ongoing basis at their regularly scheduled board and committee meetings. - ------ 79 INVESTMENT MANAGEMENT SERVICES. The nature of the investment management services provided to the Funds is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments, and liquidity. In evaluating investment performance, the board expects the advisor and subadvisors to manage the Funds in accordance with their investment objectives and approved strategies. In providing these services, the advisor and subadvisors utilize teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance and other systems to conduct their business. At each quarterly meeting the Directors review investment performance information for the Funds, together with comparative information for appropriate benchmarks and peer groups of funds managed similarly to the Funds. The Directors also review detailed performance information during the 15(c) Process comparing each Fund's performance with that of similar funds not managed by the advisor. If performance concerns are identified, the Directors discuss with the advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. Each Fund's performance for both the one- and three-year periods was above the median for its peer group. SHAREHOLDER AND OTHER SERVICES. The advisor provides the Funds with a comprehensive package of transfer agency, shareholder, and other services. The Directors review reports and evaluations of such services at their regular quarterly meetings, including the annual meeting concerning contract review, and reports to the board. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the advisor. COSTS OF SERVICES PROVIDED AND PROFITABILITY. The advisor provides detailed information concerning its cost of providing various services to the Funds, its profitability in managing the Funds, its overall profitability, and its financial condition. The Directors have reviewed with the advisor the methodology used to prepare this financial information. This financial information regarding the advisor is considered in order to evaluate the advisor's financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The board concluded that the advisor's profits were reasonable in light of the services provided to the Funds. The board did not consider the profitability of the subadvisor because the subadvisor is paid from the unified fee of the advisor as a result of arm's length negotiations. ETHICS. The Directors generally consider the advisor's commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the advisor's practices generally meet or exceed industry best practices. With respect to the subadvisors, as part of its oversight responsibilities, the board approves each subadvisor's code of ethics and any changes thereto. Further, through the advisor's compliance group, the board stays abreast of any violations of each subadvisor's code. - ------ 80 ECONOMIES OF SCALE. The Directors review reports provided by the advisor on economies of scale for the complex as a whole and the year-over-year changes in revenue, costs, and profitability. The Directors concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. This analysis is also complicated by the additional services and content provided by the advisor and its reinvestment in its ability to provide and expand those services. Accordingly, the Directors also seek to evaluate economies of scale by reviewing other information, such as year-over-year profitability of the advisor generally, the profitability of its management of the Funds specifically, the expenses incurred by the advisor in providing various functions to the Funds, and the fees of competitive funds not managed by the advisor. The Directors believe the advisor is appropriately sharing economies of scale through its competitive fee structure, fee breakpoints as each Fund increases in size, and through reinvestment in its business to provide shareholders additional content and services. COMPARISON TO OTHER FUNDS' FEES. The Funds pay the advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Funds, other than brokerage expenses, taxes, interest, extraordinary expenses, and the fees and expenses of each Fund's independent directors (including their independent legal counsel). The Directors specifically noted that the subadvisory fees paid to the subadvisor under the subadvisory agreement were subject to arm's length negotiation between the advisor and the subadvisor and are paid by the advisor out of its unified fee. Under the unified fee structure, the advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the advisor the risk of increased costs of operating the Funds and provides a direct incentive to minimize administrative inefficiencies. Part of the Directors' analysis of fee levels involves reviewing certain evaluative data compiled by a 15(c) Provider comparing each Fund's unified fee to the total expense ratio of other funds in the Fund's peer group. The unified fee charged to shareholders of Emerging Markets was below the median of the total expense ration of its peer group. The unified fee charged to shareholders of each of the other Funds was above the median of the total expense ratios of its peer group. The board concluded that the management fee paid by each Fund to the advisor was reasonable in light of the services provided to the Fund. COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The Directors also requested and received information from the advisor concerning the nature of the services, fees, and profitability of its advisory services to advisory clients other than the Funds. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Funds. The Directors analyzed this information and concluded that the fees charged and services provided to the Funds were reasonable by comparison. - ------ 81 COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information from the advisor concerning collateral benefits it receives as a result of its relationship with the Funds. They concluded that the advisor's primary business is managing mutual funds and it generally does not use the Funds or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Directors noted that the advisor receives proprietary research from broker-dealers that execute Fund portfolio transactions and concluded that this research is likely to benefit Fund shareholders. The Directors also determined that the advisor is able to provide investment management services to certain clients other than the Funds, at least in part, due to its existing infrastructure built to serve the fund complex. The Directors concluded, however, that the assets of those other clients are not material to the analysis and, in any event, are included with the assets of the Funds to determine breakpoints in each Fund's fee schedule, provided they are managed using the same investment team and strategy. CONCLUSIONS OF THE DIRECTORS As a result of this process, the board, including all of the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor concluded that the investment management agreement between each Fund and the advisor is fair and reasonable in light of the services provided and should be renewed. Additionally, the board, including all the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor, concluded that the subadvisory agreement between the advisor and each subadvisor, on behalf of each Fund, is fair and reasonable in light of the services provided and should be renewed. - ------ 82 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans 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. 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. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information. 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. - ------ 83 INDEX DEFINITIONS The following indices are used to illustrate investment market, sector, or style performance or to serve as fund performance comparisons. They are not investment products available for purchase. Morgan Stanley Capital International (MSCI) has developed several indices that measure the performance of foreign stock markets. The MSCI EAFE (EUROPE, AUSTRALASIA, FAR EAST) INDEX is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE GROWTH INDEX is a capitalization-weighted index that monitors the performance of growth stocks from Europe, Australasia, and the Far East. The MSCI EAFE VALUE INDEX is a capitalization-weighted index that monitors the performance of value stocks from Europe, Australasia, and the Far East. The MSCI EM (EMERGING MARKETS) INDEX represents the gross performance of stocks in global emerging market countries. The MSCI EUROPE INDEX is designed to measure equity market performance in Europe. The MSCI JAPAN INDEX is designed to measure equity market performance in Japan. The MSCI WORLD FREE INDEX represents the performance of stocks in developed countries (including the United States) that are available for purchase by global investors. - ------ 84 [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 ©2009 American Century Proprietary Holdings, Inc. All rights reserved. 0901 CL-ANN-63740S
[front cover] ANNUAL REPORT NOVEMBER 30, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS INTERNATIONAL STOCK FUND INTERNATIONAL DISCOVERY FUND INTERNATIONAL OPPORTUNITIES FUND PROSPECTUS SUPPLEMENT ENCLOSED PRESIDENT'S LETTER [photo of Jonathan Thomas] JONATHAN THOMAS Dear Investor: Thank you for taking time to review the following discussions, from our experienced portfolio management team, of the fund reporting period ended November 30, 2008. It was a time of enormous upheaval and change. We understand and appreciate the challenges you have faced during this historic period, and share your concerns about the economy, the markets, and fund holdings. To help address these issues, I'd like to provide my perspective on how we have managed--and continue to manage--your investments in these uncertain times. As a company, American Century Investments® is well positioned to deal with market turmoil. We are financially strong and privately held, which allows us to align our resources with your long-term investment interests. In addition, our actively managed, team-based approach allows our portfolio teams to identify attractive investment opportunities regardless of market conditions. Our seasoned investment professionals have substantial experience and have successfully navigated previous market crises. These portfolio managers and analysts continue to use a team approach and follow disciplined investment processes designed to produce the best possible long-term results for you. For example, our equity investment teams are working closely with our fixed income group to monitor and assess credit crisis developments. The fixed income team anticipated dislocation in the credit markets and--through its disciplined processes and teamwork--helped reduce our exposure to investments that suffered substantial losses. How soon a sustainable recovery will occur is uncertain. But I am certain of this: Since 1958, we've demonstrated a consistent ability to execute solid, long-term investment strategies and the discipline to remain focused during times of volatility or shifts in the markets. We've stayed true to our principles, especially our belief that your success is the ultimate measure of our success. Thank you for your continued confidence in us. 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 STOCK Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 5 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 6 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 6 INTERNATIONAL DISCOVERY Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 9 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 10 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 10 INTERNATIONAL OPPORTUNITIES Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 13 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 14 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 14 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 15 FINANCIAL STATEMENTS Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 17 Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 26 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 27 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 28 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 30 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 39 Report of Independent Registered Public Accounting Firm . . . . . . . 45 OTHER INFORMATION Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Approval of Management Agreements for International Stock, International Discovery and International Opportunities . . . . . . . 49 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 54 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 55 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 Kopinski, Chief Investment Officer, International Equity CREDIT CRISIS DEMONSTRATES ITS SCOPE What started as a credit crisis in the U.S. subprime mortgage market eventually exploded into a worldwide financial sector meltdown in 2008. Frozen credit markets and slowing economic growth led to plunging international stock returns for the 12-month period ended November 30, 2008. Stock investors had nowhere to hide, as developed and emerging markets plunged. For much of the period, soaring oil and commodity prices caused inflation to spike, which added to investors' woes. After peaking at $147 a barrel in July, however, oil prices quickly descended on waning global demand. Other commodity prices followed suit, and near-term inflationary pressures subsided. JOINT EFFORT PROMPTS RATE CUTS At the urging of the U.S. Federal Reserve, global central banks launched a coordinated response to combat the mounting credit crisis and restore worldwide market liquidity. Rate cuts represented a key component of this strategy. The Bank of England, which had been steadily cutting rates since December 2007, slashed its key lending rate by 275 basis points during the period to 3.0%. Citing sluggish economic growth and severe financial sector strain, Japan implemented its first rate cut in seven years. In early October, Japan's central bank cut the nation's key lending rate to 0.3% from 0.5%. In Europe, action on the monetary policy front was mixed. As late as July 2008, the European Central Bank (ECB) hiked its key interest rate to combat the effects of rising inflation and a record-high euro. But, as economic conditions worsened and inflationary pressures eased, the ECB finally cut its key lending rate by 150 basis points late in the period to 3.25%. CONCENTRATING ON OPPORTUNITY The recent negative financial and economic news makes it difficult to see the opportunities that exist in the current market environment. For example, given their current prices and expected rates of economic growth, certain emerging markets appear attractive on a long-term basis. With our disciplined investment approach, we are as focused as ever on finding and capitalizing on the best international investment opportunities. International Equity Total Returns For the 12 months ended November 30, 2008 (in U.S. dollars) MSCI EM Index -56.42% MSCI EAFE Growth Index -47.28% MSCI Europe Index -49.99% MSCI EAFE Index -47.79% MSCI World Free Index -43.30% MSCI EAFE Value Index -48.33% MSCI Japan Index -37.12% - ------ 2 PERFORMANCE International Stock Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year Inception Date INVESTOR CLASS -48.50% -4.02% 3/31/05 MSCI EAFE INDEX -47.79% -4.24% -- 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 November 30 2005* 2006 2007 2008 Investor Class 8.40% 26.07% 22.22% -48.50% MSCI EAFE Index 8.67% 28.20% 17.30% -47.79% *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 -48.50% for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -47.79%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which increasingly restricted corporate access to operating capital and fueled economic anxieties. Every sector in the benchmark and portfolio posted double-digit declines for the period. Similarly, every country in the benchmark and most countries in the portfolio posted double-digit losses. JAPAN LED DETRACTORS From a regional perspective, exposure in Japan, the portfolio's second-largest country weighting as of November 30, 2008, detracted the most from relative results. The Japanese market outperformed MSCI EAFE during the 12-month period, boosted by a surge in the value of the yen versus the U.S. dollar. Our underweight exposure to the Japanese market detracted significantly from overall performance. Our overweight positions in Greece and South Africa also weighed on returns. At the opposite end of the performance spectrum, the United Kingdom, the portfolio's largest country weighting at the end of the reporting period, followed by the Netherlands and Switzerland, made the greatest contributions to the portfolio's relative performance. In the United Kingdom and the Netherlands, stock selection helped, and in Switzerland, our overweight position accounted for the relative outperformance. UTILITIES, INDUSTRIALS SECTORS LAGGED The utilities industry ended the period as the portfolio's smallest sector weighting, yet it had the largest negative impact on relative performance. This was due to the portfolio's underweight to the sector combined with unfavorable stock selection. Our position in the United Kingdom's electricity generating company International Power was the sector's poorest performer. Slumping worldwide demand meant the industrials sector was among the worst contributors--for the portfolio and the benchmark. Our overweight to electrical equipment companies accounted for the bulk of the sector's relative underperformance. Q-Cells, the German manufacturer of solar cells, was the sector's weakest stock, tumbling on weak economic data and slowing demand for solar projects. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 BG Group plc 2.5% 1.9% Nestle SA 2.3% 1.4% ENI SpA 2.3% 2.0% Total SA 2.1% 1.9% CSL Ltd. 1.9% 1.5% Nintendo Co. Ltd. 1.8% 1.5% Reckitt Benckiser Group plc 1.7% 1.4% Novartis AG 1.7% 0.9% SES SA Fiduciary Depositary Receipt 1.7% 1.3% Tesco plc 1.6% 1.8% - ------ 5 International Stock PORTFOLIO'S FINANCIALS BEAT BENCHMARK Despite the barrage of negative news within the financials industry, the portfolio's financials sector made the greatest contribution to relative performance. Our underweight position combined with favorable stock selection helped the portfolio's results outpace those of the benchmark. In particular, not owning several of the commercial banks and diversified financial services companies represented in the benchmark helped the portfolio's relative results. Our health care stocks also contributed positively to relative performance, with an overweight position and stock selection boosting results. Denmark's Novo Nordisk AS, a pharmaceutical company specializing in insulin treatments for diabetes, was among the portfolio's top contributors. Overall, the portfolio's materials sector contributed positively to relative performance. It was home to the fund's top-performing stock, Germany's K+S AG. The company, which produces potash, a key ingredient in fertilizers, benefited from rising demand for fertilizer products. OUTLOOK International Stock primarily invests in companies located in developed countries around the world, excluding the United States. Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies with sustainable growth characteristics. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks & Rights 99.9% 98.5% Temporary Cash Investments 0.3% 1.0% Other Assets and Liabilities(1) (0.2)% 0.5% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 United Kingdom 22.9% 19.8% Japan 15.1% 12.4% Switzerland 10.9% 9.5% France 8.1% 8.5% Germany 7.0% 7.8% Australia 4.5% 5.3% Italy 4.3% 4.9% Spain 3.7% 3.6% Canada 3.4% 3.1% Netherlands 3.2% 0.9% Other Countries 16.8% 22.7% Cash and Equivalent(2) 0.1% 1.5% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 6 PERFORMANCE International Discovery Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years 10 years Inception Date INVESTOR CLASS -55.48% 3.45% 6.87% 9.94% 4/1/94 MSCI AC WORLD EX-US MID CAP GROWTH INDEX(1) -54.16% 1.53% 0.32% N/A(2) -- S&P DEVELOPED EX-US SMALLCAP GROWTH INDEX(3) -53.81% 1.20% 1.36% 1.86%(4) -- Institutional Class -55.37% 3.65% 7.08% 7.67% 1/2/98 Advisor Class -55.56% 3.19% 6.62% 5.33% 4/28/98 (1) 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. (2) Benchmark data first available June 1994. (3) Formerly S&P/Citigroup EMI Growth World ex-US. (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. - ------ 7 International Discovery Growth of $10,000 Over 10 Years $10,000 investment made November 30, 1998
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One-Year Returns Over 10 Years Periods ended November 30 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 65.12% -1.27% -20.17% -8.00% 37.05% 18.76% 24.30% 36.41% 32.18% -55.48% MSCI AC World ex-US Mid Cap Growth Index 40.18% -23.22% -23.25% -10.71% 29.81% 26.63% 18.61% 31.56% 19.11% -54.16% S&P Developed ex-US SmallCap Growth Index 27.50% -14.20% -20.23% -10.96% 38.79% 27.58% 19.21% 31.56% 14.82% -53.81% 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. - ------ 8 PORTFOLIO COMMENTARY International Discovery Portfolio Managers: Mark Kopinski and Brian Brady PERFORMANCE SUMMARY International Discovery returned -55.48%* for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI All-Country World ex-U.S. Mid Cap Growth Index, returned -54.16%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which restricted corporate access to operating capital and fueled economic anxieties. Within the portfolio and the benchmark, every sector and nearly every country posted double-digit declines for the period. Plummeting commodity prices late in the period also weighed prominently on the natural resources-rich developing markets, and emerging market stocks underperformed the developed markets. JAPAN LED DETRACTORS From a regional perspective, exposure in Japan, the portfolio's largest country weighting as of November 30, 2008, detracted the most from relative results. Our underweight position helped, but it wasn't enough to offset the negative impact of stock selection. NGK Insulators, a manufacturer of electrical insulators and industrial ceramic products, was the country's largest detractor for the period. Exposure to France and Spain also weighed on returns, primarily due to stock selection. At the opposite end of the performance spectrum, our small positions in Korea, India, and Ireland made the greatest contributions to the portfolio's relative performance. Stock selection was the contributing factor in Korea and Ireland, while an underweight position helped in India. Korea's STX Pan Ocean, a shipping company, was among the portfolio's top contributors. CONSUMER STOCKS DISAPPOINTED From a sector perspective, the portfolio's consumer discretionary, utilities, and energy stocks represented the largest detractors to relative performance. In the consumer discretionary sector, stock selection was the primary detractor. In the utilities sector, our underweight position hurt results, while an overweight position in energy detracted from performance. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Serco Group plc 2.5% 1.4% Shimano, Inc. 2.3% 0.7% Lonza Group AG 2.3% 2.7% CSL Ltd. 2.3% 2.6% Firstgroup plc 2.2% -- Open Text Corp. 2.2% 1.2% Nitori Co. Ltd. 2.1% 0.5% Everest Re Group Ltd. 2.0% -- Imperial Energy Corp. plc 1.9% 1.1% Link Real Estate Investment Trust (The) 1.9% 1.0% *All fund returns referenced in this commentary are for Investor Class shares. - ------ 9 International Discovery Within the consumer discretionary sector, media stocks were the weakest performers, led by China's Focus Media. Early in the period, the advertising company was charged with spamming wireless phone users, and we subsequently exited our position. FINANCIALS STOCKS SURPRISED Despite the barrage of negative news within the financials industry, the portfolio's financials sector made the greatest contribution to relative performance. Favorable stock selection combined with our underweight position helped the portfolio's results outpace those of the benchmark. In particular, our stock selection within the real estate investment trust segment helped the portfolio outperform the benchmark. The portfolio's health care stocks also contributed positively 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 rising royalties for its cervical cancer vaccine. The portfolio's materials sector also performed well on a relative basis. Germany's K+S AG, a producer of potash for use in fertilizers, represented a top contributor to the fund's relative performance. OUTLOOK International Discovery primarily invests in small- to mid-sized companies located around the world (excluding the United States). Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies we believe have a high likelihood of growing earnings and revenues at improving rates. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks 97.4% 98.5% Temporary Cash Investments 2.4% 1.4% Other Assets and Liabilities(1) 0.2% 0.1% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Japan 24.7% 15.0% United Kingdom 20.3% 12.3% Canada 8.2% 9.2% Switzerland 6.1% 5.3% Australia 5.6% 5.7% People's Republic of China 4.7% 1.2% Bermuda 3.6% 3.3% Denmark 3.2% 2.9% Ireland 3.0% 1.4% Spain 2.1% 2.8% France 2.1% 1.6% Other Countries 13.8% 37.8% Cash and Equivalent(2) 2.6% 1.5% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 10 PERFORMANCE International Opportunities Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years Inception Date INVESTOR CLASS -56.46% 4.65% 9.07% 6/1/01 MSCI AC WORLD EX-US SMALL CAP GROWTH INDEX(1) -56.62% 0.45% 1.26%(2) -- S&P DEVELOPED EX-US SMALLCAP GROWTH INDEX(3) -53.81% 1.20% 1.54%(2) -- Institutional Class -56.44% 4.85% 12.61% 1/9/03 (1) 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. (2) Since 5/31/01, the date nearest the Investor Class's inception for which data are available. (3) Formerly S&P/Citigroup EMI Growth World ex-US. 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 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 November 30 2001* 2002 2003 2004 2005 2006 2007 2008 Investor Class -2.60% -2.87% 61.54% 27.14% 35.28% 25.37% 33.73% -56.46% MSCI AC World ex-US Small Cap Growth Index -15.29% -11.48% 43.18% 25.65% 20.71% 30.17% 19.40% -56.62% S&P Developed ex-US SmallCap Growth Index -14.51% -10.96% 38.79% 27.58% 19.21% 31.56% 14.82% -53.81% * 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. - ------ 12 PORTFOLIO COMMENTARY International Opportunities Portfolio Managers: Mark Kopinski and Trevor Gurwich PERFORMANCE SUMMARY International Opportunities returned -56.46%* for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI All-Country World ex-U.S. Small Cap Growth Index, returned -56.62%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which restricted corporate access to operating capital and fueled economic anxieties. Within the portfolio and benchmark, every sector and nearly every country posted double-digit declines for the period. Plummeting commodity prices late in the period also weighed prominently on the natural resources-rich developing markets, and emerging market stocks underperformed the developed markets. CHINA LED COUNTRY DETRACTORS From a regional perspective, the portfolio's exposure to the developing markets of China, Hong Kong, and South Africa contributed negatively to performance. Stock selection was the culprit in China, where our portfolio-only position in China Medical Technologies, a medical device company, was the portfolio's largest performance detractor. Overweight positions in Hong Kong and an underweight in South Africa contributed to negative returns. JAPAN WAS TOP PERFORMER Japan (the portfolio's largest country weighting at the end of the reporting period) made the greatest contribution to the portfolio's relative performance, due to stock selection. Eight of the portfolio's top 10 contributors to relative performance were Japanese companies, including healthcare company Tsumura & Co., the portfolio's top contributor. Tsumura has a dominant market share of the traditional herbal medicine (Kampo) market in Japan and benefited from the company's medicine education and scientific initiatives. The company also benefited from the strong yen, which helped reduce procurement costs. Additionally, the company sold one of its divisions and upped its dividend. Spain and Italy also made positive contributions to performance, with stock selection the overriding factor. Spain's Grifols SA, a blood plasma processor, was among the portfolio's top contributors, advancing on strong pricing and healthy volume growth of its products. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Tsumura & Co. 2.5% 1.0% Kaken Pharmaceutical Co. Ltd. 2.1% -- Seven Bank Ltd. 2.1% -- Jardine Lloyd Thompson Group plc 2.0% -- Hokuto Corp. 1.8% -- Kakaku.com, Inc. 1.8% 1.1% Point, Inc. 1.8% -- Nissha Printing Co. Ltd. 1.8% -- NET One Systems Co. Ltd. 1.7% -- Ansaldo STS SpA 1.7% 0.5% *All fund returns referenced in this commentary are for Investor Class shares. - ------ 13 International Opportunities ALL SECTORS STRUGGLED On an absolute basis, all sectors in the portfolio posted sharply negative total returns. Stock selection put the consumer discretionary, energy, and utilities sectors among the weakest contributors to relative performance. In the consumer discretionary sector, stocks in the textiles, apparel, and luxury goods segment and the hotels, restaurants, and leisure category posted the worst relative results. In the energy group, Wellstream Holdings, a U.K.-based oil pipeline manufacturer, was among the portfolio's largest performance detractors, falling on plunging oil prices and concerns about slowing demand from oilfield projects. Stock selection drove performance in the industrials sector, the portfolio's top contributor to relative performance. Our overweight positions in Japan's Aeon Delight Co., a maintenance services company for shopping malls, and Nissha Printing Co., a maker of decorative films and touch screens for notebook computers and cell phones, were the sector's top contributors. The portfolio's health care sector also contributed favorably to relative performance. In particular, an overweight combined with good stock selection in the pharmaceuticals industry helped performance. In addition, our stock selection in the financials sector helped relative results, even as financial companies faced significant stress from the global credit crisis. Seven Bank, a regional bank servicing company in Japan, and Jardine Lloyd Thompson Group, a U.K.-based insurance broker, were among the portfolio's top contributors to relative performance. OUTLOOK International Opportunities primarily invests in small-capitalization companies located around the world (excluding the United States). Although we expect to encounter a challenging equity environment and volatility in the short term, the International Opportunities team will continue to focus on finding companies we believe exhibit a high likelihood of growing earnings and revenues at improving rates. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Foreign Common Stocks 98.6% 98.3% Temporary Cash Investments 0.1% 0.5% Other Assets and Liabilities(1) 1.3% 1.2% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Japan 29.7% 13.2% United Kingdom 17.3% 14.3% Germany 6.6% 6.5% Italy 4.8% 5.2% Hong Kong 4.4% 1.0% Spain 4.3% 6.0% France 3.6% 3.8% Switzerland 3.2% 1.6% People's Republic of China 2.8% 0.6% Netherlands 2.6% 4.7% Canada 2.5% 6.6% Other Countries 16.8% 34.8% Cash and Equivalent(2) 1.4% 1.7% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 14 SHAREHOLDER FEE EXAMPLES (UNAUDITED) Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2008 to November 30, 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 Beginning Account Ending Account Expenses Paid Annualized Value Value During Period* Expense 6/1/08 11/30/08 6/1/08 - 11/30/08 Ratio* International Stock ACTUAL Investor Class $1,000 $530.80 $5.78 1.51% HYPOTHETICAL Investor Class $1,000 $1,017.45 $7.62 1.51% International Discovery ACTUAL Investor Class $1,000 $469.60 $5.14 1.40% Institutional Class $1,000 $470.30 $4.41 1.20% Advisor Class $1,000 $469.00 $6.06 1.65% HYPOTHETICAL Investor Class $1,000 $1,018.00 $7.06 1.40% Institutional Class $1,000 $1,019.00 $6.06 1.20% Advisor Class $1,000 $1,016.75 $8.32 1.65% International Opportunities ACTUAL Investor Class $1,000 $500.70 $7.20 1.92% Institutional Class $1,000 $500.70 $6.45 1.72% HYPOTHETICAL Investor Class $1,000 $1,015.40 $9.67 1.92% Institutional Class $1,000 $1,016.40 $8.67 1.72% * 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 SCHEDULE OF INVESTMENTS International Stock NOVEMBER 30, 2008 Shares Value Common Stocks & Rights -- 99.9% AUSTRALIA -- 4.5% 32,435 BHP Billiton Ltd. $ 651,838 50,002 CSL Ltd. 1,151,224 16,015 Rio Tinto Ltd. 493,857 155,836 Telstra Corp. Ltd. 416,012 ----------- 2,712,931 ----------- BELGIUM -- 2.2% 7,852 Anheuser-Busch Inbev NV 129,228 6,973 KBC Groep NV 211,564 56,584 SES SA Fiduciary Depositary Receipt 991,581 ----------- 1,332,373 ----------- BERMUDA -- 0.6% 11,260 Lazard Ltd., Class A 351,988 ----------- BRAZIL -- 1.7% 20,200 Cia Vale do Rio Doce, preference shares 217,617 71,300 Redecard SA 828,157 ----------- 1,045,774 ----------- CANADA -- 3.4% 14,818 Canadian National Railway Co. 522,489 9,553 EnCana Corp. 447,176 10,656 Gildan Activewear, Inc.(1) 180,349 16,645 Research In Motion Ltd.(1) 706,913 5,666 Shoppers Drug Mart Corp. 201,887 ----------- 2,058,814 ----------- CZECH REPUBLIC -- 0.9% 12,944 CEZ AS 513,821 ----------- DENMARK -- 1.9% 18,974 Novo Nordisk AS B Shares 969,698 3,695 Vestas Wind Systems AS(1) 168,015 ----------- 1,137,713 ----------- FINLAND -- 1.0% 12,959 Fortum Oyj 260,362 12,099 Nokia Oyj 171,188 21,054 Stora Enso Oyj R Shares 171,758 ----------- 603,308 ----------- FRANCE -- 8.1% 9,631 ALSTOM SA 513,794 29,989 AXA SA 574,205 11,165 BNP Paribas 618,991 5,053 Compagnie Generale des Etablissements Michelin, Class B 242,543 Shares Value 4,056 Essilor International SA $ 162,333 11,949 GDF Suez 480,980 3,875 Groupe Danone 223,382 7,851 Suez Environnement SA(1) 135,243 23,794 Total SA 1,248,784 12,332 Ubisoft Entertainment SA(1) 284,221 13,422 Vivendi 380,518 ----------- 4,864,994 ----------- GERMANY -- 7.0% 3,808 adidas AG 119,156 9,121 Bayer AG 474,109 4,559 Deutsche Boerse AG 327,873 36,490 Deutsche Telekom AG 507,972 20,957 Fresenius Medical Care AG & Co. KGaA 915,896 6,385 K+S AG 289,545 5,183 Linde AG 380,474 7,100 Muenchener Rueckversicherungs AG 970,001 896 Q-Cells SE(1) 30,184 5,961 SAP AG 204,859 ----------- 4,220,069 ----------- GREECE -- 1.5% 7,257 Coca Cola Hellenic Bottling Co. SA 112,938 41,994 National Bank of Greece SA 802,304 ----------- 915,242 ----------- HONG KONG -- 1.4% 12,500 China Mobile Ltd. 114,599 14,400 Hang Seng Bank Ltd. 184,282 84,000 Li & Fung Ltd. 152,903 189,000 Link Real Estate Investment Trust (The) 356,859 ----------- 808,643 ----------- INDIA -- 0.8% 23,701 Bharti Airtel Ltd.(1) 320,027 5,645 Housing Development Finance Corp. Ltd. 166,499 ----------- 486,526 ----------- IRELAND -- 1.0% 14,097 Anglo Irish Bank Corp. plc 15,278 21,393 Ryanair Holdings plc ADR(1) 561,780 ----------- 577,058 ----------- ISRAEL -- 1.1% 15,033 Teva Pharmaceutical Industries Ltd. ADR 648,674 ----------- - ------ 17 International Stock Shares Value ITALY -- 4.3% 59,426 ENI SpA $ 1,348,411 16,365 Finmeccanica SpA 205,011 93,211 Intesa Sanpaolo SpA 281,856 46,359 Saipem SpA 722,703 ----------- 2,557,981 ----------- JAPAN -- 15.1% 9,500 Benesse Corp. 402,007 9,000 Canon, Inc. 267,797 64 Central Japan Railway Co. 541,665 5,300 Daito Trust Construction Co. Ltd. 225,566 13,500 FamilyMart Co. Ltd. 550,004 5,000 FAST RETAILING CO. LTD. 573,956 15,100 Honda Motor Co. Ltd. 331,902 107,291 iShares MSCI Japan Index Fund 929,140 34,000 Japan Steel Works Ltd. (The) 349,486 18,800 Konami Corp. 426,105 16,200 Kurita Water Industries Ltd. 383,447 11,100 Mitsubishi Corp. 138,059 3,500 Nintendo Co. Ltd. 1,083,392 976 Rakuten, Inc. 533,943 8,000 Shiseido Co. Ltd. 148,790 314 Sony Financial Holdings, Inc. 928,753 47 Sumitomo Mitsui Financial Group, Inc. 172,417 9,600 Terumo Corp. 445,820 50,000 Tokyo Gas Co. Ltd. 225,248 5,700 Unicharm Corp. 393,545 ----------- 9,051,042 ----------- LUXEMBOURG -- 0.2% 3,839 Millicom International Cellular SA 147,149 ----------- NETHERLANDS -- 3.2% 6,253 ASML Holding NV 95,398 73,327 Koninklijke Ahold NV 818,523 64,179 Koninklijke KPN NV 887,608 5,096 Unilever NV CVA 119,163 ----------- 1,920,692 ----------- PEOPLE'S REPUBLIC OF CHINA -- 1.0% 167,000 China Communications Construction Co. Ltd. H Shares 178,914 259,500 China Merchants Bank Co. Ltd. H Shares 416,734 ----------- 595,648 ----------- SINGAPORE -- 0.6% 40,000 United Overseas Bank Ltd. 347,394 ----------- Shares Value SOUTH KOREA -- 0.3% 5,924 Hyundai Motor Co. $ 167,558 ----------- SPAIN -- 3.7% 76,954 Banco Santander SA(1) 632,927 45,311 Cintra Concesiones de Infraestructuras de Transporte SA(1) 362,165 24,455 Indra Sistemas SA 500,187 35,267 Telefonica SA 716,211 ----------- 2,211,490 ----------- SWITZERLAND -- 10.9% 24,680 ABB Ltd.(1) 318,897 12,148 Actelion Ltd.(1) 548,642 4,818 Credit Suisse Group AG 141,422 8,737 EFG International AG 139,573 20,430 Julius Baer Holding AG 674,930 3,605 Lonza Group AG 298,217 38,122 Nestle SA 1,378,971 21,945 Novartis AG 1,025,825 5,788 Roche Holding AG 813,798 388 SGS SA 332,368 4,757 Syngenta AG 846,138 ----------- 6,518,781 ----------- TAIWAN (REPUBLIC OF CHINA) -- 0.6% 107,900 Hon Hai Precision Industry Co. Ltd. 209,584 20,625 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 147,469 ----------- 357,053 ----------- UNITED KINGDOM -- 22.9% 31,492 Admiral Group plc 478,260 17,948 Aggreko plc 124,297 19,378 AMEC plc 157,458 3,840 Anglo American plc 91,322 21,984 AstraZeneca plc 830,720 25,337 Autonomy Corp. plc(1) 365,151 42,801 BAE Systems plc 235,269 103,016 BG Group plc 1,475,246 21,921 British American Tobacco plc 574,471 91,674 British Sky Broadcasting Group plc 625,019 17,775 Cadbury plc 150,671 45,943 Capita Group plc (The) 492,627 138,167 Cobham plc 379,277 134,805 Compass Group plc 639,386 43,482 GlaxoSmithKline plc 753,278 47,530 HSBC Holdings plc 510,831 20,251 International Power plc 80,621 - ------ 18 International Stock Shares Value 89,222 Man Group plc $ 347,469 18,070 Next plc 309,782 24,299 Reckitt Benckiser Group plc 1,031,253 58,615 Reed Elsevier plc 487,380 53,993 Scottish and Southern Energy plc 915,335 88,921 Stagecoach Group plc 240,315 21,474 Standard Chartered plc 280,729 7,079 Standard Chartered plc Rights(1) 44,639 214,073 Tesco plc 971,500 105,249 TUI Travel plc 344,118 391,979 Vodafone Group plc 765,800 ----------- 13,702,224 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $76,261,623) 59,854,940 ----------- Temporary Cash Investments -- 0.3% Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $203,740), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $200,003) (Cost $200,000) 200,000 ----------- TOTAL INVESTMENT SECURITIES -- 100.2% (Cost $76,461,623) 60,054,940 ----------- OTHER ASSETS AND LIABILITIES -- (0.2)% (142,895) ----------- TOTAL NET ASSETS -- 100.0% $59,912,045 =========== Market Sector Diversification (as a % of net assets) Financials 17.0% Health Care 15.1% Consumer Staples 11.4% Consumer Discretionary 10.8% Industrials 10.1% Energy 9.0% Information Technology 8.8% Telecommunication Services 6.5% Materials 5.2% Utilities 4.4% Diversified 1.6% Cash and Equivalents* 0.1% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt CVA = Certificaten Van Aandelen MSCI = Morgan Stanley Capital International (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 19 International Discovery NOVEMBER 30, 2008 Shares Value Common Stocks -- 97.4% AUSTRALIA -- 5.6% 764,700 Billabong International Ltd. $5,321,038 720,000 Computershare Ltd. 3,126,342 786,400 CSL Ltd. 18,105,724 655,800 Lion Nathan Ltd. 3,744,593 1,206,000 Sonic Healthcare Ltd. 10,616,800 1,545,800 Tatts Group Ltd. 2,564,689 ------------ 43,479,186 ------------ BERMUDA -- 3.6% 203,400 Everest Re Group Ltd. 15,958,764 38,300 Lazard Ltd., Class A 1,197,258 1,301,000 Seadrill Ltd. 10,666,201 ------------ 27,822,223 ------------ BRAZIL -- 1.3% 867,100 Global Village Telecom Holding SA(1) 9,809,374 ------------ CANADA -- 8.2% 377,400 Agnico-Eagle Mines Ltd. 14,250,639 334,500 Alimentation Couche Tard, Inc., Class B 3,304,003 216,400 Crescent Point Energy Trust 4,618,697 173,800 Fortis, Inc. 3,766,928 815,800 Gildan Activewear, Inc.(1) 13,807,162 191,900 Metro, Inc., Class A 5,245,452 632,700 Open Text Corp.(1) 16,836,147 42,058 Ritchie Bros. Auctioneers, Inc. 783,374 91,200 Saputo, Inc.(1) 1,691,340 ------------ 64,303,742 ------------ CHANNEL ISLANDS -- 0.9% 367,200 Amdocs Ltd.(1) 6,899,688 ------------ DENMARK -- 3.2% 153,100 Genmab AS(1) 6,842,713 92,300 Novozymes AS B Shares 6,548,586 93,500 Topdanmark AS(1) 11,212,600 ------------ 24,603,899 ------------ FINLAND -- 0.1% 100,400 Nokian Renkaat Oyj 1,179,762 ------------ FRANCE -- 2.1% 252,100 Gemalto NV(1) 5,959,105 145,300 Neopost SA 10,393,929 ------------ 16,353,034 ------------ Shares Value GREECE -- 0.2% 61,700 OPAP SA $1,530,381 ------------ HONG KONG -- 1.9% 7,735,500 Link Real Estate Investment Trust (The) 14,605,716 ------------ IRELAND -- 3.0% 1,618,930 Anglo Irish Bank Corp. plc 1,754,543 1,078,700 Experian plc 6,592,428 231,500 Icon plc ADR(1) 4,905,485 143,900 Kerry Group plc, Class A 2,998,937 281,600 Ryanair Holdings plc ADR(1) 7,394,816 ------------ 23,646,209 ------------ ITALY -- 1.8% 341,800 ERG SpA 4,633,752 766,100 Mediolanum SpA 3,141,917 562,200 Prysmian SpA 6,279,981 ------------ 14,055,650 ------------ JAPAN -- 24.7% 157,300 ABC-Mart, Inc. 5,361,117 429,500 AEON Mall Co. Ltd. 9,080,315 679,000 Asics Corp. 4,093,786 494,600 Capcom Co. Ltd. 10,055,779 226,800 FamilyMart Co. Ltd. 9,240,069 2,322,000 Hankyu Hanshin Holdings, Inc. 11,553,981 163,200 Hosiden Corp. 2,003,645 713,200 iShares MSCI Japan Index Fund 6,176,312 408,000 Japan Steel Works Ltd. (The) 4,193,827 206,000 JGC Corp. 2,380,129 5,400 Jupiter Telecommunications Co. Ltd. 4,163,430 150,800 Kobayashi Pharmaceutical Co. Ltd. 5,536,267 239,000 Nippon Meat Packers, Inc. 2,996,777 186,100 Nissha Printing Co. Ltd. 8,674,540 229,600 Nitori Co. Ltd. 16,353,171 3,125,000 Osaka Gas Co. Ltd. 11,887,044 4,200 Rakuten, Inc. 2,297,707 495,100 Shimano, Inc. 18,314,235 350,000 Shionogi & Co. Ltd. 7,594,355 1,262,600 Sumitomo Rubber Industries, Inc. 11,524,589 639,000 Suruga Bank Ltd. 6,451,079 2,079,000 Taisei Corp. 4,111,541 - ------ 20 International Discovery Shares Value 190,200 Tokyo Broadcasting System, Inc. $2,514,105 525,000 Toyo Suisan Kaisha Ltd. 12,265,092 88,700 Toyo Tanso Co. Ltd. 4,283,629 2,536,000 Ube Industries Ltd. 5,058,927 67,100 Unicharm Corp. 4,632,787 ------------ 192,798,235 ------------ LUXEMBOURG -- 0.5% 107,500 Millicom International Cellular SA 4,120,475 ------------ MULTI-NATIONAL -- 0.5% 98,600 iShares MSCI EAFE Growth Index Fund 4,118,522 ------------ NETHERLANDS -- 1.8% 150,900 Fugro NV 4,807,039 557,400 Qiagen NV(1) 8,851,068 ------------ 13,658,107 ------------ NORWAY -- 1.0% 2,832,100 Pronova BioPharma AS(1) 7,817,356 ------------ PEOPLE'S REPUBLIC OF CHINA -- 4.7% 5,306,000 China High Speed Transmission Equipment Group Co. Ltd. 4,193,434 28,885,389 China South Locomotive & Rolling Stock Corp. H Shares(1) 12,188,397 6,832,000 China Yurun Food Group Ltd. 7,603,712 412,100 Mindray Medical International Ltd. ADR 7,450,768 102,800 New Oriental Education & Technology Group ADR(1) 5,305,508 ------------ 36,741,819 ------------ SINGAPORE -- 0.6% 4,195,000 SMRT Corp. Ltd. 4,513,705 ------------ SOUTH AFRICA -- 0.7% 1,525,000 Aspen Pharmacare Holdings Ltd.(1) 5,689,385 ------------ SOUTH KOREA -- 1.1% 34,500 Hite Brewery Co. Ltd.(1) 4,250,321 35,200 LG Household & Health Care Ltd. 4,008,569 ------------ 8,258,890 ------------ Shares Value SPAIN -- 2.1% 162,800 Bolsas y Mercados Espanoles $3,869,612 373,500 Enagas 6,945,421 290,400 Indra Sistemas SA 5,939,662 ------------ 16,754,695 ------------ SWITZERLAND -- 6.1% 239,200 Actelion Ltd.(1) 10,803,033 76,600 Aryzta AG(1) 2,054,611 6,200 Barry Callebaut AG(1) 3,658,102 105,900 Basilea Pharmaceutica(1) 9,896,793 2,400 Givaudan SA 1,575,890 220,500 Lonza Group AG 18,240,447 25,000 Partners Group Holding AG 1,508,051 ------------ 47,736,927 ------------ TAIWAN (REPUBLIC OF CHINA) -- 1.4% 7,083,000 Acer, Inc. 9,040,131 638,000 President Chain Store Corp. 1,503,502 ------------ 10,543,633 ------------ UNITED KINGDOM -- 20.3% 568,600 Admiral Group plc 8,635,173 1,547,200 Amlin plc 8,758,004 1,386,700 ARM Holdings plc 2,053,952 315,900 Berkeley Group Holdings plc(1) 4,108,321 2,721,000 Cobham plc 7,469,320 266,089 De La Rue plc(1) 3,493,692 415,100 De La Rue plc, preference shares(1) 1,947,129 2,413,000 Firstgroup plc, 17,524,546 2,197,000 IG Group Holdings plc 7,612,437 971,700 Imperial Energy Corp. plc(1) 14,908,393 1,745,700 Inmarsat plc 11,730,501 538,000 London Stock Exchange Group plc 5,073,472 1,823,000 Rexam plc 9,814,391 319,600 Rotork plc 3,848,087 628,398 Schroders plc 8,227,272 3,119,100 Serco Group plc 19,156,301 736,300 Smith & Nephew plc 5,490,021 1,712,200 VT Group plc 13,323,629 839,300 Wellstream Holdings plc 4,998,851 ------------ 158,173,492 ------------ TOTAL COMMON STOCKS (Cost $905,111,951) 759,214,105 ------------ - ------ 21 International Discovery Shares Value Temporary Cash Investments -- 2.4% 29,511 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares $ 29,511 Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, $18,845,958), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $18,500,308) 18,500,000 ------------ TOTAL TEMPORARY CASH INVESTMENTS (Cost $18,529,511) 18,529,511 ------------ TOTAL INVESTMENT SECURITIES -- 99.8% (Cost $923,641,462) 777,743,616 ------------ OTHER ASSETS AND LIABILITIES -- 0.2% 1,732,859 ------------ TOTAL NET ASSETS -- 100.0% $779,476,475 ============ Market Sector Diversification (as a % of net assets) Industrials 17.7% Health Care 15.7% Financials 13.8% Consumer Discretionary 12.6% Information Technology 10.0% Consumer Staples 9.7% Energy 5.7% Materials 4.7% Telecommunication Services 3.3% Utilities 2.9% Diversified 1.3% Cash and Equivalents* 2.6% * Includes temporary cash investments 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 (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 22 International Opportunities NOVEMBER 30, 2008 Shares Value Common Stocks -- 98.6% AUSTRALIA -- 1.5% 76,690 Ansell Ltd. $ 641,993 70,721 JB Hi-Fi Ltd. 387,008 ----------- 1,029,001 ----------- AUSTRIA -- 1.0% 25,750 Intercell AG(1) 681,324 ----------- BERMUDA -- 2.4% 132,799 Catlin Group Ltd. 884,177 13,949 Endurance Specialty Holdings Ltd. 375,507 58,142 Lancashire Holdings Ltd. 345,475 ----------- 1,605,159 ----------- BRITISH VIRGIN ISLANDS -- 0.5% 76,577 Playtech Ltd. 360,876 ----------- CANADA -- 2.5% 23,791 Laurentian Bank of Canada 679,277 17,312 Metro, Inc., Class A 473,211 20,073 Open Text Corp.(1) 534,143 ----------- 1,686,631 ----------- CYPRUS -- 0.4% 65,791 ProSafe SE(1) 251,056 ----------- FRANCE -- 3.6% 43,327 Altran Technologies SA(1) 161,212 8,354 bioMerieux 613,000 34,443 Gemalto NV(1) 814,159 8,912 Ingenico 115,407 11,181 Orpea(1) 343,856 9,924 Sechilienne-Sidec 332,164 ----------- 2,379,798 ----------- GERMANY -- 6.6% 13,195 Biotest AG, preference shares 710,311 16,277 Fielmann AG 919,110 29,091 Gerresheimer AG 1,001,237 6,625 Software AG 342,699 11,217 Vossloh AG 1,040,413 71,918 Wire Card AG(1) 407,831 ----------- 4,421,601 ----------- GREECE -- 1.2% 98,646 Hellenic Exchanges SA Holding 819,915 ----------- HONG KONG -- 4.4% 196,000 Cafe de Coral Holdings Ltd. 329,091 471,000 China Green Holdings Ltd. 305,742 318,000 Hengan International Group Co. Ltd. 945,960 Shares Value 1,185,000 Huabao International Holdings Ltd. $ 742,500 1,692,000 Ju Teng International Holdings Ltd.(1) 327,981 246,000 Ports Design Ltd. 276,725 ----------- 2,927,999 ----------- INDIA -- 2.0% 179,702 Indian Bank 446,129 45,292 Lupin Ltd. 532,172 46,766 Piramal Healthcare Ltd. 199,226 17,428 Tulip Telecom Ltd. 145,857 ----------- 1,323,384 ----------- ISRAEL -- 1.6% 28,410 Elbit Systems Ltd. 1,030,373 ----------- ITALY -- 4.8% 90,785 Ansaldo STS SpA 1,135,263 130,731 Astaldi SpA 600,696 124,969 Davide Campari-Milano SpA 692,991 183,911 Landi Renzo SpA 800,365 ----------- 3,229,315 ----------- JAPAN -- 29.7% 19,500 ABC-Mart, Inc. 664,601 35,900 Aeon Delight Co. Ltd. 956,620 52,800 Capcom Co. Ltd. 1,073,484 33,100 Daiseki Co. Ltd. 779,306 46,700 Hokuto Corp. 1,199,236 64,800 Hosiden Corp. 795,565 337 Kakaku.com, Inc. 1,182,199 144,000 Kaken Pharmaceutical Co. Ltd. 1,426,820 37,000 Kikkoman Corp. 417,079 15,500 Kobayashi Pharmaceutical Co. Ltd. 569,046 11,600 Matsumotokiyoshi Holdings Co Ltd. 228,694 26,500 Ministop Co. Ltd. 512,565 661 NET One Systems Co. Ltd. 1,137,077 25,300 Nissha Printing Co. Ltd. 1,179,290 35 Nomura Real Estate Office Fund, Inc. REIT 204,163 35 Osaka Securities Exchange Co. Ltd. 156,244 24,260 Point, Inc. 1,179,290 386 Seven Bank Ltd. 1,372,366 116,300 Shinko Plantech Co. Ltd. 1,086,776 40,000 Toyo Suisan Kaisha Ltd. 934,483 52,000 Tsumura & Co. 1,667,009 33,500 Unicharm Petcare Corp. 1,092,002 ----------- 19,813,915 ----------- - ------ 23 International Opportunities Shares Value NETHERLANDS -- 2.6% 41,070 Imtech NV $ 629,950 42,378 QIAGEN NV(1) 683,556 7,246 Smit Internationale NV 402,980 ----------- 1,716,486 ----------- NEW ZEALAND -- 1.0% 404,784 Fisher & Paykel Healthcare Corp. Ltd. 683,865 ----------- NORWAY -- 0.4% 37,900 TGS Nopec Geophysical Co ASA(1) 248,867 ----------- PEOPLE'S REPUBLIC OF CHINA -- 2.8% 30,692 China Medical Technologies, Inc. ADR 629,493 371,000 Golden Eagle Retail Group Ltd. 200,265 504,000 New World Department Store China Ltd. 215,844 352,000 Shandong Weigao Group Medical Polymer Co. Ltd., Class H 500,605 429,000 Zhuzhou CSR Times Electric Co. Ltd., Class H 346,565 ----------- 1,892,772 ----------- SOUTH KOREA -- 2.3% 7,389 CJ Home Shopping 157,079 29,200 DigiTech Systems Co. Ltd.(1) 183,435 22,040 LG Fashion Corp. 307,804 828 Lotte Chilsung Beverage Co. Ltd. 421,842 2,856 Nong Shim Co. Ltd. 438,605 ----------- 1,508,765 ----------- SPAIN -- 4.3% 1,656 Construcciones y Auxiliar de Ferrocarriles SA 475,523 32,815 Grifols SA 565,463 34,161 Prosegur, Compania de Seguridad SA 971,002 47,313 Viscofan SA 887,143 ----------- 2,899,131 ----------- SWEDEN -- 0.8% 52,652 Elekta AB, Class B 558,288 ----------- Shares Value SWITZERLAND -- 3.2% 880 Acino Holding AG $ 163,392 14,987 Advanced Digital Broadcast Holdings SA(1) 339,436 6,007 Bank Sarasin & Compagnie AG, Class B 147,991 1,727 Galenica Holding AG 488,911 11,616 PSP Swiss Property AG(1) 486,182 11,128 Swiss Prime Site AG(1) 478,003 ----------- 2,103,915 ----------- TAIWAN (REPUBLIC OF CHINA) -- 1.7% 325,000 Giant Manufacturing Co. Ltd. 808,565 1,255,000 Goldsun Development & Construction Co. Ltd. 339,408 ----------- 1,147,973 ----------- UNITED KINGDOM -- 17.3% 89,780 888 Holdings plc 105,929 107,796 ASOS plc(1) 459,016 50,682 Autonomy Corp. plc(1) 730,417 113,775 Babcock International Group plc 843,815 17,941 Chemring Group plc 518,221 110,612 Connaught plc 632,787 24,642 Croda International plc 171,624 28,790 Dana Petroleum plc(1) 387,602 225,748 Domino's Pizza UK & IRL plc 615,158 254,070 IG Group Holdings plc 880,333 40,916 Intertek Group plc 478,115 170,759 Jardine Lloyd Thompson Group plc 1,312,595 143,957 John Wood Group plc 476,696 118,883 Micro Focus International plc 469,359 79,783 Petrofac Ltd. 417,195 50,783 Provident Financial plc 673,021 154,229 PV Crystalox Solar plc 270,844 318,596 QinetiQ plc 854,429 136,970 SSL International plc 1,010,726 36,542 Wellstream Holdings plc 217,643 ----------- 11,525,525 ----------- TOTAL COMMON STOCKS (Cost $77,783,545) 65,845,934 ----------- - ------ 24 International Opportunities Shares Value Temporary Cash Investments -- 0.1% 51,022 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares (Cost $51,022) $ 51,022 ----------- TOTAL INVESTMENT SECURITIES -- 98.7% (Cost $77,834,567) 65,896,956 ----------- OTHER ASSETS AND LIABILITIES -- 1.3% 889,045 ----------- TOTAL NET ASSETS -- 100.0% $66,786,001 =========== Market Sector Diversification (as a % of net assets) Industrials 19.7% Health Care 19.6% Financials 13.9% Consumer Staples 13.7% Information Technology 12.9% Consumer Discretionary 11.6% Energy 4.6% Materials 1.9% Utilities 0.5% Telecommunication Services 0.2% Cash and Equivalents* 1.4% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt REIT = Real Estate Investment Trust (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 25 STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 2008 International International International Stock Discovery Opportunities ASSETS Investments securities, at value (cost of $76,461,623, $923,641,462 and $77,834,567, respectively) $60,054,940 $777,743,616 $65,896,956 Cash -- 47,455 -- Foreign currency holdings, at value (cost of $156,613, $- and $722,509, respectively) 151,750 -- 723,042 Receivable for investments sold 705,219 24,538,462 4,537,470 Receivable for capital shares sold 28,579 197,106 200 Dividends and interest receivable 177,193 1,369,976 127,419 Other assets 416 49,686 13,598 ------------- -------------- ------------- 61,118,097 803,946,301 71,298,685 ------------- -------------- ------------- LIABILITIES Disbursements in excess of demand deposit cash 11,997 -- 67,642 Payable for investments purchased 1,066,757 22,930,452 4,316,256 Payable for capital shares redeemed 57,403 549,288 16,956 Accrued management fees 69,895 987,864 111,830 Distribution and service fees payable -- 2,222 -- ------------- -------------- ------------- 1,206,052 24,469,826 4,512,684 ------------- -------------- ------------- NET ASSETS $59,912,045 $779,476,475 $66,786,001 ============= ============== ============= NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $94,415,951 $1,405,336,910 $ 125,725,067 Undistributed net investment income 919,289 6,695,502 -- Accumulated net realized loss on investment and foreign currency transactions (19,010,587) (486,680,971) (47,003,398) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (16,412,608) (145,874,966) (11,935,668) ------------- -------------- ------------- $59,912,045 $779,476,475 $66,786,001 ============= ============== ============= INVESTOR CLASS, $0.01 PAR VALUE Net assets $59,912,045 $713,763,646 $65,541,062 Shares outstanding 7,401,137 113,944,291 17,727,967 Net asset value per share $8.09 $6.26 $3.70 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets N/A $55,090,869 $1,244,939 Shares outstanding N/A 8,686,980 334,436 Net asset value per share N/A $6.34 $3.72 ADVISOR CLASS, $0.01 PAR VALUE Net assets N/A $10,621,960 N/A Shares outstanding N/A 1,731,989 N/A Net asset value per share N/A $6.13 N/A See Notes to Financial Statements. - ------ 26 STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 2008 International International International Stock Discovery Opportunities INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $247,923, $2,274,487 and $297,143, respectively) $ 2,857,042 $ 27,189,597 $ 3,460,408 Interest 13,945 605,164 90,251 Securities lending, net 80,819 927,428 279,559 ------------- ---------------- -------------- 2,951,806 28,722,189 3,830,218 ------------- ---------------- -------------- EXPENSES: Management fees 1,684,681 20,651,064 2,757,074 Distribution and service fees - -- Advisor Class -- 32,448 -- Directors' fees and expenses 3,120 42,877 4,125 Other expenses 7,570 16,538 2,604 ------------- ---------------- -------------- 1,695,371 20,742,927 2,763,803 ------------- ---------------- -------------- NET INVESTMENT INCOME (LOSS) 1,256,435 7,979,262 1,066,415 ------------- ---------------- -------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $(416), $1,154 and $-, respectively) (22,105,720) (469,686,994) (46,571,416) Foreign currency transactions 3,505,224 (13,585,873) 121,915 ------------- ---------------- -------------- (18,600,496) (483,272,867) (46,449,501) ------------- ---------------- -------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $12,541, $571,796 and $55,966, respectively) (32,913,461) (446,466,634) (48,543,808) Translation of assets and liabilities in foreign currencies (13,314,983) (115,177,238) (11,768,883) ------------- ---------------- -------------- (46,228,444) (561,643,872) (60,312,691) ------------- ---------------- -------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (64,828,940) (1,044,916,739) (106,762,192) ------------- ---------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(63,572,505) $(1,036,937,477) $(105,695,777) ============= ================ ============== See Notes to Financial Statements. - ------ 27 STATEMENT OF CHANGES IN NET ASSETS YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 International Stock International Discovery Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 1,256,435 $ 1,071,359 $ 7,979,262 $ 5,449,656 Net realized gain (loss) (18,600,496) 5,989,515 (483,272,867) 430,556,176 Change in net unrealized appreciation (depreciation) (46,228,444) 17,434,439 (561,643,872) 35,680,142 ------------- ------------- --------------- -------------- Net increase (decrease) in net assets resulting from operations (63,572,505) 24,495,313 (1,036,937,477) 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 (14,439,277) 30,456,260 346,302,568 255,971,291 ------------- ------------- --------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS (84,900,008) 54,631,405 (1,127,075,521) 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 $59,912,045 $ 144,812,053 $ 779,476,475 $1,906,551,996 ============= ============= =============== ============== Undistributed net investment income $919,289 $934,954 $6,695,502 $6,986,593 ============= ============= =============== ============== See Notes to Financial Statements. - ------ 28 YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 International Opportunities Increase (Decrease) in Net Assets 2008 2007 OPERATIONS Net investment income (loss) $ 1,066,415 $ 410,877 Net realized gain (loss) (46,449,501) 49,869,818 Change in net unrealized appreciation (depreciation) (60,312,691) 7,884,112 ------------- ------------ Net increase (decrease) in net assets resulting from operations (105,695,777) 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 6,871,665 29,319,513 ------------- ------------ NET INCREASE (DECREASE) IN NET ASSETS (149,884,172) 34,838,773 NET ASSETS Beginning of period 216,670,173 181,831,400 ------------- ------------ End of period $66,786,001 $216,670,173 ============= ============ Undistributed net investment income -- $1,022,884 ============= ============ See Notes to Financial Statements. - ------ 29 NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 2008 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, although it may invest in companies of any size. 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. - ------ 30 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. 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 have adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an interpretation of FASB Statement No. 109" during the current fiscal year. All tax years for International Stock remain subject to examination by tax authorities. International Discovery and International Opportunities are no longer subject to examination by tax authorities for years prior to 2005. Additionally, non-U.S. tax returns filed by the funds due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for 7 years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and 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. - ------ 31 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. 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 each fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadivised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). 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 year ended November 30, 2008, was as follows: Investor Institutional Advisor International Stock 1.50% N/A N/A International Discovery 1.37% 1.17% 1.38% International Opportunities 1.87% 1.67% 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. - ------ 32 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 year ended November 30, 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 with JPMCB. JPMCB is a custodian of the funds and a wholly owned subsidiary of JPM. 3. INVESTMENT TRANSACTIONS Investment transactions, excluding short-term investments, for the year ended November 30, 2008, were as follows: International International International Stock Discovery Opportunities Purchases $120,853,568 $2,639,116,571 $304,166,451 Proceeds from sales $141,028,864 $2,683,604,925 $342,761,459 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Year ended November 30, 2008 Year ended November 30, 2007 Shares Amount Shares Amount International Stock INVESTOR CLASS/SHARES AUTHORIZED 50,000,000 100,000,000 =========== =========== Sold 1,268,342 $17,252,483 4,667,303 $69,025,896 Issued in reinvestment of distributions 450,577 6,757,448 22,704 314,002 Redeemed (3,076,774) (38,449,208)(1) (2,576,619) (38,883,638)(2) ----------- --------------- ----------- --------------- Net increase (decrease) (1,357,855) $(14,439,277) 2,113,388 $30,456,260 =========== =============== =========== =============== (1) Net of redemption fees of $22,320. (2) Net of redemption fees of $30,038. - ------ 33 Year ended November 30, 2008 Year ended November 30, 2007 Shares Amount Shares Amount International Discovery INVESTOR CLASS/SHARES AUTHORIZED 400,000,000 400,000,000 ============ ============ Sold 15,572,354 $ 185,693,343 8,720,352 $ 151,608,309 Issued in reinvestment of distributions 28,325,967 386,169,151 22,034,751 328,726,897 Redeemed (25,534,894) (273,173,021)(1) (15,512,121) (258,448,133)(2) ------------ ---------------- ------------ ---------------- 18,363,427 298,689,473 15,242,982 221,887,073 ------------ ---------------- ------------ ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 70,000,000 75,000,000 ============ ============ Sold 3,577,588 45,306,392 1,808,129 31,398,024 Issued in reinvestment of distributions 2,453,486 33,751,832 1,690,068 25,425,423 Redeemed (5,184,774) (52,166,981)(3) (1,485,143) (25,231,865)(4) ------------ ---------------- ------------ ---------------- 846,300 26,891,243 2,013,054 31,591,582 ------------ ---------------- ------------ ---------------- ADVISOR CLASS/SHARES AUTHORIZED 10,000,000 5,000,000 ============ ============ Sold 2,008,006 24,142,371 141,592 2,568,299 Issued in reinvestment of distributions 109,343 1,447,972 177 2,581 Redeemed (523,292) (4,868,491)(5) (4,218) (78,244)(6) ------------ ---------------- ------------ ---------------- 1,594,057 20,721,852 137,551 2,492,636 ------------ ---------------- ------------ ---------------- Net increase (decrease) 20,803,784 $ 346,302,568 17,393,587 $ 255,971,291 ============ ================ ============ ================ International Opportunities INVESTOR CLASS/SHARES AUTHORIZED 100,000,000 100,000,000 ============ ============ Sold 799,367 $ 5,682,329 108,195 $ 1,144,613 Issued in reinvestment of distributions 6,031,614 48,303,707 5,744,532 51,241,065 Redeemed (7,755,525) (47,755,326)(7) (2,526,820) (26,038,993)(8) ------------ ---------------- ------------ ---------------- (924,544) 6,230,710 3,325,907 26,346,685 ------------ ---------------- ------------ ---------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 10,000,000 10,000,000 ============ ============ Sold 242,328 1,848,016 261,114 2,618,066 Issued in reinvestment of distributions 138,903 1,113,768 40,239 354,762 Redeemed (441,223) (2,320,829) -- -- ------------ ---------------- ------------ ---------------- (59,992) 640,955 301,353 2,972,828 ------------ ---------------- ------------ ---------------- Net increase (decrease) (984,536) $ 6,871,665 3,627,260 $ 29,319,513 ============ ================ ============ ================ (1) Net of redemption fees of $401,633. (2) Net of redemption fees of $101,600. (3) Net of redemption fees of $33,836. (4) Net of redemption fees of $22,764. (5) Net of redemption fees of $29,868. (6) Net of redemption fees of $1,595. (7) Net of redemption fees of $4,553. (8) Net of redemption fees of $610. - ------ 34 5. SECURITIES LENDING As of November 30, 2008, the funds did not have any securities on loan. 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 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. Investments made with cash collateral may decline in value. 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. The following is a summary of the valuation inputs used to determine the fair value of the funds' securities as of November 30, 2008: Value of Fund/Valuation Inputs Investment Securities INTERNATIONAL STOCK Level 1 -- Quoted Prices $ 3,940,289 Level 2 -- Other Significant Observable Inputs 56,114,651 Level 3 -- Significant Unobservable Inputs -- ------------------ $60,054,940 ================== INTERNATIONAL DISCOVERY Level 1 -- Quoted Prices $ 80,393,254 Level 2 -- Other Significant Observable Inputs 697,350,362 Level 3 -- Significant Unobservable Inputs -- ------------------ $777,743,616 ================== INTERNATIONAL OPPORTUNITIES Level 1 -- Quoted Prices $ 2,273,721 Level 2 -- Other Significant Observable Inputs 63,623,235 Level 3 -- Significant Unobservable Inputs -- ------------------ $65,896,956 ================== - ------ 35 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 line expired December 10, 2008, and was not renewed. The funds did not borrow from either line during the year ended November 30, 2008. 8. INTERFUND LENDING The funds, along with certain other funds managed by ACIM or ACGIM, may participate in an interfund lending program, pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC). This program provides an alternative credit facility allowing the funds to borrow from or lend to other funds in the American Century Investments family of funds that permit such transactions. During the year ended November 30, 2008, the funds did not utilize the program. 9. 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. 10. FEDERAL TAX INFORMATION On December 16, 2008, International Stock declared and paid a $0.1272 per-share distribution from net investment income to Investor Class shareholders of record on December 15, 2008. The tax character of distributions paid during the years ended November 30, 2008 and November 30, 2007 were as follows: International Stock International Discovery 2008 2007 2008 2007 DISTRIBUTIONS PAID FROM Ordinary income $3,196,425 $320,168 $142,720,514 $117,024,910 Long-term capital gains $3,691,801 -- $293,720,098 $256,891,012 International Opportunities 2008 2007 DISTRIBUTIONS PAID FROM Ordinary income $19,328,096 $9,421,215 Long-term capital gains $31,731,964 $43,224,332 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. - ------ 36 As of November 30, 2008, the components of distributable earnings on a tax-basis and the federal tax cost of investments were as follows: International International International Stock Discovery Opportunities Federal tax cost of investments $78,254,735 $953,819,300 $82,043,512 ============= ============== ============= Gross tax appreciation of investments $1,926,847 $29,696,567 $ 2,657,506 Gross tax depreciation of investments (20,126,642) (205,772,251) (18,804,062) ------------- -------------- ------------- Net tax appreciation (depreciation) of investments $(18,199,795) $(176,075,684) $(16,146,556) ============= ============== ============= Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies $(6,596) $24,520 $1,943 ------------- -------------- ------------- Net tax appreciation (depreciation) $(18,206,391) $(176,051,164) $(16,144,613) ============= ============== ============= Undistributed ordinary income $928,693 $6,941,231 -- Accumulated capital losses $(13,201,545) $(318,602,999) $(36,833,557) Capital loss deferrals $(4,024,663) $(137,900,135) $(5,960,896) Currency loss deferrals -- $(247,368) -- The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and on investments in passive foreign investment companies. The accumulated capital losses listed above represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers expire in 2016. The capital and currency loss deferrals listed above represent net capital and foreign currency losses incurred in the one-month period ended November 30, 2008. The funds have elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes. 11. RECENTLY ISSUED ACCOUNTING STANDARDS The FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157), in September 2006, which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands the required financial statement disclosures about fair value measurements. The adoption of FAS 157 did 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 interim periods 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. - ------ 37 12. OTHER TAX INFORMATION (UNAUDITED) The following information is provided pursuant to provisions of the Internal Revenue Code. The funds hereby designate up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2008. For corporate taxpayers, the funds hereby designate ordinary income distributions, or up to the maximum amount allowable, as qualified for the corporate dividends received deduction for the fiscal year ended November 30, 2008. International Stock International Discovery International Opportunities $1,226 $13,222 -- The funds hereby designate the following long-term capital gain distributions, or up to the maximum amount allowable, for the fiscal year ended November 30, 2008. International Stock International Discovery International Opportunities $3,691,801 $293,720,098 $31,731,964 The funds hereby designate the following distributions as qualified short-term capital gain distributions for purposes of Internal Revenue Code Section 871 for the fiscal year ended November 30, 2008. International Stock International Discovery International Opportunities $2,033,475 $135,470,613 $17,295,313 As of November 30, 2008, the funds designate the following as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possessions of the United States: International Stock International Discovery International Opportunities $247,923 $2,274,487 $297,143 - ------ 38 FINANCIAL HIGHLIGHTS International Stock Investor Class For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006 2005(1) 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) 0.15(2) 0.13 0.06 0.06(2) Net Realized and Unrealized Gain (Loss) (7.81) 2.88 2.74 0.78 -------- -------- ------- -------- Total From Investment Operations (7.66) 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(2) --(3) --(3) 0.01 -- -------- -------- ------- -------- Net Asset Value, End of Period $8.09 $16.53 $13.57 $10.84 ======== ======== ======= ======== TOTAL RETURN(4) (48.50)% 22.22% 26.07% 8.40% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.51% 1.50% 1.50% 1.50%(5) Ratio of Net Investment Income (Loss) to Average Net Assets 1.12% 0.83% 0.40% 0.91%(5) Portfolio Turnover Rate 107% 103% 109% 109% Net Assets, End of Period (in thousands) $59,912 $144,812 $90,181 $20,342 (1) March 31, 2005 (fund inception) through November 30, 2005. (2) Computed using average shares outstanding throughout the period. (3) Per-share amount was less than $0.005. (4) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (5) Annualized. See Notes to Financial Statements. - ------ 39 International Discovery Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $18.40 $18.01 $15.94 $15.11 $12.75 -------- ---------- ---------- ---------- ---------- Income From Investment Operations Net Investment Income (Loss)(1) 0.06 0.05 (0.02) 0.14 (0.01) Net Realized and Unrealized Gain (Loss) (8.09) 4.60 5.00 2.97 2.40 -------- ---------- ---------- ---------- ---------- Total From Investment Operations (8.03) 4.65 4.98 3.11 2.39 -------- ---------- ---------- ---------- ---------- Distributions From Net Investment Income (0.06) -- (0.13) -- (0.03) From Net Realized Gains (4.05) (4.26) (2.78) (2.28) -- -------- ---------- ---------- ---------- ---------- Total Distributions (4.11) (4.26) (2.91) (2.28) (0.03) -------- ---------- ---------- ---------- ---------- Net Asset Value, End of Period $6.26 $18.40 $18.01 $15.94 $15.11 ======== ========== ========== ========== ========== TOTAL RETURN(2) (55.48)% 32.18% 36.41% 24.30% 18.76% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.37% 1.36% 1.41% 1.47% 1.49% Ratio of Net Investment Income (Loss) to Average Net Assets 0.51% 0.30% (0.11)% 1.02% (0.06)% Portfolio Turnover Rate 175% 162% 148% 145% 201% Net Assets, End of Period (in thousands) $713,764 $1,758,335 $1,446,955 $1,145,623 $1,112,870 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 40 International Discovery Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $18.59 $18.16 $16.06 $15.21 $12.84 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.08 0.09 0.04 0.17 0.02 Net Realized and Unrealized Gain (Loss) (8.18) 4.64 5.00 2.99 2.40 -------- -------- -------- -------- -------- Total From Investment Operations (8.10) 4.73 5.04 3.16 2.42 -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.10) -- (0.16) -- (0.05) From Net Realized Gains (4.05) (4.30) (2.78) (2.31) -- -------- -------- -------- -------- -------- Total Distributions (4.15) (4.30) (2.94) (2.31) (0.05) -------- -------- -------- -------- -------- Net Asset Value, End of Period $6.34 $18.59 $18.16 $16.06 $15.21 ======== ======== ======== ======== ======== TOTAL RETURN(2) (55.37)% 32.45% 36.65% 24.56% 18.94% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.17% 1.16% 1.21% 1.27% 1.29% Ratio of Net Investment Income (Loss) to Average Net Assets 0.71% 0.50% 0.09% 1.22% 0.14% Portfolio Turnover Rate 175% 162% 148% 145% 201% Net Assets, End of Period (in thousands) $55,091 $145,723 $105,849 $205,406 $165,600 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 41 International Discovery Advisor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $18.08 $17.76 $15.75 $14.95 $12.63 -------- ------ ------- ------ ------- Income From Investment Operations Net Investment Income (Loss)(1) 0.06 0.07 (0.08) 0.10 (0.05) Net Realized and Unrealized Gain (Loss) (7.95) 4.46 4.96 2.95 2.37 -------- ------ ------- ------ ------- Total From Investment Operations (7.89) 4.53 4.88 3.05 2.32 -------- ------ ------- ------ ------- 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 $6.13 $18.08 $17.76 $15.75 $14.95 ======== ====== ======= ====== ======= TOTAL RETURN(2) (55.56)% 31.83% 36.08% 24.01% 18.37% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.63% 1.61% 1.66% 1.72% 1.74% Ratio of Net Investment Income (Loss) to Average Net Assets 0.25% 0.05% (0.36)% 0.77% (0.31)% Portfolio Turnover Rate 175% 162% 148% 145% 201% Net Assets, End of Period (in thousands) $10,622 $2,494 $7 $70 $201 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 42 International Opportunities Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $11.37 $11.79 $12.27 $9.35 $7.62 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) 0.05 0.02 (0.01) 0.02 (0.05) Net Realized and Unrealized Gain (Loss) (5.06) 2.94 2.53 3.19 2.03 -------- -------- -------- -------- -------- Total From Investment Operations (5.01) 2.96 2.52 3.21 1.98 -------- -------- -------- -------- -------- Distributions From Net Investment Income (0.05) --(2) (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) -------- -------- -------- -------- -------- Redemption Fees(1) --(2) --(2) --(2) --(2) 0.02 -------- -------- -------- -------- -------- Net Asset Value, End of Period $3.70 $11.37 $11.79 $12.27 $9.35 ======== ======== ======== ======== ======== TOTAL RETURN(3) (56.46)% 33.73% 25.37% 35.28% 27.14% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.87% 1.81% 1.85% 1.91% 1.97% Ratio of Net Investment Income (Loss) to Average Net Assets 0.72% 0.19% (0.06)% 0.20% (0.63)% Portfolio Turnover Rate 206% 149% 160% 112% 139% Net Assets, End of Period (in thousands) $65,541 $212,157 $180,732 $198,197 $176,100 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 43 International Opportunities Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $11.44 $11.85 $12.32 $9.37 $7.63 -------- ------ ------ ------ ------- Income From Investment Operations Net Investment Income (Loss)(1) 0.07 0.06 0.02 0.10 (0.03) Net Realized and Unrealized Gain (Loss) (5.10) 2.94 2.54 3.14 2.04 -------- ------ ------ ------ ------- Total From Investment Operations (5.03) 3.00 2.56 3.24 2.01 -------- ------ ------ ------ ------- 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(1) --(2) --(2) --(2) --(2) 0.02 -------- ------ ------ ------ ------- Net Asset Value, End of Period $3.72 $11.44 $11.85 $12.32 $9.37 ======== ====== ====== ====== ======= TOTAL RETURN(3) (56.44)% 33.97% 25.66% 35.53% 27.50% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.67% 1.61% 1.65% 1.71% 1.77% Ratio of Net Investment Income (Loss) to Average Net Assets 0.92% 0.39% 0.14% 0.40% (0.43)% Portfolio Turnover Rate 206% 149% 160% 112% 139% Net Assets, End of Period (in thousands) $1,245 $4,513 $1,099 $31 $10,868 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 44 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders, American Century World Mutual Funds, Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of International Stock Fund, International Discovery Fund and International Opportunities Fund, three of the funds constituting American Century World Mutual Funds, Inc. (the "Corporation"), as of November 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the respective financial positions of International Stock Fund, International Discovery Fund and International Opportunities Fund, three of the funds constituting American Century World Mutual Funds, Inc., as of November 30, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Kansas City, Missouri January 14, 2009 - ------ 45 MANAGEMENT The individuals listed below serve as directors or officers of the funds. Each director serves until his or her successor is duly elected and qualified or until he or she retires. Mandatory retirement age for independent directors is 72. Those listed as interested directors are "interested" primarily by virtue of their engagement as directors and/or officers of, or ownership interest in, American Century Companies, Inc. (ACC) or its wholly owned, direct or indirect, subsidiaries, including the funds' investment advisor, American Century Global Investment Management, Inc. (ACGIM) or American Century Investment Management, Inc. (ACIM); the funds' principal underwriter, American Century Investment Services, Inc. (ACIS); and the funds' transfer agent, American Century Services, LLC (ACS). The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACGIM, ACIM, ACIS and ACS. The directors serve in this capacity for seven registered investment companies in the American Century Investments family of funds. All persons named as officers of the funds also serve in similar capacities for the other 14 investment companies in the American Century Investments family of funds advised by ACGIM or ACIM, unless otherwise noted. Only officers with policy-making functions are listed. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. INTERESTED DIRECTORS JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1924 POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1963 POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: President, Chief Executive Officer and Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM, ACGIM, ACIS and other ACC subsidiaries. Managing Director, Morgan Stanley (March 2000 to November 2005) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 111 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None - ------ 46 INDEPENDENT DIRECTORS THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1940 POSITION(S) HELD WITH FUNDS: Director (since 1980) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated Investments, LLC (real estate investment company); Managing Member, Brown Cascade Properties, LLC (real estate investment company); Retired, Area Vice President, Applied Industrial Technologies (bearings and power transmission company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1997) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the President, Midwest Research Institute (not-for-profit, contract research organization) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1942 POSITION(S) HELD WITH FUNDS: Director (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Saia, Inc. and Entertainment Properties Trust DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1937 POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board (since 2005) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company); Retired Chairman of the Board, Butler Manufacturing Company (metal buildings producer) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1943 POSITION(S) HELD WITH FUNDS: Director (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive Officer and Founder, Sayers40, Inc. (technology products and services provider) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1994) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice President, Sprint Corporation (telecommunications company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: DST Systems, Inc.; Euronet Worldwide, Inc. and Charming Shoppes, Inc. - ------ 47 JOHN R. WHITTEN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1946 POSITION(S) HELD WITH FUNDS: Director (since 2008) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Project Consultant, Celanese Corp. (industrial chemical company) (September 2004 to January 2005); Chief Financial Officer, Vice President and Treasurer, Applied Industrial Technologies, Inc. (bearings and power transmission company) (1995 to 2003) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Rudolph Technologies, Inc. OFFICERS BARRY FINK, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1955 POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Director, ACC, ACS, ACIS and other ACC subsidiaries MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1956 POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior Vice President (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM, ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century Investments funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1957 POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice President (since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present); General Counsel, ACC (March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1966 POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial Officer (all since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February 2000 to present); Controller, various American Century Investments funds (1997 to September 2006) JON ZINDEL, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1967 POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October 2001 to present); Vice President, certain ACC subsidiaries (October 2001 to August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006). Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief Accounting Officer and Senior Vice President, ACIS The SAI has additional information about the funds' directors and is available without charge, upon request, by calling 1-800-345-2021. - ------ 48 APPROVAL OF MANAGEMENT AGREEMENTS International Stock, International Discovery, and International Opportunities Under Section 15(c) of the Investment Company Act, contracts for investment advisory services (including subadvisory services) are required to be reviewed, evaluated and approved by a majority of a fund's independent directors or trustees (the "Directors") each year. At American Century Investments, this process is referred to as the "15(c) Process." As a part of this process, the board reviews fund performance, shareholder services, audit and compliance information, and a variety of other reports from the advisor concerning fund operations. In addition to this annual review, the board of directors oversees and evaluates on a continuous basis at its quarterly meetings the nature and quality of significant services performed by the advisor and the subadvisor, fund performance, audit and compliance information, and a variety of other reports relating to fund operations. The board, or committees of the board, also holds special meetings as needed. Under a Securities and Exchange Commission rule, each fund is required to disclose in its annual or semiannual report, as appropriate, the material factors and conclusions that formed the basis for the board's approval or renewal of any advisory agreements within the fund's most recently completed fiscal half-year period. ANNUAL CONTRACT REVIEW PROCESS As part of the annual 15(c) Process undertaken during the most recent fiscal half-year period, the Directors reviewed extensive data and information compiled by the advisor and certain independent providers of evaluative data (the "15(c) Providers") concerning International Stock, International Discovery, and International Opportunities (the "Funds") and the services provided to the Funds under the management and subadvisory agreements. The information considered and the discussions held at the meetings included, but were not limited to: * the nature, extent and quality of investment management, shareholder services and other services provided to the Funds; * reports on the wide range of programs and services the advisor provides to the Funds and their shareholders on a routine and non-routine basis; * information about the compliance policies, procedures, and regulatory experience of both the advisor and the subadvisor; * data comparing the cost of owning the Funds to the cost of owning a similar fund; * data comparing the Funds' performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies; * financial data showing the profitability of the Funds to the advisor and the overall profitability of the advisor; and * data comparing services provided and charges to other investment management clients of the advisor. In keeping with its practice, the Funds' board of directors held two in-person meetings and one telephonic meeting to review and discuss the information provided. The board also had the benefit of the advice of its independent counsel throughout the period. - ------ 49 FACTORS CONSIDERED The Directors considered all of the information provided by the advisor, the 15(c) Providers, and the board's independent counsel, and evaluated such information for each fund for which the board has responsibility. In connection with their review of the Funds, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management and subadvisory agreements under the terms ultimately determined by the board to be appropriate, the Directors' decision was based on the following factors. NATURE, EXTENT AND QUALITY OF SERVICES -- GENERALLY. Under the management agreement, the advisor is responsible for providing or arranging for all services necessary for the operation of the Funds. The board noted that under the management agreement, the advisor provides or arranges at its own expense a wide variety of services including: * Fund construction and design * portfolio security selection * initial capitalization/funding * securities trading * custody of Fund assets * daily valuation of the each Fund's portfolio * shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping and communications * legal services * regulatory and portfolio compliance * financial reporting * marketing and distribution The Directors noted that many of the services provided by the advisor have expanded over time both in terms of quantity and complexity in response to shareholder demands, competition in the industry and the changing regulatory environment. The directors specifically noted that with respect to the Funds, the advisor had retained the subadvisor to provide the day-to-day cash management services. In performing their evaluation, the Directors considered information received in connection with the annual review, as well as information provided on an ongoing basis at their regularly scheduled board and committee meetings. - ------ 50 INVESTMENT MANAGEMENT SERVICES. The nature of the investment management services provided to the Funds is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments, and liquidity. In evaluating investment performance, the board expects the advisor and subadvisor to manage the Funds in accordance with their investment objectives and approved strategies. In providing these services, the advisor and subadvisor utilize teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance and other systems to conduct their business. At each quarterly meeting the Directors review investment performance information for the Funds, together with comparative information for appropriate benchmarks and peer groups of funds managed similarly to the Funds. The Directors also review detailed performance information during the 15(c) Process comparing each Fund's performance with that of similar funds not managed by the advisor. If performance concerns are identified, the Directors discuss with the advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. Each Fund's performance for both the one- and three-year periods was above the median for its peer group. SHAREHOLDER AND OTHER SERVICES. The advisor provides the Funds with a comprehensive package of transfer agency, shareholder, and other services. The Directors review reports and evaluations of such services at their regular quarterly meetings, including the annual meeting concerning contract review, and reports to the board. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the advisor. COSTS OF SERVICES PROVIDED AND PROFITABILITY. The advisor provides detailed information concerning its cost of providing various services to the Funds, its profitability in managing the Funds, its overall profitability, and its financial condition. The Directors have reviewed with the advisor the methodology used to prepare this financial information. This financial information regarding the advisor is considered in order to evaluate the advisor's financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The board concluded that the advisor's profits were reasonable in light of the services provided to the Funds. The board did not consider the profitability of the subadvisor because the subadvisor is paid from the unified fee of the advisor as a result of arm's length negotiations. ETHICS. The Directors generally consider the advisor's commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the advisor's practices generally meet or exceed industry best practices. With respect to the subadvisor, as part of its oversight responsibilities, the board approves the subadvisor's code of ethics and any changes thereto. Further, through the advisor's compliance group, the board stays abreast of any violations of the subadvisor's code. - ------ 51 ECONOMIES OF SCALE. The Directors review reports provided by the advisor on economies of scale for the complex as a whole and the year-over-year changes in revenue, costs, and profitability. The Directors concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. This analysis is also complicated by the additional services and content provided by the advisor and its reinvestment in its ability to provide and expand those services. Accordingly, the Directors also seek to evaluate economies of scale by reviewing other information, such as year-over-year profitability of the advisor generally, the profitability of its management of the Funds specifically, the expenses incurred by the advisor in providing various functions to the Funds, and the fees of competitive funds not managed by the advisor. The Directors believe the advisor is appropriately sharing economies of scale through its competitive fee structure, fee breakpoints as each Fund increases in size, and through reinvestment in its business to provide shareholders additional content and services. COMPARISON TO OTHER FUNDS' FEES. The Funds pay the advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Funds, other than brokerage expenses, taxes, interest, extraordinary expenses, and the fees and expenses of each Fund's independent directors (including their independent legal counsel). The Directors specifically noted that the subadvisory fees paid to the subadvisor under the subadvisory agreement were subject to arm's length negotiation between the advisor and the subadvisor and are paid by the advisor out of its unified fee. Under the unified fee structure, the advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the advisor the risk of increased costs of operating the Funds and provides a direct incentive to minimize administrative inefficiencies. Part of the Directors' analysis of fee levels involves reviewing certain evaluative data compiled by a 15(c) Provider comparing each Fund's unified fee to the total expense ratio of other funds in the Fund's peer group. The unified fee charged to shareholders of each of the Funds was at or above the median of the total expense ratios of its peer group. The board concluded that the management fee paid by each Fund to the advisor was reasonable in light of the services provided to the Fund. COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The Directors also requested and received information from the advisor concerning the nature of the services, fees, and profitability of its advisory services to advisory clients other than the Funds. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Funds. The Directors analyzed this information and concluded that the fees charged and services provided to the Funds were reasonable by comparison. - ------ 52 COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information from the advisor concerning collateral benefits it receives as a result of its relationship with the Funds. They concluded that the advisor's primary business is managing mutual funds and it generally does not use the Funds or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Directors noted that the advisor receives proprietary research from broker-dealers that execute Fund portfolio transactions and concluded that this research is likely to benefit Fund shareholders. The Directors also determined that the advisor is able to provide investment management services to certain clients other than the Funds, at least in part, due to its existing infrastructure built to serve the fund complex. The Directors concluded, however, that the assets of those other clients are not material to the analysis and, in any event, are included with the assets of the Funds to determine breakpoints in each Fund's fee schedule, provided they are managed using the same investment team and strategy. CONCLUSIONS OF THE DIRECTORS As a result of this process, the board, including all of the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor concluded that the investment management agreement between each Fund and the advisor is fair and reasonable in light of the services provided and should be renewed. Additionally, the board, including all the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor, concluded that the subadvisory agreement between the advisor and the subadvisor, on behalf of each Fund, is fair and reasonable in light of the services provided and should be renewed. - ------ 53 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans 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. 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. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information. 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. - ------ 54 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 MORGAN STANLEY CAPITAL INTERNATIONAL ALL COUNTRY WORLD INDEX (MSCI ACWI) is designed to measure equity market performance of developed and emerging markets. The MSCI ACWI includes 47 country indices. The MSCI AC (ALL COUNTRY) WORLD EX-US MID CAP GROWTH INDEX represents the performance of mid cap growth stocks in developed and emerging markets, 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 and emerging markets, excluding the United States. The MSCI EAFE (EUROPE, AUSTRALASIA, FAR EAST) INDEX is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE GROWTH INDEX is a capitalization-weighted index that monitors the performance of growth stocks from Europe, Australasia, and the Far East. The MSCI EAFE VALUE INDEX is a capitalization-weighted index that monitors the performance of value stocks from Europe, Australasia, and the Far East. The MSCI EM (EMERGING MARKETS) INDEX represents the gross performance of stocks in global emerging market countries. The MSCI EUROPE INDEX is designed to measure equity market performance in Europe. The MSCI JAPAN INDEX is designed to measure equity market performance in Japan. The MSCI WORLD FREE INDEX represents the performance of stocks in developed countries (including the United States) that are available for purchase by global investors. The S&P DEVELOPED EX-US SMALLCAP GROWTH INDEX represents the smaller-cap universe of stocks of growth companies in developed country markets outside the United States. - ------ 55 NOTES - ------ 56 [back cover] [american century investments logo and text logo ®] CONTACT US AMERICANCENTURY.COM AUTOMATED INFORMATION LINE . . . . . . . . . . . . . . . . 1-800-345-8765 1-800-345-2021 INVESTOR SERVICES REPRESENTATIVE . . . . . . . . . . . . . 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 Investments PRSRT STD P.O. Box 419200 U.S. POSTAGE PAID Kansas City, MO 64141-6200 AMERICAN CENTURY COMPANIES American Century Investment Services, Inc., Distributor ©2009 American Century Proprietary Holdings, Inc. All rights reserved. 0901 CL-ANN-63741S-SUP
[front cover] ANNUAL REPORT NOVEMBER 30, 2008 [american century investments logo and text logo ®] American Century Investments LIFE SCIENCES FUND TECHNOLOGY FUND PROSPECTUS SUPPLEMENT ENCLOSED PRESIDENT'S LETTER [photo of Jonathan Thomas] JONATHAN THOMAS Dear Investor: Thank you for taking time to review the following discussions, from our experienced portfolio management team, of the fund reporting period ended November 30, 2008. It was a time of enormous upheaval and change. We understand and appreciate the challenges you have faced during this historic period, and share your concerns about the economy, the markets, and fund holdings. To help address these issues, I'd like to provide my perspective on how we have managed--and continue to manage--your investments in these uncertain times. As a company, American Century Investments® is well positioned to deal with market turmoil. We are financially strong and privately held, which allows us to align our resources with your long-term investment interests. In addition, our actively managed, team-based approach allows our portfolio teams to identify attractive investment opportunities regardless of market conditions. Our seasoned investment professionals have substantial experience and have successfully navigated previous market crises. These portfolio managers and analysts continue to use a team approach and follow disciplined investment processes designed to produce the best possible long-term results for you. For example, our equity investment teams are working closely with our fixed income group to monitor and assess credit crisis developments. The fixed income team anticipated dislocation in the credit markets and--through its disciplined processes and teamwork--helped reduce our exposure to investments that suffered substantial losses. How soon a sustainable recovery will occur is uncertain. But I am certain of this: Since 1958, we've demonstrated a consistent ability to execute solid, long-term investment strategies and the discipline to remain focused during times of volatility or shifts in the markets. We've stayed true to our principles, especially our belief that your success is the ultimate measure of our success. Thank you for your continued confidence in us. Sincerely, /s/Jonathan 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 TECHNOLOGY Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 9 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . 9 Top Five Industries. . . . . . . . . . . . . . . . . . . . . . . . 10 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . 10 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 11 FINANCIAL STATEMENTS Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 13 Statement of Assets and Liabilities . . . . . . . . . . . . . . . . . 17 Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . 18 Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . . 19 Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . 20 Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . . 27 Report of Independent Registered Public Accounting Firm . . . . . . . 31 OTHER INFORMATION Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Approval of Management Agreements for Life Sciences and Technology. . 35 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 40 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 41 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 FINANCIAL STORM SANK STOCKS The year ended November 30, 2008, represented one of the most tumultuous periods in the history of the U.S. equity market as an ongoing financial storm and a recession battered the stock market. Continued deterioration in the credit environment and a deepening liquidity crisis--ignited by last year's mortgage-market meltdown--led to an increasingly urgent need for capital at many major financial companies. By September, the crisis reached a tipping point as a number of major financial institutions filed for bankruptcy, sold out to competitors to avoid insolvency, or were taken over by the federal government. The U.S. economy, which officially entered a recession in December 2007, grew even more sluggish. Steady job losses pushed the unemployment rate up to a 15-year high, consumer spending slowed dramatically, and mortgage foreclosures and delinquencies rose markedly. In addition, the financial crisis spread around the world, increasing the likelihood of a global economic downturn. On the positive side, the slowing economic environment brought the prices of energy and other commodities down sharply from record highs reached during the summer. The troubling financial and economic news led to an unprecedented level of stock market turbulence. Day-to-day volatility increased dramatically as investor confidence faltered, producing a market storm that has not been seen since the 1930s. Stocks declined in five of the last six months of the period, with October producing the worst monthly performance in 21 years and one of the 10 worst months in the stock market's history. INTERVENTION AND RESILIENCY As business and economic conditions worsened, intervention increased. The U.S. government and the Federal Reserve have provided extraordinary levels of fiscal and monetary assistance, and other central banks and governments have contributed additional stimulus. Furthermore, downturns play the sometimes necessary role of correcting past market misbehavior and eliminating excesses and inefficiencies. The current downturn was years in the making, so it may take some time before we are firmly on the road to recovery. However, we remain confident in the stock market's long-term resiliency. Market Returns For the 12 months ended November 30, 2008 U.S. STOCKS Russell 1000 Index (Large-Cap) -38.98% Russell Midcap Index -44.04% Russell 2000 Index (Small-Cap) -37.46% FOREIGN STOCKS MSCI EAFE Index -47.79% MSCI EM Index -56.42% - ------ 2 PERFORMANCE Life Sciences Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years Inception Date INVESTOR CLASS -28.17% -0.23% -1.45% 6/30/00 S&P COMPOSITE 1500 HEALTH CARE INDEX -30.45% -0.74% -1.85% -- S&P 500 INDEX(1) -38.09% -1.39% -3.92% -- Institutional Class -28.08% -0.09% -1.86% 7/17/00 (1) 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 November 30 2000* 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class 5.60% -5.35% -27.31% 23.16% 7.57% 13.43% -1.88% 14.94% -28.17% S&P Composite 1500 Health Care Index 7.11% -6.10% -18.37% 8.06% 2.91% 10.26% 9.09% 11.93% -30.45% S&P 500 Index -9.16% -12.22% -16.51% 15.09% 12.86% 8.44% 14.23% 7.72% -38.09% *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 -28.17%** for the 12 months ended November 30, 2008. The portfolio's benchmark, the S&P Composite 1500 Health Care Index, returned - -30.45%. The broader equity market, represented by the S&P 500 Index, returned - -38.09%. Anxieties surrounding the economic slowdown and global financial market distress undermined the broader U.S. equity market during the period. Although inflationary worries eased in the final months of the reporting period, tighter credit conditions increasingly restricted access to operating capital and fueled investor pessimism. Befitting its reputation as a "safe haven" in volatile times, the health care sector outperformed the broader stock market. Nevertheless, every health care industry represented in the benchmark and the portfolio posted a negative total return for the 12-month period, with most posting double digit losses. STOCK SELECTION DROVE RESULTS Stock selection in the health care industry accounted for the majority of the portfolio's outperformance compared to the benchmark. Additionally, an underweight position in health care providers and services and an overweight position in health care equipment contributed positively to the portfolio's relative performance. Despite realizing positive effects from stock selection, our pharmaceuticals component, the portfolio's largest industry weighting, detracted from relative performance due to our underweight position. Our stock selection in the biotechnology industry, the portfolio's second-largest weighting, was a negative influence on performance. SLEEP DISORDER COMPANY WAS TOP STOCK The health care equipment category was home to Respironics, the portfolio's top contributor to relative performance. We maintained an overweight position in the company, a manufacturer of respiratory products for sleep disorders, which reported record earnings and revenue growth before being acquired by Royal Philips Electronics. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Abbott Laboratories 6.6% 5.5% Johnson & Johnson 6.6% 5.7% Thermo Fisher Scientific, Inc. 4.7% 6.6% Amgen, Inc. 4.1% -- Gilead Sciences, Inc. 4.1% 5.1% Wyeth 4.0% -- Celgene Corp. 3.9% 2.6% Baxter International, Inc. 3.8% 4.2% Teva Pharmaceutical Industries Ltd. ADR 3.7% 3.3% Genentech, Inc. 3.4% -- * As of December 19, 2008, Steve Lurito is the portfolio manager. ** All fund returns referenced in this commentary are for Investor Class shares. - ------ 5 Life Sciences In the pharmaceuticals area, our out-of-benchmark positions in Israel's Teva Pharmaceutical Industries, a generic drug manufacturer, and the United Kingdom's Elan Corp., a biopharmaceuticals company, boosted performance. Teva reported higher sales and continued success with its multiple sclerosis drug and its inhalers. Elan rallied on encouraging results for its investigational Alzheimer's disease drug and on prescription increases for its multiple sclerosis treatment. Our small, out-of-benchmark position in Sigma-Aldrich, a supplier of biochemicals and organic chemicals to the life sciences industry, was a top contributor to relative performance during the period. The company reported improved margins, cash flow, and sales combined with a steady increase in its emerging-markets business. UNDERWEIGHTS IN KEY COMPANIES DETRACTED Our underweight positions in Johnson & Johnson, the health care products and pharmaceuticals giant, and Amgen, a biotechnology company, represented the largest detractors to relative performance. Both companies were among the largest holdings in the portfolio, but they were underweighted compared with the benchmark. From a relative perspective, Johnson & Johnson benefited from its blue-chip status in a fairly recession-proof industry. Amgen benefited, on a relative basis, from solid earnings and positive phase 3 data for its pipeline product, denosumab, which treats low bone mass. Our portfolio-only position in Switzerland's Alcon, a surgical equipment and consumer eye-care products manufacturer, also detracted from results. Shares fell sharply after the company cut its revenue outlook. Alcon attributed the revised forecast to currency fluctuations tied to the strengthening U.S. dollar and to slowing U.S. prescription sales. OUTLOOK Regardless of the macroeconomic environment, we will continue to emphasize companies from across the health care spectrum exhibiting accelerating earnings and reasonable valuations. Our investment decisions may result in shifts in industry weightings, but any such developments stem from a fundamental, bottom-up assessment of each company's merits. Top Five Industries as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Pharmaceuticals 39.1% 30.7% Biotechnology 21.0% 11.7% Health Care Equipment & Supplies 16.4% 27.1% Health Care Providers & Services 13.4% 11.4% Life Sciences Tools & Services 7.9% 10.6% Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Domestic Common Stocks 85.7% 81.9% Foreign Common Stocks(1) 14.0% 17.2% TOTAL COMMON STOCKS 99.7% 99.1% Temporary Cash Investments 1.1% 1.3% Other Assets and Liabilities (0.8)% (0.4)% (1) Includes depositary shares, dual listed securities and foreign ordinary shares. - ------ 6 PERFORMANCE Technology Total Returns as of November 30, 2008 Average Annual Returns Since Inception 1 year 5 years Inception Date INVESTOR CLASS -51.13% -8.56% -15.16% 6/30/00 S&P COMPOSITE 1500 TECHNOLOGY INDEX -43.26% -5.65% -12.83% -- S&P 500 INDEX(1) -38.09% -1.39% -3.92% -- Institutional Class -51.02% -8.38% -16.08% 7/14/00 (1) 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, high commission costs 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. - ------ 7 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 November 30 2000* 2001 2002 2003 2004 2005 2006 2007 2008 Investor Class -36.20% -34.48% -31.10% 35.97% -7.05% 7.75% 7.60% 21.33% -51.13% S&P Composite 1500 Technology Index -33.66% -29.22% -27.70% 24.02% 1.48% 7.21% 7.65% 12.50% -43.26% S&P 500 Index -9.16% -12.22% -16.51% 15.09% 12.86% 8.44% 14.23% 7.72% -38.09% *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, high commission costs 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. - ------ 8 PORTFOLIO COMMENTARY Technology Portfolio Manager: Tom Telford* PERFORMANCE SUMMARY Technology returned -51.13%** for the 12 months ended November 30, 2008. The portfolio's benchmark, the S&P Composite 1500 Technology Index, returned - -43.26%. The broader equity market, represented by the S&P 500 Index, returned - -38.09%. The global credit crisis culminated late in the period with a series of extraordinary corporate failures and takeovers and government intervention. These events triggered a widespread stock market downturn that significantly magnified the losses experienced earlier in the period. Growth stocks underperformed value stocks across the capitalization spectrum, as the sectors closely aligned with business and consumer spending suffered the most. STOCK SELECTION HAMPERED RESULTS Stock selection accounted for the portfolio's underperformance relative to the benchmark. Specifically, our stocks in the IT services and software industries were among the largest detractors. In the IT services sector, our underweight position in IBM landed the computer manufacturer among the portfolio's largest detractors to relative performance. Similarly, in the software industry, which ended the period as the portfolio's largest sector, our underweighted position in Microsoft was the top detractor to relative results. The company reported healthy earnings throughout the reporting period, which helped its stock performance. But, as with most stocks, IBM and Microsoft declined in the final months of the period, due to dismal economic forecasts and the broad-based stock market sell-off. After delivering strong performance in 2007 and early 2008, our position in Canada's Research In Motion, the maker of the BlackBerry handheld device and one of the largest holdings in the portfolio, represented the greatest individual performance detractor for the 12-month period. Shares nose-dived after the company warned that new-product-related spending would erode profit margins. Concerns about the global economic slowdown also weighed on the stock price. Top Ten Holdings as of November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Hewlett-Packard Co. 5.7% -- Oracle Corp. 4.3% 2.3% McAfee, Inc. 3.8% -- QUALCOMM, Inc. 3.6% -- Cisco Systems, Inc. 3.2% 4.5% Websense, Inc. 3.2% 1.9% Research In Motion Ltd. 3.1% 6.9% Altera Corp. 3.1% 1.6% Apple, Inc. 2.9% 3.2% Netease.com ADR 2.7% 1.5% * As of December 19, 2008, Steve Lurito is the portfolio manager. ** All fund returns referenced in this commentary are for Investor Class shares. - ------ 9 Technology PORTFOLIO-ONLY POSITIONS HELPED PERFORMANCE From a sector perspective, our small, portfolio-only exposure to the industrials and consumer discretionary sectors represented the greatest contributors to relative performance. For example, in the industrials sector, Japan's Nissha Printing was among the portfolio's top contributors to relative performance. The company, which engages in printing and publishing for industrial materials and electronic products, raised its dividend payment and revenue outlook, and announced a joint venture with a Tokyo-based internet and printing-related business. In the electronic equipment industry, our small, out-of-benchmark position in Cogent, Inc., a provider of automated fingerprint identification systems, was the portfolio's leading contributor to relative performance. The company advanced on strong earnings and sales growth, soaring demand for its products, and management's stock buyback plan. 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 November 30, 2008 % of net % of net assets as of assets as of 11/30/08 5/31/08 Software 25.5% 13.2% Communications Equipment 15.8% 17.0% Computers & Peripherals 14.4% 6.7% Internet Software & Services 12.3% 11.6% Semiconductors & Semiconductor Equipment 11.7% 30.3% Types of Investments in Portfolio % of net % of net assets as of assets as of 11/30/08 5/31/08 Domestic Common Stocks 84.6% 72.7% Foreign Common Stocks(1) 14.0% 24.6% TOTAL COMMON STOCKS 98.6% 97.3% Temporary Cash Investments 1.1% 1.6% Other Assets and Liabilities 0.3% 1.1% (1) Includes depositary shares, dual listed securities and foreign ordinary shares. - ------ 10 SHAREHOLDER FEE EXAMPLES (UNAUDITED) Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2008 to November 30, 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. - ------ 11 Beginning Expenses Paid Account Ending During Period* Annualized Value Account Value 6/1/08 - Expense 6/1/08 11/30/08 11/30/08 Ratio* Life Sciences ACTUAL Investor Class $1,000 $772.40 $5.98 1.35% Institutional Class $1,000 $771.10 $5.09 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 $529.40 $5.77 1.51% Institutional Class $1,000 $530.20 $5.01 1.31% HYPOTHETICAL Investor Class $1,000 $1,017.45 $7.62 1.51% Institutional Class $1,000 $1,018.45 $6.61 1.31% * 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. - ------ 12 SCHEDULE OF INVESTMENTS Life Sciences NOVEMBER 30, 2008 Shares Value Common Stocks -- 99.7% BIOTECHNOLOGY -- 21.0% 11,000 Alexion Pharmaceuticals, Inc.(1) $ 370,260 50,000 Amgen, Inc.(1) 2,777,000 20,300 BioMarin Pharmaceutical, Inc.(1) 345,709 50,669 Celgene Corp.(1) 2,639,855 10,200 Cephalon, Inc.(1) 749,496 30,200 Genentech, Inc.(1) 2,313,320 12,000 Genzyme Corp.(1) 768,240 61,600 Gilead Sciences, Inc.(1) 2,759,064 21,700 Grifols SA 373,931 6,500 Onyx Pharmaceuticals, Inc.(1) 182,650 6,800 United Therapeutics Corp.(1) 372,844 24,500 Vertex Pharmaceuticals, Inc.(1) 602,455 ----------- 14,254,824 ----------- FOOD & STAPLES RETAILING -- 1.9% 48,000 CVS/Caremark Corp. 1,388,640 ----------- HEALTH CARE EQUIPMENT & SUPPLIES -- 16.4% 21,500 Alcon, Inc. 1,715,485 48,500 Baxter International, Inc. 2,565,650 7,500 Beckman Coulter, Inc. 326,850 11,000 Becton, Dickinson & Co. 698,830 5,500 C.R. Bard, Inc. 451,165 27,500 Covidien Ltd. 1,013,375 8,500 DENTSPLY International, Inc. 221,680 13,500 Hospira, Inc.(1) 405,405 15,000 Inverness Medical Innovations, Inc.(1) 263,550 44,000 Medtronic, Inc. 1,342,880 10,051 NuVasive, Inc.(1) 346,257 32,250 Smith & Nephew plc ADR 1,207,118 20,000 St. Jude Medical, Inc.(1) 560,600 ----------- 11,118,845 ----------- HEALTH CARE PROVIDERS & SERVICES -- 13.4% 26,000 Aetna, Inc. 567,320 8,500 Amedisys, Inc.(1) 330,565 23,000 AmerisourceBergen Corp. 721,050 12,500 Coventry Health Care, Inc.(1) 155,875 Shares Value 7,000 DaVita, Inc.(1) $ 351,750 29,000 Express Scripts, Inc.(1) 1,667,790 6,500 Laboratory Corp. of America Holdings(1) 411,840 20,828 McKesson Corp. 727,730 27,317 Psychiatric Solutions, Inc.(1) 691,120 9,000 Quest Diagnostics, Inc. 419,130 60,000 Sun Healthcare Group, Inc.(1) 601,200 65,000 UnitedHealth Group, Inc. 1,365,650 30,000 WellPoint, Inc.(1) 1,068,000 ----------- 9,079,020 ----------- LIFE SCIENCES TOOLS & SERVICES -- 7.9% 100,000 Bruker Corp.(1) 470,000 6,000 Charles River Laboratories International, Inc.(1) 136,800 10,000 Covance, Inc.(1) 390,800 17,000 Icon plc ADR(1) 360,230 16,000 Life Technologies Corp.(1) 417,600 90,000 Thermo Fisher Scientific, Inc.(1) 3,211,200 10,000 Varian, Inc.(1) 366,000 ----------- 5,352,630 ----------- PHARMACEUTICALS -- 39.1% 86,000 Abbott Laboratories 4,505,540 34,500 Allergan, Inc. 1,299,960 11,213 Barr Pharmaceuticals, Inc.(1) 733,218 103,800 Bristol-Myers Squibb Co. 2,148,660 76,500 Johnson & Johnson 4,481,370 130,000 Mylan, Inc.(1) 1,223,300 36,000 Novartis AG ADR 1,689,120 125,000 Pfizer, Inc. 2,053,750 5,170 Roche Holding AG 726,907 93,000 Schering-Plough Corp. 1,563,330 22,500 Shire plc ADR 922,500 58,509 Teva Pharmaceutical Industries Ltd. ADR 2,524,663 76,000 Wyeth 2,736,760 ----------- 26,609,078 ----------- TOTAL COMMON STOCKS (Cost $78,758,453) 67,803,037 ----------- - ------ 13 Life Sciences Shares Value Temporary Cash Investments -- 1.1% 35,117 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares $ 35,117 Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $713,090), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $700,012) 700,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS (Cost $735,117) 735,117 ----------- TOTAL INVESTMENT SECURITIES -- 100.8% (Cost $79,493,570) 68,538,154 ----------- OTHER ASSETS AND LIABILITIES -- (0.8)% (556,204) ----------- TOTAL NET ASSETS -- 100.0% $67,981,950 =========== Geographic Diversification (as a % of net assets) United States 85.7% Switzerland 6.1% Israel 3.7% United Kingdom 3.1% Spain 0.6% Ireland 0.5% Cash and Equivalents* 0.3% *Includes temporary cash investments and other assets and liabilities. Forward Foreign Currency Exchange Contracts Settlement Contracts to Sell Date Value Unrealized Gain (Loss) 419,029 CHF for USD 1/30/09 $346,401 $ 7,493 131,719 EUR for USD 1/30/09 167,271 3,702 ---------- ------------ $513,672 $11,195 ========== ============ (Value on Settlement Date $524,867) Notes to Schedule of Investments ADR = American Depositary Receipt CHF = Swiss Franc EUR = Euro USD = United States Dollar (1) Non-income producing. Industry classifications and geographic diversification are unaudited. See Notes to Financial Statements. - ------ 14 Technology NOVEMBER 30, 2008 Shares Value Common Stocks -- 98.6% AEROSPACE & DEFENSE -- 1.6% 12,386 American Science & Engineering, Inc. $ 939,726 ----------- COMMERCIAL SERVICES & SUPPLIES -- 2.3% 29,500 Nissha Printing Co. Ltd. 1,375,061 ----------- COMMUNICATIONS EQUIPMENT -- 15.8% 56,959 Avocent Corp.(1) 1,071,399 114,318 Cisco Systems, Inc.(1) 1,890,820 35,840 EMS Technologies, Inc.(1) 867,686 63,415 QUALCOMM, Inc. 2,128,841 43,063 Research In Motion Ltd.(1) 1,828,886 126,288 Seachange International, Inc.(1) 1,000,201 128,437 Symmetricom, Inc.(1) 536,867 ----------- 9,324,700 ----------- COMPUTERS & PERIPHERALS -- 14.4% 18,407 Apple, Inc.(1) 1,705,777 94,731 Hewlett-Packard Co. 3,342,110 128,270 High Tech Computer Corp. 1,277,514 86,347 LaserCard Corp.(1) 328,118 36,722 Netezza Corp.(1) 265,133 85,355 QLogic Corp.(1) 906,470 29,128 Synaptics, Inc.(1) 639,942 ----------- 8,465,064 ----------- ELECTRONIC EQUIPMENT & INSTRUMENTS -- 5.6% 70,827 Cogent, Inc.(1) 951,915 37,270 Flir Systems, Inc.(1) 1,156,115 47,643 National Instruments Corp. 1,148,673 ----------- 3,256,703 ----------- INTERNET SOFTWARE & SERVICES -- 12.3% 116,280 Ariba, Inc.(1) 936,054 90,819 AsiaInfo Holdings, Inc.(1) 1,001,734 3,529 Google, Inc., Class A(1) 1,033,856 85,311 Netease.com ADR(1) 1,569,722 17,787 Sohu.com, Inc.(1) 863,381 115,032 Websense, Inc.(1) 1,860,067 ----------- 7,264,814 ----------- Shares Value IT SERVICES -- 9.4% 23,903 Affiliated Computer Services, Inc., Class A(1) $ 966,876 10,764 Alliance Data Systems Corp.(1) 466,189 24,259 Automatic Data Processing, Inc. 996,075 60,195 Gartner, Inc.(1) 924,595 26,574 Global Payments, Inc. 961,182 11,314 International Business Machines Corp. 923,222 23,759 Western Union Co. (The) 315,282 ----------- 5,553,421 ----------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT -- 11.7% 123,294 Altera Corp. 1,813,655 63,280 Intel Corp. 873,264 39,580 Linear Technology Corp. 789,621 67,434 Microchip Technology, Inc. 1,247,529 74,740 Ultratech, Inc.(1) 937,987 60,716 Volterra Semiconductor Corp.(1) 454,155 48,100 Xilinx, Inc. 786,916 ----------- 6,903,127 ----------- SOFTWARE -- 25.5% 131,834 Activision Blizzard, Inc.(1) 1,542,458 36,315 Adobe Systems, Inc.(1) 841,055 12,281 Aladdin Knowledge Systems Ltd.(1) 92,599 27,725 Cerner Corp.(1) 997,546 78,906 JDA Software Group, Inc.(1) 1,039,981 2,410,000 Kingdee International Software Group Co. Ltd. 247,261 74,568 McAfee, Inc.(1) 2,261,647 61,407 Microsoft Corp. 1,241,650 83,664 Opnet Technologies, Inc.(1) 923,651 156,677 Oracle Corp.(1) 2,520,933 37,590 Quality Systems, Inc. 1,130,331 78,508 Quest Software, Inc.(1) 1,048,082 12,018 salesforce.com, inc.(1) 343,955 64,135 Tyler Technologies, Inc.(1) 810,025 ----------- 15,041,174 ----------- TOTAL COMMON STOCKS (Cost $75,894,355) 58,123,790 ----------- - ------ 15 Technology Shares Value Temporary Cash Investments -- 1.1% 33,360 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares $ 33,360 Repurchase Agreement, Deutsche Bank Securities (collateralized by various U.S. Treasury obligations, 4.00%, 8/31/09, valued at $612,062), in a joint trading account at 0.15%, dated 11/28/08, due 12/1/08 (Delivery value $600,008) 600,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS (Cost $633,360) 633,360 ----------- TOTAL INVESTMENT SECURITIES -- 99.7% (Cost $76,527,715) 58,757,150 ----------- OTHER ASSETS AND LIABILITIES -- 0.3% 173,776 ----------- TOTAL NET ASSETS -- 100.0% $58,930,926 =========== Geographic Diversification (as a % of net assets) United States 84.6% People's Republic of China 5.8% Canada 3.1% Japan 2.3% Taiwan (Republic of China) 2.2% Hong Kong 0.4% Israel 0.2% Cash and Equivalents* 1.4% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt (1) Non-income producing. Industry classifications and geographic diversification are unaudited. See Notes to Financial Statements. - ------ 16 STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 2008 Life Sciences Technology ASSETS Investment securities, at value (cost of $79,493,570 and $76,527,715, respectively) $68,538,154 $58,757,150 Cash -- 26,261 Foreign currency holdings, at value (cost of $- and $111, respectively) -- 98 Receivable for investments sold 161,262 1,090,181 Receivable for forward foreign currency exchange contracts 11,195 -- Receivable for capital shares sold 15,382 15,262 Dividends and interest receivable 123,481 40,246 ------------ ------------- 68,849,474 59,929,198 ------------ ------------- LIABILITIES Disbursements in excess of demand deposit cash 23,888 -- Payable for investments purchased 767,008 892,524 Payable for capital shares redeemed 5,279 31,454 Accrued management fees 71,349 74,294 ------------ ------------- 867,524 998,272 ------------ ------------- NET ASSETS $67,981,950 $58,930,926 ============ ============= NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $ 86,093,265 $300,135,055 Accumulated net investment loss (11,195) (6,259) Accumulated net realized loss on investment and foreign currency transactions (7,155,253) (223,427,925) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (10,944,867) (17,769,945) ------------ ------------- $ 67,981,950 $58,930,926 ============ ============= INVESTOR CLASS, $0.01 PAR VALUE Net assets $66,285,283 $56,268,590 Shares outstanding 15,390,127 4,497,079 Net asset value per share $4.31 $12.51 INSTITUTIONAL CLASS, $0.01 PAR VALUE Net assets $1,696,667 $2,662,336 Shares outstanding 387,140 208,971 Net asset value per share $4.38 $12.74 See Notes to Financial Statements. - ------ 17 STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 2008 Life Sciences Technology INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $25,039 and $40,635, respectively) $ 1,029,403 $ 594,714 Interest 39,365 41,479 ------------- ------------- 1,068,768 636,193 ------------- ------------- EXPENSES: Management fees 1,201,859 1,539,716 Directors' fees and expenses 2,447 2,855 Other expenses 254 1,184 ------------- ------------- 1,204,560 1,543,755 ------------- ------------- NET INVESTMENT INCOME (LOSS) (135,792) (907,562) ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions 2,361,530 (27,406,990) Foreign currency transactions (22,805) 6,917 ------------- ------------- 2,338,725 (27,400,073) ------------- ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (30,078,108) (36,354,620) Translation of assets and liabilities in foreign currencies (3,918) (465) ------------- ------------- (30,082,026) (36,355,085) ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (27,743,301) (63,755,158) ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(27,879,093) $(64,662,720) ============= ============= See Notes to Financial Statements. - ------ 18 STATEMENT OF CHANGES IN NET ASSETS YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 Life Sciences Technology Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $(135,792) $(419,188) $(907,562) $(1,103,646) Net realized gain (loss) 2,338,725 7,543,213 (27,400,073) 22,515,205 Change in net unrealized appreciation (depreciation) (30,082,026) 7,704,876 (36,355,085) 1,098,503 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (27,879,093) 14,828,901 (64,662,720) 22,510,062 ------------ ------------ ------------ ------------ CAPITAL SHARE TRANSACTIONS Net increase (decrease) in net assets from capital share transactions (6,703,985) (27,830,419) (13,105,492) (13,354,560) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (34,583,078) (13,001,518) (77,768,212) 9,155,502 NET ASSETS Beginning of period 102,565,028 115,566,546 136,699,138 127,543,636 ------------ ------------ ------------ ------------ End of period $ 67,981,950 $102,565,028 $ 58,930,926 $136,699,138 ============ ============ ============ ============ Accumulated net investment loss $(11,195) $(32,513) $(6,259) -- ============ ============ ============ ============ See Notes to Financial Statements. - ------ 19 NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 2008 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 10). 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 NOTES TO FINANCIAL STATEMENTS 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 have adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" during the current fiscal year. The funds are no longer subject to examination by tax authorities for years prior to 2005. Additionally, non-U.S. tax returns filed by the funds due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for 7 years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and 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. - ------ 21 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 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 each fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). 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. The effective annual management fee for each class of each fund for the year ended November 30, 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, American Century Investment Services, Inc., 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 JPMorgan Chase Bank (JPMCB). JPMCB is a custodian of the funds and a wholly owned subsidiary of JPM. 3. INVESTMENT TRANSACTIONS Investment transactions, excluding short-term investments, for the year ended November 30, 2008, were as follows: Life Sciences Technology Purchases $68,474,127 $180,753,778 Proceeds from sales $74,309,391 $190,965,058 - ------ 22 4. CAPITAL SHARE TRANSACTIONS Transactions in shares of the funds were as follows: Year ended Year ended November 30, 2008 November 30, 2007 Shares Amount Shares Amount Life Sciences INVESTOR CLASS/SHARES AUTHORIZED 110,000,000 100,000,000 =========== =========== Sold 2,291,505 $12,724,581 1,584,191 $ 8,866,913 Issued in connection with reclassification (Note 10) 23,433 136,104 -- -- Redeemed (3,622,288) (19,487,311) (6,459,895) (35,850,490) ----------- ------------- ----------- ------------- (1,307,350) (6,626,626) (4,875,704) (26,983,577) ----------- ------------- ----------- ------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 =========== =========== Sold 86,556 489,223 107,059 588,684 Redeemed (78,575) (430,478) (246,509) (1,377,285) ----------- ------------- ----------- ------------- 7,981 58,745 (139,450) (788,601) ----------- ------------- ----------- ------------- ADVISOR CLASS/SHARES AUTHORIZED N/A 5,000,000 =========== =========== Sold -- -- 5,964 32,965 Redeemed in connection with reclassification (Note 10) (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 10) (7,709) (43,534) -- -- ----------- ------------- ----------- ------------- (7,709) (43,534) 750 3,996 ----------- ------------- ----------- ------------- Net increase (decrease) (1,322,802) $ (6,703,985) (5,025,908) $(27,830,419) =========== ============= =========== ============= Technology INVESTOR CLASS/SHARES AUTHORIZED 50,000,000 100,000,000 =========== =========== Sold 1,137,181 $23,175,663 1,561,495 $38,575,501 Issued in connection with reclassification (Note 10) 14,547 364,793 -- -- Redeemed (1,766,303) (36,317,087) (2,249,110) (51,673,565) ----------- ------------- ----------- ------------- (614,575) (12,776,631) (687,615) (13,098,064) ----------- ------------- ----------- ------------- INSTITUTIONAL CLASS/SHARES AUTHORIZED 5,000,000 5,000,000 =========== =========== Sold 73,392 1,482,573 80,907 2,000,214 Redeemed (75,109) (1,446,641) (106,292) (2,480,039) ----------- ------------- ----------- ------------- (1,717) 35,932 (25,385) (479,825) ----------- ------------- ----------- ------------- ADVISOR CLASS/SHARES AUTHORIZED N/A 10,000,000 =========== =========== Sold -- -- 15,122 393,853 Redeemed in connection with reclassification (Note 10) (14,547) (364,793) -- -- Redeemed -- -- (7,302) (170,524) ----------- ------------- ----------- ------------- (14,547) (364,793) 7,820 223,329 ----------- ------------- ----------- ------------- Net increase (decrease) (630,839) $(13,105,492) (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 November 30, 2008: Unrealized Gain Value of (Loss) on Investment Other Financial Fund/Valuation Inputs Securities Instruments* LIFE SCIENCES Level 1 -- Quoted Prices $66,737,316 -- Level 2 -- Other Significant Observable Inputs 1,800,838 $11,195 Level 3 -- Significant Unobservable Inputs -- -- -------------- ------------ $68,538,154 $11,195 ============== ============ TECHNOLOGY Level 1 -- Quoted Prices $55,257,314 -- Level 2 -- Other Significant Observable Inputs 3,499,836 -- Level 3 -- Significant Unobservable Inputs -- -- -------------- ------------ $58,757,150 -- ============== ============ *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 line expired December 10, 2008, and was not renewed. The funds did not borrow from either line during the year ended November 30, 2008. 7. INTERFUND LENDING The funds, along with certain other funds managed by ACIM or ACGIM, may participate in an interfund lending program, pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC). This program provides an alternative credit facility allowing the funds to borrow from or lend to other funds in the American Century Investments family of funds that permit such transactions. During the year ended November 30, 2008, the funds did not utilize the program. - ------ 24 8. 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, their 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. Investing in emerging markets may accentuate these risks. Technology's investment process may result in high portfolio turnover, high commission costs and high capital gains distributions. 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. There were no distributions paid by the funds during the years ended November 30, 2008 and November 30, 2007. As of November 30, 2008, the components of distributable earnings on a tax-basis and the federal tax cost of investments were as follows: Life Sciences Technology Federal tax cost of investments $79,502,756 $76,734,575 ============= ============== Gross tax appreciation of investments $ 2,986,240 $ 1,081,890 Gross tax depreciation of investments (13,950,842) (19,059,315) ------------- -------------- Net tax appreciation (depreciation) of investments $(10,964,602) $(17,977,425) ============= ============== Net tax appreciation (depreciation) on derivatives and translation of assets and liabilities in foreign currencies $ (645) $ 620 ------------- -------------- Net tax appreciation (depreciation) $(10,965,247) $(17,976,805) ============= ============== Accumulated capital losses $(5,367,479) $(219,779,782) Capital loss deferrals $(1,778,589) $(3,441,283) Currency loss deferrals -- $(6,259) The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on certain forward foreign currency exchange contracts. The accumulated capital losses listed above represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers expire as follows: 2009 2010 2016 Life Sciences -- $(5,367,479) -- Technology $(142,889,307) $(52,734,829) $(24,155,646) The capital and currency deferrals represent net capital and foreign currency losses incurred in the one-month period ended November 30, 2008. The funds have elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes. - ------ 25 10. 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. 11. RECENTLY ISSUED ACCOUNTING STANDARDS The FASB issued Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" (FAS 157), in September 2006, which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands the required financial statement disclosures about fair value measurements. The adoption of FAS 157 did 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 interim periods 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. 12. SUBSEQUENT EVENTS On December 3, 2008, the Board of Directors of the funds approved plans of reorganization (the reorganizations) pursuant to which Growth Fund (Growth), a fund in a series issued by American Century Mutual Funds, Inc., will acquire all of the assets of Life Sciences and Technology in exchange for shares of equal value of Growth and assumption by Growth of certain liabilities of Life Sciences and Technology. The financial statements and performance history of Growth will be carried over in the post-reorganization. The reorganizations are subject to approval by Life Sciences and Technology shareholders. - ------ 26 FINANCIAL HIGHLIGHTS Life Sciences Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $6.00 $5.22 $5.32 $4.69 $4.36 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) (0.01) (0.02) (0.04) (0.04) (0.04) Net Realized and Unrealized Gain (Loss) (1.68) 0.80 (0.06) 0.67 0.37 -------- -------- -------- -------- -------- Total From Investment Operations (1.69) 0.78 (0.10) 0.63 0.33 -------- -------- -------- -------- -------- Net Asset Value, End of Period $4.31 $6.00 $5.22 $5.32 $4.69 ======== ======== ======== ======== ======== TOTAL RETURN(2) (28.17)% 14.94% (1.88)% 13.43% 7.57% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.35% 1.35% 1.46% 1.50% 1.50% Ratio of Net Investment Income (Loss) to Average Net Assets (0.16)% (0.39)% (0.67)% (0.81)% (0.85)% Portfolio Turnover Rate 78% 73% 151% 162% 215% Net Assets, End of Period (in thousands) $66,285 $100,120 $112,648 $155,835 $155,530 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 27 Life Sciences Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $6.09 $5.29 $5.38 $4.74 $4.40 -------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(1) --(2) (0.01) (0.02) (0.03) (0.03) Net Realized and Unrealized Gain (Loss) (1.71) 0.81 (0.07) 0.67 0.37 -------- ------- ------- ------- ------- Total From Investment Operations (1.71) 0.80 (0.09) 0.64 0.34 -------- ------- ------- ------- ------- Net Asset Value, End of Period $4.38 $6.09 $5.29 $5.38 $4.74 ======== ======= ======= ======= ======= TOTAL RETURN(3) (28.08)% 15.12% (1.67)% 13.50% 7.73% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.15% 1.15% 1.26% 1.30% 1.30% Ratio of Net Investment Income (Loss) to Average Net Assets 0.04% (0.19)% (0.47)% (0.61)% (0.65)% Portfolio Turnover Rate 78% 73% 151% 162% 215% Net Assets, End of Period (in thousands) $1,697 $2,309 $2,744 $3,953 $3,510 (1) Computed using average shares outstanding throughout the period. (2) Per-share amount was less than $0.005. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 28 Technology Investor Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $25.60 $21.10 $19.61 $18.20 $19.58 -------- -------- -------- -------- -------- Income From Investment Operations Net Investment Income (Loss)(1) (0.18) (0.21) (0.24) (0.19) (0.24) Net Realized and Unrealized Gain (Loss) (12.91) 4.71 1.73 1.60 (1.14) -------- -------- -------- -------- -------- Total From Investment Operations (13.09) 4.50 1.49 1.41 (1.38) -------- -------- -------- -------- -------- Net Asset Value, End of Period $12.51 $25.60 $21.10 $19.61 $18.20 ======== ======== ======== ======== ======== TOTAL RETURN(2) (51.13)% 21.33% 7.60% 7.75% (7.05)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.50% 1.51% 1.51% 1.51% 1.50% Ratio of Net Investment Income (Loss) to Average Net Assets (0.88)% (0.91)% (1.15)% (1.06)% (1.30)% Portfolio Turnover Rate 178% 260% 385% 388% 279% Net Assets, End of Period (in thousands) $56,269 $130,854 $122,353 $137,710 $166,986 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 29 Technology Institutional Class For a Share Outstanding Throughout the Years Ended November 30 2008 2007 2006 2005 2004 PER-SHARE DATA Net Asset Value, Beginning of Period $26.01 $21.40 $19.84 $18.38 $19.74 -------- ------- ------- ------- ------- Income From Investment Operations Net Investment Income (Loss)(1) (0.14) (0.17) (0.20) (0.15) (0.20) Net Realized and Unrealized Gain (Loss) (13.13) 4.78 1.76 1.61 (1.16) -------- ------- ------- ------- ------- Total From Investment Operations (13.27) 4.61 1.56 1.46 (1.36) -------- ------- ------- ------- ------- Net Asset Value, End of Period $12.74 $26.01 $21.40 $19.84 $18.38 ======== ======= ======= ======= ======= TOTAL RETURN(2) (51.02)% 21.54% 7.86% 7.94% (6.89)% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.30% 1.31% 1.31% 1.31% 1.30% Ratio of Net Investment Income (Loss) to Average Net Assets (0.68)% (0.71)% (0.95)% (0.86)% (1.10)% Portfolio Turnover Rate 178% 260% 385% 388% 279% Net Assets, End of Period (in thousands) $2,662 $5,481 $5,051 $6,099 $7,805 (1) Computed using average shares outstanding throughout the period. (2) Total return assumes reinvestment of net investment income and capital gains distributions, if any. The total return of the classes may not precisely reflect the class expense differences because of the impact of calculating the net asset values to two decimal places. If net asset values were calculated to three decimal places, the total return differences would more closely reflect the class expense differences. The calculation of net asset values to two decimal places is made in accordance with SEC guidelines and does not result in any gain or loss of value between one class and another. See Notes to Financial Statements. - ------ 30 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders, American Century World Mutual Funds, Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Life Sciences Fund and Technology Fund, two of the funds constituting American Century World Mutual Funds, Inc. (the "Corporation"), as of November 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the respective financial positions of Life Sciences Fund and Technology Fund, two of the funds constituting American Century World Mutual Funds, Inc., as of November 30, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Kansas City, Missouri January 14, 2009 - ------ 31 MANAGEMENT The individuals listed below serve as directors or officers of the funds. Each director serves until his or her successor is duly elected and qualified or until he or she retires. Mandatory retirement age for independent directors is 72. Those listed as interested directors are "interested" primarily by virtue of their engagement as directors and/or officers of, or ownership interest in, American Century Companies, Inc. (ACC) or its wholly owned, direct or indirect, subsidiaries, including the funds' investment advisor, American Century Global Investment Management, Inc. (ACGIM) or American Century Investment Management, Inc. (ACIM); the funds' principal underwriter, American Century Investment Services, Inc. (ACIS); and the funds' transfer agent, American Century Services, LLC (ACS). The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACGIM, ACIM, ACIS and ACS. The directors serve in this capacity for seven registered investment companies in the American Century Investments family of funds. All persons named as officers of the funds also serve in similar capacities for the other 14 investment companies in the American Century Investments family of funds advised by ACGIM or ACIM, unless otherwise noted. Only officers with policy-making functions are listed. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. INTERESTED DIRECTORS JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1924 POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1963 POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: President, Chief Executive Officer and Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM, ACGIM, ACIS and other ACC subsidiaries. Managing Director, Morgan Stanley (March 2000 to November 2005) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 111 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None - ------ 32 INDEPENDENT DIRECTORS THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1940 POSITION(S) HELD WITH FUNDS: Director (since 1980) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated Investments, LLC (real estate investment company); Managing Member, Brown Cascade Properties, LLC (real estate investment company); Retired, Area Vice President, Applied Industrial Technologies (bearings and power transmission company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1997) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the President, Midwest Research Institute (not-for-profit, contract research organization) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1942 POSITION(S) HELD WITH FUNDS: Director (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Saia, Inc. and Entertainment Properties Trust DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1937 POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board (since 2005) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company); Retired Chairman of the Board, Butler Manufacturing Company (metal buildings producer) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1943 POSITION(S) HELD WITH FUNDS: Director (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive Officer and Founder, Sayers40, Inc. (technology products and services provider) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1994) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice President, Sprint Corporation (telecommunications company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: DST Systems, Inc.; Euronet Worldwide, Inc. and Charming Shoppes, Inc. - ------ 33 JOHN R. WHITTEN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1946 POSITION(S) HELD WITH FUNDS: Director (since 2008) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Project Consultant, Celanese Corp. (industrial chemical company) (September 2004 to January 2005); Chief Financial Officer, Vice President and Treasurer, Applied Industrial Technologies, Inc. (bearings and power transmission company) (1995 to 2003) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Rudolph Technologies, Inc. OFFICERS BARRY FINK, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1955 POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Director, ACC, ACS, ACIS and other ACC subsidiaries MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1956 POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior Vice President (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM, ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century Investments funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1957 POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice President (since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present); General Counsel, ACC (March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1966 POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial Officer (all since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February 2000 to present); Controller, various American Century Investments funds (1997 to September 2006) JON ZINDEL, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1967 POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October 2001 to present); Vice President, certain ACC subsidiaries (October 2001 to August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006). Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief Accounting Officer and Senior Vice President, ACIS The SAI has additional information about the funds' directors and is available without charge, upon request, by calling 1-800-345-2021. - ------ 34 APPROVAL OF MANAGEMENT AGREEMENTS Life Sciences and Technology Under Section 15(c) of the Investment Company Act, contracts for investment advisory services (including subadvisory services) are required to be reviewed, evaluated and approved by a majority of a fund's independent directors or trustees (the "Directors") each year. At American Century Investments, this process is referred to as the "15(c) Process." As a part of this process, the board reviews fund performance, shareholder services, audit and compliance information, and a variety of other reports from the advisor concerning fund operations. In addition to this annual review, the board of directors oversees and evaluates on a continuous basis at its quarterly meetings the nature and quality of significant services performed by the advisor and the subadvisor, fund performance, audit and compliance information, and a variety of other reports relating to fund operations. The board, or committees of the board, also holds special meetings as needed. Under a Securities and Exchange Commission rule, each fund is required to disclose in its annual or semiannual report, as appropriate, the material factors and conclusions that formed the basis for the board's approval or renewal of any advisory agreements within the fund's most recently completed fiscal half-year period. ANNUAL CONTRACT REVIEW PROCESS As part of the annual 15(c) Process undertaken during the most recent fiscal half-year period, the Directors reviewed extensive data and information compiled by the advisor and certain independent providers of evaluative data (the "15(c) Providers") concerning Life Sciences and Technology (the "Funds") and the services provided to the Funds under the management and subadvisory agreements. The information considered and the discussions held at the meetings included, but were not limited to: * the nature, extent and quality of investment management, shareholder services and other services provided to the Funds; * reports on the wide range of programs and services the advisor provides to the Funds and their shareholders on a routine and non-routine basis; * information about the compliance policies, procedures, and regulatory experience of both the advisor and the subadvisor; * data comparing the cost of owning the Funds to the cost of owning a similar fund; * data comparing the Funds' performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies; * financial data showing the profitability of the Funds to the advisor and the overall profitability of the advisor; and * data comparing services provided and charges to other investment management clients of the advisor. In keeping with its practice, the Funds' board of directors held two in-person meetings and one telephonic meeting to review and discuss the information provided. The board also had the benefit of the advice of its independent counsel throughout the period. - ------ 35 FACTORS CONSIDERED The Directors considered all of the information provided by the advisor, the 15(c) Providers, and the board's independent counsel, and evaluated such information for each fund for which the board has responsibility. In connection with their review of the Funds, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management and subadvisory agreements under the terms ultimately determined by the board to be appropriate, the Directors' decision was based on the following factors. NATURE, EXTENT AND QUALITY OF SERVICES -- GENERALLY. Under the management agreement, the advisor is responsible for providing or arranging for all services necessary for the operation of the Funds. The board noted that under the management agreement, the advisor provides or arranges at its own expense a wide variety of services including: * Fund construction and design * portfolio security selection * initial capitalization/funding * securities trading * custody of Fund assets * daily valuation of the each Fund's portfolio * shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping and communications * legal services * regulatory and portfolio compliance * financial reporting * marketing and distribution The Directors noted that many of the services provided by the advisor have expanded over time both in terms of quantity and complexity in response to shareholder demands, competition in the industry and the changing regulatory environment. The directors specifically noted that with respect to Life Sciences, the advisor had retained the subadvisor to provide the day-to-day cash management services. In performing their evaluation, the Directors considered information received in connection with the annual review, as well as information provided on an ongoing basis at their regularly scheduled board and committee meetings. - ------ 36 INVESTMENT MANAGEMENT SERVICES. The nature of the investment management services provided to the Funds is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments, and liquidity. In evaluating investment performance, the board expects the advisor and subadvisor to manage the Funds in accordance with their investment objectives and approved strategies. In providing these services, the advisor and subadvisor utilize teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance and other systems to conduct their business. At each quarterly meeting the Directors review investment performance information for the Funds, together with comparative information for appropriate benchmarks and peer groups of funds managed similarly to the Funds. The Directors also review detailed performance information during the 15(c) Process comparing each Fund's performance with that of similar funds not managed by the advisor. If performance concerns are identified, the Directors discuss with the advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. Technology's performance for both the one- and three-year periods was above the median for its peer group. Life Sciences' performance was above the median for its peer group for the one year period and below the median for the three year period. SHAREHOLDER AND OTHER SERVICES. The advisor provides the Funds with a comprehensive package of transfer agency, shareholder, and other services. The Directors review reports and evaluations of such services at their regular quarterly meetings, including the annual meeting concerning contract review, and reports to the board. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the advisor. COSTS OF SERVICES PROVIDED AND PROFITABILITY. The advisor provides detailed information concerning its cost of providing various services to the Funds, its profitability in managing the Funds, its overall profitability, and its financial condition. The Directors have reviewed with the advisor the methodology used to prepare this financial information. This financial information regarding the advisor is considered in order to evaluate the advisor's financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The board concluded that the advisor's profits were reasonable in light of the services provided to the Funds. The board did not consider the profitability of the subadvisor because the subadvisor is paid from the unified fee of the advisor as a result of arm's length negotiations. ETHICS. The Directors generally consider the advisor's commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the advisor's practices generally meet or exceed industry best practices. With respect to the subadvisor, as part of its oversight responsibilities, the board approves the subadvisor's code of ethics and any changes thereto. Further, through the advisor's compliance group, the board stays abreast of any violations of the subadvisor's code. - ------ 37 ECONOMIES OF SCALE. The Directors review reports provided by the advisor on economies of scale for the complex as a whole and the year-over-year changes in revenue, costs, and profitability. The Directors concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. This analysis is also complicated by the additional services and content provided by the advisor and its reinvestment in its ability to provide and expand those services. Accordingly, the Directors also seek to evaluate economies of scale by reviewing other information, such as year-over-year profitability of the advisor generally, the profitability of its management of the Funds specifically, the expenses incurred by the advisor in providing various functions to the Funds, and the fees of competitive funds not managed by the advisor. The Directors believe the advisor is appropriately sharing economies of scale through its competitive fee structure, fee breakpoints as each Fund increases in size, and through reinvestment in its business to provide shareholders additional content and services. COMPARISON TO OTHER FUNDS' FEES. The Funds pay the advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Funds, other than brokerage expenses, taxes, interest, extraordinary expenses, and the fees and expenses of each Fund's independent directors (including their independent legal counsel). The Directors specifically noted that the subadvisory fees paid to the subadvisor under the subadvisory agreement were subject to arm's length negotiation between the advisor and the subadvisor and are paid by the advisor out of its unified fee. Under the unified fee structure, the advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the advisor the risk of increased costs of operating the Funds and provides a direct incentive to minimize administrative inefficiencies. Part of the Directors' analysis of fee levels involves reviewing certain evaluative data compiled by a 15(c) Provider comparing each Fund's unified fee to the total expense ratio of other funds in the Fund's peer group. The unified fee charged to shareholders of each of the Funds was above the median of the total expense ratios of its peer group. The board concluded that the management fee paid by each Fund to the advisor was reasonable in light of the services provided to the Fund. COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The Directors also requested and received information from the advisor concerning the nature of the services, fees, and profitability of its advisory services to advisory clients other than the Funds. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Funds. The Directors analyzed this information and concluded that the fees charged and services provided to the Funds were reasonable by comparison. - ------ 38 COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information from the advisor concerning collateral benefits it receives as a result of its relationship with the Funds. They concluded that the advisor's primary business is managing mutual funds and it generally does not use the Funds or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Directors noted that the advisor receives proprietary research from broker-dealers that execute Fund portfolio transactions and concluded that this research is likely to benefit Fund shareholders. The Directors also determined that the advisor is able to provide investment management services to certain clients other than the Funds, at least in part, due to its existing infrastructure built to serve the fund complex. The Directors concluded, however, that the assets of those other clients are not material to the analysis and, in any event, are included with the assets of the Funds to determine breakpoints in each Fund's fee schedule, provided they are managed using the same investment team and strategy. CONCLUSIONS OF THE DIRECTORS As a result of this process, the board, including all of the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor concluded that the investment management agreement between each Fund and the advisor is fair and reasonable in light of the services provided and should be renewed. Additionally, the board, including all the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor, concluded that the subadvisory agreement between the advisor and the subadvisor, on behalf of Life Sciences, is fair and reasonable in light of the services provided and should be renewed. - ------ 39 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans 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. 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. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information. 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. - ------ 40 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. - ------ 41 NOTES - ------ 42 NOTES - ------ 43 NOTES - ------ 44 [back cover] [american century investments logo and text logo ®] CONTACT US AMERICANCENTURY.COM AUTOMATED INFORMATION LINE . . . . . . . . . . . . . . . 1-800-345-8765 1-800-345-2021 INVESTOR SERVICES REPRESENTATIVE . . . . . . . . . . . . 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. American Century Investments P.O. Box 419200 Kansas City, MO 64141-6200 American Century Investment Services, Inc., Distributor ©2009 American Century Proprietary Holdings, Inc. All rights reserved. 0901 CL-ANN-63739N-SUP
[front cover] ANNUAL REPORT NOVEMBER 30, 2008 [american century investments logo and text logo ®] AMERICAN CENTURY INVESTMENTS NT INTERNATIONAL GROWTH FUND NT EMERGING MARKETS FUND PRESIDENT'S LETTER JONATHAN THOMAS [photo of Jonathan Thomas] Dear Investor: Thank you for taking time to review the following discussions, from our experienced portfolio management team, of the fund reporting period ended November 30, 2008. It was a time of enormous upheaval and change. We understand and appreciate the challenges you have faced during this historic period, and share your concerns about the economy, the markets, and fund holdings. To help address these issues, I'd like to provide my perspective on how we have managed--and continue to manage--your investments in these uncertain times. As a company, American Century Investments® is well positioned to deal with market turmoil. We are financially strong and privately held, which allows us to align our resources with your long-term investment interests. In addition, our actively managed, team-based approach allows our portfolio teams to identify attractive investment opportunities regardless of market conditions. Our seasoned investment professionals have substantial experience and have successfully navigated previous market crises. These portfolio managers and analysts continue to use a team approach and follow disciplined investment processes designed to produce the best possible long-term results for you. For example, our equity investment teams are working closely with our fixed income group to monitor and assess credit crisis developments. The fixed income team anticipated dislocation in the credit markets and--through its disciplined processes and teamwork--helped reduce our exposure to investments that suffered substantial losses. How soon a sustainable recovery will occur is uncertain. But I am certain of this: Since 1958, we've demonstrated a consistent ability to execute solid, long-term investment strategies and the discipline to remain focused during times of volatility or shifts in the markets. We've stayed true to our principles, especially our belief that your success is the ultimate measure of our success. Thank you for your continued confidence in us. 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 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 5 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 5 NT EMERGING MARKETS Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . . 7 Top Ten Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Types of Investments in Portfolio. . . . . . . . . . . . . . . . . . 8 Investments by Country . . . . . . . . . . . . . . . . . . . . . . . 8 Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . . 9 FINANCIAL STATEMENTS Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . . 11 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 Report of Independent Registered Public Accounting Firm . . . . . . . 28 OTHER INFORMATION Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Approval of Management Agreements for NT International Growth and NT Emerging Markets. . . . . . . . . . . 32 Additional Information. . . . . . . . . . . . . . . . . . . . . . . . 37 Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 38 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 Kopinski, Chief Investment Officer, International Equity CREDIT CRISIS DEMONSTRATES ITS SCOPE What started as a credit crisis in the U.S. subprime mortgage market eventually exploded into a worldwide financial sector meltdown in 2008. Frozen credit markets and slowing economic growth led to plunging international stock returns for the 12-month period ended November 30, 2008. Stock investors had nowhere to hide, as developed and emerging markets plunged. For much of the period, soaring oil and commodity prices caused inflation to spike, which added to investors' woes. After peaking at $147 a barrel in July, however, oil prices quickly descended on waning global demand. Other commodity prices followed suit, and near-term inflationary pressures subsided. JOINT EFFORT PROMPTS RATE CUTS At the urging of the U.S. Federal Reserve, global central banks launched a coordinated response to combat the mounting credit crisis and restore worldwide market liquidity. Rate cuts represented a key component of this strategy. The Bank of England, which had been steadily cutting rates since December 2007, slashed its key lending rate by 275 basis points during the period to 3.0%. Citing sluggish economic growth and severe financial sector strain, Japan implemented its first rate cut in seven years. In early October, Japan's central bank cut the nation's key lending rate to 0.3% from 0.5%. In Europe, action on the monetary policy front was mixed. As late as July 2008, the European Central Bank (ECB) hiked its key interest rate to combat the effects of rising inflation and a record-high euro. But, as economic conditions worsened and inflationary pressures eased, the ECB finally cut its key lending rate by 150 basis points late in the period to 3.25%. CONCENTRATING ON OPPORTUNITY The recent negative financial and economic news makes it difficult to see the opportunities that exist in the current market environment. For example, given their current prices and expected rates of economic growth, certain emerging markets appear attractive on a long-term basis. With our disciplined investment approach, we are as focused as ever on finding and capitalizing on the best international investment opportunities. International Equity Total Returns For the 12 months ended November 30, 2008 (in U.S. dollars) MSCI EM Index -56.56% MSCI EAFE Growth Index -47.28% MSCI Europe Index -49.99% MSCI EAFE Index -47.79% MSCI World Free Index -43.30% MSCI EAFE Value Index -48.33% MSCI Japan Index -37.12% - ------ 2 PERFORMANCE NT International Growth Total Returns as of November 30, 2008 Average Annual Returns 1 year Since Inception Inception Date INSTITUTIONAL CLASS -48.82% -15.35% 5/12/06 MSCI EAFE INDEX -47.79% -15.88% -- MSCI EAFE GROWTH INDEX -47.28% -14.97% -- 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 November 30 2006* 2007 2008 Institutional Class 3.40% 23.40% -48.82% MSCI EAFE Index 4.97% 17.30% -47.79% MSCI EAFE Growth Index 2.43% 22.32% -47.28% *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 -48.82% for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI EAFE Index, returned -47.79%. Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which increasingly restricted corporate access to operating capital and fueled economic anxieties. Within the portfolio and benchmark, every sector posted double-digit declines for the period. Similarly, every benchmark country and nearly every country in the portfolio posted double-digit losses. JAPAN LED DETRACTORS From a regional perspective, exposure in Japan, the portfolio's second-largest country weighting as of November 30, 2008, detracted the most from relative results. The Japanese market outperformed MSCI EAFE during the 12-month period, boosted by a surge in the value of the yen versus the U.S. dollar. Our underweight exposure to the Japanese market detracted significantly from overall performance. Stock-specific exposure to Greece and France also weighed on returns. At the opposite end of the performance spectrum, the Netherlands, followed by the United Kingdom, the portfolio's largest country weighting at the end of the reporting period, and Belgium, made the greatest contributions to the portfolio's relative performance. Within each country, stock selection accounted for the outperformance compared with the benchmark. UTILITIES, INDUSTRIALS SECTORS LAGGED The utilities industry represented the portfolio's smallest sector weighting on November 30, 2008, yet it had the largest negative impact on relative performance. This was due to the portfolio's underweight to the sector combined with unfavorable stock selection. Our position in Finland's state-owned electric utility Fortum Oyj was the sector's poorest performer, mainly due to concerns about the company's exposure to Russia's energy market. The industrials sector was among the portfolio's top performers in the first half of the period, but slumping worldwide demand landed the sector among the worst contributors--for the portfolio and the benchmark--as of November 30, 2008. Our overweight to electrical equipment companies accounted for the bulk of the sector's relative underperformance. Q-Cells, the German manufacturer of solar cells, was the sector's weakest stock, tumbling on weak economic data and slowing demand for solar projects. Top Ten Holdings as of November 30, 2008 % of net assets % of net assets as of 11/30/08 as of 05/31/08 BG Group plc 2.4% 1.8% Nestle SA 2.2% 1.5% ENI SpA 2.2% 1.8% Total SA 2.0% 1.8% CSL Ltd. 1.7% 1.2% Nintendo Co. Ltd. 1.7% 1.6% Sony Financial Holdings, Inc. 1.7% 1.2% Reckitt Benckiser Group plc 1.7% 1.4% Novartis AG 1.7% 0.9% iShares MSCI Japan Index Fund 1.7% 0.5% - ------ 4 NT International Growth PORTFOLIO'S FINANCIALS BEAT BENCHMARK Despite the barrage of negative news within the financials industry, the portfolio's financials sector contributed positively to relative performance. Our underweight combined with favorable stock selection helped the portfolio's results outpace those of the benchmark. The portfolio's consumer discretionary and materials sectors also contributed positively to relative performance. In particular, our position in Fast Retailing Co., a Japan-based apparel company, drove performance in the consumer discretionary sector and was among the portfolio's strongest contributors. The company posted strong profit and sales growth during its fiscal year, bucking the otherwise negative trend for Japanese retailers. In the materials sector, rising demand for agrichemical products from consumers and the alternative energy industry fueled gains in Germany's K+S AG. The company, which produces potash, a key fertilizer ingredient, ranked among the portfolio's top performers during the 12-month period. OUTLOOK NT International Growth primarily invests in companies located in developed countries around the world (excluding the United States). Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies with sustainable growth characteristics. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net assets % of net assets as of 11/30/08 as of 05/31/08 Foreign Common Stocks 99.3% 97.1% Temporary Cash Investments 0.7% 2.2% Other Assets and Liabilities(1) --(2) 0.7% (1) Includes securities lending collateral and other assets and liabilities. (2) Category is less than 0.05% of total net assets Investments by Country as of November 30, 2008 % of net assets % of net assets as of 11/30/08 as of 05/31/08 United Kingdom 21.9% 19.3% Japan 14.2% 12.5% Switzerland 9.6% 8.2% France 7.4% 7.6% Germany 6.8% 8.9% Australia 4.4% 5.2% Italy 4.2% 3.9% Canada 3.8% 3.1% Spain 3.8% 3.5% Netherlands 3.4% 0.9% Belgium 2.4% 2.3% Brazil 2.1% 1.7% Other Countries 15.3% 20.0% Cash and Equivalents(3) 0.7% 2.9% (3) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 5 PERFORMANCE NT Emerging Markets Total Returns as of November 30, 2008 Average Annual Returns 1 year Since Inception Inception Date INSTITUTIONAL CLASS -61.75% -16.83% 5/12/06 MSCI EM INDEX -56.56% -15.42% -- 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 November 30 2006* 2007 2008 Institutional Class 10.10% 48.22% -61.75% MSCI EM Index 3.37% 45.15% -56.56% *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. - ------ 6 PORTFOLIO COMMENTARY NT Emerging Markets Portfolio Managers: Patricia Ribeiro and Mark On* PERFORMANCE SUMMARY NT Emerging Markets returned -61.75% for the 12 months ended November 30, 2008. The portfolio's benchmark, the MSCI Emerging Markets Index, returned - -56.56% Decelerating economic growth rates and global financial market distress battered international equities during the 12-month period. Fallout from the U.S. subprime mortgage market meltdown spread throughout the world, resulting in tighter credit conditions, which increasingly restricted corporate access to operating capital and fueled economic anxieties. Plummeting commodity prices late in the period also weighed prominently on the natural resources-rich developing markets. Emerging market stocks underperformed the developed markets, which, as measured by the MSCI EAFE Index, returned -47.79% for the reporting period. Within the MSCI Emerging Markets Index and the portfolio, every sector posted double-digit declines for the period. Similarly, all benchmark countries and most countries in the portfolio posted double-digit losses. Overall, stock selection accounted for the portfolio's underperformance relative to the benchmark. MEXICO, CHINA AMONG TOP DETRACTORS From a regional perspective, the portfolio's largest detractors to performance included Indonesia, Mexico, and China, which was the fund's largest-weighted country as of November 30, 2008. In each country, stock selection primarily accounted for the portfolio's poor relative performance. China was home to several of the portfolio's worst-performing stocks, including Suntech Power Holdings and China High Speed Transmission Equipment Group in the electrical equipment industry and AAC Acoustic Technologies in the communications equipment industry. Although their absolute returns were negative, the Czech Republic, India, and Israel had the greatest positive influence on the portfolio's relative performance. Stock selection and overweight positions were helpful in the Czech Republic and India, while stock selection contributed favorably in Israel. Top Ten Holdings as of November 30, 2008 % of % of net assets net assets as of as of 11/30/08 05/31/08 iShares MSCI Emerging Markets Index Fund 3.7% -- Petroleo Brasileiro SA ADR 3.5% 4.7% China Mobile Ltd. ADR 3.1% 2.3% Industrial & Commercial Bank of China Ltd. H Shares 2.6% 1.1% Sasol Ltd. 2.3% 1.7% Samsung Electronics Co. Ltd. 2.2% 3.5% OAO Gazprom ADR 2.1% 3.2% Samsung Fire & Marine Insurance Co. Ltd. 2.1% -- Taiwan Semiconductor Manufacturing Co. Ltd. 2.1% 1.6% Teva Pharmaceutical Industries Ltd. ADR 2.0% -- *Effective December 19, 2008, Mark On is no longer with American Century Investments. - ------ 7 NT Emerging Markets INDUSTRIALS LED DETRACTORS The period's widespread losses were most severe in the industrials sector, the largest detractor to the portfolio's relative performance. Globaltrans Investment PLC, a Russian freight rail operator not represented in the benchmark, was the portfolio's largest performance detractor. The portfolio also suffered weak relative performance in the information technology and telecommunications services sectors. On a relative basis, only the financials sector made a positive contribution to performance. India's Power Finance Corp., which was not represented in the benchmark, was among the top contributors. The state-owned company provides financing for power projects. Although China and the industrials sector were overall performance detractors, they were home to the portfolio's leading contributor, China South Locomotive and Rolling Stock, a manufacturer of rail vehicles. The company's stock, which the benchmark did not own, advanced strongly due to government stimulus measures focused on China's infrastructure. OUTLOOK NT Emerging Markets primarily invests in companies located in emerging market countries. Recent events suggest emotions, rather than fundamentals, have driven the world's equity markets. Although we expect further difficulties and volatility in the short term, we will continue to focus on finding companies we believe have a high likelihood of growing earnings and revenues. Where appropriate, we will take advantage of market weaknesses to add to high-conviction names. Types of Investments in Portfolio % of net assets % of net assets as of 11/30/08 as of 05/31/08 Foreign Common Stocks 96.9% 95.8% Temporary Cash Investments 2.0% 2.8% Other Assets and Liabilities(1) 1.1% 1.4% (1) Includes securities lending collateral and other assets and liabilities. Investments by Country as of November 30, 2008 % of net assets % of net assets as of 11/30/08 as of 05/31/08 People's Republic of China 15.7% 10.9% Brazil 12.9% 17.0% South Korea 10.6% 10.5% South Africa 7.4% 5.0% Taiwan (Republic of China) 7.0% 10.2% India 6.4% 5.0% Hong Kong 5.0% 2.5% Russian Federation 4.3% 10.6% Czech Republic 4.2% 2.9% Poland 4.1% 2.0% Mexico 3.0% 2.9% Turkey 2.0% 0.8% Other Countries 14.3% 15.5% Cash and Equivalents(2) 3.1% 4.2% (2) Includes temporary cash investments, securities lending collateral and other assets and liabilities. - ------ 8 SHAREHOLDER FEE EXAMPLES (UNAUDITED) Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds. The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from June 1, 2008 to November 30, 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. - ------ 9 Beginning Ending Expenses Paid Account Value Account Value During Period* Annualized 6/1/08 11/30/08 6/1/08 - 11/30/08 Expense Ratio* NT International Growth -- Institutional Class Actual $1,000 $527.20 $4.31 1.13% Hypothetical $1,000 $1,019.35 $5.70 1.13% NT Emerging Markets -- Institutional Class Actual $1,000 $407.30 $5.38 1.53% Hypothetical $1,000 $1,017.35 $7.72 1.53% *Expenses are equal to the fund's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multipliedby 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. - ------ 10 SCHEDULE OF INVESTMENTS NT International Growth NOVEMBER 30, 2008 Shares Value Common Stocks & Rights -- 99.3% AUSTRALIA -- 4.4% 29,531 BHP Billiton Ltd. $593,477 41,934 CSL Ltd. 965,470 48,600 OZ Minerals Ltd. 17,837 13,846 Rio Tinto Ltd. 426,971 10,100 Sonic Healthcare Ltd. 88,914 144,400 Telstra Corp. Ltd. 385,483 ----------- 2,478,152 ----------- BELGIUM -- 2.4% 14,408 Anheuser-Busch Inbev NV 237,126 6,255 KBC Groep NV 189,779 52,901 SES SA Fiduciary Depositary Receipt 927,040 ----------- 1,353,945 ----------- BERMUDA -- 0.8% 11,647 Lazard Ltd., Class A 364,085 7,100 Seadrill Ltd. 58,209 ----------- 422,294 ----------- BRAZIL -- 2.1% 39,900 Cia Vale do Rio Doce, preference shares 429,847 65,100 Redecard SA 756,143 ----------- 1,185,990 ----------- CANADA -- 3.8% 13,800 Canadian National Railway Co. 486,594 8,600 EnCana Corp. 402,566 14,600 Gildan Activewear, Inc.(1) 247,101 17,900 Research In Motion Ltd.(1) 760,213 6,800 Shoppers Drug Mart Corp. 242,293 ----------- 2,138,767 ----------- CZECH REPUBLIC -- 0.8% 11,800 CEZ AS 468,409 ----------- DENMARK -- 1.7% 15,700 Novo Nordisk AS B Shares 802,375 3,600 Vestas Wind Systems AS(1) 163,696 ----------- 966,071 ----------- FINLAND -- 1.4% 20,500 Fortum Oyj 411,871 11,300 Nokia Oyj 159,883 27,000 Stora Enso Oyj R Shares 220,265 ----------- 792,019 ----------- FRANCE -- 7.4% 8,900 ALSTOM SA 474,796 27,365 AXA SA 523,963 10,400 BNP Paribas 576,579 Shares Value 5,100 Compagnie Generale des Etablissements Michelin, Class B $244,799 3,700 Essilor International SA 148,085 3,582 Groupe Danone 206,491 2,300 Lafarge SA 127,163 3,650 Suez Environnement SA(1) 62,875 21,624 Total SA 1,134,896 9,360 Ubisoft Entertainment SA(1) 215,724 13,800 Vivendi 391,234 ----------- 4,106,605 ----------- GERMANY -- 6.8% 3,500 adidas AG 109,519 1,700 Allianz SE 142,301 8,300 Bayer AG 431,433 4,640 Deutsche Boerse AG 333,699 33,907 Deutsche Telekom AG 472,014 10,870 Fresenius Medical Care AG & Co. KGaA 475,058 4,943 GEA Group AG 76,684 5,282 K+S AG 239,527 4,900 Linde AG 359,699 6,600 Muenchener Rueckversicherungs AG 901,691 808 Q-Cells AG(1) 27,220 7,000 SAP AG 240,565 ----------- 3,809,410 ----------- GREECE -- 1.5% 5,500 Coca Cola Hellenic Bottling Co. SA 85,595 38,784 National Bank of Greece SA 740,977 ----------- 826,572 ----------- HONG KONG -- 1.7% 12,000 China Mobile Ltd. 110,015 22,000 Hang Seng Bank Ltd. 281,542 76,000 Li & Fung Ltd. 138,341 212,000 Link Real Estate Investment Trust (The) 400,286 ----------- 930,184 ----------- INDIA -- 1.1% 4,600 Bharat Heavy Electricals Ltd. 125,976 21,800 Bharti Airtel Ltd.(1) 294,358 7,067 Housing Development Finance Corp. Ltd. 208,441 ----------- 628,775 ----------- IRELAND -- 1.0% 18,231 Anglo Irish Bank Corp. plc 19,758 20,677 Ryanair Holdings plc ADR(1) 542,978 ----------- 562,736 ----------- - ------ 11 NT International Growth Shares Value ISRAEL -- 1.2% 15,600 Teva Pharmaceutical Industries Ltd. ADR $673,140 ----------- ITALY -- 4.2% 54,211 ENI SpA 1,230,079 14,344 Finmeccanica SpA 179,693 86,000 Intesa Sanpaolo SpA 260,051 44,062 Saipem SpA 686,895 ----------- 2,356,718 ----------- JAPAN -- 14.2% 8,700 Benesse Corp. 368,154 6,800 Canon, Inc. 202,335 12,400 FamilyMart Co. Ltd. 505,189 4,500 FAST RETAILING CO. LTD. 516,560 13,900 Honda Motor Co. Ltd. 305,526 107,100 iShares MSCI Japan Index Fund 927,486 31,000 Japan Steel Works Ltd. (The) 318,649 17,700 Konami Corp. 401,173 14,900 Kurita Water Industries Ltd. 352,676 10,300 Mitsubishi Corp. 128,109 3,100 Nintendo Co. Ltd. 959,576 900 Rakuten, Inc. 492,366 8,000 Shiseido Co. Ltd. 148,790 324 Sony Financial Holdings, Inc. 958,332 100 Sumitomo Mitsui Financial Group, Inc. 366,845 8,600 Terumo Corp. 399,380 45,000 Tokyo Gas Co. Ltd. 202,723 5,300 Unicharm Corp. 365,928 ----------- 7,919,797 ----------- LUXEMBOURG -- 0.2% 3,300 Millicom International Cellular SA 126,489 ----------- MULTI-NATIONAL -- 0.9% 12,400 iShares MSCI EAFE Growth Index Fund 517,948 ----------- NETHERLANDS -- 3.4% 9,500 ASML Holding NV 144,935 75,100 Koninklijke Ahold NV 838,315 59,600 Koninklijke KPN NV 824,280 4,700 Unilever NV CVA 109,903 ----------- 1,917,433 ----------- PEOPLE'S REPUBLIC OF CHINA -- 1.2% 153,000 China Communications Construction Co. Ltd. H Shares 163,915 295,000 China Merchants Bank Co. Ltd. H Shares 473,744 ----------- 637,659 ----------- Shares Value SINGAPORE -- 0.5% 33,000 United Overseas Bank Ltd. $286,600 ----------- SOUTH KOREA -- 0.4% 5,300 Hyundai Motor Co. 149,908 200 Samsung Electronics Co. Ltd. 66,153 ----------- 216,061 ----------- SPAIN -- 3.8% 68,625 Banco Santander SA(1) 564,425 41,191 Cintra Concesiones de Infraestructuras de Transporte SA 329,234 28,200 Indra Sistemas SA 576,785 31,800 Telefonica SA 645,803 ----------- 2,116,247 ----------- SWEDEN -- 0.2% 2,500 H & M Hennes & Mauritz AB B Shares 92,057 ----------- SWITZERLAND -- 9.6% 22,515 ABB Ltd.(1) 290,922 5,100 Credit Suisse Group AG 149,699 6,200 EFG International AG 99,044 18,800 Julius Baer Holding AG 621,081 3,200 Lonza Group AG 264,714 34,400 Nestle SA 1,244,337 20,165 Novartis AG 942,619 5,066 Roche Holding AG 712,284 400 SGS SA 342,648 3,807 Syngenta AG 677,159 ----------- 5,344,507 ----------- TAIWAN (REPUBLIC OF CHINA) -- 0.7% 117,599 AU Optronics Corp. 71,645 98,900 Hon Hai Precision Industry Co. Ltd. 192,103 16,900 Taiwan Semiconductor Manufacturing Co. Ltd. ADR 120,835 ----------- 384,583 ----------- UNITED KINGDOM -- 21.9% 23,876 Admiral Group plc 362,598 16,500 Aggreko plc 114,269 17,700 AMEC plc 143,823 3,599 Anglo American plc 85,591 20,400 AstraZeneca plc 770,864 25,472 Autonomy Corp. plc(1) 367,096 39,200 BAE Systems plc 215,475 95,231 BG Group plc 1,363,761 89,468 British Sky Broadcasting Group plc 609,978 11,586 Burberry Group plc 36,888 16,200 Cadbury plc 137,320 - ------ 12 NT International Growth Shares Value 50,801 Capita Group plc (The) $544,717 125,460 Cobham plc 344,396 124,600 Compass Group plc 590,983 39,672 GlaxoSmithKline plc 687,274 44,008 HSBC Holdings plc 472,978 28,400 International Power plc 113,063 96,520 Man Group plc 375,891 16,800 Next plc 288,010 22,508 Reckitt Benckiser Group plc 955,242 61,698 Reed Elsevier plc 513,015 42,500 Scottish and Southern Energy plc 720,496 81,800 Stagecoach Group plc 221,070 20,700 Standard Chartered plc 270,611 6,824 Standard Chartered plc Rights(1) 43,030 195,382 Tesco plc 886,677 94,300 TUI Travel plc 308,319 349,500 Vodafone Group plc 682,810 ----------- 12,226,245 ----------- TOTAL COMMON STOCKS & RIGHTS (Cost $72,321,206) 55,485,413 ----------- Temporary Cash Investments -- 0.7% Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $407,480), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $400,007) (Cost $400,000) 400,000 ----------- TOTAL INVESTMENT SECURITIES -- 100.0% (Cost $72,721,206) $55,885,413 ----------- OTHER ASSETS AND LIABILITIES(2) (25,758) ----------- TOTAL NET ASSETS -- 100.0% $55,859,655 =========== Market Sector Diversification (as a % of net assets) Financials 19.2% Health Care 13.2% Consumer Discretionary 11.3% Consumer Staples 10.7% Industrials 9.8% Energy 9.0% Information Technology 8.0% Telecommunication Services 6.3% Materials 5.7% Utilities 3.5% Diversified 2.6% Cash and Equivalents* 0.7% *Includes temporary cash investments and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt CVA = Certificaten Van Aandelen EAFE = Europe, Australasia, and Far East MSCI = Morgan Stanley Capital International (1) Non-income producing. (2) Category is less than 0.05% of total net assets. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 13 NT Emerging Markets NOVEMBER 30, 2008 Shares Value Common Stocks -- 96.9% BRAZIL -- 12.9% 25,200 ALL - America Latina Logistica SA $ 122,521 22,000 Banco Bradesco SA, preference shares 233,684 13,249 Dufry South America Ltd. BDR 73,111 12,200 Global Village Telecom Holding SA(1) 138,017 17,200 Lupatech SA(1) 137,395 22,000 Natura Cosmeticos SA 199,486 34,928 Petroleo Brasileiro SA ADR 731,392 29,750 Redecard SA 345,549 26,300 Tractebel Energia SA 219,853 34,200 Unibanco-Uniao de Bancos Brasileiros SA 218,111 20,350 Vivo Particpacoes SA ADR, preference shares 252,544 ----------- 2,671,663 ----------- CHILE -- 0.6% 20,300 Cia Cervecerias Unidas SA 113,567 ----------- CZECH REPUBLIC -- 4.2% 6,500 CEZ AS 258,022 2,100 Komercni Banka AS 315,568 13,600 Telefonica O2 Czech Republic AS 295,903 ----------- 869,493 ----------- HONG KONG -- 5.0% 13,800 China Mobile Ltd. ADR 632,454 495,000 CNOOC Ltd. 405,363 ----------- 1,037,817 ----------- HUNGARY -- 1.6% 69,200 Magyar Telekom Telecommuncations plc 204,812 900 Richter Gedeon Nyrt 120,962 ----------- 325,774 ----------- INDIA -- 6.4% 24,500 Dr. Reddys Laboratories Ltd. 210,448 175,100 Power Finance Corp. Ltd. 390,447 209,600 Power Grid Corp. of India Ltd. 310,225 69,600 Rolta India Ltd. 239,800 10,000 United Spirits Ltd.(1) 171,165 ----------- 1,322,085 ----------- INDONESIA -- 1.7% 1,108,500 PT Bank Central Asia Tbk 249,637 443,000 PT Bumi Resources Tbk 36,365 412,000 PT Perusahaan Gas Negara 63,381 ----------- 349,383 ----------- Shares Value ISRAEL -- 2.0% 9,600 Teva Pharmaceutical Industries Ltd. ADR $ 414,240 ----------- LUXEMBOURG -- 0.2% 2,200 Tenaris SA ADR 46,266 ----------- MALAYSIA -- 0.6% 602,200 SapuraCrest Petroleum Bhd 121,745 ----------- MEXICO -- 3.0% 7,700 America Movil, SAB de CV ADR, Series L 231,000 16,800 Desarrolladora Homex SAB de CV(1) 45,422 157,900 Grupo Financiero Banorte, SAB de CV, Class O 245,772 40,900 Grupo Modelo SAB de CV 103,861 ----------- 626,055 ----------- MULTI-NATIONAL -- 3.7% 33,200 iShares MSCI Emerging Markets Index Fund 762,272 ----------- PEOPLE'S REPUBLIC OF CHINA -- 15.7% 729,500 Asia Cement China Holdings Corp.(1) 320,939 300,000 China Construction Bank Corp., H Shares 156,771 257,000 China High Speed Transmission Equipment Group Co. Ltd. 203,112 93,000 China Merchants Bank Co. Ltd. H Shares 149,350 102,500 China Railway Construction Corp., H Shares(1) 139,094 851,285 China South Locomotive & Rolling Stock Corp. H Shares(1) 359,206 247,000 China Yurun Food Group Ltd. 274,900 1,082,000 Industrial & Commercial Bank of China Ltd. H Shares 532,174 13,400 Mindray Medical International Ltd. ADR 242,272 6,200 New Oriental Education & Technology Group ADR(1) 319,982 133,500 Parkson Retail Group Ltd. 123,610 30,800 Tencent Holdings Ltd. 169,588 654,000 Want Want China Holdings Ltd. 266,217 ----------- 3,257,215 ----------- PERU -- 1.8% 8,600 Credicorp Ltd. 375,820 ----------- POLAND -- 4.1% 146,400 Polskie Gornictwo Naftowe I Gazownictwo SA 174,097 - ------ 14 NT Emerging Markets Shares Value 27,800 Powszechna Kasa Oszczednosci Bank Polski SA $ 302,080 56,600 Telekomunikacja Polska SA 371,299 ----------- 847,476 ----------- RUSSIAN FEDERATION -- 4.3% 36,383 Globaltrans Investment plc GDR(1) 81,241 24,900 OAO Gazprom ADR 437,223 4,200 OAO LUKOIL 135,600 17,901 OJSC Pharmstandard GDR(1) 169,919 11,773 X5 Retail Group NV GDR(1) 64,208 ----------- 888,191 ----------- SINGAPORE -- 1.2% 133,000 Wilmar International Ltd. 243,082 ----------- SOUTH AFRICA -- 7.4% 64,782 Aspen Pharmacare Holdings Ltd.(1) 241,685 7,900 MTN Group Ltd. 82,578 20,500 Naspers Ltd., Class N 315,747 16,600 Sasol Ltd. 476,716 28,900 Shoprite Holdings Ltd. 130,088 12,100 Tiger Brands Ltd. 163,726 41,300 Truworths International Ltd. 130,058 ----------- 1,540,598 ----------- SOUTH KOREA -- 10.6% 1,100 DC Chemical Co. Ltd. 151,044 1,900 Hite Brewery Co. Ltd.(1) 234,076 7,960 Korean Reinsurance Co. 48,520 8,900 KT Freetel Co. Ltd.(1) 172,717 900 LG Household & Health Care Ltd. 102,492 1,700 Nong Shim Co. Ltd. 261,074 1,400 Samsung Electronics Co. Ltd. 463,072 3,300 Samsung Fire & Marine Insurance Co. Ltd. 435,587 2,200 Yuhan Corp. 319,848 ----------- 2,188,430 ----------- Shares Value TAIWAN (REPUBLIC OF CHINA) -- 7.0% 94,000 Acer, Inc. $ 119,973 150,267 Asia Cement Corp. 121,867 60,050 Hon Hai Precision Industry Co. Ltd. 116,641 46,190 MediaTek, Inc. 307,818 121,000 President Chain Store Corp. 285,147 350,194 Taiwan Semiconductor Manufacturing Co. Ltd. 432,215 113,000 Wistron Corp. 75,243 ----------- 1,458,904 ----------- THAILAND -- 0.5% 84,000 Kasikornbank PCL NVDR 101,684 ----------- TURKEY -- 2.0% 33,000 Anadolu Efes Biracilik Ve Malt 259,998 109,100 Turkiye Garanti Bankasi AS(1) 160,558 ----------- 420,556 ----------- UNITED KINGDOM -- 0.4% 12,000 Antofagasta plc 80,379 ----------- TOTAL COMMON STOCKS (Cost $27,596,091) 20,062,695 ----------- Temporary Cash Investments -- 2.0% 18,099 JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares 18,099 Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.75%, 2/15/37, valued at $407,480), in a joint trading account at 0.20%, dated 11/28/08, due 12/1/08 (Delivery value $400,007) 400,000 ----------- TOTAL TEMPORARY CASH INVESTMENTS (Cost $418,099) 418,099 ----------- TOTAL INVESTMENT SECURITIES -- 98.9% (Cost $28,014,190) 20,480,794 ----------- OTHER ASSETS AND LIABILITIES -- 1.1% 233,861 ----------- TOTAL NET ASSETS -- 100.0% $20,714,655 =========== - ------ 15 Market Sector Diversification (as a % of net assets) Financials 20.7% Consumer Staples 13.9% Energy 12.4% Telecommunication Services 11.4% Information Technology 9.4% Health Care 8.3% Industrials 5.1% Consumer Discretionary 4.7% Utilities 4.1% Diversified 3.7% Materials 3.2% Cash and Equivalents* 3.1% *Includes temporary cash investments, and other assets and liabilities. Notes to Schedule of Investments ADR = American Depositary Receipt BDR = Brazilian Depositary Receipt GDR = Global Depositary Receipt MSCI = Morgan Stanley Capital International NVDR = Non-Voting Depositary Receipt OJSC = Open Joint Stock Company (1) Non-income producing. Geographic classifications and market sector diversification are unaudited. See Notes to Financial Statements. - ------ 16 STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 2008 NT International NT Emerging Growth Markets ASSETS Investment securities, at value (cost of $72,721,206 and $28,014,190, respectively) $55,885,413 $20,480,794 Cash 34,747 15,808 Foreign currency holdings, at value (cost of $85,477 and $199,536, respectively) 83,314 199,493 Receivable for investments sold 1,056,808 397,157 Receivable for capital shares sold 97,495 40,161 Dividends and interest receivable 156,614 35,938 Other assets 3,674 1,173 ------------- ------------- 57,318,065 21,170,524 ------------- ------------- LIABILITIES Payable for investments purchased 1,391,831 427,052 Payable for capital shares redeemed 11,819 1,459 Accrued management fees 54,760 27,358 ------------- ------------- 1,458,410 455,869 ------------- ------------- NET ASSETS $55,859,655 $20,714,655 ------------- ------------- INSTITUTIONAL CLASS CAPITAL SHARES, $0.01 PAR VALUE Authorized 50,000,000 50,000,000 ============= ============= Outstanding 8,882,289 4,047,658 ============= ============= NET ASSET VALUE PER SHARE $6.29 $5.12 ============= ============= NET ASSETS CONSIST OF: Capital (par value and paid-in surplus) $84,454,635 $35,645,229 Undistributed net investment income 1,000,779 143,450 Accumulated net realized loss on investment and foreign currency transactions (12,754,828) (7,538,568) Net unrealized depreciation on investments and translation of assets and liabilities in foreign currencies (16,840,931) (7,535,456) ------------- ------------- $55,859,655 $20,714,655 ============= ============= See Notes to Financial Statements. - ------ 17 STATEMENT OF OPERATIONS YEAR ENDED NOVEMBER 30, 2008 NT International NT Emerging Growth Markets INVESTMENT INCOME (LOSS) INCOME: Dividends (net of foreign taxes withheld of $146,325 and $53,059, respectively) $ 1,726,495 $ 615,657 Interest 25,932 21,043 Securities lending, net 31,223 11,436 ------------- ------------- 1,783,650 648,136 ------------- ------------- EXPENSES: Management fees 717,091 352,976 Directors' fees and expenses 1,788 668 Other expenses 7,535 13,263 ------------- ------------- 726,414 366,907 ------------- ------------- NET INVESTMENT INCOME (LOSS) 1,057,236 281,229 ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) NET REALIZED GAIN (LOSS) ON: Investment transactions (net of foreign taxes accrued of $16,180 and $38,475, respectively) (13,214,006) (6,583,070) Foreign currency transactions 673,201 (993,285) ------------- ------------- (12,540,805) (7,576,355) ------------- ------------- CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON: Investments (net of foreign taxes accrued of $51,314 and $81,551, respectively) (20,641,079) (12,098,167) Translation of assets and liabilities in foreign currencies (8,885,520) (2,740,251) ------------- ------------- (29,526,599) (14,838,418) ------------- ------------- NET REALIZED AND UNREALIZED GAIN (LOSS) (42,067,404) (22,414,773) ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(41,010,168) $(22,133,544) ============= ============= See Notes to Financial Statements. - ------ 18 STATEMENT OF CHANGES IN NET ASSETS YEARS ENDED NOVEMBER 30, 2008 AND NOVEMBER 30, 2007 NT International Growth NT Emerging Markets Increase (Decrease) in Net Assets 2008 2007 2008 2007 OPERATIONS Net investment income (loss) $ 1,057,236 $ 643,847 $ 281,229 $ 249,461 Net realized gain (loss) (12,540,805) 2,689,810 (7,576,355) 3,942,328 Change in net unrealized appreciation (depreciation) (29,526,599) 8,697,350 (14,838,418) 5,011,164 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations (41,010,168) 12,031,007 (22,133,544) 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 47,294,600 25,863,755 25,420,763 10,699,873 Proceeds from shares redeemed (16,124,105) (16,433,430) (6,777,463) (11,235,649) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from capital share transactions 31,170,495 9,430,325 18,643,300 (535,776) ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS (11,843,257) 21,323,279 (7,663,716) 8,534,231 NET ASSETS Beginning of period 67,702,912 46,379,633 28,378,371 19,844,140 ------------ ------------ ------------ ------------ End of period $55,859,655 $67,702,912 $20,714,655 $28,378,371 ============ ============ ============ ============ Undistributed net investment income $1,000,779 $569,114 $143,450 $218,538 ============ ============ ============ ============ TRANSATIONS IN SHARES OF THE FUNDS Sold 4,992,480 2,284,414 2,804,035 836,418 Redeemed (1,433,404) (1,444,625) (508,834) (886,517) ------------ ------------ ------------ ------------ Net increase (decrease) in shares of the funds 3,559,076 839,789 2,295,201 (50,099) ============ ============ ============ ============ See Notes to Financial Statements. - ------ 19 NOTES TO FINANCIAL STATEMENTS NOVEMBER 30, 2008 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. - ------ 20 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. The funds have adopted the provisions of Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes--an interpretation of FASB Statement No. 109" during the current fiscal year. All tax years for the funds remain subject to examination by tax authorities. Additionally, non-U.S. tax returns filed by the funds due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for 7 years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and 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 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 ACGIM. 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 each fund's assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of NT International Growth and NT Emerging Markets include the assets of International Growth Fund and Emerging Markets Fund, respectively, two funds in a series issued by the corporation. The annual management fee schedule for NT International Growth ranges from 0.90% to 1.30%. The annual management fee schedule for NT Emerging Markets ranges from 1.05% to 1.65%. The effective annual management fee for NT International Growth and NT Emerging Markets for the year ended November 30, 2008 was 1.10% and 1.46%, respectively. ACGIM has entered into a Subadvisory Agreement with ACIM (the subadvisor) on behalf of the funds. The subadvisor makes investment decisions for the cash portion of the funds in accordance with the funds' investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM pays all costs associated with retaining ACIM as the subadvisor of the funds. OTHER EXPENSES -- The impact of total other expenses, including certain 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 0.06% 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 fund and a wholly owned subsidiary of JPM. 3. INVESTMENT TRANSACTIONS Investment transactions, excluding short-term investments, for the year ended November 30, 2008, were as follows: NT International Growth NT Emerging Markets Purchases $107,272,589 $52,551,586 Proceeds from sales $77,073,865 $37,223,278 - ------ 22 4. SECURITIES LENDING As of November 30, 2008, the funds did not have any securities on loan. JPMCB receives and maintains collateral in the form of cash and/or acceptable securities as approved by ACIM. Cash collateral is invested in authorized investments by the lending agent in a pooled account. The value of cash collateral received at period end is disclosed in the Statement of Assets and Liabilities and investments made with the cash by the lending agent are listed in the Schedule of Investments. Any deficiencies or excess of collateral must be delivered or transferred by the member firms no later than the close of business on the next business day. The 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. Investment made with cash collateral may decline in value. 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 November 30, 2008: Value of Investment Fund/Valuation Inputs Securities NT INTERNATIONAL GROWTH Level 1 -- Quoted Prices $ 4,435,740 Level 2 -- Other Significant Observable Inputs 51,449,673 Level 3 -- Significant Unobservable Inputs -- -------------- $55,885,413 ============== NT EMERGING MARKETS Level 1 -- Quoted Prices $ 3,773,797 Level 2 -- Other Significant Observable Inputs 16,706,997 Level 3 -- Significant Unobservable Inputs -- -------------- $20,480,794 ============== 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 line expired December 10, 2008 and was not renewed. The funds did not borrow from either line during the year ended November 30, 2008. - ------ 23 7. INTERFUND LENDING The funds, along with certain other funds managed by ACIM or ACGIM, may participate in an interfund lending program, pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC). This program provides an alternative credit facility allowing the funds to borrow from or lend to other funds in the American Century Investments family of funds that permit such transactions. During the year ended November 30, 2008, the funds did not utilize the program. 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 On December 16, 2008, NT International Growth declared and paid a $0.1081 per-share distribution from net investment income to Institutional Class shareholders of record on December 15, 2008. The tax character of distributions paid during the years ended November 30, 2008 and November 30, 2007 were as follows: NT International Growth NT Emerging Markets 2008 2007 2008 2007 DISTRIBUTIONS PAID FROM Ordinary income $1,139,053 $138,053 $2,352,219 $132,946 Long-term capital gains $864,531 -- $1,821,253 -- The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements. As of November 30, 2008, the components of distributable earnings on a tax-basis and the federal tax cost of investments were as follows: NT International NT Emerging Growth Market Federal tax cost of investments $75,796,162 $29,785,176 ============= ============= Gross tax appreciation of investments $ 570,763 $ 146,858 Gross tax depreciation of investments (20,481,512) (9,451,240) ------------- ------------- Net tax appreciation (depreciation) of investments $(19,910,749) $(9,304,382) ============= ============= Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies $ (5,549) $ (2,059) Net tax appreciation (depreciation) $(19,916,298) $(9,306,441) ============= ============= Undistributed ordinary income $1,008,514 $152,236 Accumulated capital losses $(6,493,005) $(3,303,739) Capital loss deferrals $(3,194,191) $(2,463,844) Currency loss deferrals -- $(8,786) The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales, the realization for tax purposes of unrealized gains on certain forward foreign currency exchange contracts and on investments in passive foreign investment companies. The accumulated capital losses listed above represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. The capital loss carryovers expire in 2016. - ------ 24 The capital and currency loss deferrals listed above for the funds represent net capital and foreign currency losses incurred in the one-month period ended November 30, 2008. 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 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 did 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 interim periods 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. 11. OTHER TAX INFORMATION (UNAUDITED) The following information is provided pursuant to provisions of the Internal Revenue Code. The funds hereby designate up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2008. For corporate taxpayers, the funds hereby designate the following ordinary income distributions paid during the fiscal year ended November 30, 2008, or up to the maximum amount allowable, as qualified for the corporate dividends received deduction. NT International Growth NT Emerging Markets $624 $10,284 The funds hereby designate the following long-term capital gain distributions or up to the maximum amount allowable, for the fiscal year ended November 30, 2008. NT International Growth NT Emerging Markets $864,531 $1,821,253 The funds hereby designate the following distributions as qualified short-term capital gains for purposes of Internal Revenue Code Section 871. NT International Growth NT Emerging Markets $553,591 $2,059,211 As of November 30, 2008, the funds designate the following as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possession of the United States. NT International Growth NT Emerging Markets $146,325 $53,059 - ------ 25 FINANCIAL HIGHLIGHTS NT International Growth For a Share Outstanding Throughout the Years Ended November 30 (except as noted) 2008 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $12.72 $10.34 $10.00 -------- ------- -------- Income From Investment Operations Net Investment Income (Loss) 0.16(2) 0.12 0.03 Net Realized and Unrealized Gain (Loss) (6.18) 2.29 0.31 -------- ------- -------- Total From Investment Operations (6.02) 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 $6.29 $12.72 $10.34 ======== ======= ======== TOTAL RETURN(3) (48.82)% 23.40% 3.40% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.12% 1.07% 1.07%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.62% 1.15% 0.59%(4) Portfolio Turnover Rate 119% 104% 65% Net Assets, End of Period (in thousands) $55,860 $67,703 $46,380 (1) May 12, 2006 (fund inception) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (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 2007 2006(1) PER-SHARE DATA Net Asset Value, Beginning of Period $16.19 $11.01 $10.00 -------- ------- -------- Income From Investment Operations Net Investment Income (Loss) 0.11(2) 0.15 0.07 Net Realized and Unrealized Gain (Loss) (8.52) 5.12 0.94 -------- ------- -------- Total From Investment Operations (8.41) 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 $5.12 $16.19 $11.01 ======== ======= ======== TOTAL RETURN(3) (61.75)% 48.22% 10.10% RATIOS/SUPPLEMENTAL DATA Ratio of Operating Expenses to Average Net Assets 1.52% 1.46% 1.60%(4) Ratio of Net Investment Income (Loss) to Average Net Assets 1.17% 1.12% 1.68%(4) Portfolio Turnover Rate 157% 113% 59% Net Assets, End of Period (in thousands) $20,715 $28,378 $19,844 (1) May 12, 2006 (fund inception) through November 30, 2006. (2) Computed using average shares outstanding throughout the period. (3) Total return assumes reinvestment of net investment income and capital gains distributions, if any. Total returns for periods less than one year are not annualized. (4) Annualized. See Notes to Financial Statements. - ------ 27 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders, American Century World Mutual Funds, Inc.: We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of NT International Growth Fund and NT Emerging Markets Fund, two of the funds constituting American Century World Mutual Funds, Inc. (the "Corporation"), as of November 30, 2008, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period May 12, 2006 (inception of the funds) through November 30, 2006. These financial statements and financial highlights are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2008, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the respective financial positions of NT International Growth Fund and NT Emerging Markets Fund, two of the funds constituting American Century World Mutual Funds, Inc., as of November 30, 2008, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period May 12, 2006 through November 30, 2006, in conformity with accounting principles generally accepted in the United States of America. Deloitte & Touche LLP Kansas City, Missouri January 14, 2009 - ------ 28 MANAGEMENT The individuals listed below serve as directors or officers of the funds. Each director serves until his or her successor is duly elected and qualified or until he or she retires. Mandatory retirement age for independent directors is 72. Those listed as interested directors are "interested" primarily by virtue of their engagement as directors and/or officers of, or ownership interest in, American Century Companies, Inc. (ACC) or its wholly owned, direct or indirect, subsidiaries, including the funds' investment advisor, American Century Global Investment Management, Inc. (ACGIM) or American Century Investment Management, Inc. (ACIM); the funds' principal underwriter, American Century Investment Services, Inc. (ACIS); and the funds' transfer agent, American Century Services, LLC (ACS). The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACGIM, ACIM, ACIS and ACS. The directors serve in this capacity for seven registered investment companies in the American Century Investments family of funds. All persons named as officers of the funds also serve in similar capacities for the other 14 investment companies in the American Century Investments family of funds advised by ACGIM or ACIM, unless otherwise noted. Only officers with policy-making functions are listed. No officer is compensated for his or her service as an officer of the funds. The listed officers are interested persons of the funds and are appointed or re-appointed on an annual basis. INTERESTED DIRECTORS JAMES E. STOWERS, JR., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1924 POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JONATHAN S. THOMAS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1963 POSITION(S) HELD WITH FUNDS: Director (since 2007) and President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: President, Chief Executive Officer and Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM, ACGIM, ACIS and other ACC subsidiaries. Managing Director, Morgan Stanley (March 2000 to November 2005) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 111 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None - ------ 29 INDEPENDENT DIRECTORS THOMAS A. BROWN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1940 POSITION(S) HELD WITH FUNDS: Director (since 1980) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated Investments, LLC (real estate investment company); Managing Member, Brown Cascade Properties, LLC (real estate investment company); Retired, Area Vice President, Applied Industrial Technologies (bearings and power transmission company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None ANDREA C. HALL, PH.D., 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1997) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the President, Midwest Research Institute (not-for-profit, contract research organization) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None JAMES A. OLSON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1942 POSITION(S) HELD WITH FUNDS: Director (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Saia, Inc. and Entertainment Properties Trust DONALD H. PRATT, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1937 POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board (since 2005) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company); Retired Chairman of the Board, Butler Manufacturing Company (metal buildings producer) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None GALE E. SAYERS, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1943 POSITION(S) HELD WITH FUNDS: Director (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive Officer and Founder, Sayers40, Inc. (technology products and services provider) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: None M. JEANNINE STRANDJORD, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1945 POSITION(S) HELD WITH FUNDS: Director (since 1994) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice President, Sprint Corporation (telecommunications company) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: DST Systems, Inc.; Euronet Worldwide, Inc. and Charming Shoppes, Inc. - ------ 30 JOHN R. WHITTEN, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1946 POSITION(S) HELD WITH FUNDS: Director (since 2008) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Project Consultant, Celanese Corp. (industrial chemical company) (September 2004 to January 2005); Chief Financial Officer, Vice President and Treasurer, Applied Industrial Technologies, Inc. (bearings and power transmission company) (1995 to 2003) NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 70 OTHER DIRECTORSHIPS HELD BY DIRECTOR: Rudolph Technologies, Inc. OFFICERS BARRY FINK, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1955 POSITION(S) HELD WITH FUNDS: Executive Vice President (since 2007) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Director, ACC, ACS, ACIS and other ACC subsidiaries MARYANNE ROEPKE, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1956 POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior Vice President (since 2000) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM, ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century Investments funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS CHARLES A. ETHERINGTON, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1957 POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice President (since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present); General Counsel, ACC (March 2007 to present). Also serves as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM, ACGIM and ACS ROBERT LEACH, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1966 POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial Officer (all since 2006) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February 2000 to present); Controller, various American Century Investments funds (1997 to September 2006) JON ZINDEL, 4500 Main Street, Kansas City, MO 64111 YEAR OF BIRTH: 1967 POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998) PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October 2001 to present); Vice President, certain ACC subsidiaries (October 2001 to August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006). Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief Accounting Officer and Senior Vice President, ACIS The SAI has additional information about the funds' directors and is available without charge, upon request, by calling 1-800-345-2021. - ------ 31 APPROVAL OF MANAGEMENT AGREEMENTS NT International Growth and NT Emerging Markets Under Section 15(c) of the Investment Company Act, contracts for investment advisory services (including subadvisory services) are required to be reviewed, evaluated and approved by a majority of a fund's independent directors or trustees (the "Directors") each year. At American Century Investments, this process is referred to as the "15(c) Process." As a part of this process, the board reviews fund performance, shareholder services, audit and compliance information, and a variety of other reports from the advisor concerning fund operations. In addition to this annual review, the board of directors oversees and evaluates on a continuous basis at its quarterly meetings the nature and quality of significant services performed by the advisor and the subadvisor, fund performance, audit and compliance information, and a variety of other reports relating to fund operations. The board, or committees of the board, also holds special meetings as needed. Under a Securities and Exchange Commission rule, each fund is required to disclose in its annual or semiannual report, as appropriate, the material factors and conclusions that formed the basis for the board's approval or renewal of any advisory agreements within the fund's most recently completed fiscal half-year period. ANNUAL CONTRACT REVIEW PROCESS As part of the annual 15(c) Process undertaken during the most recent fiscal half-year period, the Directors reviewed extensive data and information compiled by the advisor and certain independent providers of evaluative data (the "15(c) Providers") concerning NT International Growth and NT Emerging Markets (the "Funds") and the services provided to the Funds under the management and subadvisory agreements. The information considered and the discussions held at the meetings included, but were not limited to: * the nature, extent and quality of investment management, shareholder services and other services provided to the Funds; * reports on the wide range of programs and services the advisor provides to the Funds and their shareholders on a routine and non-routine basis; * information about the compliance policies, procedures, and regulatory experience of both the advisor and the subadvisor; * data comparing the cost of owning the Funds to the cost of owning a similar fund; * data comparing the Funds' performance to appropriate benchmarks and/or a peer group of other mutual funds with similar investment objectives and strategies; * financial data showing the profitability of the Funds to the advisor and the overall profitability of the advisor; and * data comparing services provided and charges to other investment management clients of the advisor. In keeping with its practice, the Funds' board of directors held two in-person meet- ings and one telephonic meeting to review and discuss the information provided. The board also had the benefit of the advice of its independent counsel throughout the period. - ------ 32 FACTORS CONSIDERED The Directors considered all of the information provided by the advisor, the 15(c) Providers, and the board's independent counsel, and evaluated such information for each fund for which the board has responsibility. In connection with their review of the Funds, the Directors did not identify any single factor as being all-important or controlling, and each Director may have attributed different levels of importance to different factors. In deciding to renew the management and subadvisory agreements under the terms ultimately determined by the board to be appropriate, the Directors' decision was based on the following factors. NATURE, EXTENT AND QUALITY OF SERVICES -- GENERALLY. Under the management agreement, the advisor is responsible for providing or arranging for all services necessary for the operation of the Funds. The board noted that under the manage-ment agreement, the advisor provides or arranges at its own expense a wide variety of services including: * Fund construction and design * portfolio security selection * initial capitalization/funding * securities trading * custody of Fund assets * daily valuation of the each Fund's portfolio * shareholder servicing and transfer agency, including shareholder confirmations, recordkeeping and communications * legal services * regulatory and portfolio compliance * financial reporting * marketing and distribution The Directors noted that many of the services provided by the advisor have expanded over time both in terms of quantity and complexity in response to shareholder demands, competition in the industry and the changing regulatory environment. The directors specifically noted that with respect to the Funds, the advisor had retained the subadvisor to provide the day-to-day cash management services. In performing their evaluation, the Directors considered information received in connection with the annual review, as well as information provided on an ongoing basis at their regularly scheduled board and committee meetings. INVESTMENT MANAGEMENT SERVICES. The nature of the investment management services provided to the Funds is quite complex and allows Fund shareholders access to professional money management, instant diversification of their investments, and liquidity. In evaluating investment performance, the board expects the advisor and subadvisor to manage the Funds in accordance with their investment objectives and approved strategies. In providing these services, the advisor and subadvisor utilize - ------ 33 teams of investment professionals (portfolio managers, analysts, research assistants, and securities traders) who require extensive information technology, research, training, compliance and other systems to conduct their business. At each quarterly meeting the Directors review investment performance information for the Funds, together with comparative information for appropriate benchmarks and peer groups of funds managed similarly to the Funds. The Directors also review detailed performance information during the 15(c) Process comparing each Fund's performance with that of similar funds not managed by the advisor. If performance concerns are identified, the Directors discuss with the advisor the reasons for such results (e.g., market conditions, security selection) and any efforts being undertaken to improve performance. Each Fund's performance for both the one- and three-year periods was above the median for its peer group. SHAREHOLDER AND OTHER SERVICES. The advisor provides the Funds with a comprehensive package of transfer agency, shareholder, and other services. The Directors review reports and evaluations of such services at their regular quarterly meetings, including the annual meeting concerning contract review, and reports to the board. These reports include, but are not limited to, information regarding the operational efficiency and accuracy of the shareholder and transfer agency services provided, staffing levels, shareholder satisfaction (as measured by external as well as internal sources), technology support, new products and services offered to Fund shareholders, securities trading activities, portfolio valuation services, auditing services, and legal and operational compliance activities. Certain aspects of shareholder and transfer agency service level efficiency and the quality of securities trading activities are measured by independent third party providers and are presented in comparison to other fund groups not managed by the advisor. COSTS OF SERVICES PROVIDED AND PROFITABILITY. The advisor provides detailed information concerning its cost of providing various services to the Funds, its profitability in managing the Funds, its overall profitability, and its financial condition. The Directors have reviewed with the advisor the methodology used to prepare this financial information. This financial information regarding the advisor is considered in order to evaluate the advisor's financial condition, its ability to continue to provide services under the management agreement, and the reasonableness of the current management fee. The board concluded that the advisor's profits were reasonable in light of the services provided to the Funds. The board did not consider the profitability of the subadvisor because the subadvisor is paid from the unified fee of the advisor as a result of arm's length negotiations. ETHICS. The Directors generally consider the advisor's commitment to providing quality services to shareholders and to conducting its business ethically. They noted that the advisor's practices generally meet or exceed industry best practices. With respect to the subadvisor, as part of its oversight responsibilities, the board approves the subadvisor's code of ethics and any changes thereto. Further, through the advisor's compliance group, the board stays abreast of any violations of the subadvisor's code. ECONOMIES OF SCALE. The Directors review reports provided by the advisor on economies of scale for the complex as a whole and the year-over-year changes in revenue, costs, and profitability. The Directors concluded that economies of scale are difficult to measure and predict with precision, especially on a fund-by-fund basis. This analysis is also complicated by the additional services and content provided by the advisor and its reinvestment in its ability to provide and expand those services. Accordingly, the Directors also seek to evaluate economies of scale by reviewing other information, such as year-over-year profitability of the advisor generally, the profitability - ------ 34 of its management of the Funds specifically, the expenses incurred by the advisor in providing various functions to the Funds, and the fees of competitive funds not managed by the advisor. The Directors believe the advisor is appropriately sharing economies of scale through its competitive fee structure, fee breakpoints as each Fund increases in size, and through reinvestment in its business to provide shareholders additional content and services. COMPARISON TO OTHER FUNDS' FEES. The Funds pay the advisor a single, all-inclusive (or unified) management fee for providing all services necessary for the management and operation of the Funds, other than brokerage expenses, taxes, interest, extraordinary expenses, and the fees and expenses of each Fund's independent directors (including their independent legal counsel). The Directors specifically noted that the subadvisory fees paid to the subadvisor under the subadvisory agreement were subject to arm's length negotiation between the advisor and the subadvisor and are paid by the advisor out of its unified fee. Under the unified fee structure, the advisor is responsible for providing all investment advisory, custody, audit, administrative, compliance, recordkeeping, marketing and shareholder services, or arranging and supervising third parties to provide such services. By contrast, most other funds are charged a variety of fees, including an investment advisory fee, a transfer agency fee, an administrative fee, distribution charges and other expenses. Other than their investment advisory fees and Rule 12b-1 distribution fees, all other components of the total fees charged by these other funds may be increased without shareholder approval. The board believes the unified fee structure is a benefit to Fund shareholders because it clearly discloses to shareholders the cost of owning Fund shares, and, since the unified fee cannot be increased without a vote of Fund shareholders, it shifts to the advisor the risk of increased costs of operating the Funds and provides a direct incentive to minimize administrative inefficiencies. Part of the Directors' analysis of fee levels involves reviewing certain evaluative data compiled by a 15(c) Provider comparing each Fund's unified fee to the total expense ratio of other funds in the Fund's peer group. The unified fee charged to shareholders of NT Emerging Markets was below the median of the total expense ratios of its peer group. The unified fee charged to shareholders of NT International Growth was above the median of the total expense ratios of its peer group. The board concluded that the management fee paid by each Fund to the advisor was reasonable in light of the services provided to the Fund. COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The Directors also requested and received information from the advisor concerning the nature of the services, fees, and profitability of its advisory services to advisory clients other than the Funds. They observed that these varying types of client accounts require different services and involve different regulatory and entrepreneurial risks than the management of the Funds. The Directors analyzed this information and concluded that the fees charged and services provided to the Funds were reasonable by comparison. COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information from the advisor concerning collateral benefits it receives as a result of its relationship with the Funds. They concluded that the advisor's primary business is managing mutual funds and it generally does not use the Funds or shareholder information to generate profits in other lines of business, and therefore does not derive any significant collateral benefits from them. The Directors noted that the advisor receives proprietary research from broker-dealers that execute Fund portfolio transactions and concluded that this research is likely to benefit Fund shareholders. The Directors also determined - ------ 35 that the advisor is able to provide investment management services to certain clients other than the Funds, at least in part, due to its existing infrastructure built to serve the fund complex. The Directors concluded, however, that the assets of those other clients are not material to the analysis and, in any event, are included with the assets of the Funds to determine breakpoints in each Fund's fee schedule, provided they are managed using the same investment team and strategy. CONCLUSIONS OF THE DIRECTORS As a result of this process, the board, including all of the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor concluded that the investment management agreement between each Fund and the advisor is fair and reasonable in light of the services provided and should be renewed. Additionally, the board, including all the independent directors, in the absence of particular circumstances and assisted by the advice of legal counsel that is independent of the advisor, taking into account all of the factors discussed above and the information provided by the advisor, concluded that the subadvisory agreement between the advisor and the subadvisor, on behalf of each Fund, is fair and reasonable in light of the services provided and should be renewed. - ------ 36 ADDITIONAL INFORMATION RETIREMENT ACCOUNT INFORMATION As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans 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. 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. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information. 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. - ------ 37 INDEX DEFINITIONS The following indices are used to illustrate investment market, sector, or style performance or to serve as fund performance comparisons. They are not investment products available for purchase. Morgan Stanley Capital International (MSCI) has developed several indices that measure the performance of foreign stock markets. The MSCI EAFE (EUROPE, AUSTRALASIA, FAR EAST) INDEX is designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI EAFE GROWTH INDEX is a capitalization-weighted index that monitors the performance of growth stocks from Europe, Australasia, and the Far East. The MSCI EAFE VALUE INDEX is a capitalization-weighted index that monitors the performance of value stocks from Europe, Australasia, and the Far East. The MSCI EM (EMERGING MARKETS) INDEX represents the net performance of stocks in global emerging market countries. The MSCI EUROPE INDEX is designed to measure equity market performance in Europe. The MSCI JAPAN INDEX is designed to measure equity market performance in Japan. The MSCI WORLD FREE INDEX represents the performance of stocks in developed countries (including the United States) that are available for purchase by global investors. - ------ 38 [back cover] [american century investments logo and text logo ®] CONTACT US AMERICANCENTURY.COM AUTOMATED INFORMATION LINE . . . . . . . . . . . . . . . . 1-800-345-8765 1-800-345-2021 INVESTOR SERVICES REPRESENTATIVE . . . . . . . . . . . . . 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 ©2009 American Century Proprietary Holdings, Inc. All rights reserved. 0901 CL-ANN-63737N
ITEM 2. CODE OF ETHICS. (a) The registrant has adopted a Code of Ethics for Senior Financial Officers that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions. (b) No response required. (c) None. (d) None. (e) Not applicable. (f) The registrant's Code of Ethics for Senior Financial Officers was filed as Exhibit 12 (a)(1) to American Century Asset Allocation Portfolios, Inc.'s Annual Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005, and is incorporated herein by reference. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The registrant's board has determined that the registrant has at least one audit committee financial expert serving on its audit committee. (a)(2) John R. Whitten, Thomas A. Brown and Gale E. Sayers are the registrant's designated audit committee financial experts. They are "independent" as defined in Item 3 of Form N-CSR. (a)(3) Not applicable. (b) No response required. (c) No response required. (d) No response required. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit Fees. The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows: FY 2007: $236,908 FY 2008: $239,403 (b) Audit-Related Fees. The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item were as follows: For services rendered to the registrant: FY 2007: $0 FY 2008: $0 Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant's investment adviser and its affiliates): FY 2007: $0 FY 2008: $0 (c) Tax Fees. The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were as follows: For services rendered to the registrant: FY 2007: $3,941 FY 2008: $0 These services included review of federal and state income tax forms and federal excise tax forms related to fiscal year end 2006, of which some of the 2006 fiscal year end services were received in 2007. Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant's investment adviser and its affiliates): FY 2007: $0 FY 2008: $0 (d) All Other Fees. The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item were as follows: For services rendered to the registrant: FY 2007: $0 FY 2008: $0 Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant's investment adviser and its affiliates): FY 2007: $0 FY 2008: $0 (e)(1) In accordance with paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X, before the accountant is engaged by the registrant to render audit or non-audit services, the engagement is approved by the registrant's audit committee. Pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, the registrant's audit committee also pre-approves its accountant's engagements for non-audit services with the registrant's investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant. (e)(2) All services described in each of paragraphs (b) through (d) of this Item were pre-approved before the engagement by the registrant's audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X. Consequently, none of such services were required to be approved by the audit committee pursuant to paragraph (c)(7)(i)(C). (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than 50%. (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were as follows: FY 2007: $160,804 FY 2008: $ 93,552 (h) The registrant's investment adviser and accountant have notified the registrant's audit committee of all non-audit services that were rendered by the registrant's accountant to the registrant's investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides services to the registrant, which services were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The notification provided to the registrant's audit committee included sufficient details regarding such services to allow the registrant's audit committee to consider the continuing independence of its principal accountant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. 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) Registrant's Code of Ethics for Senior Financial Officers, which is the subject of the disclosure required by Item 2 of Form N-CSR, was filed as Exhibit 12(a)(1) to American Century Asset Allocation Portfolios, Inc.'s Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005. (a)(2) Separate certifications by the registrant's principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as Exhibit 99.302CERT. (a)(3) Not applicable. (b) A certification by the registrant's chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as Exhibit 99.906CERT.SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Registrant: AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. By: /s/ Jonathan S. Thomas --------------------------------------- Name: Jonathan S. Thomas Title: President Date: January 29, 2009 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Jonathan S. Thomas --------------------------------------- Name: Jonathan S. Thomas Title: President (principal executive officer) Date: January 29, 2009 By: /s/ Robert J. Leach --------------------------------------- Name: Robert J. Leach Title: Vice President, Treasurer, and Chief Financial Officer (principal financial officer) Date: January 29, 2009