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: | 5-31-2014 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | MAY 31, 2014 |
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Emerging Markets Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWMIX | 0.03%(2) | 1.75%(2) | 9.14%(2) | 10.35% | 6.85% | 9/30/97 |
MSCI Emerging Markets Index | — | 1.89% | 4.27% | 8.37% | 11.69% | N/A(3) | — |
Institutional Class | AMKIX | 0.09%(2) | 1.99%(2) | 9.35%(2) | 10.56% | 10.43% | 1/28/99 |
A Class(4) | AEMMX | 5/12/99 | |||||
No sales charge* | -0.04%(2) | 1.61%(2) | 8.87%(2) | 10.10% | 8.20% | ||
With sales charge* | -5.75%(2) | -4.28%(2) | 7.59%(2) | 9.45% | 7.78% | ||
C Class | ACECX | 12/18/01 | |||||
No sales charge* | -0.41%(2) | 0.83%(2) | 8.05%(2) | 9.25% | 9.34% | ||
With sales charge* | -1.41%(2) | 0.83%(2) | 8.05%(2) | 9.25% | 9.34% | ||
R Class | AEMRX | -0.23%(2) | 1.28%(2) | 8.59%(2) | — | -3.13%(2) | 9/28/07 |
R6 Class | AEDMX | 0.24%(2) | — | — | — | 7.70%(1)(2) | 7/26/13 |
* 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 and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the management fee had not been waived. |
(3) | Benchmark data first available January 2001. |
(4) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.72% | 1.52% | 1.97% | 2.72% | 2.22% | 1.37% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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.
3
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.7% |
Itau Unibanco Holding SA ADR | 3.3% |
Tencent Holdings Ltd. | 3.2% |
Samsung Electronics Co. Ltd. | 2.8% |
MediaTek, Inc. | 2.1% |
Cemex SAB de CV ADR | 1.7% |
Ping An Insurance Group Co. H Shares | 1.7% |
Hon Hai Precision Industry Co. Ltd. | 1.7% |
ENN Energy Holdings Ltd. | 1.6% |
Credicorp Ltd. | 1.5% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 97.8% |
Temporary Cash Investments | 3.5% |
Other Assets and Liabilities | (1.3)% |
Investments by Country | % of net assets |
China | 15.7% |
South Korea | 13.9% |
Taiwan | 12.1% |
Brazil | 11.6% |
South Africa | 7.1% |
Mexico | 7.1% |
India | 6.5% |
Russia | 4.2% |
Indonesia | 2.9% |
Turkey | 2.8% |
Thailand | 2.2% |
Other Countries | 11.7% |
Cash and Equivalents* | 2.2% |
*Includes temporary cash investments and other assets and liabilities.
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 – 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,000.30 | $7.28 | 1.46% |
Investor Class (before waiver) | $1,000 | $1,000.30(2) | $8.53 | 1.71% |
Institutional Class (after waiver) | $1,000 | $1,000.90 | $6.29 | 1.26% |
Institutional Class (before waiver) | $1,000 | $1,000.90(2) | $7.53 | 1.51% |
A Class (after waiver) | $1,000 | $999.60 | $8.52 | 1.71% |
A Class (before waiver) | $1,000 | $999.60(2) | $9.77 | 1.96% |
C Class (after waiver) | $1,000 | $995.90 | $12.24 | 2.46% |
C Class (before waiver) | $1,000 | $995.90(2) | $13.49 | 2.71% |
R Class (after waiver) | $1,000 | $997.70 | $9.76 | 1.96% |
R Class (before waiver) | $1,000 | $997.70(2) | $11.01 | 2.21% |
R6 Class (after waiver) | $1,000 | $1,002.40 | $5.54 | 1.11% |
R6 Class (before waiver) | $1,000 | $1,002.40(2) | $6.79 | 1.36% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,017.65 | $7.34 | 1.46% |
Investor Class (before waiver) | $1,000 | $1,016.41 | $8.60 | 1.71% |
Institutional Class (after waiver) | $1,000 | $1,018.65 | $6.34 | 1.26% |
Institutional Class (before waiver) | $1,000 | $1,017.40 | $7.59 | 1.51% |
A Class (after waiver) | $1,000 | $1,016.41 | $8.60 | 1.71% |
A Class (before waiver) | $1,000 | $1,015.16 | $9.85 | 1.96% |
C Class (after waiver) | $1,000 | $1,012.67 | $12.34 | 2.46% |
C Class (before waiver) | $1,000 | $1,011.42 | $13.59 | 2.71% |
R Class (after waiver) | $1,000 | $1,015.16 | $9.85 | 1.96% |
R Class (before waiver) | $1,000 | $1,013.91 | $11.10 | 2.21% |
R6 Class (after waiver) | $1,000 | $1,019.40 | $5.59 | 1.11% |
R6 Class (before waiver) | $1,000 | $1,018.15 | $6.84 | 1.36% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the management fee had not been waived. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 97.8% | |||||
BRAZIL — 11.6% | |||||
Anhanguera Educacional Participacoes SA | 634,200 | $ | 4,552,040 | ||
BB Seguridade Participacoes SA | 324,200 | 4,101,160 | |||
BRF SA ADR | 120,500 | 2,600,390 | |||
Cia Brasileira de Distribuicao Grupo Pao de Acucar ADR | 135,600 | 6,149,460 | |||
Cielo SA | 372,800 | 6,652,923 | |||
Hypermarcas SA | 472,800 | 3,834,654 | |||
Itau Unibanco Holding SA ADR | 950,615 | 14,734,533 | |||
Ultrapar Participacoes SA | 226,500 | 5,467,625 | |||
WEG SA | 383,110 | 4,490,679 | |||
52,583,464 | |||||
CANADA — 0.9% | |||||
Pacific Rubiales Energy Corp. | 217,370 | 4,247,967 | |||
CHILE — 0.9% | |||||
SACI Falabella | 426,171 | 3,979,065 | |||
CHINA — 15.7% | |||||
Brilliance China Automotive Holdings Ltd. | 2,086,000 | 3,460,097 | |||
China Oilfield Services Ltd. H Shares | 1,830,000 | 4,513,069 | |||
China Overseas Land & Investment Ltd. | 914,000 | 2,381,390 | |||
CIMC Enric Holdings Ltd. | 1,588,000 | 2,265,367 | |||
CNOOC Ltd. | 3,085,000 | 5,292,244 | |||
CSR Corp. Ltd. | 3,040,000 | 2,250,705 | |||
ENN Energy Holdings Ltd. | 1,028,000 | 7,272,819 | |||
Great Wall Motor Co. Ltd. H Shares | 706,500 | 2,897,826 | |||
Hengan International Group Co. Ltd. | 249,500 | 2,646,912 | |||
Industrial & Commercial Bank of China Ltd. H Shares | 9,022,645 | 5,865,397 | |||
Ping An Insurance Group Co. H Shares | 1,014,500 | 7,844,662 | |||
Shenzhou International Group Holdings Ltd. | 1,471,000 | 5,132,311 | |||
Tencent Holdings Ltd. | 1,042,000 | 14,689,970 | |||
Vipshop Holdings Ltd. ADR(1) | 27,284 | 4,438,015 | |||
70,950,784 | |||||
COLOMBIA — 1.3% | |||||
Cemex Latam Holdings SA(1) | 639,910 | 5,879,735 | |||
GREECE — 0.8% | |||||
OPAP SA | 213,190 | 3,621,000 | |||
HONG KONG — 0.5% | |||||
Qihoo 360 Technology Co. Ltd. ADR(1) | 24,150 | 2,217,694 | |||
INDIA — 6.5% | |||||
HCL Technologies Ltd. | 260,190 | 6,246,277 | |||
HDFC Bank Ltd. | 419,929 | 5,633,757 | |||
ICICI Bank Ltd. ADR | 54,380 | 2,701,055 | |||
ITC Ltd. | 1,078,524 | 6,237,698 |
7
Shares | Value | ||||
Larsen & Toubro Ltd. | 85,550 | $ | 2,237,562 | ||
Tata Motors Ltd. | 872,615 | 6,129,275 | |||
29,185,624 | |||||
INDONESIA — 2.9% | |||||
PT Bank Rakyat Indonesia (Persero) Tbk | 5,805,500 | 5,072,043 | |||
PT Matahari Department Store Tbk(1) | 3,302,000 | 4,108,056 | |||
PT Tower Bersama Infrastructure Tbk(1) | 6,262,000 | 4,116,561 | |||
13,296,660 | |||||
MALAYSIA — 1.8% | |||||
Axiata Group Bhd | 2,153,100 | 4,643,941 | |||
Sapurakencana Petroleum Bhd(1) | 2,598,700 | 3,372,729 | |||
8,016,670 | |||||
MEXICO — 7.1% | |||||
Alsea SAB de CV | 779,137 | 2,656,817 | |||
Cemex SAB de CV ADR(1) | 611,771 | 7,873,493 | |||
Gruma SAB de CV B Shares(1) | 359,490 | 3,747,151 | |||
Grupo Financiero Banorte SAB de CV | 710,136 | 5,186,067 | |||
Grupo Mexico SAB de CV | 1,235,050 | 4,063,518 | |||
Infraestructura Energetica Nova SAB de CV | 1,024,430 | 5,615,978 | |||
Promotora y Operadora de Infraestructura SAB de CV(1) | 224,735 | 3,138,931 | |||
32,281,955 | |||||
PERU — 1.5% | |||||
Credicorp Ltd. | 43,704 | 6,828,750 | |||
PHILIPPINES — 1.7% | |||||
SM Investments Corp. | 123,163 | 2,212,459 | |||
Universal Robina Corp. | 1,539,390 | 5,242,123 | |||
7,454,582 | |||||
POLAND — 1.6% | |||||
Alior Bank SA(1) | 109,470 | 3,012,459 | |||
Powszechny Zaklad Ubezpieczen SA | 30,189 | 4,441,856 | |||
7,454,315 | |||||
RUSSIA — 4.2% | |||||
Magnit OJSC GDR | 43,041 | 2,504,986 | |||
Mail.ru Group Ltd. GDR(1) | 66,675 | 2,269,617 | |||
MMC Norilsk Nickel OJSC ADR | 301,770 | 5,784,931 | |||
NovaTek OAO GDR | 35,832 | 4,156,512 | |||
Sberbank of Russia(1) | 993,502 | 2,406,281 | |||
Yandex NV A Shares(1) | 66,079 | 2,057,700 | |||
19,180,027 | |||||
SINGAPORE — 0.7% | |||||
First Resources Ltd. | 1,543,000 | 3,087,722 | |||
SOUTH AFRICA — 7.1% | |||||
Aspen Pharmacare Holdings Ltd. | 212,322 | 5,479,802 | |||
Capitec Bank Holdings Ltd. | 155,780 | 3,267,633 | |||
Discovery Holdings Ltd. | 547,736 | 4,735,447 | |||
Mr Price Group Ltd. | 272,760 | 4,392,334 | |||
MTN Group Ltd. | 262,560 | 5,533,742 |
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Shares | Value | ||||
Naspers Ltd. N Shares | 47,353 | $ | 5,220,192 | ||
Sasol Ltd. | 65,450 | 3,681,163 | |||
32,310,313 | |||||
SOUTH KOREA — 13.9% | |||||
CJ Korea Express Co. Ltd.(1) | 40,760 | 4,534,660 | |||
Coway Co. Ltd. | 79,650 | 6,698,657 | |||
Daewoo International Corp. | 94,590 | 2,985,491 | |||
Hotel Shilla Co. Ltd. | 51,410 | 4,661,267 | |||
Hyundai Development Co-Engineering & Construction | 126,460 | 3,545,144 | |||
Hyundai Motor Co. | 30,550 | 6,722,677 | |||
LG Display Co. Ltd.(1) | 155,600 | 4,140,894 | |||
Naturalendo Tech Co. Ltd.(1) | 49,020 | 3,267,359 | |||
NAVER Corp. | 6,680 | 4,963,184 | |||
Samsung Electronics Co. Ltd. | 8,842 | 12,506,377 | |||
Seoul Semiconductor Co. Ltd. | 56,130 | 2,123,719 | |||
SK Hynix, Inc.(1) | 154,150 | 6,670,969 | |||
62,820,398 | |||||
TAIWAN — 12.1% | |||||
Hiwin Technologies Corp. | 411,000 | 4,221,640 | |||
Hon Hai Precision Industry Co. Ltd. | 2,513,000 | 7,743,783 | |||
King Slide Works Co. Ltd. | 290,000 | 3,965,250 | |||
Largan Precision Co. Ltd. | 70,000 | 4,575,545 | |||
MediaTek, Inc. | 596,000 | 9,679,745 | |||
Merry Electronics Co. Ltd. | 571,000 | 3,541,912 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 5,297,939 | 21,113,662 | |||
54,841,537 | |||||
THAILAND — 2.2% | |||||
Intouch Holdings PCL NVDR | 1,202,000 | 2,718,504 | |||
Kasikornbank PCL NVDR | 577,600 | 3,298,812 | |||
Thaicom PCL | 3,117,300 | 3,703,159 | |||
9,720,475 | |||||
TURKEY — 2.8% | |||||
BIM Birlesik Magazalar AS | 131,190 | 2,880,376 | |||
TAV Havalimanlari Holding AS | 522,593 | 4,161,010 | |||
Turkiye Halk Bankasi AS | 290,660 | 2,258,872 | |||
Ulker Biskuvi Sanayi AS | 388,290 | 3,276,787 | |||
12,577,045 | |||||
TOTAL COMMON STOCKS (Cost $350,621,292) | 442,535,782 | ||||
TEMPORARY CASH INVESTMENTS — 3.5% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $3,472,182), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $3,403,613) | 3,403,599 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $2,776,903), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $2,722,882) | 2,722,880 |
9
Shares | Value | ||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $2,778,654), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $2,722,882) | $ | 2,722,880 | |||
SSgA U.S. Government Money Market Fund | 6,989,372 | 6,989,372 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $15,838,731) | 15,838,731 | ||||
TOTAL INVESTMENT SECURITIES — 101.3% (Cost $366,460,023) | 458,374,513 | ||||
OTHER ASSETS AND LIABILITIES — (1.3)% | (5,669,905 | ) | |||
TOTAL NET ASSETS — 100.0% | $ | 452,704,608 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Information Technology | 24.8 | % |
Financials | 18.3 | % |
Consumer Discretionary | 15.3 | % |
Consumer Staples | 9.4 | % |
Industrials | 8.8 | % |
Energy | 6.8 | % |
Materials | 5.2 | % |
Telecommunication Services | 4.5 | % |
Utilities | 2.8 | % |
Health Care | 1.9 | % |
Cash and Equivalents* | 2.2 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
NVDR | - | Non-Voting Depositary Receipt |
OJSC | - | Open Joint Stock Company |
(1) Non-income producing.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $366,460,023) | $ | 458,374,513 | |
Foreign currency holdings, at value (cost of $1,802,852) | 1,802,624 | ||
Receivable for investments sold | 7,440,783 | ||
Receivable for capital shares sold | 56,390 | ||
Dividends and interest receivable | 300,211 | ||
467,974,521 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 2,673,613 | ||
Payable for investments purchased | 11,577,013 | ||
Payable for capital shares redeemed | 476,592 | ||
Accrued management fees | 536,736 | ||
Distribution and service fees payable | 5,959 | ||
15,269,913 | |||
Net Assets | $ | 452,704,608 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 430,093,463 | |
Distributions in excess of net investment income | (1,339,963 | ) | |
Accumulated net realized loss | (67,950,024 | ) | |
Net unrealized appreciation | 91,901,132 | ||
$ | 452,704,608 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||
Investor Class, $0.01 Par Value | $404,007,977 | 45,694,242 | $8.84 | |
Institutional Class, $0.01 Par Value | $31,849,795 | 3,514,477 | $9.06 | |
A Class, $0.01 Par Value | $12,007,708 | 1,403,452 | $8.56* | |
C Class, $0.01 Par Value | $3,239,732 | 402,550 | $8.05 | |
R Class, $0.01 Par Value | $1,572,477 | 181,085 | $8.68 | |
R6 Class, $0.01 Par Value | $26,919 | 2,969 | $9.07 |
*Maximum offering price $9.08 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $328,696) | $ | 3,291,096 | |
Interest | 218 | ||
3,291,314 | |||
Expenses: | |||
Management fees | 3,676,238 | ||
Distribution and service fees: | |||
A Class | 13,779 | ||
C Class | 16,404 | ||
R Class | 3,100 | ||
Directors' fees and expenses | 6,954 | ||
Other expenses | 3,471 | ||
3,719,946 | |||
Fees waived | (545,558 | ) | |
3,174,388 | |||
Net investment income (loss) | 116,926 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 29,154,713 | ||
Foreign currency transactions | (274,001 | ) | |
28,880,712 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (30,004,927 | ) | |
Translation of assets and liabilities in foreign currencies | (2,022 | ) | |
(30,006,949 | ) | ||
Net realized and unrealized gain (loss) | (1,126,237 | ) | |
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | (1,009,311 | ) |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 116,926 | $ | 805,903 | ||
Net realized gain (loss) | 28,880,712 | 36,603,521 | ||||
Change in net unrealized appreciation (depreciation) | (30,006,949 | ) | (6,393,203 | ) | ||
Net increase (decrease) in net assets resulting from operations | (1,009,311 | ) | 31,016,221 | |||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (1,395,783 | ) | (1,646,742 | ) | ||
Institutional Class | (127,265 | ) | (181,997 | ) | ||
A Class | (30,577 | ) | (15,732 | ) | ||
C Class | (2,581 | ) | — | |||
R Class | (2,497 | ) | — | |||
R6 Class | (117 | ) | — | |||
Decrease in net assets from distributions | (1,558,820 | ) | (1,844,471 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | (14,763,458 | ) | (57,978,517 | ) | ||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 4,709 | 24,913 | ||||
Net increase (decrease) in net assets | (17,326,880 | ) | (28,781,854 | ) | ||
Net Assets | ||||||
Beginning of period | 470,031,488 | 498,813,342 | ||||
End of period | $ | 452,704,608 | $ | 470,031,488 | ||
Undistributed (distributions in excess of) net investment income | $ | (1,339,963 | ) | $ | 101,931 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the
14
fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income - Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. and American Century Strategic Asset Allocations, Inc. own, in aggregate, 32% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 the fund also include the assets of NT Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.250% to 1.850% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.050% to 1.650% for the Institutional Class and 0.900% to 1.500% for the R6 Class. During the six months ended May 31, 2014, the investment advisor voluntarily agreed to waive 0.250% of its management fee. The investment advisor expects the fee waiver to continue through March 31, 2015, and cannot terminate it without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2014 was $487,262, $38,834, $13,779, $4,101, $1,550 and $32 for the Investor Class, Institutional Class, A Class, C Class, R Class and R6 Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2014 was 1.71% for the Investor Class, A Class, C Class and R Class, 1.51% for the Institutional Class and 1.36% for the R6 Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2014 was 1.46% for the Investor Class, A Class, C Class and R Class, 1.26% for the Institutional Class and 1.11% for the R6 Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the
16
investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $196,058,241 and $222,441,396, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 400,000,000 | 400,000,000 | ||||||||
Sold | 3,911,924 | $ | 33,877,130 | 7,313,071 | $ | 62,218,485 | ||||
Issued in reinvestment of distributions | 163,232 | 1,369,513 | 186,256 | 1,607,394 | ||||||
Redeemed | (5,866,542 | ) | (50,135,278 | ) | (14,123,267 | ) | (121,216,351 | ) | ||
(1,791,386 | ) | (14,888,635 | ) | (6,623,940 | ) | (57,390,472 | ) | |||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 358,956 | 3,126,524 | 967,833 | 8,551,403 | ||||||
Issued in reinvestment of distributions | 14,812 | 127,234 | 20,606 | 181,954 | ||||||
Redeemed | (429,947 | ) | (3,767,113 | ) | (750,390 | ) | (6,606,195 | ) | ||
(56,179 | ) | (513,355 | ) | 238,049 | 2,127,162 | |||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||
Sold | 459,840 | 3,841,724 | 756,334 | 6,291,182 | ||||||
Issued in reinvestment of distributions | 3,655 | 29,682 | 1,779 | 14,890 | ||||||
Redeemed | (407,595 | ) | (3,372,292 | ) | (1,109,049 | ) | (9,338,269 | ) | ||
55,900 | 499,114 | (350,936 | ) | (3,032,197 | ) | |||||
C Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Sold | 30,365 | 236,282 | 134,704 | 1,071,648 | ||||||
Issued in reinvestment of distributions | 322 | 2,462 | — | — | ||||||
Redeemed | (69,368 | ) | (536,844 | ) | (133,416 | ) | (1,038,723 | ) | ||
(38,681 | ) | (298,100 | ) | 1,288 | 32,925 | |||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 63,877 | 542,215 | 68,244 | 581,011 | ||||||
Issued in reinvestment of distributions | 303 | 2,497 | — | — | ||||||
Redeemed | (13,024 | ) | (107,311 | ) | (38,453 | ) | (321,946 | ) | ||
51,156 | 437,401 | 29,791 | 259,065 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 2,955 | 25,000 | ||||||
Issued in reinvestment of distributions | 14 | 117 | — | — | ||||||
14 | 117 | 2,955 | 25,000 | |||||||
Net increase (decrease) | (1,779,176 | ) | $ | (14,763,458 | ) | (6,702,793 | ) | $ | (57,978,517 | ) |
(1) | July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class. |
17
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 49,601,090 | $ | 392,934,692 | — | |||
Temporary Cash Investments | 6,989,372 | 8,849,359 | — | |||||
$ | 56,590,462 | $ | 401,784,051 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 366,627,365 | |
Gross tax appreciation of investments | $ | 96,624,257 | |
Gross tax depreciation of investments | (4,877,109 | ) | |
Net tax appreciation (depreciation) of investments | $ | 91,747,148 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $(96,644,074), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2014(3) | $8.87 | —(4) | —(4) | —(4) | (0.03) | $8.84 | 0.03% | 1.46%(5) | 1.71%(5) | 0.05%(5) | (0.20)%(5) | 45% | $404,008 | ||
2013 | $8.36 | 0.01 | 0.53 | 0.54 | (0.03) | $8.87 | 6.48% | 1.63% | 1.72% | 0.17% | 0.08% | 68% | $421,274 | ||
2012 | $7.38 | 0.02 | 0.96 | 0.98 | — | $8.36 | 13.28% | 1.74% | 1.74% | 0.29% | 0.29% | 85% | $452,331 | ||
2011 | $8.46 | 0.01 | (1.09) | (1.08) | — | $7.38 | (12.77)% | 1.71% | 1.71% | 0.17% | 0.17% | 71% | $435,079 | ||
2010 | $7.28 | —(4) | 1.18 | 1.18 | — | $8.46 | 16.21% | 1.72% | 1.72% | (0.02)% | (0.02)% | 87% | $583,978 | ||
2009 | $4.17 | 0.01 | 3.13 | 3.14 | (0.03) | $7.28 | 75.36% | 1.78% | 1.78% | 0.11% | 0.11% | 126% | $567,248 | ||
Institutional Class | |||||||||||||||
2014(3) | $9.09 | 0.01 | —(4) | 0.01 | (0.04) | $9.06 | 0.09% | 1.26%(5) | 1.51%(5) | 0.25%(5) | 0.00%(5)(6) | 45% | $31,850 | ||
2013 | $8.56 | 0.03 | 0.55 | 0.58 | (0.05) | $9.09 | 6.77% | 1.43% | 1.52% | 0.37% | 0.28% | 68% | $32,452 | ||
2012 | $7.56 | 0.04 | 0.97 | 1.01 | (0.01) | $8.56 | 13.43% | 1.54% | 1.54% | 0.49% | 0.49% | 85% | $28,536 | ||
2011 | $8.65 | 0.03 | (1.12) | (1.09) | — | $7.56 | (12.60)% | 1.51% | 1.51% | 0.37% | 0.37% | 71% | $29,695 | ||
2010 | $7.43 | 0.02 | 1.20 | 1.22 | — | $8.65 | 16.42% | 1.52% | 1.52% | 0.18% | 0.18% | 87% | $40,969 | ||
2009 | $4.26 | 0.02 | 3.18 | 3.20 | (0.03) | $7.43 | 75.92% | 1.58% | 1.58% | 0.31% | 0.31% | 126% | $27,787 |
19
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2014(3) | $8.59 | (0.01) | —(4) | (0.01) | (0.02) | $8.56 | (0.04)% | 1.71%(5) | 1.96%(5) | (0.20)%(5) | (0.45)%(5) | 45% | $12,008 | ||
2013 | $8.09 | (0.01) | 0.52 | 0.51 | (0.01) | $8.59 | 6.30% | 1.88% | 1.97% | (0.08)% | (0.17)% | 68% | $11,575 | ||
2012 | $7.16 | —(4) | 0.93 | 0.93 | — | $8.09 | 12.99% | 1.99% | 1.99% | 0.04% | 0.04% | 85% | $13,745 | ||
2011 | $8.23 | (0.01) | (1.06) | (1.07) | — | $7.16 | (13.00)% | 1.96% | 1.96% | (0.08)% | (0.08)% | 71% | $15,339 | ||
2010 | $7.10 | (0.02) | 1.15 | 1.13 | — | $8.23 | 15.92% | 1.97% | 1.97% | (0.27)% | (0.27)% | 87% | $29,572 | ||
2009 | $4.07 | (0.01) | 3.06 | 3.05 | (0.02) | $7.10 | 75.24% | 2.03% | 2.03% | (0.14)% | (0.14)% | 126% | $23,260 | ||
C Class | |||||||||||||||
2014(3) | $8.09 | (0.04) | 0.01 | (0.03) | (0.01) | $8.05 | (0.41)% | 2.46%(5) | 2.71%(5) | (0.95)%(5) | (1.20)%(5) | 45% | $3,240 | ||
2013 | $7.67 | (0.06) | 0.48 | 0.42 | — | $8.09 | 5.48% | 2.63% | 2.72% | (0.83)% | (0.92)% | 68% | $3,571 | ||
2012 | $6.84 | (0.05) | 0.88 | 0.83 | — | $7.67 | 12.13% | 2.74% | 2.74% | (0.71)% | (0.71)% | 85% | $3,376 | ||
2011 | $7.93 | (0.07) | (1.02) | (1.09) | — | $6.84 | (13.75)% | 2.71% | 2.71% | (0.83)% | (0.83)% | 71% | $3,896 | ||
2010 | $6.89 | (0.07) | 1.11 | 1.04 | — | $7.93 | 15.09% | 2.72% | 2.72% | (1.02)% | (1.02)% | 87% | $5,257 | ||
2009 | $3.96 | (0.05) | 2.98 | 2.93 | — | $6.89 | 73.99% | 2.78% | 2.78% | (0.89)% | (0.89)% | 126% | $5,372 |
20
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2014(3) | $8.72 | (0.02) | —(4) | (0.02) | (0.02) | $8.68 | (0.23)% | 1.96%(5) | 2.21%(5) | (0.45)%(5) | (0.70)%(5) | 45% | $1,572 | ||
2013 | $8.23 | (0.02) | 0.51 | 0.49 | — | $8.72 | 5.95% | 2.13% | 2.22% | (0.33)% | (0.42)% | 68% | $1,133 | ||
2012 | $7.30 | (0.02) | 0.95 | 0.93 | — | $8.23 | 12.74% | 2.24% | 2.24% | (0.21)% | (0.21)% | 85% | $824 | ||
2011 | $8.42 | (0.03) | (1.09) | (1.12) | — | $7.30 | (13.30)% | 2.21% | 2.21% | (0.33)% | (0.33)% | 71% | $631 | ||
2010 | $7.28 | (0.04) | 1.18 | 1.14 | — | $8.42 | 15.66% | 2.22% | 2.22% | (0.52)% | (0.52)% | 87% | $828 | ||
2009 | $4.17 | (0.02) | 3.14 | 3.12 | (0.01) | $7.28 | 74.94% | 2.28% | 2.28% | (0.39)% | (0.39)% | 126% | $516 | ||
R6 Class | |||||||||||||||
2014(3) | $9.09 | 0.02 | —(4) | 0.02 | (0.04) | $9.07 | 0.24% | 1.11%(5) | 1.36%(5) | 0.40%(5) | 0.15%(5) | 45% | $27 | ||
2013(7) | $8.46 | —(4) | 0.63 | 0.63 | — | $9.09 | 7.45% | 1.12%(5) | 1.37%(5) | 0.14%(5) | (0.11)%(5) | 68%(8) | $27 |
Notes to Financial Highlights | |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
(6) | Ratio was less than 0.005%. |
(7) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
21
See Notes to Financial Statements.
22
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
23
Notes |
24
![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82560 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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Global Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-14-000024/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWGGX | 4.71% | 21.02% | 15.47% | 9.05% | 8.80% | 12/1/98 |
MSCI World Index | — | 6.52% | 18.87% | 14.47% | 7.27% | 4.79%(2) | — |
Institutional Class | AGGIX | 4.80% | 21.27% | 15.71% | 9.28% | 4.68% | 8/1/00 |
A Class(3) | AGGRX | 2/5/99 | |||||
No sales charge* | 4.53% | 20.64% | 15.16% | 8.78% | 7.86% | ||
With sales charge* | -1.44% | 13.65% | 13.80% | 8.13% | 7.44% | ||
C Class | AGLCX | 3/1/02 | |||||
No sales charge* | 4.20% | 19.78% | 14.31% | 7.98% | 7.34% | ||
With sales charge* | 3.20% | 19.78% | 14.31% | 7.98% | 7.34% | ||
R Class | AGORX | 4.47% | 20.40% | 14.89% | — | 7.40% | 7/29/05 |
R6 Class | AGGDX | 4.84% | — | — | — | 17.08%(1) | 7/26/13 |
* | 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 and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since November 30, 1998, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.09% | 0.89% | 1.34% | 2.09% | 1.59% | 0.74% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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.
3
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Google, Inc.* | 3.2% |
Facebook, Inc., Class A | 2.2% |
Roche Holding AG | 2.0% |
Priceline Group, Inc. (The) | 2.0% |
Monsanto Co. | 1.8% |
Precision Castparts Corp. | 1.7% |
Home Depot, Inc. (The) | 1.7% |
Halliburton Co. | 1.5% |
Schlumberger Ltd. | 1.5% |
Union Pacific Corp. | 1.5% |
*Includes all classes of the issuer. | |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 61.2% |
Foreign Common Stocks | 37.3% |
Total Common Stocks | 98.5% |
Temporary Cash Investments | 1.4% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
United States | 61.2% |
Japan | 5.9% |
United Kingdom | 5.6% |
Switzerland | 4.9% |
France | 3.2% |
Netherlands | 2.7% |
Sweden | 2.6% |
Denmark | 2.5% |
Hong Kong | 2.2% |
Spain | 2.0% |
Other Countries | 5.7% |
Cash and Equivalents* | 1.5% |
*Includes temporary cash investments and other assets and liabilities. |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 – 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,047.10 | $5.51 | 1.08% |
Institutional Class | $1,000 | $1,048.00 | $4.49 | 0.88% |
A Class | $1,000 | $1,045.30 | $6.78 | 1.33% |
C Class | $1,000 | $1,042.00 | $10.59 | 2.08% |
R Class | $1,000 | $1,044.70 | $8.05 | 1.58% |
R6 Class | $1,000 | $1,048.40 | $3.73 | 0.73% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.55 | $5.44 | 1.08% |
Institutional Class | $1,000 | $1,020.54 | $4.43 | 0.88% |
A Class | $1,000 | $1,018.30 | $6.69 | 1.33% |
C Class | $1,000 | $1,014.56 | $10.45 | 2.08% |
R Class | $1,000 | $1,017.05 | $7.95 | 1.58% |
R6 Class | $1,000 | $1,021.29 | $3.68 | 0.73% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.5% | |||||
AUSTRALIA — 0.6% | |||||
CSL Ltd. | 61,143 | $ | 4,016,763 | ||
AUSTRIA — 0.7% | |||||
Erste Group Bank AG | 118,110 | 4,103,932 | |||
BRAZIL — 0.7% | |||||
Itau Unibanco Holding SA ADR | 284,210 | 4,405,255 | |||
CANADA — 0.8% | |||||
Canadian Pacific Railway Ltd. | 28,010 | 4,688,052 | |||
CHINA — 0.9% | |||||
ENN Energy Holdings Ltd. | 756,000 | 5,348,493 | |||
DENMARK — 2.5% | |||||
GN Store Nord A/S | 44,550 | 1,229,481 | |||
Novo Nordisk A/S B Shares | 150,720 | 6,375,006 | |||
Pandora A/S | 106,806 | 7,913,208 | |||
15,517,695 | |||||
FRANCE — 3.2% | |||||
Accor SA | 154,630 | 8,181,576 | |||
Carrefour SA | 200,810 | 7,300,490 | |||
Rexel SA | 181,261 | 4,331,416 | |||
19,813,482 | |||||
GERMANY — 0.3% | |||||
Symrise AG | 40,490 | 2,194,787 | |||
HONG KONG — 2.2% | |||||
BOC Hong Kong Holdings Ltd. | 446,000 | 1,343,243 | |||
Hang Seng Bank Ltd. | 276,200 | 4,560,019 | |||
Sands China Ltd. | 1,062,000 | 7,739,377 | |||
13,642,639 | |||||
INDIA — 0.4% | |||||
Tata Motors Ltd. ADR | 75,172 | 2,799,405 | |||
JAPAN — 5.9% | |||||
Daikin Industries Ltd. | 111,300 | 6,630,987 | |||
Keyence Corp. | 15,100 | 5,865,712 | |||
Nidec Corp. | 112,900 | 6,564,392 | |||
ORIX Corp. | 394,900 | 6,260,988 | |||
Rakuten, Inc. | 375,183 | 4,861,163 | |||
Unicharm Corp. | 100,500 | 6,085,285 | |||
36,268,527 | |||||
NETHERLANDS — 2.7% | |||||
Akzo Nobel NV | 66,580 | 4,989,904 | |||
ASML Holding NV | 43,949 | 3,771,876 | |||
ASML Holding NV New York Shares | 36,264 | 3,114,352 | |||
Koninklijke DSM NV | 63,200 | 4,557,392 | |||
16,433,524 |
7
Shares | Value | ||||
PERU — 0.7% | |||||
Credicorp Ltd. | 26,024 | $ | 4,066,250 | ||
RUSSIA — 0.6% | |||||
Magnit OJSC GDR | 64,080 | 3,729,456 | |||
SPAIN — 2.0% | |||||
Bankia SA(1) | 2,974,680 | 6,045,908 | |||
Grifols SA | 112,953 | 6,120,382 | |||
12,166,290 | |||||
SWEDEN — 2.6% | |||||
Skandinaviska Enskilda Banken AB A Shares | 415,240 | 5,637,262 | |||
SKF AB B Shares | 159,944 | 4,098,983 | |||
Svenska Cellulosa AB B Shares | 217,231 | 6,044,294 | |||
15,780,539 | |||||
SWITZERLAND — 4.9% | |||||
Adecco SA | 84,872 | 7,084,514 | |||
Cie Financiere Richemont SA | 43,170 | 4,548,397 | |||
Credit Suisse Group AG | 202,170 | 6,009,788 | |||
Roche Holding AG | 42,131 | 12,397,006 | |||
30,039,705 | |||||
UNITED KINGDOM — 5.6% | |||||
Capita Group plc (The) | 356,153 | 6,608,604 | |||
Compass Group plc | 195,150 | 3,256,382 | |||
Johnson Matthey plc | 108,600 | 5,846,970 | |||
Lloyds Banking Group plc(1) | 6,493,021 | 8,473,965 | |||
Royal Bank of Scotland Group plc(1) | 1,092,860 | 6,349,194 | |||
Whitbread plc | 59,940 | 4,205,730 | |||
34,740,845 | |||||
UNITED STATES — 61.2% | |||||
Adobe Systems, Inc.(1) | 47,030 | 3,035,316 | |||
Alexion Pharmaceuticals, Inc.(1) | 25,294 | 4,206,898 | |||
Alliance Data Systems Corp.(1) | 16,832 | 4,309,834 | |||
American Tower Corp. | 101,730 | 9,118,060 | |||
Antero Resources Corp.(1) | 47,820 | 2,940,930 | |||
B/E Aerospace, Inc.(1) | 48,570 | 4,699,148 | |||
Biogen Idec, Inc.(1) | 23,766 | 7,590,147 | |||
BorgWarner, Inc. | 108,132 | 6,800,422 | |||
Bristol-Myers Squibb Co. | 86,670 | 4,310,966 | |||
Celgene Corp.(1) | 40,439 | 6,188,380 | |||
Cerner Corp.(1) | 83,266 | 4,500,527 | |||
Charles Schwab Corp. (The) | 263,834 | 6,651,255 | |||
Cognizant Technology Solutions Corp., Class A(1) | 182,030 | 8,848,478 | |||
Colgate-Palmolive Co. | 84,796 | 5,800,046 | |||
Continental Resources, Inc.(1) | 53,904 | 7,565,965 | |||
Costco Wholesale Corp. | 62,587 | 7,261,344 | |||
eBay, Inc.(1) | 129,992 | 6,594,494 | |||
EQT Corp. | 81,030 | 8,660,486 | |||
Equinix, Inc.(1) | 30,989 | 6,159,064 |
8
Shares | Value | ||||
Estee Lauder Cos., Inc. (The), Class A | 104,965 | $ | 8,042,418 | ||
Facebook, Inc., Class A(1) | 213,301 | 13,501,953 | |||
FedEx Corp. | 57,801 | 8,332,592 | |||
Fortune Brands Home & Security, Inc. | 133,426 | 5,334,372 | |||
Gilead Sciences, Inc.(1) | 98,300 | 7,982,943 | |||
Google, Inc., Class A(1) | 17,235 | 9,852,388 | |||
Google, Inc., Class C(1) | 17,235 | 9,668,490 | |||
Halliburton Co. | 147,380 | 9,526,643 | |||
Harley-Davidson, Inc. | 43,661 | 3,110,410 | |||
Harman International Industries, Inc. | 60,005 | 6,302,325 | |||
Home Depot, Inc. (The) | 130,224 | 10,447,872 | |||
Ingersoll-Rand plc | 121,340 | 7,258,559 | |||
IntercontinentalExchange Group, Inc. | 44,145 | 8,670,078 | |||
Liberty Global plc(1) | 106,820 | 4,571,896 | |||
Liberty Global plc Class A(1) | 79,150 | 3,563,333 | |||
MasterCard, Inc., Class A | 101,990 | 7,797,136 | |||
McKesson Corp. | 31,460 | 5,966,074 | |||
Michael Kors Holdings Ltd.(1) | 95,873 | 9,048,494 | |||
Mondelez International, Inc., Class A | 219,000 | 8,238,780 | |||
Monsanto Co. | 89,481 | 10,903,260 | |||
Oceaneering International, Inc. | 74,300 | 5,353,315 | |||
Pentair Ltd. | 77,090 | 5,753,998 | |||
Precision Castparts Corp. | 41,366 | 10,464,771 | |||
Priceline Group, Inc. (The)(1) | 9,500 | 12,146,985 | |||
Schlumberger Ltd. | 90,044 | 9,368,178 | |||
Starbucks Corp. | 69,333 | 5,077,949 | |||
Towers Watson & Co., Class A | 31,480 | 3,541,815 | |||
Tractor Supply Co. | 89,923 | 5,846,793 | |||
Twenty-First Century Fox, Inc. | 234,340 | 8,297,979 | |||
Union Pacific Corp. | 46,356 | 9,237,360 | |||
United Continental Holdings, Inc.(1) | 86,240 | 3,826,469 | |||
United Rentals, Inc.(1) | 60,902 | 6,154,147 | |||
Visa, Inc., Class A | 35,463 | 7,618,516 | |||
WhiteWave Foods Co. Class A(1) | 172,549 | 5,433,568 | |||
Yum! Brands, Inc. | 71,840 | 5,553,950 | |||
377,037,569 | |||||
TOTAL COMMON STOCKS (Cost $419,324,629) | 606,793,208 | ||||
TEMPORARY CASH INVESTMENTS — 1.4% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $1,923,958), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $1,885,964) | 1,885,956 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $1,538,699), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,508,765) | 1,508,764 | ||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $1,539,670), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,508,766) | 1,508,765 |
9
Shares | Value | ||||
SSgA U.S. Government Money Market Fund | 3,894,613 | $ | 3,894,613 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,798,098) | 8,798,098 | ||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $428,122,727) | 615,591,306 | ||||
OTHER ASSETS AND LIABILITIES — 0.1% | 337,709 | ||||
TOTAL NET ASSETS — 100.0% | $ | 615,929,015 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 20.0 | % |
Industrials | 17.3 | % |
Information Technology | 14.6 | % |
Financials | 13.3 | % |
Health Care | 11.4 | % |
Consumer Staples | 9.4 | % |
Energy | 7.0 | % |
Materials | 4.6 | % |
Utilities | 0.9 | % |
Cash and Equivalents* | 1.5 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
OJSC | - | Open Joint Stock Company |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $428,122,727) | $ | 615,591,306 | |
Foreign currency holdings, at value (cost of $415,740) | 417,339 | ||
Receivable for investments sold | 5,669,597 | ||
Receivable for capital shares sold | 280,035 | ||
Dividends and interest receivable | 1,195,458 | ||
Other assets | 16,658 | ||
623,170,393 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 1,508,765 | ||
Payable for investments purchased | 4,611,415 | ||
Payable for capital shares redeemed | 565,080 | ||
Accrued management fees | 537,026 | ||
Distribution and service fees payable | 19,092 | ||
7,241,378 | |||
Net Assets | $ | 615,929,015 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 421,158,215 | |
Distributions in excess of net investment income | (3,908,306 | ) | |
Undistributed net realized gain | 11,164,981 | ||
Net unrealized appreciation | 187,514,125 | ||
$ | 615,929,015 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $464,308,064 | 36,843,062 | $12.60 | |||
Institutional Class, $0.01 Par Value | $83,738,893 | 6,573,469 | $12.74 | |||
A Class, $0.01 Par Value | $56,018,265 | 4,516,071 | $12.40* | |||
C Class, $0.01 Par Value | $6,652,240 | 581,649 | $11.44 | |||
R Class, $0.01 Par Value | $4,886,738 | 395,327 | $12.36 | |||
R6 Class, $0.01 Par Value | $324,815 | 25,475 | $12.75 |
*Maximum offering price $13.16 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $299,004) | $ | 4,001,944 | |
Interest | 587 | ||
4,002,531 | |||
Expenses: | |||
Management fees | 3,102,763 | ||
Distribution and service fees: | |||
A Class | 66,534 | ||
C Class | 31,151 | ||
R Class | 11,674 | ||
Directors' fees and expenses | 9,594 | ||
3,221,716 | |||
Net investment income (loss) | 780,815 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 12,398,654 | ||
Foreign currency transactions | (66,770 | ) | |
12,331,884 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 14,243,315 | ||
Translation of assets and liabilities in foreign currencies | 16,420 | ||
14,259,735 | |||
Net realized and unrealized gain (loss) | 26,591,619 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 27,372,434 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 780,815 | $ | 498,222 | ||
Net realized gain (loss) | 12,331,884 | 56,708,423 | ||||
Change in net unrealized appreciation (depreciation) | 14,259,735 | 71,714,914 | ||||
Net increase (decrease) in net assets resulting from operations | 27,372,434 | 128,921,559 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (2,865,005 | ) | (1,492,644 | ) | ||
Institutional Class | (560,772 | ) | (273,982 | ) | ||
A Class | (302,173 | ) | (52,005 | ) | ||
C Class | (24,440 | ) | — | |||
R Class | (23,517 | ) | — | |||
R6 Class | (209 | ) | — | |||
From net realized gains: | ||||||
Investor Class | (9,756,997 | ) | — | |||
Institutional Class | (1,784,697 | ) | — | |||
A Class | (1,171,760 | ) | — | |||
C Class | (140,516 | ) | — | |||
R Class | (100,231 | ) | — | |||
R6 Class | (620 | ) | — | |||
Decrease in net assets from distributions | (16,730,937 | ) | (1,818,631 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 25,222,665 | (7,786,769 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 13,978 | 21,725 | ||||
Net increase (decrease) in net assets | 35,878,140 | 119,337,884 | ||||
Net Assets | ||||||
Beginning of period | 580,050,875 | 460,712,991 | ||||
End of period | $ | 615,929,015 | $ | 580,050,875 | ||
Distributions in excess of net investment income | $ | (3,908,306 | ) | $ | (913,005 | ) |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Global Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the
14
fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income - Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 ranges from 1.050% to 1.300% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.850% to 1.100% for the Institutional Class and 0.700% to 0.950% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2014 was 1.08% for the Investor Class, A Class, C Class and R Class, 0.88% for the Institutional Class and 0.73% for the R6 Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $126,025,869 and $110,218,029, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||
Sold | 2,599,921 | $ | 32,008,372 | 3,867,396 | $ | 41,349,199 | ||||
Issued in reinvestment of distributions | 1,019,389 | 12,336,746 | 142,377 | 1,459,360 | ||||||
Redeemed | (2,084,771 | ) | (25,647,715 | ) | (7,522,825 | ) | (80,330,603 | ) | ||
1,534,539 | 18,697,403 | (3,513,052 | ) | (37,522,044 | ) | |||||
Institutional Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 354,858 | 4,423,595 | 2,715,772 | 32,463,147 | ||||||
Issued in reinvestment of distributions | 191,773 | 2,345,469 | 26,496 | 273,969 | ||||||
Redeemed | (440,703 | ) | (5,489,772 | ) | (1,126,926 | ) | (12,038,152 | ) | ||
105,928 | 1,279,292 | 1,615,342 | 20,698,964 | |||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||
Sold | 862,929 | 10,484,894 | 1,659,451 | 17,366,675 | ||||||
Issued in reinvestment of distributions | 122,631 | 1,460,436 | 5,001 | 50,611 | ||||||
Redeemed | (675,148 | ) | (8,259,041 | ) | (1,035,690 | ) | (10,762,776 | ) | ||
310,412 | 3,686,289 | 628,762 | 6,654,510 | |||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 121,608 | 1,364,453 | 107,127 | 1,077,402 | ||||||
Issued in reinvestment of distributions | 11,449 | 125,535 | — | — | ||||||
Redeemed | (48,330 | ) | (539,399 | ) | (74,025 | ) | (714,493 | ) | ||
84,727 | 950,589 | 33,102 | 362,909 | |||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Sold | 61,651 | 745,432 | 276,036 | 2,772,191 | ||||||
Issued in reinvestment of distributions | 10,431 | 123,748 | — | — | ||||||
Redeemed | (45,489 | ) | (549,738 | ) | (74,809 | ) | (778,299 | ) | ||
26,593 | 319,442 | 201,227 | 1,993,892 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 23,180 | 288,821 | 2,228 | 25,000 | ||||||
Issued in reinvestment of distributions | 67 | 829 | — | — | ||||||
23,247 | 289,650 | 2,228 | 25,000 | |||||||
Net increase (decrease) | 2,085,446 | $ | 25,222,665 | (1,032,391 | ) | $ | (7,786,769 | ) |
(1) July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class.
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
17
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Domestic Common Stocks | $ | 377,037,569 | — | — | ||||
Foreign Common Stocks | 14,385,262 | $ | 215,370,377 | — | ||||
Temporary Cash Investments | 3,894,613 | 4,903,485 | — | |||||
$ | 395,317,444 | $ | 220,273,862 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 429,028,941 | |
Gross tax appreciation of investments | $ | 187,950,564 | |
Gross tax depreciation of investments | (1,388,199 | ) | |
Net tax appreciation (depreciation) of investments | $ | 186,562,365 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2014(3) | $12.39 | 0.02 | 0.55 | 0.57 | (0.08) | (0.28) | (0.36) | $12.60 | 4.71% | 1.08%(4) | 0.27%(4) | 19% | $464,308 | ||
2013 | $9.63 | 0.01 | 2.79 | 2.80 | (0.04) | — | (0.04) | $12.39 | 29.15% | 1.09% | 0.11% | 64% | $437,599 | ||
2012 | $8.52 | 0.03 | 1.11 | 1.14 | (0.03) | — | (0.03) | $9.63 | 13.37% | 1.10% | 0.28% | 54% | $373,887 | ||
2011 | $8.41 | 0.03 | 0.13 | 0.16 | (0.05) | — | (0.05) | $8.52 | 1.82% | 1.11% | 0.28% | 53% | $322,672 | ||
2010 | $7.80 | 0.03 | 0.64 | 0.67 | (0.06) | — | (0.06) | $8.41 | 8.61% | 1.16% | 0.33% | 100% | $344,950 | ||
2009 | $5.90 | 0.04 | 1.86 | 1.90 | —(5) | — | —(5) | $7.80 | 32.24% | 1.22% | 0.62% | 103% | $346,590 | ||
Institutional Class | |||||||||||||||
2014(3) | $12.52 | 0.03 | 0.56 | 0.59 | (0.09) | (0.28) | (0.37) | $12.74 | 4.80% | 0.88%(4) | 0.47%(4) | 19% | $83,739 | ||
2013 | $9.73 | 0.03 | 2.82 | 2.85 | (0.06) | — | (0.06) | $12.52 | 29.42% | 0.89% | 0.31% | 64% | $80,968 | ||
2012 | $8.60 | 0.05 | 1.13 | 1.18 | (0.05) | — | (0.05) | $9.73 | 13.71% | 0.90% | 0.48% | 54% | $47,203 | ||
2011 | $8.49 | 0.04 | 0.13 | 0.17 | (0.06) | — | (0.06) | $8.60 | 2.00% | 0.91% | 0.48% | 53% | $35,991 | ||
2010 | $7.90 | 0.04 | 0.64 | 0.68 | (0.09) | — | (0.09) | $8.49 | 8.68% | 0.96% | 0.53% | 100% | $45,459 | ||
2009 | $5.97 | 0.05 | 1.89 | 1.94 | (0.01) | — | (0.01) | $7.90 | 32.61% | 1.02% | 0.82% | 103% | $44,752 |
19
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2014(3) | $12.21 | —(5) | 0.54 | 0.54 | (0.07) | (0.28) | (0.35) | $12.40 | 4.53% | 1.33%(4) | 0.02%(4) | 19% | $56,018 | ||
2013 | $9.49 | (0.02) | 2.75 | 2.73 | (0.01) | — | (0.01) | $12.21 | 28.83% | 1.34% | (0.14)% | 64% | $51,351 | ||
2012 | $8.39 | —(5) | 1.10 | 1.10 | —(5) | — | —(5) | $9.49 | 13.16% | 1.35% | 0.03% | 54% | $33,938 | ||
2011 | $8.28 | —(5) | 0.13 | 0.13 | (0.02) | — | (0.02) | $8.39 | 1.58% | 1.36% | 0.03% | 53% | $26,908 | ||
2010 | $7.67 | 0.01 | 0.62 | 0.63 | (0.02) | — | (0.02) | $8.28 | 8.20% | 1.41% | 0.08% | 100% | $33,641 | ||
2009 | $5.81 | 0.02 | 1.84 | 1.86 | — | — | — | $7.67 | 32.01% | 1.47% | 0.37% | 103% | $34,744 | ||
C Class | |||||||||||||||
2014(3) | $11.30 | (0.04) | 0.50 | 0.46 | (0.04) | (0.28) | (0.32) | $11.44 | 4.20% | 2.08%(4) | (0.73)%(4) | 19% | $6,652 | ||
2013 | $8.84 | (0.09) | 2.55 | 2.46 | — | — | — | $11.30 | 27.97% | 2.09% | (0.89)% | 64% | $5,615 | ||
2012 | $7.87 | (0.06) | 1.03 | 0.97 | — | — | — | $8.84 | 12.20% | 2.10% | (0.72)% | 54% | $4,098 | ||
2011 | $7.81 | (0.06) | 0.12 | 0.06 | — | — | — | $7.87 | 0.77% | 2.11% | (0.72)% | 53% | $3,557 | ||
2010 | $7.27 | (0.05) | 0.59 | 0.54 | — | — | — | $7.81 | 7.43% | 2.16% | (0.67)% | 100% | $4,579 | ||
2009 | $5.54 | (0.02) | 1.75 | 1.73 | — | — | — | $7.27 | 31.23% | 2.22% | (0.38)% | 103% | $3,535 |
20
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2014(3) | $12.18 | (0.01) | 0.53 | 0.52 | (0.06) | (0.28) | (0.34) | $12.36 | 4.47% | 1.58%(4) | (0.23)%(4) | 19% | $4,887 | ||
2013 | $9.47 | (0.04) | 2.75 | 2.71 | — | — | — | $12.18 | 28.51% | 1.59% | (0.39)% | 64% | $4,489 | ||
2012 | $8.39 | (0.02) | 1.10 | 1.08 | — | — | — | $9.47 | 12.87% | 1.60% | (0.22)% | 54% | $1,587 | ||
2011 | $8.29 | (0.02) | 0.12 | 0.10 | — | — | — | $8.39 | 1.21% | 1.61% | (0.22)% | 53% | $636 | ||
2010 | $7.67 | (0.01) | 0.63 | 0.62 | — | — | — | $8.29 | 8.08% | 1.66% | (0.17)% | 100% | $490 | ||
2009 | $5.82 | —(5) | 1.85 | 1.85 | — | — | — | $7.67 | 31.79% | 1.72% | 0.12% | 103% | $442 | ||
R6 Class | |||||||||||||||
2014(3) | $12.53 | 0.07 | 0.52 | 0.59 | (0.09) | (0.28) | (0.37) | $12.75 | 4.84% | 0.73%(4) | 0.62%(4) | 19% | $325 | ||
2013(6) | $11.22 | —(5) | 1.31 | 1.31 | — | — | — | $12.53 | 11.68% | 0.74%(4) | 0.00%(4)(7) | 64%(8) | $28 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(7) | Ratio was less than 0.005%. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82558 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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International Discovery Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-14-000024/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWEGX | 6.23% | 22.53% | 13.72% | 9.19% | 11.45% | 4/1/94 |
MSCI All Country World ex-U.S. Mid Cap Growth Index | — | 6.25% | 14.66% | 11.46% | 7.71% | N/A(2) | — |
Institutional Class | TIDIX | 6.33% | 22.75% | 13.95% | 9.41% | 10.33% | 1/2/98 |
A Class(3) | ACIDX | 4/28/98 | |||||
No sales charge* | 6.15% | 22.28% | 13.46% | 8.93% | 8.63% | ||
With sales charge* | 0.08% | 15.29% | 12.13% | 8.29% | 8.23% | ||
C Class | TWECX | 3/1/10 | |||||
No sales charge* | 5.69% | 21.36% | — | — | 10.84% | ||
With sales charge* | 4.69% | 21.36% | — | — | 10.84% | ||
R Class | TWERX | 5.97% | 22.02% | — | — | 11.38% | 3/1/10 |
* | 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 and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Benchmark data first available June 1994. |
(3) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.56% | 1.36% | 1.81% | 2.56% | 2.06% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
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.
3
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Pandora A/S | 3.0% |
Ashtead Group plc | 2.9% |
Lonza Group AG | 2.8% |
St. James's Place plc | 2.7% |
Vestas Wind Systems A/S | 2.6% |
Zodiac Aerospace | 2.5% |
United Internet AG | 2.2% |
Catcher Technology Co. Ltd. | 2.1% |
London Stock Exchange Group plc | 2.0% |
Groupe Eurotunnel SA | 1.8% |
Types of Investments in Portfolio | % of net assets |
Common Stocks | 98.5% |
Exchange-Traded Funds | 0.8% |
Total Equity Exposure | 99.3% |
Temporary Cash Investments | 1.0% |
Other Assets and Liabilities | (0.3)% |
Investments by Country | % of net assets |
United Kingdom | 16.1% |
Japan | 11.3% |
France | 10.6% |
Canada | 9.2% |
Switzerland | 7.1% |
Denmark | 6.7% |
Germany | 5.9% |
China | 5.3% |
Taiwan | 4.9% |
Australia | 3.9% |
Spain | 3.5% |
Sweden | 2.2% |
Other Countries | 11.8% |
Exchange-Traded Funds | 0.8% |
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments and other assets and liabilities.
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 - 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,062.30 | $7.92 | 1.54% |
Institutional Class | $1,000 | $1,063.30 | $6.89 | 1.34% |
A Class | $1,000 | $1,061.50 | $9.20 | 1.79% |
C Class | $1,000 | $1,056.90 | $13.03 | 2.54% |
R Class | $1,000 | $1,059.70 | $10.48 | 2.04% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.25 | $7.75 | 1.54% |
Institutional Class | $1,000 | $1,018.25 | $6.74 | 1.34% |
A Class | $1,000 | $1,016.01 | $9.00 | 1.79% |
C Class | $1,000 | $1,012.27 | $12.74 | 2.54% |
R Class | $1,000 | $1,014.76 | $10.25 | 2.04% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 98.5% | ||||
AUSTRALIA — 3.9% | ||||
Flight Centre Travel Group Ltd. | 102,270 | $ | 4,737,939 | |
G8 Education Ltd. | 872,860 | 3,679,841 | ||
James Hardie Industries SE | 570,030 | 7,602,041 | ||
Ramsay Health Care Ltd. | 168,620 | 7,430,455 | ||
Seek Ltd. | 199,440 | 3,142,357 | ||
26,592,633 | ||||
BELGIUM — 0.4% | ||||
Ageas | 64,280 | 2,702,302 | ||
BRAZIL — 1.1% | ||||
BM&FBovespa SA | 1,452,600 | 7,236,092 | ||
CANADA — 9.2% | ||||
Africa Oil Corp.(1) | 422,312 | 3,018,462 | ||
Agnico-Eagle Mines Ltd. New York Shares | 51,720 | 1,564,013 | ||
Alimentation Couche Tard, Inc. B Shares | 381,260 | 10,351,650 | ||
Badger Daylighting Ltd. | 33,000 | 1,065,203 | ||
Calfrac Well Services Ltd. | 142,010 | 4,861,580 | ||
Canadian Energy Services & Technology Corp. | 121,289 | 3,492,246 | ||
Capstone Mining Corp.(1) | 296,410 | 713,483 | ||
Dollarama, Inc. | 96,180 | 8,113,607 | ||
Element Financial Corp.(1) | 653,460 | 8,226,256 | ||
Linamar Corp. | 160,260 | 8,904,976 | ||
Precision Drilling Corp. | 592,980 | 7,694,576 | ||
Vermilion Energy, Inc. | 65,710 | 4,437,228 | ||
62,443,280 | ||||
CHINA — 5.3% | ||||
China Gas Holdings Ltd. | 5,080,000 | 8,216,640 | ||
China State Construction International Holdings Ltd. | 2,054,000 | 3,555,380 | ||
E-Commerce China Dangdang, Inc. A Shares ADR(1) | 312,900 | 3,135,258 | ||
Haier Electronics Group Co. Ltd. | 1,445,000 | 3,380,945 | ||
Shenzhou International Group Holdings Ltd. | 2,307,000 | 8,049,111 | ||
Vipshop Holdings Ltd. ADR(1) | 26,070 | 4,240,546 | ||
Youku Tudou, Inc. ADR(1) | 65,910 | 1,285,245 | ||
YY, Inc. ADR(1) | 64,700 | 4,212,617 | ||
36,075,742 | ||||
DENMARK — 6.7% | ||||
GN Store Nord A/S | 272,340 | 7,515,978 | ||
Pandora A/S | 271,570 | 20,120,496 | ||
Vestas Wind Systems A/S(1) | 331,550 | 17,833,103 | ||
45,469,577 | ||||
FINLAND — 0.9% | ||||
Outokumpu Oyj(1) | 16,746,860 | 5,896,597 |
7
Shares | Value | |||
FRANCE — 10.6% | ||||
Gaztransport Et Technigaz | 128,570 | $ | 8,412,489 | |
Groupe Eurotunnel SA | 945,200 | 12,497,959 | ||
Iliad SA | 23,540 | 7,524,765 | ||
JCDecaux SA | 149,890 | 5,972,348 | ||
Peugeot SA(1) | 641,081 | 9,070,974 | ||
Plastic Omnium SA | 194,260 | 6,597,629 | ||
Valeo SA | 32,580 | 4,374,525 | ||
Zodiac Aerospace | 481,930 | 17,133,070 | ||
71,583,759 | ||||
GERMANY — 5.9% | ||||
Aareal Bank AG | 159,640 | 7,552,268 | ||
Leoni AG | 61,870 | 4,953,176 | ||
Morphosys AG(1) | 56,660 | 5,132,337 | ||
OSRAM Licht AG(1) | 20,200 | 1,025,014 | ||
United Internet AG | 315,600 | 14,586,275 | ||
Wirecard AG | 160,100 | 6,983,690 | ||
40,232,760 | ||||
GREECE — 0.3% | ||||
OPAP SA | 122,090 | 2,073,680 | ||
HONG KONG — 1.7% | ||||
Techtronic Industries Co. | 1,055,500 | 3,328,665 | ||
Xinyi Solar Holdings Ltd.(1) | 30,652,000 | 8,183,935 | ||
11,512,600 | ||||
IRELAND — 1.7% | ||||
Bank of Ireland(1) | 15,058,480 | 5,788,605 | ||
Smurfit Kappa Group plc | 225,990 | 5,452,631 | ||
11,241,236 | ||||
ISRAEL — 0.6% | ||||
Caesarstone Sdot-Yam Ltd. | 94,441 | 4,266,372 | ||
ITALY — 0.5% | ||||
Banca Generali SpA | 116,190 | 3,392,594 | ||
JAPAN — 11.3% | ||||
Advantest Corp. | 217,100 | 2,454,638 | ||
Coca-Cola East Japan Co. Ltd. | 234,200 | 5,535,218 | ||
Daifuku Co. Ltd. | 579,000 | 7,547,475 | ||
Dwango Co. Ltd. | 170,000 | 4,463,752 | ||
Ebara Corp. | 1,066,000 | 6,450,452 | ||
Jafco Co. Ltd. | 72,700 | 2,878,006 | ||
Japan Airport Terminal Co. Ltd. | 270,000 | 6,935,658 | ||
M3, Inc. | 200,400 | 3,114,271 | ||
Mabuchi Motor Co. Ltd. | 118,900 | 8,806,542 | ||
Mazda Motor Corp. | 972,000 | 4,201,179 | ||
Ono Pharmaceutical Co. Ltd. | 44,200 | 3,386,641 | ||
Rinnai Corp. | 66,000 | 5,783,104 | ||
Seiko Epson Corp. | 166,000 | 5,764,342 | ||
Sohgo Security Services Co. Ltd. | 213,300 | 5,206,783 | ||
Tokyo Steel Manufacturing Co. Ltd. | 842,500 | 3,889,735 | ||
76,417,796 |
8
Shares | Value | |||
NETHERLANDS — 0.6% | ||||
Reed Elsevier NV | 175,360 | $ | 3,926,264 | |
NORWAY — 0.7% | ||||
BW LPG Ltd. | 332,010 | 4,720,864 | ||
SINGAPORE — 0.9% | ||||
Ezion Holdings Ltd. | 3,452,400 | 6,055,393 | ||
SOUTH KOREA — 1.2% | ||||
Amorepacific Corp. | 1,390 | 1,974,230 | ||
Seoul Semiconductor Co. Ltd. | 159,130 | 6,020,798 | ||
7,995,028 | ||||
SPAIN — 3.5% | ||||
Applus Services SA(1) | 380,700 | 8,510,800 | ||
Bankinter SA | 887,630 | 7,034,782 | ||
Grifols SA | 147,110 | 7,971,186 | ||
23,516,768 | ||||
SWEDEN — 2.2% | ||||
Meda AB A Shares | 305,090 | 5,338,619 | ||
Trelleborg AB B Shares | 436,820 | 9,530,144 | ||
14,868,763 | ||||
SWITZERLAND — 7.1% | ||||
AMS AG | 19,600 | 3,213,043 | ||
Aryzta AG | 51,600 | 4,811,390 | ||
Cembra Money Bank AG | 86,200 | 5,717,789 | ||
Clariant AG | 389,180 | 8,040,011 | ||
Lindt & Spruengli AG | 1,400 | 6,938,247 | ||
Lonza Group AG | 177,230 | 19,049,009 | ||
47,769,489 | ||||
TAIWAN — 4.9% | ||||
Advanced Semiconductor Engineering, Inc. | 3,351,000 | 4,246,652 | ||
Catcher Technology Co. Ltd. | 1,567,000 | 14,005,302 | ||
Hermes Microvision, Inc. | 152,041 | 6,084,581 | ||
Hiwin Technologies Corp. | 549,000 | 5,639,126 | ||
Vanguard International Semiconductor Corp. | 1,833,000 | 2,842,524 | ||
32,818,185 | ||||
UNITED KINGDOM — 16.1% | ||||
Ashtead Group plc | 1,348,470 | 19,901,973 | ||
Babcock International Group plc | 333,670 | 6,789,868 | ||
Countrywide plc | 659,500 | 6,013,665 | ||
Hays plc | 2,711,980 | 6,873,276 | ||
Henderson Group plc | 1,899,700 | 7,944,765 | ||
London Stock Exchange Group plc | 418,140 | 13,723,342 | ||
Merlin Entertainments plc(1)(2) | 1,172,270 | 7,160,305 | ||
Persimmon plc(1) | 179,290 | 4,021,033 | ||
Rentokil Initial plc | 4,223,810 | 8,354,335 | ||
St. James's Place plc | 1,412,660 | 18,528,808 | ||
Weir Group plc (The) | 218,490 | 9,595,295 | ||
108,906,665 |
9
Shares | Value | |||
UNITED STATES — 1.2% | ||||
Lazard Ltd. Class A | 155,510 | $ | 7,853,255 | |
TOTAL COMMON STOCKS (Cost $542,578,852) | 665,567,694 | |||
EXCHANGE-TRADED FUNDS — 0.8% | ||||
iShares MSCI Emerging Markets Index Fund (Cost $5,375,746) | 131,340 | 5,588,516 | ||
TEMPORARY CASH INVESTMENTS — 1.0% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $1,407,937), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $1,380,134) | 1,380,128 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $1,126,008), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,104,103) | 1,104,102 | |||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $1,126,718), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,104,103) | 1,104,102 | |||
SSgA U.S. Government Money Market Fund | 2,850,042 | 2,850,042 | ||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $6,438,374) | 6,438,374 | |||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $554,392,972) | 677,594,584 | |||
OTHER ASSETS AND LIABILITIES — (0.3)% | (2,012,793) | |||
TOTAL NET ASSETS — 100.0% | $ | 675,581,791 |
MARKET SECTOR DIVERSIFICATION | |
(as a % of net assets) | |
Industrials | 25.8% |
Consumer Discretionary | 18.7% |
Financials | 15.5% |
Information Technology | 12.5% |
Health Care | 8.8% |
Materials | 5.5% |
Energy | 5.1% |
Consumer Staples | 4.3% |
Utilities | 1.2% |
Telecommunication Services | 1.1% |
Exchange-Traded Funds | 0.8% |
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
(1) | Non-income producing. |
(2) | Restricted security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be sold without restriction to qualified institutional investors and have been deemed liquid under policies approved by the Board of Directors. The aggregate value of these securities at the period end was $7,160,305, which represented 1.1% of total net assets. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $554,392,972) | $ | 677,594,584 | |
Foreign currency holdings, at value (cost of $47,213) | 43,563 | ||
Receivable for investments sold | 14,424,951 | ||
Receivable for capital shares sold | 20,416 | ||
Dividends and interest receivable | 588,730 | ||
Other assets | 128,141 | ||
692,800,385 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 1,104,102 | ||
Payable for investments purchased | 13,182,934 | ||
Payable for capital shares redeemed | 2,051,173 | ||
Accrued management fees | 878,801 | ||
Distribution and service fees payable | 1,584 | ||
17,218,594 | |||
Net Assets | $ | 675,581,791 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 728,316,327 | |
Distributions in excess of net investment income | (3,009,757 | ) | |
Accumulated net realized loss | (172,869,212 | ) | |
Net unrealized appreciation | 123,144,433 | ||
$ | 675,581,791 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | ||||
Investor Class, $0.01 Par Value | $637,429,814 | 47,752,016 | $13.35 | |||
Institutional Class, $0.01 Par Value | $32,368,117 | 2,397,526 | $13.50 | |||
A Class, $0.01 Par Value | $4,860,650 | 373,444 | $13.02* | |||
C Class, $0.01 Par Value | $499,178 | 38,258 | $13.05 | |||
R Class, $0.01 Par Value | $424,032 | 32,035 | $13.24 |
*Maximum offering price $13.81 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $574,651) | $ | 7,473,779 | |
Interest | 609 | ||
7,474,388 | |||
Expenses: | |||
Management fees | 5,141,839 | ||
Distribution and service fees: | |||
A Class | 5,229 | ||
C Class | 2,141 | ||
R Class | 1,022 | ||
Directors' fees and expenses | 171,261 | ||
Other expenses | 200 | ||
5,321,692 | |||
Net investment income (loss) | 2,152,696 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 40,859,359 | ||
Foreign currency transactions | (58,181) | ||
40,801,178 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | (3,398,754) | ||
Translation of assets and liabilities in foreign currencies | 2,650 | ||
(3,396,104) | |||
Net realized and unrealized gain (loss) | 37,405,074 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 39,557,770 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 2,152,696 | $ | 249,567 | ||
Net realized gain (loss) | 40,801,178 | 128,353,831 | ||||
Change in net unrealized appreciation (depreciation) | (3,396,104 | ) | 25,999,876 | |||
Net increase (decrease) in net assets resulting from operations | 39,557,770 | 154,603,274 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (6,710,325 | ) | (8,871,910) | |||
Institutional Class | (445,178 | ) | (778,029) | |||
A Class | (31,274 | ) | (41,551) | |||
C Class | (1,497 | ) | (566) | |||
R Class | (1,905 | ) | (3,285) | |||
Decrease in net assets from distributions | (7,190,179 | ) | (9,695,341) | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | (8,816,494 | ) | (127,252,463) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 16,073 | 12,796 | ||||
Net increase (decrease) in net assets | 23,567,170 | 17,668,266 | ||||
Net Assets | ||||||
Beginning of period | 652,014,621 | 634,346,355 | ||||
End of period | $ | 675,581,791 | $ | 652,014,621 | ||
Undistributed (distributions in excess of) net investment income | $ | (3,009,757 | ) | $ | 2,027,726 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Discovery Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been
14
declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income - Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 ranges from 1.200% to 1.750% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.000% to 1.550% for the Institutional Class. The effective annual management fee for each class for the six months ended May 31, 2014 was 1.51% for the Investor Class, A Class, C Class and R Class and 1.31% for the Institutional Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The impact of directors' fees and expenses to the ratio of operating expenses to average net assets was 0.03% for the period ended May 31, 2014. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $442,845,216 and $455,008,872, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013 | |||||||
Shares | Amount | Shares | Amount | |||||
Investor Class/Shares Authorized | 400,000,000 | 400,000,000 | ||||||
Sold | 3,733,945 | $ | 50,372,176 | 1,547,181 | $ | 17,131,175 | ||
Issued in reinvestment of distributions | 493,153 | 6,430,257 | 795,041 | 8,371,778 | ||||
Redeemed | (5,319,531) | (70,562,187) | (11,283,868) | (122,824,641) | ||||
(1,092,433) | (13,759,754) | (8,941,646) | (97,321,688) | |||||
Institutional Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||
Sold | 1,433,282 | 19,291,959 | 264,674 | 2,892,178 | ||||
Issued in reinvestment of distributions | 33,648 | 444,778 | 73,013 | 777,585 | ||||
Redeemed | (1,195,160) | (16,017,952) | (2,993,465) | (33,838,869) | ||||
271,770 | 3,718,785 | (2,655,778) | (30,169,106) | |||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||
Sold | 120,691 | 1,552,773 | 145,076 | 1,601,685 | ||||
Issued in reinvestment of distributions | 2,425 | 31,274 | 3,872 | 39,768 | ||||
Redeemed | (39,644) | (512,205) | (148,232) | (1,628,334) | ||||
83,472 | 1,071,842 | 716 | 13,119 | |||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||
Sold | 12,241 | 158,502 | 27,306 | 303,661 | ||||
Issued in reinvestment of distributions | 113 | 1,497 | 55 | 566 | ||||
Redeemed | (1,671) | (22,269) | (9,219) | (97,824) | ||||
10,683 | 137,730 | 18,142 | 206,403 | |||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||
Sold | 1,234 | 16,120 | 2,569 | 28,230 | ||||
Issued in reinvestment of distributions | 141 | 1,905 | 315 | 3,285 | ||||
Redeemed | (237) | (3,122) | (1,158) | (12,706) | ||||
1,138 | 14,903 | 1,726 | 18,809 | |||||
Net increase (decrease) | (725,370) | $ | (8,816,494 | ) | (11,576,840) | $ | (127,252,463 | ) |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 26,557,306 | $ | 639,010,388 | — | |||
Exchange-Traded Funds | 5,588,516 | — | — | |||||
Temporary Cash Investments | 2,850,042 | 3,588,332 | — | |||||
$ | 34,995,864 | $ | 642,598,720 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund invests in common stocks of small companies. Because of this, it may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 555,719,287 | |
Gross tax appreciation of investments | $ | 128,238,764 | |
Gross tax depreciation of investments | (6,363,467) | ||
Net tax appreciation (depreciation) of investments | $ | 121,875,297 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $(211,449,086), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2014(3) | $12.70 | 0.04 | 0.75 | 0.79 | (0.14) | $13.35 | 6.23% | 1.54%(4) | 0.64%(4) | 66% | $637,430 | ||
2013 | $10.08 | —(5) | 2.79 | 2.79 | (0.17) | $12.70 | 27.97% | 1.56% | 0.03% | 157% | $620,359 | ||
2012 | $9.22 | 0.04 | 0.82 | 0.86 | —(5) | $10.08 | 9.23% | 1.50% | 0.42% | 154% | $582,331 | ||
2011 | $9.88 | 0.02 | (0.68) | (0.66) | — | $9.22 | (6.58)% | 1.42% | 0.14% | 167% | $660,971 | ||
2010 | $8.55 | —(5) | 1.35 | 1.35 | (0.02) | $9.88 | 15.80% | 1.43% | 0.00%(6) | 199% | $878,530 | ||
2009 | $6.26 | 0.01 | 2.34 | 2.35 | (0.06) | $8.55 | 38.06% | 1.48% | 0.13% | 207% | $872,865 | ||
Institutional Class | |||||||||||||
2014(3) | $12.86 | 0.05 | 0.76 | 0.81 | (0.17) | $13.50 | 6.33% | 1.34%(4) | 0.84%(4) | 66% | $32,368 | ||
2013 | $10.20 | 0.05 | 2.80 | 2.85 | (0.19) | $12.86 | 28.16% | 1.36% | 0.23% | 157% | $27,341 | ||
2012 | $9.34 | 0.05 | 0.83 | 0.88 | (0.02) | $10.20 | 9.44% | 1.30% | 0.62% | 154% | $48,794 | ||
2011 | $9.99 | 0.03 | (0.68) | (0.65) | — | $9.34 | (6.41)% | 1.22% | 0.34% | 167% | $97,063 | ||
2010 | $8.66 | 0.02 | 1.36 | 1.38 | (0.05) | $9.99 | 16.06% | 1.23% | 0.20% | 199% | $97,167 | ||
2009 | $6.34 | 0.02 | 2.37 | 2.39 | (0.07) | $8.66 | 38.32% | 1.28% | 0.33% | 207% | $79,830 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class(7) | �� | ||||||||||||
2014(3) | $12.36 | 0.03 | 0.73 | 0.76 | (0.10) | $13.02 | 6.15% | 1.79%(4) | 0.39%(4) | 66% | $4,861 | ||
2013 | $9.81 | (0.03) | 2.72 | 2.69 | (0.14) | $12.36 | 27.69% | 1.81% | (0.22)% | 157% | $3,585 | ||
2012 | $9.00 | 0.01 | 0.80 | 0.81 | — | $9.81 | 8.88% | 1.75% | 0.17% | 154% | $2,838 | ||
2011 | $9.67 | (0.02) | (0.65) | (0.67) | — | $9.00 | (6.83)% | 1.67% | (0.11)% | 167% | $3,182 | ||
2010 | $8.37 | (0.02) | 1.32 | 1.30 | — | $9.67 | 15.53% | 1.68% | (0.25)% | 199% | $4,814 | ||
2009 | $6.13 | —(5) | 2.29 | 2.29 | (0.05) | $8.37 | 37.71% | 1.73% | (0.12)% | 207% | $6,342 | ||
C Class | |||||||||||||
2014(3) | $12.39 | (0.02) | 0.73 | 0.71 | (0.05) | $13.05 | 5.69% | 2.54%(4) | (0.36)%(4) | 66% | $499 | ||
2013 | $9.83 | (0.14) | 2.76 | 2.62 | (0.06) | $12.39 | 26.75% | 2.56% | (0.97)% | 157% | $342 | ||
2012 | $9.08 | (0.05) | 0.80 | 0.75 | — | $9.83 | 8.14% | 2.50% | (0.58)% | 154% | $93 | ||
2011 | $9.82 | (0.07) | (0.67) | (0.74) | — | $9.08 | (7.43)% | 2.42% | (0.86)% | 167% | $87 | ||
2010(8) | $8.50 | (0.05) | 1.37 | 1.32 | — | $9.82 | 15.53% | 2.43%(4) | (0.77)%(4) | 199%(9) | $77 | ||
R Class | |||||||||||||
2014(3) | $12.55 | 0.01 | 0.74 | 0.75 | (0.06) | $13.24 | 5.97% | 2.04%(4) | 0.14%(4) | 66% | $424 | ||
2013 | $9.96 | (0.06) | 2.76 | 2.70 | (0.11) | $12.55 | 27.35% | 2.06% | (0.47)% | 157% | $388 | ||
2012 | $9.15 | —(5) | 0.81 | 0.81 | — | $9.96 | 8.73% | 2.00% | (0.08)% | 154% | $290 | ||
2011 | $9.86 | (0.04) | (0.67) | (0.71) | — | $9.15 | (7.10)% | 1.92% | (0.36)% | 167% | $27 | ||
2010(8) | $8.50 | (0.01) | 1.37 | 1.36 | — | $9.86 | 16.00% | 1.93%(4) | (0.16)%(4) | 199%(9) | $29 |
Notes to Financial Highlights |
20
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Ratio was less than 0.005%. |
(7) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class. |
(8) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82561 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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International Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-14-000024/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWIEX | 3.14% | 15.74% | 13.18% | 7.71% | 8.31% | 5/9/91 |
MSCI EAFE Index | — | 5.33% | 18.04% | 11.42% | 7.06% | 5.92%(2) | — |
MSCI EAFE Growth Index | — | 4.48% | 15.68% | 12.02% | 7.14% | 4.62%(2) | — |
Institutional Class | TGRIX | 3.18% | 15.93% | 13.41% | 7.93% | 6.41% | 11/20/97 |
A Class(3) | TWGAX | 10/2/96 | |||||
No sales charge* | 3.02% | 15.53% | 12.93% | 7.45% | 6.78% | ||
With sales charge* | -2.93% | 8.92% | 11.60% | 6.82% | 6.43% | ||
C Class | AIWCX | 6/4/01 | |||||
No sales charge* | 2.65% | 14.63% | 12.08% | 6.64% | 3.94% | ||
With sales charge* | 1.65% | 14.63% | 12.08% | 6.64% | 3.94% | ||
R Class | ATGRX | 2.91% | 15.20% | 12.61% | 7.19% | 8.06% | 8/29/03 |
R6 Class | ATGDX | 3.30% | — | — | — | 13.00%(1) | 7/26/13 |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since April 30, 1991, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.22% | 1.02% | 1.47% | 2.22% | 1.72% | 0.87% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
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
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Roche Holding AG | 3.0% |
Nestle SA | 2.2% |
Novartis AG | 1.9% |
Bayer AG | 1.8% |
BG Group plc | 1.6% |
Pandora A/S | 1.5% |
Nidec Corp. | 1.5% |
Associated British Foods plc | 1.4% |
Ashtead Group plc | 1.4% |
Daimler AG | 1.3% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.6% |
Other Assets and Liabilities | 0.4% |
Investments by Country | % of net assets |
United Kingdom | 22.7% |
Japan | 14.2% |
Switzerland | 10.7% |
France | 10.0% |
Germany | 8.0% |
Denmark | 4.6% |
Netherlands | 4.3% |
Australia | 3.5% |
Spain | 3.2% |
China | 3.0% |
Italy | 2.5% |
Sweden | 2.4% |
Other Countries | 10.5% |
Other Assets and Liabilities | 0.4% |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 – 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,031.40 | $6.03 | 1.19% |
Institutional Class | $1,000 | $1,031.80 | $5.01 | 0.99% |
A Class | $1,000 | $1,030.20 | $7.29 | 1.44% |
C Class | $1,000 | $1,026.50 | $11.06 | 2.19% |
R Class | $1,000 | $1,029.10 | $8.55 | 1.69% |
R6 Class | $1,000 | $1,033.00 | $4.26 | 0.84% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.00 | $5.99 | 1.19% |
Institutional Class | $1,000 | $1,020.00 | $4.99 | 0.99% |
A Class | $1,000 | $1,017.75 | $7.24 | 1.44% |
C Class | $1,000 | $1,014.01 | $11.00 | 2.19% |
R Class | $1,000 | $1,016.51 | $8.50 | 1.69% |
R6 Class | $1,000 | $1,020.74 | $4.23 | 0.84% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.6% | |||||
AUSTRALIA — 3.5% | |||||
BHP Billiton Ltd. | 472,402 | $ | 16,271,108 | ||
Commonwealth Bank of Australia | 273,456 | 20,763,984 | |||
CSL Ltd. | 366,524 | 24,078,637 | |||
James Hardie Industries SE | 928,330 | 12,380,406 | |||
73,494,135 | |||||
AUSTRIA — 0.4% | |||||
Erste Group Bank AG | 232,957 | 8,094,485 | |||
BELGIUM — 1.3% | |||||
Anheuser-Busch InBev NV | 250,902 | 27,535,793 | |||
BRAZIL — 0.5% | |||||
Itau Unibanco Holding SA Preference Shares | 712,800 | 11,097,828 | |||
CHINA — 3.0% | |||||
Baidu, Inc. ADR(1) | 80,308 | 13,331,128 | |||
ENN Energy Holdings Ltd. | 932,000 | 6,593,645 | |||
Haier Electronics Group Co. Ltd. | 3,965,000 | 9,277,127 | |||
Tencent Holdings Ltd. | 1,446,500 | 20,392,554 | |||
Vipshop Holdings Ltd. ADR(1) | 73,950 | 12,028,707 | |||
61,623,161 | |||||
DENMARK — 4.6% | |||||
Coloplast A/S B Shares | 126,513 | 10,929,762 | |||
GN Store Nord A/S | 693,506 | 19,139,221 | |||
Novo Nordisk A/S B Shares | 594,266 | 25,135,679 | |||
Pandora A/S | 414,872 | 30,737,676 | |||
Vestas Wind Systems A/S(1) | 190,130 | 10,226,536 | |||
96,168,874 | |||||
FINLAND — 0.7% | |||||
Sampo A Shares | 270,485 | 13,634,956 | |||
FRANCE — 10.0% | |||||
Accor SA | 398,930 | 21,107,652 | |||
Airbus Group NV | 249,115 | 17,865,362 | |||
AXA SA | 593,928 | 14,662,090 | |||
Carrefour SA | 308,707 | 11,223,108 | |||
Cie de St-Gobain | 297,853 | 16,969,535 | |||
Cie Generale d'Optique Essilor International SA | 70,845 | 7,441,866 | |||
Iliad SA | 39,082 | 12,492,900 | |||
Publicis Groupe SA | 134,697 | 11,618,981 | |||
Schneider Electric SA | 264,935 | 24,947,975 | |||
Technip SA | 62,180 | 6,677,445 | |||
Total SA | 387,930 | 27,222,972 | |||
Valeo SA | 122,928 | 16,505,576 | |||
Zodiac Aerospace | 523,282 | 18,603,173 | |||
207,338,635 | |||||
GERMANY — 8.0% | |||||
adidas AG | 112,312 | 12,054,944 | |||
BASF SE | 144,789 | 16,671,770 |
7
Shares | Value | ||||
Bayer AG | 255,145 | $ | 36,901,675 | ||
Continental AG | 95,731 | 22,634,481 | |||
Daimler AG | 290,125 | 27,565,227 | |||
Henkel AG & Co. KGaA Preference Shares | 87,390 | 10,093,519 | |||
Siemens AG | 128,454 | 17,065,447 | |||
Sky Deutschland AG(1) | 1,745,799 | 16,287,254 | |||
Wirecard AG | 168,121 | 7,333,572 | |||
166,607,889 | |||||
GREECE — 0.4% | |||||
Alpha Bank AE(1) | 9,280,529 | 8,729,019 | |||
HONG KONG — 0.8% | |||||
Sands China Ltd. | 2,408,000 | 17,548,417 | |||
INDIA — 1.9% | |||||
ICICI Bank Ltd. ADR | 239,290 | 11,885,534 | |||
Tata Consultancy Services Ltd. | 345,610 | 12,524,488 | |||
Tata Motors Ltd. ADR | 377,008 | 14,039,778 | |||
38,449,800 | |||||
INDONESIA — 0.5% | |||||
PT Bank Mandiri (Persero) Tbk | 12,835,000 | 11,185,964 | |||
IRELAND — 0.6% | |||||
Bank of Ireland(1) | 23,420,791 | 9,003,146 | |||
Kerry Group plc A Shares | 54,074 | 4,116,758 | |||
13,119,904 | |||||
ITALY — 2.5% | |||||
Intesa Sanpaolo SpA | 2,940,920 | 9,853,913 | |||
Luxottica Group SpA | 256,601 | 14,656,019 | |||
UniCredit SpA | 3,043,537 | 26,531,559 | |||
51,041,491 | |||||
JAPAN — 14.2% | |||||
Daikin Industries Ltd. | 370,000 | 22,043,713 | |||
Daito Trust Construction Co. Ltd. | 66,600 | 7,212,819 | |||
FANUC Corp. | 124,600 | 21,199,136 | |||
Fuji Heavy Industries Ltd. | 679,100 | 17,978,138 | |||
Honda Motor Co., Ltd. | 652,000 | 22,820,000 | |||
Japan Tobacco, Inc. | 337,429 | 11,415,574 | |||
Keyence Corp. | 69,400 | 26,958,969 | |||
Komatsu Ltd. | 778,400 | 16,951,992 | |||
Mitsubishi Estate Co. Ltd. | 339,000 | 8,228,576 | |||
Mizuho Financial Group, Inc. | 7,177,700 | 13,960,556 | |||
Murata Manufacturing Co. Ltd. | 176,900 | 14,984,368 | |||
Nidec Corp. | 525,000 | 30,525,295 | |||
ORIX Corp. | 1,722,000 | 27,301,650 | |||
Panasonic Corp. | 1,653,300 | 17,751,050 | |||
Rakuten, Inc. | 1,066,404 | 13,817,160 | |||
Seven & I Holdings Co. Ltd. | 281,000 | 11,228,959 | |||
Unicharm Corp. | 172,200 | 10,426,727 | |||
294,804,682 | |||||
MEXICO — 0.9% | |||||
Cemex SAB de CV ADR(1) | 1,531,032 | 19,704,382 | |||
NETHERLANDS — 4.3% | |||||
Akzo Nobel NV | 311,385 | 23,337,056 |
8
Shares | Value | ||||
ASML Holding NV | 267,453 | $ | 22,953,865 | ||
ING Groep NV CVA(1) | 1,815,532 | 25,429,006 | |||
Koninklijke Boskalis Westminster NV | 301,981 | 17,198,544 | |||
88,918,471 | |||||
NORWAY — 0.7% | |||||
Statoil ASA | 472,439 | 14,478,466 | |||
RUSSIA — 0.6% | |||||
Magnit OJSC GDR | 204,902 | 11,925,296 | |||
SPAIN — 3.2% | |||||
Amadeus IT Holding SA A Shares | 293,476 | 12,893,669 | |||
Banco Popular Espanol SA | 2,788,674 | 19,694,954 | |||
Bankia SA(1) | 12,324,568 | 25,049,150 | |||
Inditex SA | 55,776 | 8,097,307 | |||
65,735,080 | |||||
SWEDEN — 2.4% | |||||
Skandinaviska Enskilda Banken AB A Shares | 1,687,062 | 22,903,405 | |||
Svenska Cellulosa AB B Shares | 738,018 | 20,534,810 | |||
Volvo AB B Shares | 511,790 | 7,441,298 | |||
50,879,513 | |||||
SWITZERLAND — 10.7% | |||||
Adecco SA | 135,679 | 11,325,522 | |||
Cie Financiere Richemont SA | 137,410 | 14,477,536 | |||
Givaudan SA | 7,307 | 11,978,421 | |||
Nestle SA | 570,444 | 44,750,074 | |||
Novartis AG | 435,498 | 39,051,356 | |||
Roche Holding AG | 208,914 | 61,472,741 | |||
Sika AG | 3,824 | 15,155,082 | |||
UBS AG | 1,169,434 | 23,480,093 | |||
221,690,825 | |||||
TAIWAN — 0.8% | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 788,111 | 16,203,562 | |||
TURKEY — 0.4% | |||||
BIM Birlesik Magazalar AS | 364,218 | 7,996,681 | |||
UNITED KINGDOM — 22.7% | |||||
ARM Holdings plc | 871,381 | 13,437,590 | |||
Ashtead Group plc | 1,921,305 | 28,356,404 | |||
Associated British Foods plc | 592,075 | 29,951,698 | |||
BG Group plc | 1,598,901 | 32,723,724 | |||
BT Group plc | 2,820,538 | 18,769,295 | |||
Bunzl plc | 518,120 | 14,520,853 | |||
Burberry Group plc | 629,189 | 16,167,719 | |||
Capita Group plc (The) | 672,363 | 12,476,045 | |||
Carnival plc | 120,520 | 4,898,875 | |||
Compass Group plc | 369,285 | 6,162,095 | |||
International Consolidated Airlines Group SA(1) | 2,977,511 | 19,644,182 | |||
Intertek Group plc | 163,290 | 7,986,755 | |||
ITV plc | 3,046,450 | 9,298,855 | |||
Johnson Matthey plc | 424,583 | 22,859,337 | |||
Lloyds Banking Group plc(1) | 18,832,495 | 24,578,068 | |||
Next plc | 129,061 | 14,364,436 | |||
Prudential plc | 636,940 | 14,792,124 |
9
Shares | Value | ||||
Reckitt Benckiser Group plc | 316,236 | $ | 27,033,792 | ||
Rio Tinto plc | 484,510 | 24,826,967 | |||
Rolls-Royce Holdings plc | 685,820 | 11,955,534 | |||
Rolls-Royce Holdings plc Preference Shares | 91,899,880 | 154,043 | |||
Royal Bank of Scotland Group plc(1) | 3,258,444 | 18,930,597 | |||
Shire plc | 298,776 | 17,097,583 | |||
Smith & Nephew plc | 765,411 | 13,419,980 | |||
St. James's Place plc | 1,750,761 | 22,963,427 | |||
Travis Perkins plc | 578,902 | 16,331,071 | |||
Whitbread plc | 390,814 | 27,421,728 | |||
471,122,777 | |||||
TOTAL INVESTMENT SECURITIES — 99.6% (Cost $1,637,424,563) | 2,069,130,086 | ||||
OTHER ASSETS AND LIABILITIES — 0.4% | 8,449,480 | ||||
TOTAL NET ASSETS — 100.0% | $ | 2,077,579,566 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 19.5 | % |
Financials | 19.2 | % |
Industrials | 16.6 | % |
Health Care | 12.2 | % |
Consumer Staples | 10.9 | % |
Materials | 7.8 | % |
Information Technology | 7.7 | % |
Energy | 3.9 | % |
Telecommunication Services | 1.5 | % |
Utilities | 0.3 | % |
Other Assets and Liabilities | 0.4 | % |
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CVA | - | Certificaten Van Aandelen |
GDR | - | Global Depositary Receipt |
OJSC | - | Open Joint Stock Company |
(1) | Non-income producing. |
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $1,637,424,563) | $ | 2,069,130,086 | |
Foreign currency holdings, at value (cost of $3,185,702) | 3,182,143 | ||
Receivable for investments sold | 29,378,310 | ||
Receivable for capital shares sold | 1,291,352 | ||
Dividends and interest receivable | 8,262,624 | ||
Other assets | 320,702 | ||
2,111,565,217 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 2,925,821 | ||
Payable for investments purchased | 28,373,501 | ||
Payable for capital shares redeemed | 501,719 | ||
Accrued management fees | 2,010,672 | ||
Distribution and service fees payable | 73,036 | ||
Accrued foreign taxes | 100,902 | ||
33,985,651 | |||
Net Assets | $ | 2,077,579,566 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 1,573,555,974 | |
Distributions in excess of net investment income | (4,499,436 | ) | |
Undistributed net realized gain | 76,869,687 | ||
Net unrealized appreciation | 431,653,341 | ||
$ | 2,077,579,566 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||
Investor Class, $0.01 Par Value | $1,539,296,635 | 112,236,366 | $13.71 | ||
Institutional Class, $0.01 Par Value | $216,463,509 | 15,875,477 | $13.64 | ||
A Class, $0.01 Par Value | $304,265,434 | 22,022,729 | $13.82* | ||
C Class, $0.01 Par Value | $10,229,102 | 751,815 | $13.61 | ||
R Class, $0.01 Par Value | $2,367,088 | 169,694 | $13.95 | ||
R6 Class, $0.01 Par Value | $4,957,798 | 363,728 | $13.63 |
*Maximum offering price $14.66 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $3,232,644) | $ | 27,197,673 | |
Interest | 356 | ||
27,198,029 | |||
Expenses: | |||
Management fees | 11,644,439 | ||
Distribution and service fees: | |||
A Class | 356,549 | ||
C Class | 38,205 | ||
R Class | 5,503 | ||
Directors' fees and expenses | 32,957 | ||
Other expenses | 7,697 | ||
12,085,350 | |||
Net investment income (loss) | 15,112,679 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions (net of foreign tax expenses paid (refunded) of $22,408) | 95,602,301 | ||
Foreign currency transactions | 159,608 | ||
95,761,909 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $186,031) | (47,341,402 | ) | |
Translation of assets and liabilities in foreign currencies | (322,714 | ) | |
(47,664,116 | ) | ||
Net realized and unrealized gain (loss) | 48,097,793 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 63,210,472 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 15,112,679 | $ | 14,701,721 | ||
Net realized gain (loss) | 95,761,909 | 239,243,421 | ||||
Change in net unrealized appreciation (depreciation) | (47,664,116 | ) | 131,287,150 | |||
Net increase (decrease) in net assets resulting from operations | 63,210,472 | 385,232,292 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (21,533,533 | ) | (20,623,148 | ) | ||
Institutional Class | (3,156,132 | ) | (2,775,151 | ) | ||
A Class | (3,096,954 | ) | (2,541,575 | ) | ||
C Class | (18,143 | ) | (22,786 | ) | ||
R Class | (18,382 | ) | (23,701 | ) | ||
R6 Class | (93,071 | ) | — | |||
From net realized gains: | ||||||
Investor Class | (30,554,806 | ) | — | |||
Institutional Class | (3,774,435 | ) | — | |||
A Class | (5,446,175 | ) | — | |||
C Class | (105,404 | ) | — | |||
R Class | (45,597 | ) | — | |||
R6 Class | (103,783 | ) | — | |||
Decrease in net assets from distributions | (67,946,415 | ) | (25,986,361 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 117,090,462 | (6,050,779 | ) | |||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 92,345 | 47,633 | ||||
Net increase (decrease) in net assets | 112,446,864 | 353,242,785 | ||||
Net Assets | ||||||
Beginning of period | 1,965,132,702 | 1,611,889,917 | ||||
End of period | $ | 2,077,579,566 | $ | 1,965,132,702 | ||
Undistributed (distributions in excess of) net investment income | $ | (4,499,436 | ) | $ | 8,304,100 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the
14
fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation 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. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
Multiple Class - All shares of the 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
15
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 fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. and American Century Strategic Asset Allocations, Inc. own, in aggregate, 18% of the shares of the fund.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 the fund also include the assets of NT International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.050% to 1.500% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.850% to 1.300% for the Institutional Class and 0.700% to 1.150% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2014 was 1.19% for the Investor Class, A Class, C Class and R Class, 0.99% for the Institutional Class and 0.84% for the R6 Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
16
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $863,238,807 and $798,080,941, respectively.
For the six months ended May 31, 2014, the fund incurred net realized gains of $1,950,934 from redemptions in kind. A redemption in kind occurs when a fund delivers securities from its portfolio in lieu of cash as payment to a redeeming shareholder.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 550,000,000 | 550,000,000 | ||||||||
Sold | 8,406,799 | $ | 113,144,981 | 9,610,155 | $ | 118,472,050 | ||||
Issued in reinvestment of distributions | 3,844,324 | 50,247,027 | 1,715,577 | 19,900,407 | ||||||
Redeemed | (8,816,002 | ) | (118,926,894 | ) | (15,013,406 | ) | (184,392,231 | ) | ||
3,435,121 | 44,465,114 | (3,687,674 | ) | (46,019,774 | ) | |||||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||
Sold | 3,627,069 | 48,372,026 | 3,140,110 | 38,258,142 | ||||||
Issued in reinvestment of distributions | 529,316 | 6,878,135 | 237,368 | 2,753,024 | ||||||
Redeemed | (1,782,556 | ) | (23,915,307) | (2,376,498) | (29,848,228) | |||||
2,373,829 | 31,334,854 | 1,000,980 | 11,162,938 | |||||||
A Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||
Sold | 3,790,076 | 51,378,116 | 5,245,205 | 65,703,449 | ||||||
Issued in reinvestment of distributions | 637,839 | 8,406,322 | 215,947 | 2,503,930 | ||||||
Redeemed | (1,744,957 | ) | (23,770,039) | (3,642,714) | (45,205,498) | |||||
2,682,958 | 36,014,399 | 1,818,438 | 23,001,881 | |||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 413,244 | 5,534,399 | 163,034 | 2,125,390 | ||||||
Issued in reinvestment of distributions | 7,339 | 95,427 | 1,715 | 19,472 | ||||||
Redeemed | (26,649 | ) | (358,391) | (31,039) | (379,874) | |||||
393,934 | 5,271,435 | 133,710 | 1,764,988 | |||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Sold | 38,536 | 527,564 | 34,725 | 433,114 | ||||||
Issued in reinvestment of distributions | 4,285 | 57,002 | 1,862 | 21,632 | ||||||
Redeemed | (35,690 | ) | (485,483) | (72,251) | (914,494) | |||||
7,131 | 99,083 | (35,664) | (459,748) | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 24,433 | 325,372 | 384,473 | 4,698,936 | ||||||
Issued in reinvestment of distributions | 15,166 | 196,854 | — | — | ||||||
Redeemed | (45,407) | (616,649) | (14,937) | (200,000) | ||||||
(5,808) | (94,423) | 369,536 | 4,498,936 | |||||||
Net increase (decrease) | 8,887,165 | $ | 117,090,462 | (400,674) | $ | (6,050,779 | ) |
(1) | July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class. |
17
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 87,193,091 | $ | 1,981,936,995 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund's investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 1,646,670,761 | |
Gross tax appreciation of investments | $ | 436,714,608 | |
Gross tax depreciation of investments | (14,255,283 | ) | |
Net tax appreciation (depreciation) of investments | $ | 422,459,325 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $2,044,941, which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. As a result of a shift in ownership, the utilization of current capital loss carryovers are limited. Any remaining accumulated gains after application of this limitation will be distributed to shareholders. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2016.
18
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2014(3) | $13.78 | 0.10 | 0.31 | 0.41 | (0.20) | (0.28) | (0.48) | $13.71 | 3.14% | 1.19%(4) | 1.52%(4) | 40% | $1,539,297 | ||
2013 | $11.27 | 0.11 | 2.58 | 2.69 | (0.18) | — | (0.18) | $13.78 | 24.22% | 1.22% | 0.84% | 110% | $1,499,623 | ||
2012 | $9.90 | 0.15 | 1.33 | 1.48 | (0.11) | — | (0.11) | $11.27 | 15.10% | 1.29% | 1.41% | 106% | $1,268,251 | ||
2011 | $10.30 | 0.10 | (0.35) | (0.25) | (0.15) | — | (0.15) | $9.90 | (2.57)% | 1.32% | 0.95% | 125% | $1,189,245 | ||
2010 | $9.75 | 0.09 | 0.61 | 0.70 | (0.15) | — | (0.15) | $10.30 | 7.28% | 1.35% | 0.87% | 130% | $1,320,906 | ||
2009 | $7.15 | 0.09 | 2.64 | 2.73 | (0.13) | — | (0.13) | $9.75 | 38.66% | 1.38% | 1.18% | 151% | $1,279,615 | ||
Institutional Class | |||||||||||||||
2014(3) | $13.73 | 0.12 | 0.30 | 0.42 | (0.23) | (0.28) | (0.51) | $13.64 | 3.18% | 0.99%(4) | 1.72%(4) | 40% | $216,464 | ||
2013 | $11.24 | 0.13 | 2.58 | 2.71 | (0.22) | — | (0.22) | $13.73 | 24.54% | 1.02% | 1.04% | 110% | $185,325 | ||
2012 | $9.89 | 0.17 | 1.33 | 1.50 | (0.15) | — | (0.15) | $11.24 | 15.28% | 1.09% | 1.61% | 106% | $140,446 | ||
2011 | $10.30 | 0.12 | (0.33) | (0.21) | (0.20) | — | (0.20) | $9.89 | (2.27)% | 1.12% | 1.15% | 125% | $113,741 | ||
2010 | $9.78 | 0.10 | 0.61 | 0.71 | (0.19) | — | (0.19) | $10.30 | 7.38% | 1.15% | 1.07% | 130% | $98,610 | ||
2009 | $7.17 | 0.11 | 2.64 | 2.75 | (0.14) | — | (0.14) | $9.78 | 38.96% | 1.18% | 1.38% | 151% | $66,920 |
19
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2014(3) | $13.86 | 0.09 | 0.31 | 0.40 | (0.16) | (0.28) | (0.44) | $13.82 | 3.02% | 1.44%(4) | 1.27%(4) | 40% | $304,265 | ||
2013 | $11.33 | 0.07 | 2.61 | 2.68 | (0.15) | — | (0.15) | $13.86 | 23.98% | 1.47% | 0.59% | 110% | $267,979 | ||
2012 | $9.92 | 0.12 | 1.35 | 1.47 | (0.06) | — | (0.06) | $11.33 | 14.80% | 1.54% | 1.16% | 106% | $198,434 | ||
2011 | $10.29 | 0.08 | (0.35) | (0.27) | (0.10) | — | (0.10) | $9.92 | (2.76)% | 1.57% | 0.70% | 125% | $172,901 | ||
2010 | $9.72 | 0.06 | 0.61 | 0.67 | (0.10) | — | (0.10) | $10.29 | 6.98% | 1.60% | 0.62% | 130% | $183,990 | ||
2009 | $7.13 | 0.07 | 2.63 | 2.70 | (0.11) | — | (0.11) | $9.72 | 38.30% | 1.63% | 0.93% | 151% | $177,804 | ||
C Class | |||||||||||||||
2014(3) | $13.58 | 0.06 | 0.28 | 0.34 | (0.03) | (0.28) | (0.31) | $13.61 | 2.65% | 2.19%(4) | 0.52%(4) | 40% | $10,229 | ||
2013 | $11.14 | (0.03) | 2.57 | 2.54 | (0.10) | — | (0.10) | $13.58 | 23.00% | 2.22% | (0.16)% | 110% | $4,859 | ||
2012 | $9.77 | 0.04 | 1.33 | 1.37 | — | — | — | $11.14 | 14.02% | 2.29% | 0.41% | 106% | $2,497 | ||
2011 | $10.13 | —(5) | (0.36) | (0.36) | — | — | — | $9.77 | (3.55)% | 2.32% | (0.05)% | 125% | $2,725 | ||
2010 | $9.54 | (0.01) | 0.60 | 0.59 | — | — | — | $10.13 | 6.18% | 2.35% | (0.13)% | 130% | $2,691 | ||
2009 | $7.00 | 0.01 | 2.59 | 2.60 | (0.06) | — | (0.06) | $9.54 | 37.29% | 2.38% | 0.18% | 151% | $3,051 |
20
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||||
2014(3) | $13.96 | 0.07 | 0.31 | 0.38 | (0.11) | (0.28) | (0.39) | $13.95 | 2.91% | 1.69%(4) | 1.02%(4) | 40% | $2,367 | ||
2013 | $11.41 | 0.05 | 2.62 | 2.67 | (0.12) | — | (0.12) | $13.96 | 23.59% | 1.72% | 0.34% | 110% | $2,270 | ||
2012 | $9.97 | 0.10 | 1.35 | 1.45 | (0.01) | — | (0.01) | $11.41 | 14.56% | 1.79% | 0.91% | 106% | $2,262 | ||
2011 | $10.32 | 0.05 | (0.36) | (0.31) | (0.04) | — | (0.04) | $9.97 | (3.05)% | 1.82% | 0.45% | 125% | $3,222 | ||
2010 | $9.72 | 0.03 | 0.62 | 0.65 | (0.05) | — | (0.05) | $10.32 | 6.75% | 1.85% | 0.37% | 130% | $4,381 | ||
2009 | $7.13 | 0.06 | 2.62 | 2.68 | (0.09) | — | (0.09) | $9.72 | 37.97% | 1.88% | 0.68% | 151% | $5,436 | ||
R6 Class | |||||||||||||||
2014(3) | $13.74 | 0.13 | 0.29 | 0.42 | (0.25) | (0.28) | (0.53) | $13.63 | 3.30% | 0.84%(4) | 1.87%(4) | 40% | $4,958 | ||
2013(6) | $12.56 | 0.01 | 1.17 | 1.18 | — | — | — | $13.74 | 9.39% | 0.85%(4) | 0.20%(4) | 110%(7) | $5,076 |
Notes to Financial Highlights | |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
21
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
22
Notes |
23
Notes |
24
![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82557 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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International Opportunities Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-14-000024/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | AIOIX | 4.97%(2) | 18.06%(2) | 17.19%(2) | 11.34% | 13.47% | 6/1/01 |
MSCI All Country World ex-U.S. Small Cap Growth Index | — | 6.23% | 16.31% | 13.99% | 9.12% | 8.34% | — |
Institutional Class | ACIOX | 4.98%(2) | 18.22%(2) | 17.40%(2) | 11.57% | 16.13% | 1/9/03 |
A Class(2) | AIVOX | 3/1/10 | |||||
No sales charge* | 4.80% | 17.75% | — | — | 14.41% | ||
With sales charge* | -1.23% | 10.96% | — | — | 12.81% | ||
C Class(2) | AIOCX | 3/1/10 | |||||
No sales charge* | 4.41% | 16.91% | — | — | 13.58% | ||
With sales charge* | 3.41% | 16.91% | — | — | 13.58% | ||
R Class(2) | AIORX | 4.73% | 17.44% | — | — | 14.13% | 3/1/10 |
* 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 and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the management fee had not been waived. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | A Class | R Class |
1.80% | 1.60% | 2.05% | 2.80% | 2.30% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors. 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.
3
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Aareal Bank AG | 2.8% |
Wirecard AG | 2.2% |
Vestas Wind Systems A/S | 2.2% |
Royal UNIBREW A/S | 2.1% |
Sanitec Corp. | 2.0% |
Plastic Omnium SA | 1.7% |
Banca Generali SpA | 1.7% |
NORMA Group | 1.6% |
CCL Industries, Inc. Class B | 1.6% |
Countrywide plc | 1.5% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 98.6% |
Rights | 0.2% |
Total Equity Exposure | 98.8% |
Temporary Cash Investments | 1.2% |
Other Assets and Liabilities | —* |
*Category is less than 0.05% of total net assets. | |
Investments by Country | % of net assets |
Japan | 12.7% |
Germany | 11.0% |
United Kingdom | 11.0% |
Canada | 9.2% |
France | 5.8% |
Denmark | 5.6% |
Sweden | 5.3% |
Italy | 5.1% |
South Korea | 4.3% |
China | 3.5% |
Hong Kong | 3.2% |
Finland | 3.0% |
Spain | 2.6% |
Taiwan | 2.4% |
Singapore | 2.1% |
Australia | 2.1% |
Switzerland | 2.0% |
India | 2.0% |
Other Countries | 5.9% |
Cash and Equivalents** | 1.2% |
**Includes temporary cash investments and other assets and liabilities. |
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 – 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class (after waiver) | $1,000 | $1,049.70 | $7.87 | 1.54% |
Investor Class (before waiver) | $1,000 | $1,049.70(2) | $8.89 | 1.74% |
Institutional Class (after waiver) | $1,000 | $1,049.80 | $6.85 | 1.34% |
Institutional Class (before waiver) | $1,000 | $1,049.80(2) | $7.87 | 1.54% |
A Class (after waiver) | $1,000 | $1,048.00 | $9.14 | 1.79% |
A Class (before waiver) | $1,000 | $1,048.00(2) | $10.16 | 1.99% |
C Class (after waiver) | $1,000 | $1,044.10 | $12.94 | 2.54% |
C Class (before waiver) | $1,000 | $1,044.10(2) | $13.96 | 2.74% |
R Class (after waiver) | $1,000 | $1,047.30 | $10.41 | 2.04% |
R Class (before waiver) | $1,000 | $1,047.30(2) | $11.43 | 2.24% |
Hypothetical | ||||
Investor Class (after waiver) | $1,000 | $1,017.25 | $7.75 | 1.54% |
Investor Class (before waiver) | $1,000 | $1,016.26 | $8.75 | 1.74% |
Institutional Class (after waiver) | $1,000 | $1,018.25 | $6.74 | 1.34% |
Institutional Class (before waiver) | $1,000 | $1,017.25 | $7.75 | 1.54% |
A Class (after waiver) | $1,000 | $1,016.01 | $9.00 | 1.79% |
A Class (before waiver) | $1,000 | $1,015.01 | $10.00 | 1.99% |
C Class (after waiver) | $1,000 | $1,012.27 | $12.74 | 2.54% |
C Class (before waiver) | $1,000 | $1,011.27 | $13.74 | 2.74% |
R Class (after waiver) | $1,000 | $1,014.76 | $10.25 | 2.04% |
R Class (before waiver) | $1,000 | $1,013.76 | $11.25 | 2.24% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the management fee had not been waived. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.6% | |||||
AUSTRALIA — 2.1% | |||||
G8 Education Ltd. | 551,180 | $ | 2,323,689 | ||
Magellan Financial Group Ltd. | 100,960 | 1,165,084 | |||
3,488,773 | |||||
AUSTRIA — 0.5% | |||||
Zumtobel AG | 40,080 | 857,770 | |||
CAMBODIA — 0.5% | |||||
NagaCorp Ltd. | 854,000 | 783,178 | |||
CANADA — 9.2% | |||||
Africa Oil Corp.(1) | 69,770 | 494,187 | |||
ATS Automation Tooling Systems, Inc.(1) | 79,060 | 1,074,743 | |||
Capstone Mining Corp.(1) | 76,459 | 184,043 | |||
CCL Industries, Inc. Class B | 27,034 | 2,624,115 | |||
Element Financial Corp.(1) | 194,270 | 2,445,620 | |||
FirstService Corp. | 43,270 | 2,157,714 | |||
Linamar Corp. | 37,750 | 2,097,609 | |||
Raging River Exploration, Inc.(1) | 245,140 | 2,278,900 | |||
Stantec, Inc. | 28,050 | 1,736,084 | |||
West Fraser Timber Co. Ltd. | 8,970 | 411,976 | |||
15,504,991 | |||||
CHINA — 3.5% | |||||
21Vianet Group, Inc. ADR(1) | 49,610 | 1,337,486 | |||
58.com, Inc. ADR(1) | 20,380 | 819,276 | |||
CIMC Enric Holdings Ltd. | 606,000 | 864,491 | |||
Ju Teng International Holdings Ltd. | 1,794,000 | 1,367,549 | |||
Jumei International Holding Ltd. ADR(1) | 17,240 | 474,100 | |||
YY, Inc. ADR(1) | 15,970 | 1,039,807 | |||
5,902,709 | |||||
DENMARK — 5.6% | |||||
OW Bunker A/S(1) | 47,090 | 1,513,692 | |||
Pandora A/S | 9,260 | 686,069 | |||
Royal UNIBREW A/S(1) | 22,250 | 3,582,669 | |||
Vestas Wind Systems A/S(1) | 68,560 | 3,687,641 | |||
9,470,071 | |||||
FINLAND — 3.0% | |||||
Cramo Oyj | 81,050 | 1,794,249 | |||
Sanitec Corp. | 255,020 | 3,334,466 | |||
5,128,715 | |||||
FRANCE — 5.8% | |||||
APERAM(1) | 36,140 | 1,178,893 | |||
Criteo SA ADR(1) | 31,380 | 902,175 | |||
Eurofins Scientific | 6,800 | 2,085,619 |
7
Shares | Value | ||||
Gaztransport Et Technigaz | 24,000 | $ | 1,570,349 | ||
Nexity SA | 25,490 | 1,072,109 | |||
Plastic Omnium SA | 85,600 | 2,907,223 | |||
9,716,368 | |||||
GERMANY — 11.0% | |||||
Aareal Bank AG | 100,560 | 4,757,304 | |||
Aurelius AG | 48,898 | 1,809,692 | |||
CTS Eventim AG | 14,050 | 869,417 | |||
DMG MORI SEIKI AG | 68,140 | 2,169,330 | |||
Jungheinrich AG Preference Shares | 19,340 | 1,402,529 | |||
Morphosys AG(1) | 12,480 | 1,130,455 | |||
NORMA Group | 48,930 | 2,668,291 | |||
Wirecard AG | 85,560 | 3,732,195 | |||
18,539,213 | |||||
GREECE — 1.1% | |||||
Hellenic Exchanges - Athens Stock Exchange SA Holding | 156,350 | 1,817,986 | |||
HONG KONG — 3.2% | |||||
Man Wah Holdings Ltd. | 544,400 | 884,752 | |||
Melco International Development Ltd. | 235,000 | 748,683 | |||
Paradise Entertainment Ltd.(1) | 2,428,000 | 1,932,266 | |||
Techtronic Industries Co. | 327,500 | 1,032,816 | |||
Xinyi Solar Holdings Ltd.(1) | 3,132,000 | 836,229 | |||
5,434,746 | |||||
INDIA — 2.0% | |||||
Apollo Tyres Ltd. | 437,700 | 1,304,804 | |||
Bharat Forge Ltd. | 242,040 | 2,054,821 | |||
3,359,625 | |||||
INDONESIA — 0.6% | |||||
PT Matahari Department Store Tbk(1) | 770,900 | 959,085 | |||
ISRAEL — 1.0% | |||||
Caesarstone Sdot-Yam Ltd. | 36,060 | 1,629,011 | |||
ITALY — 5.1% | |||||
Banca Generali SpA | 99,050 | 2,892,128 | |||
Banca Popolare di Milano Scarl(1) | 1,228,230 | 1,121,755 | |||
Ei Towers SpA | 11,610 | 654,887 | |||
Interpump Group SpA | 163,710 | 2,296,330 | |||
Piaggio & C SpA(1) | 433,257 | 1,622,953 | |||
8,588,053 | |||||
JAPAN — 12.7% | |||||
Aica Kogyo Co. Ltd. | 69,300 | 1,505,811 | |||
Aida Engineering Ltd. | 90,900 | 799,170 | |||
Daifuku Co. Ltd. | 125,600 | 1,637,242 | |||
Dwango Co. Ltd. | 30,200 | 792,973 | |||
F@N Communications, Inc. | 64,100 | 964,648 | |||
Fujitsu General Ltd. | 127,000 | 1,377,289 | |||
Hoshizaki Electric Co. Ltd. | 27,200 | 1,247,780 | |||
Japan Aviation Electronics Industry Ltd. | 94,000 | 1,746,110 |
8
Shares | Value | ||||
Kanamoto Co. Ltd. | 33,800 | $ | 1,245,088 | ||
Kureha Corp. | 299,000 | 1,448,006 | |||
M3, Inc. | 86,000 | 1,336,464 | |||
Sanwa Holdings Corp. | 182,000 | 1,238,959 | |||
Seiko Epson Corp. | 52,700 | 1,830,005 | |||
Seria Co. Ltd. | 31,000 | 1,266,798 | |||
Sohgo Security Services Co. Ltd. | 51,400 | 1,254,705 | |||
Tadano Ltd. | 112,000 | 1,693,202 | |||
21,384,250 | |||||
MALAYSIA — 0.4% | |||||
7-Eleven Malaysia Holdings Bhd(1) | 1,579,600 | 752,190 | |||
NORWAY — 0.6% | |||||
Hexagon Composites ASA | 162,175 | 1,058,035 | |||
PORTUGAL — 1.2% | |||||
Sonae | 1,112,530 | 1,950,277 | |||
SINGAPORE — 2.1% | |||||
Ezion Holdings Ltd. | 1,282,200 | 2,248,936 | |||
OSIM International Ltd. | 577,000 | 1,288,049 | |||
3,536,985 | |||||
SOUTH KOREA — 4.3% | |||||
Cosmax, Inc.(1) | 22,120 | 1,782,263 | |||
Hanssem Co. Ltd. | 18,750 | 1,628,357 | |||
Hotel Shilla Co. Ltd. | 20,720 | 1,878,651 | |||
Kolao Holdings | 34,243 | 847,516 | |||
Seoul Semiconductor Co. Ltd. | 29,400 | 1,112,370 | |||
7,249,157 | |||||
SPAIN — 2.4% | |||||
Applus Services SA(1) | 56,100 | 1,254,153 | |||
Liberbank SA(1) | 919,540 | 990,242 | |||
Melia Hotels International SA | 137,620 | 1,760,595 | |||
4,004,990 | |||||
SWEDEN — 5.3% | |||||
AarhusKarlshamn AB | 24,710 | 1,620,994 | |||
Avanza Bank Holding AB | 33,270 | 1,310,019 | |||
Clas Ohlson AB B Shares | 73,720 | 1,679,961 | |||
Cloetta AB B Shares(1) | 249,840 | 866,152 | |||
Haldex AB | 138,150 | 1,744,422 | |||
Hexpol AB | 18,700 | 1,788,404 | |||
9,009,952 | |||||
SWITZERLAND — 2.0% | |||||
AMS AG | 6,310 | 1,034,403 | |||
Cembra Money Bank AG | 24,550 | 1,628,442 | |||
Leonteq AG | 4,190 | 781,385 | |||
3,444,230 |
9
Shares | Value | ||||
TAIWAN — 2.4% | |||||
AirTAC International Group | 120,210 | $ | 1,306,914 | ||
Everlight Electronics Co. Ltd. | 593,000 | 1,400,157 | |||
Makalot Industrial Co. Ltd. | 249,000 | 1,278,818 | |||
3,985,889 | |||||
UNITED KINGDOM — 11.0% | |||||
Bellway plc | 66,910 | 1,547,731 | |||
Bodycote plc | 126,010 | 1,575,685 | |||
Close Brothers Group plc | 59,164 | 1,315,994 | |||
Countrywide plc | 275,210 | 2,509,508 | |||
Grafton Group plc | 123,380 | 1,180,882 | |||
Hikma Pharmaceuticals plc | 51,080 | 1,459,825 | |||
Howden Joinery Group plc | 138,600 | 741,801 | |||
Keller Group plc | 50,600 | 809,141 | |||
Pets at Home Group plc(1) | 302,280 | 1,050,097 | |||
Plus500 Ltd. | 83,840 | 836,168 | |||
Poundland Group plc(1) | 321,140 | 1,847,696 | |||
Regus plc | 369,800 | 1,192,607 | |||
Restaurant Group plc (The) | 143,610 | 1,439,499 | |||
Stock Spirits Group plc(1) | 184,093 | 940,387 | |||
18,447,021 | |||||
TOTAL COMMON STOCKS (Cost $135,369,324) | 166,003,270 | ||||
RIGHTS — 0.2% | |||||
SPAIN — 0.2% | |||||
Liberbank SA(1) (Cost $181,410) | 919,540 | 220,611 | |||
TEMPORARY CASH INVESTMENTS — 1.2% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $451,584), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $442,666) | 442,664 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $361,158), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $354,132) | 354,132 | ||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $361,385), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $354,132) | 354,132 | ||||
SSgA U.S. Government Money Market Fund | 914,026 | 914,026 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,064,954) | 2,064,954 | ||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $137,615,688) | 168,288,835 | ||||
OTHER ASSETS AND LIABILITIES† | 66,940 | ||||
TOTAL NET ASSETS — 100.0% | $ | 168,355,775 |
10
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Industrials | 25.8 | % |
Consumer Discretionary | 25.2 | % |
Financials | 16.7 | % |
Information Technology | 11.6 | % |
Consumer Staples | 6.4 | % |
Materials | 5.5 | % |
Energy | 3.9 | % |
Health Care | 3.7 | % |
Cash and Equivalents* | 1.2 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
† Category is less than 0.05% of total net assets.
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $137,615,688) | $ | 168,288,835 | |
Foreign currency holdings, at value (cost of $30,758) | 30,521 | ||
Receivable for investments sold | 4,405,604 | ||
Receivable for capital shares sold | 106,189 | ||
Dividends and interest receivable | 287,376 | ||
Other assets | 33,711 | ||
173,152,236 | |||
Liabilities | |||
Disbursements in excess of demand deposit cash | 354,132 | ||
Payable for investments purchased | 4,026,080 | ||
Payable for capital shares redeemed | 71,839 | ||
Accrued management fees | 211,130 | ||
Distribution and service fees payable | 3,605 | ||
Accrued foreign taxes | 129,675 | ||
4,796,461 | |||
Net Assets | $ | 168,355,775 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 135,249,014 | |
Distributions in excess of net investment income | (176,507 | ) | |
Undistributed net realized gain | 2,749,951 | ||
Net unrealized appreciation | 30,533,317 | ||
$ | 168,355,775 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |
Investor Class, $0.01 Par Value | $149,474,535 | 15,520,085 | $9.63 |
Institutional Class, $0.01 Par Value | $4,160,367 | 427,816 | $9.72 |
A Class, $0.01 Par Value | $13,307,708 | 1,385,908 | $9.60* |
C Class, $0.01 Par Value | $783,794 | 82,768 | $9.47 |
R Class, $0.01 Par Value | $629,371 | 65,754 | $9.57 |
*Maximum offering price $10.19 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $167,094) | $ | 1,707,115 | |
Interest | 97 | ||
1,707,212 | |||
Expenses: | |||
Management fees | 1,362,437 | ||
Distribution and service fees: | |||
A Class | 12,671 | ||
C Class | 2,980 | ||
R Class | 1,607 | ||
Directors' fees and expenses | 2,472 | ||
Other expenses | 108 | ||
1,382,275 | |||
Fees waived | (157,664 | ) | |
1,224,611 | |||
Net investment income (loss) | 482,601 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 7,866,954 | ||
Foreign currency transactions | (36,917 | ) | |
7,830,037 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $(124,182)) | (771,263 | ) | |
Translation of assets and liabilities in foreign currencies | 4,725 | ||
(766,538 | ) | ||
Net realized and unrealized gain (loss) | 7,063,499 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 7,546,100 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 482,601 | $ | (60,956 | ) | |
Net realized gain (loss) | 7,830,037 | 19,677,913 | ||||
Change in net unrealized appreciation (depreciation) | (766,538 | ) | 12,865,378 | |||
Net increase (decrease) in net assets resulting from operations | 7,546,100 | 32,482,335 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (420,466) | (1,124,548) | ||||
Institutional Class | (13,066) | (576) | ||||
A Class | (24,247) | (18,389) | ||||
R Class | (931) | (2,420) | ||||
Decrease in net assets from distributions | (458,710) | (1,145,933) | ||||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 13,108,035 | 15,147,764 | ||||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 5,018 | 18,160 | ||||
Net increase (decrease) in net assets | 20,200,443 | 46,502,326 | ||||
Net Assets | ||||||
Beginning of period | 148,155,332 | 101,653,006 | ||||
End of period | $ | 168,355,775 | $ | 148,155,332 | ||
Distributions in excess of net investment income | $ | (176,507 | ) | $ | (200,398 | ) |
See Notes to Financial Statements.
14
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Opportunities Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been
15
declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation 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. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
16
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 ranges from 1.400% to 2.000% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 1.200% to 1.800% for the Institutional Class. During the six months ended May 31, 2014, the investment advisor voluntarily agreed to waive 0.200% of its management fee. The investment advisor expects the fee waiver to continue through March 31, 2015, and cannot terminate it without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2014 was $142,703, $3,586 $10,137, $596 and $642 for the Investor Class, Institutional Class, A Class, C Class, and R Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2014 was 1.74% for the Investor Class, A Class, C Class and R Class and 1.54% for the Institutional Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2014 was 1.54% for the Investor Class, A Class, C Class and R Class and 1.34% for the Institutional Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
17
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $102,304,659 and $90,772,594, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013 | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 1,986,513 | $ | 18,758,540 | 4,740,316 | $ | 37,564,336 | ||||
Issued in reinvestment of distributions | 40,854 | 398,738 | 141,042 | 1,093,076 | ||||||
Redeemed | (1,425,830 | ) | (13,393,679 | ) | (3,886,304 | ) | (31,104,411 | ) | ||
601,537 | 5,763,599 | 995,054 | 7,553,001 | |||||||
Institutional Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 138,391 | 1,308,454 | 327,546 | 2,997,896 | ||||||
Issued in reinvestment of distributions | 1,325 | 13,066 | 74 | 576 | ||||||
Redeemed | (45,734 | ) | (432,448 | ) | — | — | ||||
93,982 | 889,072 | 327,620 | 2,998,472 | |||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 786,733 | 7,420,886 | 533,481 | 4,521,661 | ||||||
Issued in reinvestment of distributions | 2,490 | 24,247 | 2,339 | 18,101 | ||||||
Redeemed | (137,963 | ) | (1,305,210 | ) | (72,269 | ) | (585,413 | ) | ||
651,260 | 6,139,923 | 463,551 | 3,954,349 | |||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 39,384 | 370,317 | 35,314 | 284,970 | ||||||
Redeemed | (3,530 | ) | (32,852 | ) | (5,813 | ) | (45,657 | ) | ||
35,854 | 337,465 | 29,501 | 239,313 | |||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 2,260 | 21,170 | 59,917 | 458,537 | ||||||
Issued in reinvestment of distributions | 96 | 931 | 313 | 2,420 | ||||||
Redeemed | (4,693 | ) | (44,125 | ) | (7,521 | ) | (58,328 | ) | ||
(2,337 | ) | (22,024 | ) | 52,709 | 402,629 | |||||
Net increase (decrease) | 1,380,296 | $ | 13,108,035 | 1,868,435 | $ | 15,147,764 |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, |
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credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars.
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 6,201,855 | $ | 159,801,415 | — | |||
Rights | — | 220,611 | — | |||||
Temporary Cash Investments | 914,026 | 1,150,928 | — | |||||
$ | 7,115,881 | $ | 161,172,954 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund concentrates its investments in common stocks of small companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 137,875,266 | |
Gross tax appreciation of investments | $ | 32,328,130 | |
Gross tax depreciation of investments | (1,914,561 | ) | |
Net tax appreciation (depreciation) of investments | $ | 30,413,569 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $(4,975,283), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Ivnestment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||||
2014(3) | $9.20 | 0.03 | 0.43 | 0.46 | (0.03) | $9.63 | 4.97% | 1.54%(4) | 1.74%(4) | 0.63%(4) | 0.43%(4) | 58% | $149,475 | ||
2013 | $7.14 | —(5) | 2.14 | 2.14 | (0.08) | $9.20 | 30.13% | 1.72% | 1.79% | (0.04)% | (0.11)% | 123% | $137,264 | ||
2012 | $5.98 | —(5) | 1.16 | 1.16 | — | $7.14 | 19.40% | 1.87% | 1.87% | (0.04)% | (0.04)% | 127% | $99,445 | ||
2011 | $6.29 | (0.01) | (0.27) | (0.28) | (0.03) | $5.98 | (4.57)% | 1.83% | 1.83% | (0.17)% | (0.17)% | 146% | $89,708 | ||
2010 | $5.49 | (0.03) | 0.94 | 0.91 | (0.11) | $6.29 | 16.72% | 1.89% | 1.89% | (0.52)% | (0.52)% | 209% | $102,739 | ||
2009 | $3.70 | (0.02) | 1.81 | 1.79 | — | $5.49 | 48.38% | 1.95% | 1.95% | (0.52)% | (0.52)% | 244% | $92,968 | ||
Institutional Class | |||||||||||||||
2014(3) | $9.29 | 0.04 | 0.42 | 0.46 | (0.03) | $9.72 | 4.98% | 1.34%(4) | 1.54%(4) | 0.83%(4) | 0.63%(4) | 58% | $4,160 | ||
2013 | $7.21 | (0.04) | 2.21 | 2.17 | (0.09) | $9.29 | 30.38% | 1.52% | 1.59% | 0.16% | 0.09% | 123% | $3,100 | ||
2012 | $6.03 | 0.01 | 1.17 | 1.18 | — | $7.21 | 19.57% | 1.67% | 1.67% | 0.16% | 0.16% | 127% | $45 | ||
2011 | $6.34 | —(5) | (0.27) | (0.27) | (0.04) | $6.03 | (4.35)% | 1.63% | 1.63% | 0.03% | 0.03% | 146% | $37 | ||
2010 | $5.54 | (0.02) | 0.95 | 0.93 | (0.13) | $6.34 | 17.04% | 1.69% | 1.69% | (0.32)% | (0.32)% | 209% | $39 | ||
2009 | $3.72 | (0.04) | 1.86 | 1.82 | — | $5.54 | 48.92% | 1.75% | 1.75% | (0.32)% | (0.32)% | 244% | $33 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Ivnestment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||||
2014(3) | $9.18 | 0.03 | 0.41 | 0.44 | (0.02) | $9.60 | 4.80% | 1.79%(4) | 1.99%(4) | 0.38%(4) | 0.18%(4) | 58% | $13,308 | ||
2013 | $7.12 | (0.03) | 2.15 | 2.12 | (0.06) | $9.18 | 29.89% | 1.97% | 2.04% | (0.29)% | (0.36)% | 123% | $6,743 | ||
2012 | $5.98 | (0.04) | 1.18 | 1.14 | — | $7.12 | 19.06% | 2.12% | 2.12% | (0.29)% | (0.29)% | 127% | $1,931 | ||
2011 | $6.29 | (0.04) | (0.26) | (0.30) | (0.01) | $5.98 | (4.81)% | 2.10% | 2.10% | (0.44)% | (0.44)% | 146% | $5,147 | ||
2010(6) | $5.51 | (0.02) | 0.84 | 0.82 | (0.04) | $6.29 | 14.87% | 2.14%(4) | 2.14%(4) | (0.45)%(4) | (0.45)%(4) | 209%(7) | $92 | ||
C Class | |||||||||||||||
2014(3) | $9.07 | (0.01) | 0.41 | 0.40 | — | $9.47 | 4.41% | 2.54%(4) | 2.74%(4) | (0.37)%(4) | (0.57)%(4) | 58% | $784 | ||
2013 | $7.04 | (0.09) | 2.12 | 2.03 | — | $9.07 | 29.02% | 2.72% | 2.79% | (1.04)% | (1.11)% | 123% | $425 | ||
2012 | $5.95 | (0.06) | 1.15 | 1.09 | — | $7.04 | 18.15% | 2.87% | 2.87% | (1.04)% | (1.04)% | 127% | $123 | ||
2011 | $6.30 | (0.06) | (0.29) | (0.35) | — | $5.95 | (5.56)% | 2.83% | 2.83% | (1.17)% | (1.17)% | 146% | $103 | ||
2010(6) | $5.51 | (0.05) | 0.84 | 0.79 | — | $6.30 | 14.34% | 2.89%(4) | 2.89%(4) | (1.19)%(4) | (1.19)%(4) | 209%(7) | $44 | ||
R Class | |||||||||||||||
2014(3) | $9.15 | —(5) | 0.43 | 0.43 | (0.01) | $9.57 | 4.73% | 2.04%(4) | 2.24%(4) | 0.13%(4) | (0.07)%(4) | 58% | $629 | ||
2013 | $7.10 | (0.03) | 2.12 | 2.09 | (0.04) | $9.15 | 29.50% | 2.22% | 2.29% | (0.54)% | (0.61)% | 123% | $623 | ||
2012 | $5.98 | (0.03) | 1.15 | 1.12 | — | $7.10 | 18.73% | 2.37% | 2.37% | (0.54)% | (0.54)% | 127% | $109 | ||
2011 | $6.30 | (0.04) | (0.28) | (0.32) | — | $5.98 | (5.08)% | 2.33% | 2.33% | (0.67)% | (0.67)% | 146% | $61 | ||
2010(6) | $5.51 | (0.03) | 0.84 | 0.81 | (0.02) | $6.30 | 14.77% | 2.39%(4) | 2.39%(4) | (0.69)%(4) | (0.69)%(4) | 209%(7) | $51 |
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Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
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![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82562 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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International Value Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of May 31, 2014 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
A Class | MEQAX | 3/31/97 | |||||
No sales charge* | 7.19% | 21.64% | 11.56% | 7.38%(2) | 4.95%(2) | ||
With sales charge* | 1.02% | 14.70% | 10.26% | 6.74%(2) | 4.59%(2) | ||
MSCI EAFE Value Index | — | 6.18% | 20.42% | 10.75% | 6.90% | 6.42% | — |
Investor Class | ACEVX | 7.41% | 22.12% | 11.84% | — | 4.68% | 4/3/06 |
Institutional Class | ACVUX | 7.60% | 22.35% | 12.08% | — | 4.89% | 4/3/06 |
C Class | ACCOX | 4/3/06 | |||||
No sales charge* | 6.87% | 20.74% | 10.73% | — | 3.63% | ||
With sales charge* | 5.87% | 20.74% | 10.73% | — | 3.63% | ||
R Class | ACVRX | 7.03% | 21.37% | 11.26% | — | 4.14% | 4/3/06 |
R6 Class | ACVDX | 7.65% | — | — | — | 17.48%(1) | 7/26/13 |
*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 and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
International Value acquired all the net assets of the Mason Street International Equity Fund on March 31, 2006, pursuant to a plan of reorganization approved by the acquired fund’s shareholders on March 15, 2006. Performance information prior to April 1, 2006, is that of the Mason Street International Equity Fund.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the fees had not been waived. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | C Class | R Class | R6 Class |
1.32% | 1.12% | 1.57% | 2.32% | 1.82% | 0.97% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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.
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Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
HSBC Holdings plc | 3.4% |
Royal Dutch Shell plc B Shares | 2.8% |
Total SA | 2.8% |
GlaxoSmithKline plc | 2.7% |
BASF SE | 2.0% |
Banco Santander SA | 1.8% |
Allianz SE | 1.7% |
Zurich Financial Services AG | 1.5% |
GDF Suez | 1.5% |
Westpac Banking Corp. | 1.4% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 96.9% |
Exchange-Traded Funds | 1.0% |
Total Equity Exposure | 97.9% |
Temporary Cash Investments | 1.3% |
Other Assets and Liabilities | 0.8% |
Investments by Country | % of net assets |
United Kingdom | 23.7% |
Japan | 18.3% |
France | 9.7% |
Germany | 9.1% |
Australia | 8.3% |
Switzerland | 4.3% |
Spain | 3.7% |
Hong Kong | 3.0% |
Sweden | 3.0% |
Singapore | 2.5% |
Italy | 2.4% |
Other Countries | 8.9% |
Exchange-Traded Funds | 1.0% |
Cash and Equivalents* | 2.1% |
*Includes temporary cash investments and other assets and liabilities.
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
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Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 - 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,074.10 | $6.72 | 1.30% |
Institutional Class | $1,000 | $1,076.00 | $5.69 | 1.10% |
A Class | $1,000 | $1,071.90 | $8.01 | 1.55% |
C Class | $1,000 | $1,068.70 | $11.86 | 2.30% |
R Class | $1,000 | $1,070.30 | $9.29 | 1.80% |
R6 Class | $1,000 | $1,076.50 | $4.92 | 0.95% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.45 | $6.54 | 1.30% |
Institutional Class | $1,000 | $1,019.45 | $5.54 | 1.10% |
A Class | $1,000 | $1,017.20 | $7.80 | 1.55% |
C Class | $1,000 | $1,013.46 | $11.55 | 2.30% |
R Class | $1,000 | $1,015.96 | $9.05 | 1.80% |
R6 Class | $1,000 | $1,020.20 | $4.78 | 0.95% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
6
Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | |||
COMMON STOCKS — 96.9% | ||||
AUSTRALIA — 8.3% | ||||
Arrium Ltd. | 139,349 | $ | 117,365 | |
Australia & New Zealand Banking Group Ltd. | 14,522 | 452,614 | ||
Commonwealth Bank of Australia | 4,610 | 350,045 | ||
Fortescue Metals Group Ltd. | 87,224 | 357,982 | ||
Insurance Australia Group Ltd. | 85,051 | 470,959 | ||
Mineral Resources Ltd. | 12,176 | 115,696 | ||
Mount Gibson Iron Ltd. | 191,924 | 131,281 | ||
National Australia Bank Ltd. | 11,490 | 358,114 | ||
Regis Resources Ltd. | 37,390 | 54,109 | ||
Telstra Corp. Ltd. | 75,447 | 374,947 | ||
Westpac Banking Corp. | 18,359 | 588,093 | ||
3,371,205 | ||||
BELGIUM — 1.2% | ||||
Delhaize Group SA | 3,396 | 241,462 | ||
KBC Groep NV(1) | 3,929 | 233,888 | ||
475,350 | ||||
DENMARK — 1.4% | ||||
AP Moeller - Maersk A/S B Shares | 109 | 284,872 | ||
H. Lundbeck A/S | 5,501 | 148,325 | ||
Vestas Wind Systems A/S(1) | 2,205 | 118,601 | ||
551,798 | ||||
FINLAND — 0.2% | ||||
Kesko Oyj B Shares | 1,485 | 65,748 | ||
FRANCE — 9.7% | ||||
BNP Paribas SA | 834 | 58,401 | ||
Bouygues SA | 8,476 | 393,473 | ||
Cie Generale des Etablissements Michelin Class B | 442 | 54,467 | ||
Credit Agricole SA | 25,797 | 402,466 | ||
Faurecia | 1,588 | 65,308 | ||
GDF Suez | 21,573 | 602,407 | ||
Metropole Television SA | 11,948 | 242,268 | ||
Orange SA | 7,598 | 127,031 | ||
Sanofi | 2,945 | 314,896 | ||
Suez Environnement Co. | 12,356 | 248,267 | ||
Technicolor SA(1) | 11,700 | 86,363 | ||
Total SA | 16,076 | 1,128,133 | ||
Vinci SA | 2,765 | 204,663 | ||
3,928,143 | ||||
GERMANY — 9.1% | ||||
Allianz SE | 4,000 | 678,303 | ||
BASF SE | 6,988 | 804,635 | ||
Daimler AG | 1,312 | 124,655 |
7
Shares | Value | |||
Deutsche Lufthansa AG | 15,038 | $ | 396,657 | |
Deutsche Telekom AG | 29,661 | 498,329 | ||
E.ON AG | 222 | 4,323 | ||
Metro AG(1) | 2,703 | 112,822 | ||
ProSiebenSat.1 Media AG | 8,516 | 387,553 | ||
RWE AG | 10,688 | 429,067 | ||
Siemens AG | 1,779 | 236,345 | ||
3,672,689 | ||||
HONG KONG — 3.0% | ||||
Dah Sing Banking Group Ltd. | 26,400 | 44,063 | ||
Hang Seng Bank Ltd. | 27,700 | 457,322 | ||
Link Real Estate Investment Trust (The) | 67,000 | 356,909 | ||
SJM Holdings Ltd. | 42,000 | 120,535 | ||
Wynn Macau Ltd. | 54,800 | 227,952 | ||
1,206,781 | ||||
ISRAEL — 1.4% | ||||
Bank Hapoalim BM | 64,752 | 378,284 | ||
Bezeq The Israeli Telecommunication Corp. Ltd. | 87,153 | 156,628 | ||
Teva Pharmaceutical Industries Ltd. | 968 | 48,902 | ||
583,814 | ||||
ITALY — 2.4% | ||||
A2A SpA | 30,251 | 36,247 | ||
Enel SpA | 42,252 | 239,138 | ||
ENI SpA | 18,689 | 476,145 | ||
Exor SpA | 2,643 | 113,488 | ||
Fiat SpA(1) | 8,000 | 83,588 | ||
Mediaset SpA(1) | 7,787 | 38,447 | ||
987,053 | ||||
JAPAN — 18.3% | ||||
Aeon Co. Ltd. | 25,200 | 303,737 | ||
Asahi Kasei Corp. | 53,000 | 395,678 | ||
Astellas Pharma, Inc. | 8,800 | 112,723 | ||
Bridgestone Corp. | 10,000 | 361,100 | ||
Central Japan Railway Co. | 3,300 | 436,974 | ||
Daito Trust Construction Co. Ltd. | 1,500 | 162,451 | ||
FamilyMart Co. Ltd. | 8,100 | 346,916 | ||
Fuji Heavy Industries Ltd. | 13,500 | 357,392 | ||
FUJIFILM Holdings Corp. | 17,700 | 456,931 | ||
Fukuoka Financial Group, Inc. | 51,000 | 220,933 | ||
Hino Motors Ltd. | 14,000 | 176,169 | ||
Japan Airlines Co. Ltd. | 7,300 | 380,776 | ||
JGC Corp. | 3,000 | 86,169 | ||
KDDI Corp. | 3,100 | 184,325 | ||
Konica Minolta Holdings, Inc. | 27,500 | 236,640 | ||
Mitsubishi Electric Corp. | 9,000 | 104,411 | ||
Mitsubishi Motors Corp. | 13,800 | 140,440 | ||
Mitsubishi UFJ Financial Group, Inc. | 2,100 | 11,820 |
8
Shares | Value | |||
Nippon Telegraph & Telephone Corp. | 8,800 | $ | 522,295 | |
NTT Data Corp. | 4,000 | 145,383 | ||
NTT DoCoMo, Inc. | 7,100 | 117,868 | ||
Panasonic Corp. | 18,400 | 197,556 | ||
Seiko Epson Corp. | 9,100 | 315,997 | ||
Seven Bank Ltd. | 68,500 | 254,352 | ||
Showa Shell Sekiyu KK | 24,800 | 267,489 | ||
SKY Perfect JSAT Holdings, Inc. | 18,500 | 96,135 | ||
Sumitomo Chemical Co. Ltd. | 21,000 | 77,770 | ||
Sumitomo Mitsui Financial Group, Inc. | 7,700 | 310,496 | ||
Sumitomo Mitsui Trust Holdings, Inc. | 69,000 | 278,576 | ||
T&D Holdings, Inc. | 15,400 | 200,442 | ||
Tosoh Corp. | 20,000 | 95,088 | ||
Toyota Motor Corp. | 400 | 22,637 | ||
TS Tech Co. Ltd. | 1,900 | 50,878 | ||
7,428,547 | ||||
NETHERLANDS — 1.5% | ||||
ING Groep NV CVA(1) | 37,638 | 527,172 | ||
Koninklijke Ahold NV | 4,158 | 75,554 | ||
602,726 | ||||
NEW ZEALAND — 0.6% | ||||
Telecom Corp. of New Zealand Ltd. | 109,016 | 249,016 | ||
NORWAY — 1.7% | ||||
Statoil ASA | 6,919 | 212,041 | ||
Telenor ASA | 2,588 | 61,346 | ||
TGS Nopec Geophysical Co. ASA | 4,373 | 142,502 | ||
Yara International ASA | 6,422 | 293,281 | ||
709,170 | ||||
PORTUGAL — 0.9% | ||||
EDP - Energias de Portugal SA | 80,032 | 378,562 | ||
SINGAPORE — 2.5% | ||||
Oversea-Chinese Banking Corp. Ltd. | 11,000 | 85,506 | ||
Singapore Post Ltd. | 351,000 | 460,332 | ||
United Overseas Bank Ltd. | 25,000 | 449,853 | ||
995,691 | ||||
SPAIN — 3.7% | ||||
Banco Santander SA | 69,558 | 713,411 | ||
Endesa SA | 11,600 | 442,514 | ||
Mapfre SA | 88,245 | 360,392 | ||
1,516,317 | ||||
SWEDEN — 3.0% | ||||
Industrivarden AB C Shares | 6,864 | 137,649 | ||
Intrum Justitia AB | 11,100 | 345,507 | ||
Investor AB B Shares | 9,668 | 379,381 | ||
Skandinaviska Enskilda Banken AB A Shares | 14,021 | 190,348 | ||
Telefonaktiebolaget LM Ericsson B Shares | 11,531 | 144,482 | ||
1,197,367 |
9
Shares | Value | |||
SWITZERLAND — 4.3% | ||||
Nestle SA | 2,216 | $ | 173,840 | |
Novartis AG | 4,690 | 420,555 | ||
Roche Holding AG | 1,251 | 368,106 | ||
Swiss Reinsurance Co. | 2,003 | 178,156 | ||
Zurich Financial Services AG | 2,035 | 610,614 | ||
1,751,271 | ||||
UNITED KINGDOM — 23.7% | ||||
AstraZeneca plc | 7,072 | 507,769 | ||
Berendsen plc | 9,784 | 163,015 | ||
BP plc | 59,415 | 500,944 | ||
BT Group plc | 62,114 | 413,338 | ||
Catlin Group Ltd. | 17,965 | 157,641 | ||
Centrica plc | 86,659 | 487,485 | ||
Direct Line Insurance Group plc | 94,785 | 402,439 | ||
Dixons Retail plc(1) | 301,840 | 245,383 | ||
Evraz plc(1) | 65,000 | 114,183 | ||
GlaxoSmithKline plc | 40,480 | 1,086,319 | ||
HSBC Holdings plc | 131,816 | 1,390,216 | ||
Imperial Tobacco Group plc | 6,489 | 292,805 | ||
Lloyds Banking Group plc(1) | 293,261 | 382,732 | ||
Man Group plc | 81,438 | 136,916 | ||
Marks & Spencer Group plc | 33,712 | 253,834 | ||
Mondi plc | 3,130 | 56,190 | ||
Rio Tinto plc | 6,992 | 358,280 | ||
Royal Dutch Shell plc B Shares | 27,871 | 1,137,567 | ||
Soco International plc | 33,064 | 232,772 | ||
Standard Chartered plc | 16,511 | 371,547 | ||
Standard Life plc | 71,237 | 477,629 | ||
TUI Travel plc | 9,310 | 64,029 | ||
Vedanta Resources plc | 10,870 | 200,423 | ||
Vodafone Group plc | 54,895 | 192,771 | ||
9,626,227 | ||||
TOTAL COMMON STOCKS (Cost $33,474,051) | 39,297,475 | |||
EXCHANGE-TRADED FUNDS — 1.0% | ||||
iShares MSCI EAFE Value ETF (Cost $398,049) | 6,700 | 399,923 | ||
TEMPORARY CASH INVESTMENTS — 1.3% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $140,478), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $137,705) | 137,704 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $112,349), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $110,163) | 110,163 | |||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $112,419), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $110,163) | 110,163 |
10
Shares | Value | |||
SSgA U.S. Government Money Market Fund | 173,702 | $ | 173,702 | |
TOTAL TEMPORARY CASH INVESTMENTS (Cost $531,732) | 531,732 | |||
TOTAL INVESTMENT SECURITIES — 99.2% (Cost $34,403,832) | 40,229,130 | |||
OTHER ASSETS AND LIABILITIES — 0.8% | 333,269 | |||
TOTAL NET ASSETS — 100.0% | $ | 40,562,399 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Financials | 32.7 | % |
Energy | 10.1 | % |
Industrials | 9.8 | % |
Consumer Discretionary | 7.9 | % |
Materials | 7.5 | % |
Health Care | 7.5 | % |
Utilities | 7.1 | % |
Telecommunication Services | 7.0 | % |
Consumer Staples | 4.0 | % |
Information Technology | 3.3 | % |
Exchange-Traded Funds | 1.0 | % |
Cash and Equivalents* | 2.1 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
CVA | - | Certificaten Van Aandelen |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $34,403,832) | $ | 40,229,130 | |
Foreign currency holdings, at value (cost of $41,792) | 41,805 | ||
Receivable for capital shares sold | 30,875 | ||
Dividends and interest receivable | 310,978 | ||
40,612,788 | |||
Liabilities | |||
Payable for capital shares redeemed | 2,051 | ||
Accrued management fees | 42,855 | ||
Distribution and service fees payable | 5,483 | ||
50,389 | |||
Net Assets | $ | 40,562,399 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 36,637,390 | |
Undistributed net investment income | 825,782 | ||
Accumulated net realized loss | (2,728,942 | ) | |
Net unrealized appreciation | 5,828,169 | ||
$ | 40,562,399 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||
Investor Class, $0.01 Par Value | $20,122,454 | 2,132,428 | $9.44 | ||
Institutional Class, $0.01 Par Value | $1,669,334 | 176,907 | $9.44 | ||
A Class, $0.01 Par Value | $15,880,309 | 1,676,612 | $9.47* | ||
C Class, $0.01 Par Value | $2,372,789 | 251,864 | $9.42 | ||
R Class, $0.01 Par Value | $488,145 | 51,795 | $9.42 | ||
R6 Class, $0.01 Par Value | $29,368 | 3,111 | $9.44 |
*Maximum offering price $10.05 (net asset value divided by 0.9425).
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $71,668) | $ | 1,108,552 | |
Interest | 18 | ||
1,108,570 | |||
Expenses: | |||
Management fees | 234,511 | ||
Distribution and service fees: | |||
A Class | 19,400 | ||
C Class | 10,406 | ||
R Class | 955 | ||
Directors' fees and expenses | 683 | ||
Other expenses | 261 | ||
266,216 | |||
Net investment income (loss) | 842,354 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 1,719,217 | ||
Foreign currency transactions | 4,655 | ||
1,723,872 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments | 70,988 | ||
Translation of assets and liabilities in foreign currencies | (6,555 | ) | |
64,433 | |||
Net realized and unrealized gain (loss) | 1,788,305 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 2,630,659 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 842,354 | $ | 739,123 | ||
Net realized gain (loss) | 1,723,872 | 2,760,410 | ||||
Change in net unrealized appreciation (depreciation) | 64,433 | 3,209,375 | ||||
Net increase (decrease) in net assets resulting from operations | 2,630,659 | 6,708,908 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Investor Class | (338,923 | ) | (355,003 | ) | ||
Institutional Class | (42,388 | ) | (8,858 | ) | ||
A Class | (303,879 | ) | (376,552 | ) | ||
C Class | (35,907 | ) | (32,740 | ) | ||
R Class | (6,548 | ) | (7,869 | ) | ||
R6 Class | (593 | ) | — | |||
Decrease in net assets from distributions | (728,238 | ) | (781,022) | |||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 2,078,602 | 4,132,134 | ||||
Redemption Fees | ||||||
Increase in net assets from redemption fees | 6,263 | 7,206 | ||||
Net increase (decrease) in net assets | 3,987,286 | 10,067,226 | ||||
Net Assets | ||||||
Beginning of period | 36,575,113 | 26,507,887 | ||||
End of period | $ | 40,562,399 | $ | 36,575,113 | ||
Undistributed net investment income | $ | 825,782 | $ | 711,666 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Value Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund's investment objective is to seek long-term capital growth.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class, the R Class and the R6 Class. The A Class may incur an initial sales charge. The A 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. The Institutional Class and R6 Class shareholders do not require the same level of shareholder and administrative services from American Century Investment Management, Inc. (ACIM) (the investment advisor) as shareholders of other classes. In addition, financial intermediaries do not receive any service, distribution or administrative fees for the R6 Class. As a result, the Institutional Class and R6 Class are charged lower unified management fees. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation
15
with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income - Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
16
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption Fees - The fund 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 retained by the fund and helps cover transaction costs that long-term investors may bear when the 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc. (ACIS), and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 ranges from 1.100% to 1.300% for the Investor Class, A Class, C Class and R Class. The annual management fee schedule ranges from 0.900% to 1.100% for the Institutional Class and 0.750% to 0.950% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2014 was 1.30% for the Investor Class, A Class, C Class and R Class, 1.10% for the Institutional Class and 0.95% for the R6 Class.
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, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay ACIS an annual distribution and service fee of 0.25%. The plans provide that the C Class will pay ACIS an annual distribution and service fee of 1.00%, of which 0.25% is paid for individual shareholder services and 0.75% is paid for distribution services. 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. Fees incurred under the plans during the six months ended May 31, 2014 are detailed in the Statement of Operations.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
Acquired Fund Fees and Expenses - The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
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4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $18,347,780 and $16,926,302, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Investor Class/Shares Authorized | 20,000,000 | 20,000,000 | ||||||||
Sold | 527,596 | $ | 4,844,049 | 966,244 | $ | 7,876,534 | ||||
Issued in reinvestment of distributions | 36,672 | 328,583 | 43,565 | 336,754 | ||||||
Redeemed | (430,029 | ) | (3,854,546 | ) | (420,477 | ) | (3,411,416 | ) | ||
134,239 | 1,318,086 | 589,332 | 4,801,872 | |||||||
Institutional Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Sold | 162,001 | 1,449,393 | 52,897 | 452,810 | ||||||
Issued in reinvestment of distributions | 4,736 | 42,388 | 1,147 | 8,858 | ||||||
Redeemed | (75,568 | ) | (688,187 | ) | (60 | ) | (487 | ) | ||
91,169 | 803,594 | 53,984 | 461,181 | |||||||
A Class/Shares Authorized | 25,000,000 | 25,000,000 | ||||||||
Sold | 96,641 | 881,836 | 354,167 | 2,849,895 | ||||||
Issued in reinvestment of distributions | 33,692 | 303,228 | 47,564 | 370,051 | ||||||
Redeemed | (180,840 | ) | (1,653,520 | ) | (580,391 | ) | (4,601,535 | ) | ||
(50,507 | ) | (468,456 | ) | (178,660 | ) | (1,381,589 | ) | |||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||
Sold | 36,244 | 331,539 | 65,495 | 533,407 | ||||||
Issued in reinvestment of distributions | 3,916 | 35,093 | 4,183 | 32,584 | ||||||
Redeemed | (12,200 | ) | (110,134 | ) | (36,560 | ) | (295,562 | ) | ||
27,960 | 256,498 | 33,118 | 270,429 | |||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||
Sold | 18,820 | 169,663 | 4,680 | 37,488 | ||||||
Issued in reinvestment of distributions | 731 | 6,548 | 1,014 | 7,869 | ||||||
Redeemed | (886 | ) | (7,924 | ) | (10,888 | ) | (90,116 | ) | ||
18,665 | 168,287 | (5,194 | ) | (44,759 | ) | |||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | — | — | 3,045 | 25,000 | ||||||
Issued in reinvestment of distributions | 66 | 593 | — | — | ||||||
66 | 593 | 3,045 | 25,000 | |||||||
Net increase (decrease) | 221,592 | $ | 2,078,602 | 495,625 | $ | 4,132,134 |
(1) | July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class. |
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6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | — | $ | 39,297,475 | — | ||||
Exchange-Traded Funds | $ | 399,923 | — | — | ||||
Temporary Cash Investments | 173,702 | 358,030 | — | |||||
$ | 573,625 | $ | 39,655,505 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 34,405,451 | |
Gross tax appreciation of investments | $ | 6,379,305 | |
Gross tax depreciation of investments | (555,626 | ) | |
Net tax appreciation (depreciation) of investments | $ | 5,823,679 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $(4,327,914), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Investor Class | |||||||||||||
2014(3) | $8.97 | 0.22 | 0.44 | 0.66 | (0.19) | $9.44 | 7.41% | 1.30%(4) | 4.77%(4) | 46% | $20,122 | ||
2013 | $7.40 | 0.21 | 1.60 | 1.81 | (0.24) | $8.97 | 24.96% | 1.31% | 2.63% | 83% | $17,920 | ||
2012 | $6.84 | 0.20 | 0.49 | 0.69 | (0.13) | $7.40 | 10.25% | 1.31% | 2.95% | 125% | $10,423 | ||
2011 | $6.91 | 0.14 | (0.09) | 0.05 | (0.12) | $6.84 | 0.57% | 1.31% | 1.85% | 30% | $9,391 | ||
2010 | $7.33 | 0.11 | (0.24) | (0.13) | (0.29) | $6.91 | (1.82)% | 1.32% | 1.66% | 26% | $7,272 | ||
2009 | $5.47 | 0.11 | 1.88 | 1.99 | (0.13) | $7.33 | 36.98% | 1.31% | 2.34% | 16% | $7,062 | ||
Institutional Class | |||||||||||||
2014(3) | $8.96 | 0.24 | 0.43 | 0.67 | (0.19) | $9.44 | 7.60% | 1.10%(4) | 4.97%(4) | 46% | $1,669 | ||
2013 | $7.39 | 0.23 | 1.59 | 1.82 | (0.25) | $8.96 | 25.24% | 1.11% | 2.83% | 83% | $769 | ||
2012 | $6.84 | 0.23 | 0.47 | 0.70 | (0.15) | $7.39 | 10.33% | 1.11% | 3.15% | 125% | $235 | ||
2011 | $6.90 | 0.15 | (0.07) | 0.08 | (0.14) | $6.84 | 0.92% | 1.11% | 2.05% | 30% | $244 | ||
2010 | $7.34 | 0.13 | (0.25) | (0.12) | (0.32) | $6.90 | (1.69)% | 1.12% | 1.86% | 26% | $1,456 | ||
2009 | $5.48 | 0.18 | 1.82 | 2.00 | (0.14) | $7.34 | 37.18% | 1.11% | 2.54% | 16% | $1,627 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
A Class | |||||||||||||
2014(3) | $9.01 | 0.20 | 0.44 | 0.64 | (0.18) | $9.47 | 7.19% | 1.55%(4) | 4.52%(4) | 46% | $15,880 | ||
2013 | $7.43 | 0.20 | 1.60 | 1.80 | (0.22) | $9.01 | 24.67% | 1.56% | 2.38% | 83% | $15,554 | ||
2012 | $6.87 | 0.19 | 0.48 | 0.67 | (0.11) | $7.43 | 9.91% | 1.56% | 2.70% | 125% | $14,155 | ||
2011 | $6.93 | 0.12 | (0.08) | 0.04 | (0.10) | $6.87 | 0.45% | 1.56% | 1.60% | 30% | $13,981 | ||
2010 | $7.33 | 0.10 | (0.24) | (0.14) | (0.26) | $6.93 | (2.04)% | 1.57% | 1.41% | 26% | $15,783 | ||
2009 | $5.48 | 0.10 | 1.86 | 1.96 | (0.11) | $7.33 | 36.40% | 1.56% | 2.09% | 16% | $18,644 | ||
C Class | |||||||||||||
2014(3) | $8.97 | 0.17 | 0.44 | 0.61 | (0.16) | $9.42 | 6.87% | 2.30%(4) | 3.77%(4) | 46% | $2,373 | ||
2013 | $7.40 | 0.14 | 1.59 | 1.73 | (0.16) | $8.97 | 23.68% | 2.31% | 1.63% | 83% | $2,009 | ||
2012 | $6.84 | 0.13 | 0.49 | 0.62 | (0.06) | $7.40 | 9.10% | 2.31% | 1.95% | 125% | $1,412 | ||
2011 | $6.90 | 0.06 | (0.08) | (0.02) | (0.04) | $6.84 | (0.31)% | 2.31% | 0.85% | 30% | $1,137 | ||
2010 | $7.25 | 0.05 | (0.25) | (0.20) | (0.15) | $6.90 | (2.85)% | 2.32% | 0.66% | 26% | $1,039 | ||
2009 | $5.42 | 0.05 | 1.85 | 1.90 | (0.07) | $7.25 | 35.44% | 2.31% | 1.34% | 16% | $869 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
R Class | |||||||||||||
2014(3) | $8.97 | 0.20 | 0.42 | 0.62 | (0.17) | $9.42 | 7.03% | 1.80%(4) | 4.27%(4) | 46% | $488 | ||
2013 | $7.40 | 0.18 | 1.59 | 1.77 | (0.20) | $8.97 | 24.32% | 1.81% | 2.13% | 83% | $297 | ||
2012 | $6.84 | 0.17 | 0.49 | 0.66 | (0.10) | $7.40 | 9.67% | 1.81% | 2.45% | 125% | $283 | ||
2011 | $6.90 | 0.10 | (0.08) | 0.02 | (0.08) | $6.84 | 0.20% | 1.81% | 1.35% | 30% | $234 | ||
2010 | $7.28 | 0.09 | (0.25) | (0.16) | (0.22) | $6.90 | (2.27)% | 1.82% | 1.16% | 26% | $273 | ||
2009 | $5.45 | 0.09 | 1.84 | 1.93 | (0.10) | $7.28 | 35.90% | 1.81% | 1.84% | 16% | $123 | ||
R6 Class | |||||||||||||
2014(3) | $8.96 | 0.23 | 0.44 | 0.67 | (0.19) | $9.44 | 7.65% | 0.95%(4) | 5.12%(4) | 46% | $29 | ||
2013(5) | $8.21 | 0.06 | 0.69 | 0.75 | — | $8.96 | 9.14% | 0.96%(4) | 2.02%(4) | 83%(6) | $27 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
22
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
23
Notes |
24
![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82559 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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NT Emerging Markets Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Performance |
Total Returns as of May 31, 2014 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class(2) | ACLKX | 0.04% | 2.24% | 8.82% | 3.47% | 5/12/06 |
MSCI Emerging Markets Index | — | 1.89% | 4.27% | 8.37% | 4.70% | — |
R6 Class(2) | ACKDX | 0.13% | — | — | 8.02%(1) | 7/26/13 |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the management fee had not been waived. |
Total Annual Fund Operating Expenses | |
Institutional Class | R6 Class |
1.53% | 1.38% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
Unless otherwise indicated, performance reflects Institutional 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.
3
Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Taiwan Semiconductor Manufacturing Co. Ltd. | 4.8% |
Itau Unibanco Holding SA ADR | 3.4% |
Tencent Holdings Ltd. | 3.3% |
Samsung Electronics Co. Ltd. | 2.8% |
MediaTek, Inc. | 2.1% |
Cemex SAB de CV ADR | 1.8% |
Ping An Insurance Group Co. H Shares | 1.8% |
Hon Hai Precision Industry Co. Ltd. | 1.7% |
ENN Energy Holdings Ltd. | 1.6% |
Credicorp Ltd. | 1.6% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 98.7% |
Exchange-Traded Funds | 0.3% |
Total Equity Exposure | 99.0% |
Temporary Cash Investments | 0.7% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
China | 16.0% |
South Korea | 14.2% |
Taiwan | 12.4% |
Brazil | 11.9% |
Mexico | 7.3% |
South Africa | 7.3% |
India | 5.2% |
Russia | 4.3% |
Indonesia | 3.0% |
Turkey | 2.9% |
Thailand | 2.2% |
Other Countries | 12.0% |
Exchange-Traded Funds | 0.3% |
Cash and Equivalents* | 1.0% |
*Includes temporary cash investments and other assets and liabilities.
4
Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 - 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class (after waiver) | $1,000 | $1,000.40 | $6.28 | 1.26% |
Institutional Class (before waiver) | $1,000 | $1,000.40(2) | $7.53 | 1.51% |
R6 Class (after waiver) | $1,000 | $1,001.30 | $5.54 | 1.11% |
R6 Class (before waiver) | $1,000 | $1,001.30(2) | $6.79 | 1.36% |
Hypothetical | ||||
Institutional Class (after waiver) | $1,000 | $1,018.65 | $6.34 | 1.26% |
Institutional Class (before waiver) | $1,000 | $1,017.40 | $7.59 | 1.51% |
R6 Class (after waiver) | $1,000 | $1,019.40 | $5.59 | 1.11% |
R6 Class (before waiver) | $1,000 | $1,018.15 | $6.84 | 1.36% |
(1) | Expenses are equal to the class's annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
(2) | Ending account value assumes the return earned after waiver and would have been lower if a portion of the management fee had not been waived. |
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Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 98.7% | |||||
BRAZIL — 11.9% | |||||
Anhanguera Educacional Participacoes SA | 432,700 | $ | 3,105,752 | ||
BB Seguridade Participacoes SA | 224,300 | 2,837,415 | |||
BRF SA ADR | 81,660 | 1,762,223 | |||
Cia Brasileira de Distribuicao Grupo Pao de Acucar ADR | 90,150 | 4,088,302 | |||
Cielo SA | 258,200 | 4,607,792 | |||
Hypermarcas SA | 329,500 | 2,672,417 | |||
Itau Unibanco Holding SA ADR | 669,714 | 10,380,567 | |||
Ultrapar Participacoes SA | 159,400 | 3,847,856 | |||
WEG SA | 267,820 | 3,139,291 | |||
36,441,615 | |||||
CANADA — 0.9% | |||||
Pacific Rubiales Energy Corp. | 149,660 | 2,924,740 | |||
CHILE — 0.9% | |||||
SACI Falabella | 300,038 | 2,801,389 | |||
CHINA — 16.0% | |||||
Brilliance China Automotive Holdings Ltd. | 1,442,000 | 2,391,879 | |||
China Oilfield Services Ltd. H Shares | 1,284,000 | 3,166,547 | |||
China Overseas Land & Investment Ltd. | 628,000 | 1,636,229 | |||
CIMC Enric Holdings Ltd. | 1,100,000 | 1,569,209 | |||
CNOOC Ltd. | 2,086,000 | 3,578,483 | |||
CSR Corp. Ltd. | 2,125,000 | 1,573,272 | |||
ENN Energy Holdings Ltd. | 698,000 | 4,938,159 | |||
Great Wall Motor Co. Ltd. H Shares | 471,500 | 1,933,935 | |||
Hengan International Group Co. Ltd. | 174,500 | 1,851,247 | |||
Industrial & Commercial Bank of China Ltd. H Shares | 6,250,095 | 4,063,032 | |||
Ping An Insurance Group Co. H Shares | 711,000 | 5,497,836 | |||
Shenzhou International Group Holdings Ltd. | 1,034,000 | 3,607,620 | |||
Tencent Holdings Ltd. | 719,500 | 10,143,410 | |||
Vipshop Holdings Ltd. ADR(1) | 18,456 | 3,002,053 | |||
48,952,911 | |||||
COLOMBIA — 1.4% | |||||
Cemex Latam Holdings SA(1) | 462,620 | 4,250,727 | |||
GREECE — 0.8% | |||||
OPAP SA | 149,140 | 2,533,120 | |||
HONG KONG — 0.5% | |||||
Qihoo 360 Technology Co. Ltd. ADR(1) | 16,350 | 1,501,421 | |||
INDIA — 5.2% | |||||
HCL Technologies Ltd. | 180,020 | 4,321,668 | |||
HDFC Bank Ltd. | 301,562 | 4,045,748 | |||
ICICI Bank Ltd. ADR | 36,780 | 1,826,863 | |||
Larsen & Toubro Ltd. | 57,860 | 1,513,329 |
7
Shares | Value | ||||
Tata Motors Ltd. | 595,836 | $ | 4,185,171 | ||
15,892,779 | |||||
INDONESIA — 3.0% | |||||
PT Bank Rakyat Indonesia (Persero) Tbk | 4,047,800 | 3,536,408 | |||
PT Matahari Department Store Tbk(1) | 2,332,200 | 2,901,516 | |||
PT Tower Bersama Infrastructure Tbk(1) | 4,333,600 | 2,848,855 | |||
9,286,779 | |||||
MALAYSIA — 1.8% | |||||
Axiata Group Bhd | 1,452,300 | 3,132,412 | |||
Sapurakencana Petroleum Bhd(1) | 1,780,300 | 2,310,567 | |||
5,442,979 | |||||
MEXICO — 7.3% | |||||
Alsea SAB de CV | 538,039 | 1,834,685 | |||
Cemex SAB de CV ADR(1) | 427,956 | 5,507,794 | |||
Gruma SAB de CV B Shares(1) | 248,730 | 2,592,642 | |||
Grupo Financiero Banorte SAB de CV | 491,454 | 3,589,050 | |||
Grupo Mexico SAB de CV | 863,830 | 2,842,143 | |||
Infraestructura Energetica Nova SAB de CV | 727,020 | 3,985,561 | |||
Promotora y Operadora de Infraestructura SAB de CV(1) | 156,981 | 2,192,594 | |||
22,544,469 | |||||
PERU — 1.6% | |||||
Credicorp Ltd. | 30,674 | 4,792,812 | |||
PHILIPPINES — 1.7% | |||||
SM Investments Corp. | 85,235 | 1,531,133 | |||
Universal Robina Corp. | 1,074,840 | 3,660,179 | |||
5,191,312 | |||||
POLAND — 1.7% | |||||
Alior Bank SA(1) | 76,570 | 2,107,098 | |||
Powszechny Zaklad Ubezpieczen SA | 20,688 | 3,043,927 | |||
5,151,025 | |||||
RUSSIA — 4.3% | |||||
Magnit OJSC GDR | 29,312 | 1,705,958 | |||
Mail.ru Group Ltd. GDR(1) | 45,447 | 1,547,016 | |||
MMC Norilsk Nickel OJSC ADR | 209,060 | 4,007,680 | |||
NovaTek OAO GDR | 24,549 | 2,847,684 | |||
Sberbank of Russia(1) | 684,800 | 1,658,599 | |||
Yandex NV A Shares(1) | 45,045 | 1,402,701 | |||
13,169,638 | |||||
SINGAPORE — 0.7% | |||||
First Resources Ltd. | 1,069,000 | 2,139,193 | |||
SOUTH AFRICA — 7.3% | |||||
Aspen Pharmacare Holdings Ltd. | 145,386 | 3,752,256 | |||
Capitec Bank Holdings Ltd. | 108,030 | 2,266,032 | |||
Discovery Holdings Ltd. | 385,088 | 3,329,275 | |||
Mr Price Group Ltd. | 188,720 | 3,039,013 | |||
MTN Group Ltd. | 184,140 | 3,880,954 | |||
Naspers Ltd. N Shares | 32,032 | 3,531,206 |
8
Shares | Value | ||||
Sasol Ltd. | 46,020 | $ | 2,588,344 | ||
22,387,080 | |||||
SOUTH KOREA — 14.2% | |||||
CJ Korea Express Co. Ltd.(1) | 28,200 | 3,137,326 | |||
Cosmax, Inc.(1) | 1 | 80 | |||
Coway Co. Ltd. | 55,530 | 4,670,137 | |||
Daewoo International Corp. | 67,680 | 2,136,146 | |||
Hotel Shilla Co. Ltd. | 35,580 | 3,225,985 | |||
Hyundai Development Co-Engineering & Construction | 88,910 | 2,492,478 | |||
Hyundai Motor Co. | 21,370 | 4,702,573 | |||
LG Display Co. Ltd.(1) | 109,390 | 2,911,133 | |||
Naturalendo Tech Co. Ltd.(1) | 34,250 | 2,282,886 | |||
NAVER Corp. | 4,640 | 3,447,481 | |||
Samsung Electronics Co. Ltd. | 6,141 | 8,686,006 | |||
Seoul Semiconductor Co. Ltd. | 38,520 | 1,457,432 | |||
SK Hynix, Inc.(1) | 104,260 | 4,511,938 | |||
43,661,601 | |||||
TAIWAN — 12.4% | |||||
Hiwin Technologies Corp. | 295,000 | 3,030,131 | |||
Hon Hai Precision Industry Co. Ltd. | 1,699,000 | 5,235,451 | |||
King Slide Works Co. Ltd. | 200,000 | 2,734,655 | |||
Largan Precision Co. Ltd. | 48,000 | 3,137,517 | |||
MediaTek, Inc. | 404,000 | 6,561,438 | |||
Merry Electronics Co. Ltd. | 404,000 | 2,506,011 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 3,701,774 | 14,752,530 | |||
37,957,733 | |||||
THAILAND — 2.2% | |||||
Intouch Holdings PCL NVDR | 833,500 | 1,885,086 | |||
Kasikornbank PCL NVDR | 400,500 | 2,287,352 | |||
Thaicom PCL | 2,157,300 | 2,562,738 | |||
6,735,176 | |||||
TURKEY — 2.9% | |||||
BIM Birlesik Magazalar AS | 94,546 | 2,075,829 | |||
TAV Havalimanlari Holding AS | 371,688 | 2,959,469 | |||
Turkiye Halk Bankasi AS | 196,760 | 1,529,125 | |||
Ulker Biskuvi Sanayi AS | 262,610 | 2,216,171 | |||
8,780,594 | |||||
TOTAL COMMON STOCKS (Cost $252,797,118) | 302,539,093 | ||||
EXCHANGE-TRADED FUNDS — 0.3% | |||||
iShares MSCI Emerging Markets Index Fund (Cost $824,484) | 21,359 | 908,825 | |||
TEMPORARY CASH INVESTMENTS — 0.7% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $569,070), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $557,832) | 557,830 |
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Shares | Value | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $455,118), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $446,264) | $ | 446,264 | |||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $455,405), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $446,264) | 446,264 | ||||
SSgA U.S. Government Money Market Fund | 679,411 | 679,411 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,129,769) | 2,129,769 | ||||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $255,751,371) | 305,577,687 | ||||
OTHER ASSETS AND LIABILITIES — 0.3% | 1,046,959 | ||||
TOTAL NET ASSETS — 100.0% | $ | 306,624,646 |
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Information Technology | 25.1 | % |
Financials | 19.2 | % |
Consumer Discretionary | 15.5 | % |
Industrials | 9.1 | % |
Consumer Staples | 8.1 | % |
Energy | 6.9 | % |
Materials | 5.4 | % |
Telecommunication Services | 4.6 | % |
Utilities | 2.9 | % |
Health Care | 1.9 | % |
Exchange-Traded Funds | 0.3 | % |
Cash and Equivalents* | 1.0 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
GDR | - | Global Depositary Receipt |
NVDR | - | Non-Voting Depositary Receipt |
OJSC | - | Open Joint Stock Company |
(1) Non-income producing.
See Notes to Financial Statements.
10
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $255,751,371) | $ | 305,577,687 | |
Cash | 33,001 | ||
Foreign currency holdings, at value (cost of $910,347) | 910,184 | ||
Receivable for investments sold | 7,451,657 | ||
Receivable for capital shares sold | 38,880 | ||
Dividends and interest receivable | 174,616 | ||
Other assets | 12,190 | ||
314,198,215 | |||
Liabilities | |||
Payable for investments purchased | 7,113,670 | ||
Accrued management fees | 321,098 | ||
Accrued foreign taxes | 138,801 | ||
7,573,569 | |||
Net Assets | $ | 306,624,646 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 267,625,482 | |
Distributions in excess of net investment income | (461,962 | ) | |
Accumulated net realized loss | (10,220,081 | ) | |
Net unrealized appreciation | 49,681,207 | ||
$ | 306,624,646 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |||
Institutional Class, $0.01 Par Value | $299,593,016 | 28,177,611 | $10.63 | ||
R6 Class, $0.01 Par Value | $7,031,630 | 661,458 | $10.63 |
See Notes to Financial Statements.
11
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $210,548) | $ | 2,069,580 | |
Interest | 295 | ||
2,069,875 | |||
Expenses: | |||
Management fees | 2,127,292 | ||
Directors' fees and expenses | 4,371 | ||
Other expenses | 806 | ||
2,132,469 | |||
Fees waived | (354,360 | ) | |
1,778,109 | |||
Net investment income (loss) | 291,766 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions | 2,801,735 | ||
Foreign currency transactions | (176,757 | ) | |
2,624,978 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $(84,781)) | (1,156,367 | ) | |
Translation of assets and liabilities in foreign currencies | 250 | ||
(1,156,117 | ) | ||
Net realized and unrealized gain (loss) | 1,468,861 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 1,760,627 |
See Notes to Financial Statements.
12
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 291,766 | $ | 847,359 | ||
Net realized gain (loss) | 2,624,978 | (509,010 | ) | |||
Change in net unrealized appreciation (depreciation) | (1,156,117 | ) | 14,903,031 | |||
Net increase (decrease) in net assets resulting from operations | 1,760,627 | 15,241,380 | ||||
Distributions to Shareholders | ||||||
From net investment income: | ||||||
Institutional Class | (1,117,830 | ) | (935,022 | ) | ||
R6 Class | (15,761 | ) | — | |||
Decrease in net assets from distributions | (1,133,591 | ) | (935,022 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 34,600,415 | 87,813,658 | ||||
Net increase (decrease) in net assets | 35,227,451 | 102,120,016 | ||||
Net Assets | ||||||
Beginning of period | 271,397,195 | 169,277,179 | ||||
End of period | $ | 306,624,646 | $ | 271,397,195 | ||
Undistributed (distributions in excess of) net investment income | $ | (461,962 | ) | $ | 379,863 |
See Notes to Financial Statements.
13
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is not the result of any difference in advisory or custodial fees or other expenses related to management of the fund’s assets, which do not vary by class. The fund’s R6 Class shares are available for purchase exclusively by certain American Century Investments funds of funds that are offered only through employer-sponsored retirement plans where a financial intermediary provides retirement recordkeeping services to plan participants. Because financial intermediaries do not receive any service, distribution or administrative fees for offering such funds of funds, American Century Investment Management, Inc. (ACIM) (the investment advisor) is able to charge the R6 Class a lower unified management fee. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and
14
procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation 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. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions.
15
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.
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees - The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 the fund also include the assets of Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.050% to 1.650% for the Institutional Class and 0.900% to 1.500% for the R6 Class. During the six months ended May 31, 2014, the investment advisor voluntarily agreed to waive 0.250% of its management fee. The investment advisor expects the fee waiver to continue through March 31, 2015, and cannot terminate it without the approval of the Board of Directors. The total amount of the waiver for each class for the six months ended May 31, 2014 was $349,333 and $5,027 for the Institutional Class and R6 Class, respectively. The effective annual management fee before waiver for each class for the six months ended May 31, 2014 was 1.51% for the Institutional Class and 1.36% for the R6 Class. The effective annual management fee after waiver for each class for the six months ended May 31, 2014 was 1.26% for the Institutional Class and 1.11% for the R6 Class.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
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Acquired Fund Fees and Expenses - The fund may invest in mutual funds, exchange-traded funds, and business development companies (the acquired funds). The fund will indirectly realize its pro rata share of the fees and expenses of the acquired funds in which it invests. These indirect fees and expenses are not paid out of the fund's assets but are reflected in the return realized by the fund on its investment in the acquired funds.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $177,734,251 and $145,849,565, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||
Sold | 4,384,383 | $ | 44,931,458 | 9,378,494 | $ | 96,078,378 | ||||
Issued in reinvestment of distributions | 108,942 | 1,117,830 | 90,253 | 935,022 | ||||||
Redeemed | (1,527,148 | ) | (16,085,103 | ) | (1,106,676 | ) | (11,438,585 | ) | ||
2,966,177 | 29,964,185 | 8,362,071 | 85,574,815 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 499,414 | 5,166,399 | 223,318 | 2,344,206 | ||||||
Issued in reinvestment of distributions | 1,539 | 15,761 | — | — | ||||||
Redeemed | (52,868 | ) | (545,930 | ) | (9,945 | ) | (105,363 | ) | ||
448,085 | 4,636,230 | 213,373 | 2,238,843 | |||||||
Net increase (decrease) | 3,414,262 | $ | 34,600,415 | 8,575,444 | $ | 87,813,658 |
(1) July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class.
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 34,264,736 | $ | 268,274,357 | — | |||
Exchange-Traded Funds | 908,825 | — | — | |||||
Temporary Cash Investments | 679,411 | 1,450,358 | — | |||||
$ | 35,852,972 | $ | 269,724,715 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 257,298,414 | |
Gross tax appreciation of investments | $ | 50,983,643 | |
Gross tax depreciation of investments | (2,704,370 | ) | |
Net tax appreciation (depreciation) of investments | $ | 48,279,273 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2013, the fund had accumulated short-term capital losses of $(11,232,382), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Any unlimited losses will be required to be utilized prior to the losses which carry an expiration date. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(1,146,451) expire in 2017 and the remaining losses are unlimited.
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Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Ratio to Average Net Assets of: | ||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Distributions From Net Investment Income | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Institutional Class | |||||||||||||||
2014(3) | $10.67 | 0.01 | (0.01) | — | (0.04) | $10.63 | 0.04% | 1.26%(4) | 1.51%(4) | 0.20%(4) | (0.05)%(4) | 52% | $299,593 | ||
2013 | $10.05 | 0.04 | 0.63 | 0.67 | (0.05) | $10.67 | 6.66% | 1.42% | 1.52% | 0.38% | 0.28% | 76% | $269,117 | ||
2012 | $8.94 | 0.05 | 1.07 | 1.12 | (0.01) | $10.05 | 12.51% | 1.54% | 1.54% | 0.50% | 0.50% | 101% | $169,277 | ||
2011 | $10.24 | 0.04 | (1.34) | (1.30) | — | $8.94 | (12.70)% | 1.52% | 1.52% | 0.37% | 0.37% | 87% | $119,682 | ||
2010 | $8.86 | 0.02 | 1.37 | 1.39 | (0.01) | $10.24 | 15.73% | 1.52% | 1.52% | 0.19% | 0.19% | 94% | $91,110 | ||
2009 | $5.12 | 0.02 | 3.74 | 3.76 | (0.02) | $8.86 | 73.87% | 1.57% | 1.57% | 0.36% | 0.36% | 158% | $60,311 | ||
R6 Class | |||||||||||||||
2014(3) | $10.68 | 0.01 | —(7) | 0.01 | (0.06) | $10.63 | 0.13% | 1.11%(4) | 1.36%(4) | 0.35%(4) | 0.10%(4) | 52% | $7,032 | ||
2013(5) | $9.90 | (0.01) | 0.79 | 0.78 | — | $10.68 | 7.88% | 1.12%(4) | 1.37%(4) | (0.37)%(4) | (0.62)%(4) | 76%(6) | $2,280 |
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Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
(7) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
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Notes |
22
Notes |
23
Notes |
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![]() | ||
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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82555 1407 |
SEMIANNUAL REPORT | MAY 31, 2014 |
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NT International Growth Fund
Table of Contents |
Any opinions expressed in this report reflect those of the author 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.
President’s Letter |
![]() | Dear Investor: Thank you for reviewing this semiannual report for the six months ended May 31, 2014. It provides a macroeconomic and financial market overview (below), followed by fund performance, a schedule of fund investments, and other financial information. For additional commentary and updated information on fund performance, key factors that affected asset returns, and other insights regarding the investment markets, we encourage you to visit our website, americancentury.com. |
Jonathan Thomas |
Unexpected Economic Slowdown, Which Favored Defensive Stock Sectors and Bonds
The six-month reporting period started on an optimistic note during December 2013, when signs seemed to point toward stronger economic growth, led by the U.S., in the coming year. Instead, the U.S. economy contracted in the first quarter of 2014, frozen by harsh winter weather. Weaker economic conditions also afflicted Europe and China, leading to downgrades in global and U.S. growth estimates for the rest of the current calendar year.
In this weaker-than-expected economic environment, bonds rallied and interest rates fell. Stocks also generally advanced, led by relatively defensive sectors such as REITs and utilities in the U.S., where the value discipline outperformed growth, and larger-capitalization companies outpaced smaller. For the six months, the S&P 500 Index gained 7.62%, the MSCI EAFE Index advanced 5.33%, and the 10-year U.S. Treasury note returned 4.33% as its yield declined from 2.74% to 2.48%.
Looking ahead, we see signs of potential global economic improvement in the second half of 2014 as central banks continue to provide extraordinary levels of monetary stimulus, but headwinds persist and geopolitical tensions remain a wildcard. Inflation pressures are starting to build in the U.S., interest rates could rise, and geopolitics could disrupt oil trading and other markets. In this environment, we continue to believe in a disciplined, diversified, long-term investment approach, using professionally managed stock and bond portfolios—as appropriate—for meeting financial goals. We appreciate your continued trust in us.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0000872825-14-000024/jonathanthomassig.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Performance |
Total Returns as of May 31, 2014 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLNX | 3.54% | 16.24% | 12.93% | 4.20% | 5/12/06 |
MSCI EAFE Index | — | 5.33% | 18.04% | 11.42% | 3.02% | — |
MSCI EAFE Growth Index | — | 4.48% | 15.68% | 12.02% | 3.51% | — |
R6 Class | ACDNX | 3.61% | — | — | 13.39%(1) | 7/26/13 |
(1) | Total returns for periods less than one year are not annualized. |
Total Annual Fund Operating Expenses | |
Institutional Class | R6 Class |
1.02% | 0.87% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
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 Institutional Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the indices do not.
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Fund Characteristics |
MAY 31, 2014 | |
Top Ten Holdings | % of net assets |
Roche Holding AG | 2.9% |
Nestle SA | 2.1% |
Novartis AG | 2.0% |
BG Group plc | 1.6% |
Bayer AG | 1.6% |
Pandora A/S | 1.5% |
Nidec Corp. | 1.4% |
Ashtead Group plc | 1.4% |
Associated British Foods plc | 1.4% |
Anheuser-Busch InBev NV | 1.3% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.1% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
United Kingdom | 21.8% |
Japan | 13.5% |
Switzerland | 11.5% |
France | 10.1% |
Germany | 8.7% |
Denmark | 4.6% |
Netherlands | 4.2% |
Australia | 3.4% |
Spain | 3.1% |
China | 2.9% |
Sweden | 2.4% |
Italy | 2.3% |
Other Countries | 10.6% |
Cash and Equivalents* | 0.9% |
*Includes temporary cash investments and other assets and liabilities. |
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Shareholder Fee Example |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2013 to May 31, 2014.
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. 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.
5
Beginning Account Value 12/1/13 | Ending Account Value 5/31/14 | Expenses Paid During Period(1) 12/1/13 – 5/31/14 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $1,035.40 | $5.02 | 0.99% |
R6 Class | $1,000 | $1,036.10 | $4.26 | 0.84% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,020.00 | $4.99 | 0.99% |
R6 Class | $1,000 | $1,020.74 | $4.23 | 0.84% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period. |
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Schedule of Investments |
MAY 31, 2014 (UNAUDITED)
Shares | Value | ||||
COMMON STOCKS — 99.1% | |||||
AUSTRALIA — 3.4% | |||||
BHP Billiton Ltd. | 193,840 | $ | 6,676,499 | ||
Commonwealth Bank of Australia | 107,274 | 8,145,499 | |||
CSL Ltd. | 160,675 | 10,555,476 | |||
James Hardie Industries SE | 382,280 | 5,098,167 | |||
30,475,641 | |||||
AUSTRIA — 0.4% | |||||
Erste Group Bank AG | 94,283 | 3,276,022 | |||
BELGIUM — 1.3% | |||||
Anheuser-Busch InBev NV | 106,578 | 11,696,637 | |||
BRAZIL — 0.5% | |||||
Itau Unibanco Holding SA Preference Shares | 304,900 | 4,747,093 | |||
CHINA — 2.9% | |||||
Baidu, Inc. ADR(1) | 33,840 | 5,617,440 | |||
ENN Energy Holdings Ltd. | 338,000 | 2,391,258 | |||
Haier Electronics Group Co. Ltd. | 1,703,000 | 3,984,602 | |||
Tencent Holdings Ltd. | 614,500 | 8,663,135 | |||
Vipshop Holdings Ltd. ADR(1) | 31,440 | 5,114,030 | |||
25,770,465 | |||||
DENMARK — 4.6% | |||||
Coloplast A/S B Shares | 65,260 | 5,637,968 | |||
GN Store Nord A/S | 294,290 | 8,121,749 | |||
Novo Nordisk A/S B Shares | 236,070 | 9,985,057 | |||
Pandora A/S | 176,420 | 13,070,877 | |||
Vestas Wind Systems A/S(1) | 80,840 | 4,348,146 | |||
41,163,797 | |||||
FINLAND — 0.7% | |||||
Sampo A Shares | 120,168 | 6,057,583 | |||
FRANCE — 10.1% | |||||
Accor SA | 165,340 | 8,748,250 | |||
Airbus Group NV | 104,971 | 7,528,029 | |||
AXA SA | 239,030 | 5,900,849 | |||
Carrefour SA | 107,136 | 3,894,952 | |||
Cie de St-Gobain | 123,900 | 7,058,936 | |||
Cie Generale d'Optique Essilor International SA | 27,701 | 2,909,833 | |||
Danone SA | 59,610 | 4,439,090 | |||
Iliad SA | 16,040 | 5,127,325 | |||
Publicis Groupe SA | 57,282 | 4,941,153 | |||
Schneider Electric SA | 112,428 | 10,586,940 | |||
Technip SA | 26,210 | 2,814,664 | |||
Total SA | 161,290 | 11,318,519 | |||
Valeo SA | 51,840 | 6,960,571 |
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Shares | Value | ||||
Zodiac Aerospace | 217,560 | $ | 7,734,465 | ||
89,963,576 | |||||
GERMANY — 8.7% | |||||
adidas AG | 46,208 | 4,959,709 | |||
BASF SE | 52,520 | 6,047,430 | |||
Bayer AG | 95,800 | 13,855,574 | |||
Continental AG | 40,631 | 9,606,727 | |||
Daimler AG | 112,000 | 10,641,294 | |||
Henkel AG & Co. KGaA Preference Shares | 37,081 | 4,282,844 | |||
Siemens AG | 62,510 | 8,304,616 | |||
Sky Deutschland AG(1) | 765,506 | 7,141,710 | |||
Symrise AG | 171,760 | 9,310,364 | |||
Wirecard AG | 70,143 | 3,059,694 | |||
77,209,962 | |||||
GREECE — 0.4% | |||||
Alpha Bank AE(1) | 3,938,530 | 3,704,477 | |||
HONG KONG — 0.8% | |||||
Sands China Ltd. | 969,600 | 7,066,007 | |||
INDIA — 1.9% | |||||
ICICI Bank Ltd. ADR | 101,740 | 5,053,426 | |||
Tata Consultancy Services Ltd. | 147,940 | 5,361,166 | |||
Tata Motors Ltd. ADR | 158,863 | 5,916,058 | |||
16,330,650 | |||||
INDONESIA — 0.5% | |||||
PT Bank Mandiri (Persero) Tbk | 5,059,200 | 4,409,196 | |||
IRELAND — 0.8% | |||||
Bank of Ireland(1) | 7,471,871 | 2,872,249 | |||
Kerry Group plc A Shares | 56,300 | 4,286,228 | |||
7,158,477 | |||||
ITALY — 2.3% | |||||
Intesa Sanpaolo SpA | 1,001,940 | 3,357,123 | |||
Luxottica Group SpA | 103,304 | 5,900,310 | |||
UniCredit SpA | 1,291,520 | 11,258,624 | |||
20,516,057 | |||||
JAPAN — 13.5% | |||||
Daikin Industries Ltd. | 147,300 | 8,775,781 | |||
Daito Trust Construction Co. Ltd. | 28,400 | 3,075,737 | |||
FANUC Corp. | 52,500 | 8,932,220 | |||
Fuji Heavy Industries Ltd. | 290,400 | 7,687,898 | |||
Honda Motor Co., Ltd. | 291,700 | 10,209,500 | |||
Keyence Corp. | 29,500 | 11,459,504 | |||
Komatsu Ltd. | 328,100 | 7,145,360 | |||
Mitsubishi Estate Co. Ltd. | 145,000 | 3,519,597 | |||
Mizuho Financial Group, Inc. | 2,540,200 | 4,940,664 | |||
Murata Manufacturing Co. Ltd. | 71,300 | 6,039,488 | |||
Nidec Corp. | 221,400 | 12,872,953 | |||
ORIX Corp. | 732,200 | 11,608,750 |
8
Shares | Value | ||||
Panasonic Corp. | 707,100 | $ | 7,591,948 | ||
Rakuten, Inc. | 453,527 | 5,876,249 | |||
Seven & I Holdings Co. Ltd. | 113,600 | 4,539,536 | |||
Unicharm Corp. | 86,600 | 5,243,639 | |||
119,518,824 | |||||
MEXICO — 0.9% | |||||
Cemex SAB de CV ADR(1) | 637,433 | 8,203,763 | |||
NETHERLANDS — 4.2% | |||||
Akzo Nobel NV | 134,781 | 10,101,295 | |||
ASML Holding NV | 114,404 | 9,818,600 | |||
ING Groep NV CVA(1) | 740,770 | 10,375,496 | |||
Koninklijke Boskalis Westminster NV | 125,600 | 7,153,222 | |||
37,448,613 | |||||
NORWAY — 0.7% | |||||
Statoil ASA | 196,420 | 6,019,529 | |||
RUSSIA — 0.5% | |||||
Magnit OJSC GDR | 72,410 | 4,214,262 | |||
SPAIN — 3.1% | |||||
Amadeus IT Holding SA A Shares | 122,070 | 5,363,063 | |||
Banco Popular Espanol SA | 1,174,405 | 8,294,212 | |||
Bankia SA(1) | 5,271,752 | 10,714,607 | |||
Inditex SA | 23,713 | 3,442,546 | |||
27,814,428 | |||||
SWEDEN — 2.4% | |||||
Skandinaviska Enskilda Banken AB A Shares | 721,630 | 9,796,785 | |||
Svenska Cellulosa AB B Shares | 310,955 | 8,652,095 | |||
Volvo AB B Shares | 215,920 | 3,139,423 | |||
21,588,303 | |||||
SWITZERLAND — 11.5% | |||||
Adecco SA | 57,574 | 4,805,870 | |||
Cie Financiere Richemont SA | 58,760 | 6,190,961 | |||
Givaudan SA | 3,530 | 5,786,756 | |||
Lindt & Spruengli AG | 1,140 | 5,649,715 | |||
Nestle SA | 242,070 | 18,989,858 | |||
Novartis AG | 198,586 | 17,807,321 | |||
Roche Holding AG | 88,744 | 26,112,835 | |||
Sika AG | 1,621 | 6,424,265 | |||
UBS AG | 496,245 | 9,963,691 | |||
101,731,272 | |||||
TAIWAN — 0.8% | |||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 337,121 | 6,931,208 | |||
TURKEY — 0.4% | |||||
BIM Birlesik Magazalar AS | 173,729 | 3,814,351 | |||
UNITED KINGDOM — 21.8% | |||||
ARM Holdings plc | 372,740 | 5,748,034 | |||
Ashtead Group plc | 822,433 | 12,138,230 | |||
Associated British Foods plc | 238,623 | 12,071,383 |
9
Shares | Value | ||||
BG Group plc | 678,503 | $ | 13,886,504 | ||
BT Group plc | 1,197,990 | 7,972,035 | |||
Bunzl plc | 218,330 | 6,118,926 | |||
Burberry Group plc | 260,774 | 6,700,881 | |||
Capita Group plc (The) | 285,319 | 5,294,242 | |||
Carnival plc | 38,780 | 1,576,322 | |||
Compass Group plc | 157,488 | 2,627,933 | |||
International Consolidated Airlines Group SA(1) | 1,263,520 | 8,336,096 | |||
Intertek Group plc | 69,290 | 3,389,076 | |||
ITV plc | 1,294,114 | 3,950,099 | |||
Johnson Matthey plc | 180,548 | 9,720,614 | |||
Lloyds Banking Group plc(1) | 7,583,697 | 9,897,394 | |||
Next plc | 57,360 | 6,384,144 | |||
Prudential plc | 134,360 | 3,120,341 | |||
Reckitt Benckiser Group plc | 127,260 | 10,878,965 | |||
Rio Tinto plc | 206,436 | 10,578,068 | |||
Rolls-Royce Holdings plc | 285,138 | 4,970,658 | |||
Rolls-Royce Holdings plc Preference Shares | 38,208,492 | 64,045 | |||
Royal Bank of Scotland Group plc(1) | 1,393,740 | 8,097,218 | |||
Shire plc | 120,180 | 6,877,351 | |||
Smith & Nephew plc | 318,360 | 5,581,818 | |||
St. James's Place plc | 748,900 | 9,822,763 | |||
Travis Perkins plc | 241,860 | 6,822,973 | |||
Whitbread plc | 161,978 | 11,365,296 | |||
193,991,409 | |||||
TOTAL COMMON STOCKS (Cost $723,409,974) | 880,821,602 | ||||
TEMPORARY CASH INVESTMENTS — 0.6% | |||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.625%, 8/31/17, valued at $1,494,260), in a joint trading account at 0.05%, dated 5/30/14, due 6/2/14 (Delivery value $1,464,751) | 1,464,745 | ||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 11/30/15, valued at $1,195,045), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,171,797) | 1,171,796 | ||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 0.25%, 10/15/15, valued at $1,195,799), in a joint trading account at 0.01%, dated 5/30/14, due 6/2/14 (Delivery value $1,171,797) | 1,171,796 | ||||
SSgA U.S. Government Money Market Fund | 1,852,975 | 1,852,975 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,661,312) | 5,661,312 | ||||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $729,071,286) | 886,482,914 | ||||
OTHER ASSETS AND LIABILITIES — 0.3% | 2,541,849 | ||||
TOTAL NET ASSETS — 100.0% | $ | 889,024,763 |
10
MARKET SECTOR DIVERSIFICATION | ||
(as a % of net assets) | ||
Consumer Discretionary | 18.9 | % |
Financials | 18.2 | % |
Industrials | 16.4 | % |
Health Care | 12.1 | % |
Consumer Staples | 11.5 | % |
Materials | 8.7 | % |
Information Technology | 7.6 | % |
Energy | 3.9 | % |
Telecommunication Services | 1.5 | % |
Utilities | 0.3 | % |
Cash and Equivalents* | 0.9 | % |
*Includes temporary cash investments and other assets and liabilities.
NOTES TO SCHEDULE OF INVESTMENTS | ||
ADR | - | American Depositary Receipt |
CVA | - | Certification Van Aandelen |
GDR | - | Global Depositary Receipt |
OJSC | - | Open Joint Stock Company |
(1) | Non-income producing. |
See Notes to Financial Statements.
11
Statement of Assets and Liabilities |
MAY 31, 2014 (UNAUDITED) | |||
Assets | |||
Investment securities, at value (cost of $729,071,286) | $ | 886,482,914 | |
Foreign currency holdings, at value (cost of $1,337,823) | 1,334,378 | ||
Receivable for investments sold | 11,561,699 | ||
Receivable for capital shares sold | 127,191 | ||
Dividends and interest receivable | 3,095,412 | ||
Other assets | 12,892 | ||
902,614,486 | |||
Liabilities | |||
Payable for investments purchased | 12,802,856 | ||
Accrued management fees | 721,279 | ||
Accrued foreign taxes | 65,588 | ||
13,589,723 | |||
Net Assets | $ | 889,024,763 | |
Net Assets Consist of: | |||
Capital (par value and paid-in surplus) | $ | 707,159,586 | |
Undistributed net investment income | 765,265 | ||
Undistributed net realized gain | 23,721,253 | ||
Net unrealized appreciation | 157,378,659 | ||
$ | 889,024,763 |
Net Assets | Shares Outstanding | Net Asset Value Per Share | |
Institutional Class, $0.01 Par Value | $869,286,823 | 73,418,417 | $11.84 |
R6 Class, $0.01 Par Value | $19,737,940 | 1,666,767 | $11.84 |
See Notes to Financial Statements.
12
Statement of Operations |
FOR THE SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) | |||
Investment Income (Loss) | |||
Income: | |||
Dividends (net of foreign taxes withheld of $1,352,117) | $ | 10,951,167 | |
Interest | 546 | ||
10,951,713 | |||
Expenses: | |||
Management fees | 4,029,495 | ||
Directors’ fees and expenses | 12,704 | ||
Other expenses | 2,454 | ||
4,044,653 | |||
Net investment income (loss) | 6,907,060 | ||
Realized and Unrealized Gain (Loss) | |||
Net realized gain (loss) on: | |||
Investment transactions (net of foreign tax expenses paid (refunded) of $27,413) | 27,730,585 | ||
Foreign currency transactions | (52,231 | ) | |
27,678,354 | |||
Change in net unrealized appreciation (depreciation) on: | |||
Investments (includes (increase) decrease in accrued foreign taxes of $135,661) | (4,509,680 | ) | |
Translation of assets and liabilities in foreign currencies | (6,431 | ) | |
(4,516,111 | ) | ||
Net realized and unrealized gain (loss) | 23,162,243 | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $ | 30,069,303 |
See Notes to Financial Statements.
13
Statement of Changes in Net Assets |
SIX MONTHS ENDED MAY 31, 2014 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2013 | ||||||
Increase (Decrease) in Net Assets | May 31, 2014 | November 30, 2013 | ||||
Operations | ||||||
Net investment income (loss) | $ | 6,907,060 | $ | 6,369,114 | ||
Net realized gain (loss) | 27,678,354 | 51,288,405 | ||||
Change in net unrealized appreciation (depreciation) | (4,516,111 | ) | 79,335,173 | |||
Net increase (decrease) in net assets resulting from operations | 30,069,303 | 136,992,692 | ||||
Distributions to Shareholders | ||||||
From net investment income | ||||||
Institutional Class | (10,834,636 | ) | (7,491,880 | ) | ||
R6 Class | (101,158 | ) | — | |||
From net realized gains: | ||||||
Institutional Class | (34,990,441 | ) | — | |||
R6 Class | (295,487 | ) | — | |||
Decrease in net assets from distributions | (46,221,722 | ) | (7,491,880 | ) | ||
Capital Share Transactions | ||||||
Net increase (decrease) in net assets from capital share transactions | 127,571,709 | 160,140,262 | ||||
Net increase (decrease) in net assets | 111,419,290 | 289,641,074 | ||||
Net Assets | ||||||
Beginning of period | 777,605,473 | 487,964,399 | ||||
End of period | $ | 889,024,763 | $ | 777,605,473 | ||
Undistributed net investment income | $ | 765,265 | $ | 4,793,999 |
See Notes to Financial Statements.
14
Notes to Financial Statements |
MAY 31, 2014 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund is not permitted to invest in securities issued by companies assigned the Global Industry Classification Standard for the tobacco industry.
The fund offers the Institutional Class and the R6 Class, which have different fees and expenses. The difference in the fee structures between the classes is not the result of any difference in advisory or custodial fees or other expenses related to management of the fund’s assets, which do not vary by class. The fund’s R6 Class shares are available for purchase exclusively by certain American Century Investments funds of funds that are offered only through employer-sponsored retirement plans where a financial intermediary provides retirement recordkeeping services to plan participants. Because financial intermediaries do not receive any service, distribution or administrative fees for offering such funds of funds, American Century Investment Management, Inc. (ACIM) (the investment advisor) is able to charge the R6 Class a lower unified management fee. Sale of the R6 Class commenced on July 26, 2013.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. 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.
Investment Valuations - The fund determines the fair value of its investments and computes its net asset value per share at the close of regular trading (usually 4 p.m. Eastern time) on the New York Stock Exchange (NYSE) on each day the NYSE is open. The Board of Directors has adopted valuation policies and procedures to guide the investment advisor in the fund’s investment valuation process and to provide methodologies for the oversight of the fund’s pricing function.
Equity securities that are listed or traded on a domestic securities exchange are valued at the last reported sales price or at the official closing price as provided by the exchange. Equity securities traded on foreign securities exchanges are generally valued at the closing price of such securities on the exchange where primarily traded or at the close of the NYSE, if that is earlier. If no last sales price is reported, or if local convention or regulation so provides, the mean of the latest bid and asked prices may be used. Securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. Equity securities initially expressed in local currencies are translated into U.S. dollars at the mean of the appropriate currency exchange rate at the close of the NYSE as provided by an independent pricing service.
Fixed income securities maturing within 60 days at the time of purchase may be valued at cost, plus or minus any amortized discount or premium or at the evaluated mean as provided by an independent pricing service. Evaluated mean prices are commonly derived through utilization of market models, which may consider, among other factors: trade data, quotations from dealers and active market makers, relevant yield curve and spread data, related sector levels, creditworthiness, trade data or market information on comparable securities, and other relevant security specific information.
Open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost, which approximates fair value.
If the fund determines that the market price for an investment is not readily available or the valuation methods mentioned above do not reflect an investment’s fair value, such investment is valued as determined in good faith by the Board of Directors or its delegate, in accordance with policies and procedures adopted by the Board of Directors. In its determination of fair value, the fund may review several factors including, but not
15
limited to, market information regarding the specific investment or comparable investments and correlation with other investment types, futures indices or general market indicators. Circumstances that may cause the fund to use these procedures to value an investment include, but are not limited to: an investment has been declared in default or is distressed; trading in a security has been suspended during the trading day or a security is not actively trading on its principal exchange; prices received from a regular pricing source are deemed unreliable; or there is a foreign market holiday and no trading occurred.
The fund monitors for significant events occurring after the close of an investment’s primary exchange but before the fund’s net asset value per share is determined. Significant events may include, but are not limited to: corporate announcements and transactions; governmental action and political unrest that could impact a specific investment or an investment sector; or armed conflicts, natural disasters and similar events that could affect investments in a specific country or region. The fund also monitors for significant fluctuations between domestic and foreign markets, as evidenced by the U.S. market or such other indicators that the Board of Directors, or its delegate, deems appropriate. If significant fluctuations in foreign markets are identified, the fund may apply a model-derived factor to the closing price of equity securities traded on foreign securities exchanges. The factor is based on observable market data as provided by an independent pricing service.
Security Transactions - Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes. Certain countries impose taxes on realized gains on the sale of securities registered in their country. The fund records the foreign tax expense, if any, on an accrual basis. The foreign tax expense on realized gains and unrealized appreciation 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. Distributions received on securities that represent a return of capital or long-term capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund may estimate the components of distributions received that may be considered nontaxable distributions or long-term capital gain distributions for income tax purposes. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations - All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements - The fund may enter into repurchase agreements with institutions that ACIM has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the 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 the fund under each repurchase agreement.
Joint Trading Account - Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status - It is the 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. Accordingly, no provision has been made for income taxes. The fund files U.S. federal, state, local and non-U.S. tax returns as applicable. The fund's tax returns are subject to examination by the relevant taxing authority until expiration of the applicable statute of limitations, which is generally three years from the date of filing but can be longer in certain jurisdictions. 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.
16
Multiple Class - All shares of the 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 fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders - Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund 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 fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC). The corporation’s investment advisor, ACIM, the corporation's distributor, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC, are wholly owned, directly or indirectly, by ACC. Various funds issued by American Century Asset Allocation Portfolios, Inc. own, in aggregate, 100% of the shares of the fund. Related parties do not invest in the fund for the purpose of exercising management or control.
Management Fees -The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund 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 managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the 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 the fund also include the assets of International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 0.850% to 1.300% for the Institutional Class and 0.700% to 1.150% for the R6 Class. The effective annual management fee for each class for the six months ended May 31, 2014 was 0.99% for the Institutional Class and 0.84% for the R6 Class.
Directors' Fees and Expenses - The Board of Directors is responsible for overseeing the investment advisor’s management and operations of the fund. The directors receive detailed information about the fund and its investment advisor regularly throughout the year, and meet at least quarterly with management of the investment advisor to review reports about fund operations. Fees and expenses incurred in conjunction with the directors during the six months ended May 31, 2014 are detailed in the Statement of Operations. The fund’s officers do not receive compensation from the fund.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2014 were $382,024,905 and $293,262,102, respectively.
17
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2014 | Year ended November 30, 2013(1) | |||||||||
Shares | Amount | Shares | Amount | |||||||
Institutional Class/Shares Authorized | 250,000,000 | 250,000,000 | ||||||||
Sold | 8,229,168 | $ | 95,781,962 | 16,389,161 | $ | 178,466,964 | ||||
Issued in reinvestment of distributions | 4,106,190 | 45,825,077 | 741,776 | 7,491,880 | ||||||
Redeemed | (2,287,764 | ) | (27,097,284 | ) | (2,826,607 | ) | (32,253,447 | ) | ||
10,047,594 | 114,509,755 | 14,304,330 | 153,705,397 | |||||||
R6 Class/Shares Authorized | 50,000,000 | 50,000,000 | ||||||||
Sold | 1,221,683 | 14,169,682 | 559,698 | 6,686,823 | ||||||
Issued in reinvestment of distributions | 35,574 | 396,645 | — | — | ||||||
Redeemed | (129,175 | ) | (1,504,373 | ) | (21,013 | ) | (251,958 | ) | ||
1,128,082 | 13,061,954 | 538,685 | 6,434,865 | |||||||
Net increase (decrease) | 11,175,676 | $ | 127,571,709 | 14,843,015 | $ | 160,140,262 |
(1) | July 26, 2013 (commencement of sale) through November 30, 2013 for the R6 Class. |
6. Fair Value Measurements
The fund’s investments valuation process is based on several considerations and may use multiple inputs to determine the fair value of the investments held by the fund. 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.
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical investments. |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for comparable investments, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.). These inputs also consist of quoted prices for identical investments initially expressed in local currencies that are adjusted through translation into U.S. dollars. |
• | Level 3 valuation inputs consist of unobservable data (including a 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 necessarily an indication of the risks associated with investing in these securities or other financial instruments.
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||
Assets | ||||||||
Investment Securities | ||||||||
Common Stocks | $ | 36,835,925 | $ | 843,985,677 | — | |||
Temporary Cash Investments | 1,852,975 | 3,808,337 | — | |||||
$ | 38,688,900 | $ | 847,794,014 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
18
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2014, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $ | 731,840,998 | |
Gross tax appreciation of investments | $ | 159,979,313 | |
Gross tax depreciation of investments | (5,337,397 | ) | |
Net tax appreciation (depreciation) of investments | $ | 154,641,916 |
The difference between book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
19
Financial Highlights |
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||
Institutional Class | |||||||||||||||
2014(3) | $12.17 | 0.10 | 0.29 | 0.39 | (0.17) | (0.55) | (0.72) | $11.84 | 3.54% | 0.99%(4) | 1.68%(4) | 36% | $869,287 | ||
2013 | $9.94 | 0.11 | 2.27 | 2.38 | (0.15) | — | (0.15) | $12.17 | 24.27% | 1.02% | 1.01% | 89% | $771,045 | ||
2012 | $8.71 | 0.13 | 1.17 | 1.30 | (0.07) | — | (0.07) | $9.94 | 15.13% | 1.08% | 1.47% | 93% | $487,964 | ||
2011 | $9.11 | 0.10 | (0.41) | (0.31) | (0.09) | — | (0.09) | $8.71 | (3.47)% | 1.12% | 1.04% | 77% | $345,234 | ||
2010 | $8.61 | 0.08 | 0.54 | 0.62 | (0.12) | — | (0.12) | $9.11 | 7.28% | 1.14% | 0.95% | 85% | $250,218 | ||
2009 | $6.29 | 0.10 | 2.33 | 2.43 | (0.11) | — | (0.11) | $8.61 | 39.09% | 1.18% | 1.41% | 132% | $163,476 | ||
R6 Class | |||||||||||||||
2014(3) | $12.18 | 0.13 | 0.27 | 0.40 | (0.19) | (0.55) | (0.74) | $11.84 | 3.61% | 0.84%(4) | 1.83%(4) | 36% | $19,738 | ||
2013(5) | $11.13 | (0.01) | 1.06 | 1.05 | — | — | — | $12.18 | 9.43% | 0.85%(4) | (0.34)%(4) | 89%(6) | $6,561 |
Notes to Financial Highlights |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2014 (unaudited). |
(4) | Annualized. |
(5) | July 26, 2013 (commencement of sale) through November 30, 2013. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2013. |
See Notes to Financial Statements.
20
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs 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. For systematic withdrawals, your withholding election will remain in effect until revoked or changed by filing a new election. You have the right to revoke your election at any time.
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 (or as otherwise required by state law). State taxes will be withheld from your distribution in accordance with the respective state rules.
Distributions you receive from 403(b), 457 and qualified plans are subject to special tax and withholding rules. Your plan administrator or plan sponsor is required to provide you with a special tax notice explaining those rules at the time you request a distribution. If applicable, federal and/or state taxes may be withheld from your distribution amount.
Proxy Voting Policies
A description of the policies that the fund's investment advisor uses in exercising the voting rights associated with the securities purchased and/or held by the fund is available without charge, upon request, by calling 1-800-345-2021. It is also available on the "About Us" page of 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 fund files its 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 fund’s 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 fund also makes its complete schedule of portfolio holdings for the most recent quarter of its fiscal year available on its
website at americancentury.com and, upon request, by calling 1-800-345-2021.
21
Notes |
22
Notes |
23
Notes |
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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 Relay Service for the Deaf | 711 | |
American Century World Mutual Funds, Inc. | ||
Investment Advisor: American Century Investment Management, Inc. Kansas City, Missouri | ||
This report and the statements it contains are submitted for the general information of our shareholders. The report is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. | ||
©2014 American Century Proprietary Holdings, Inc. All rights reserved. CL-SAN-82556 1407 |
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(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 EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | American Century World Mutual Funds, Inc. | |||
By: | /s/ Jonathan S. Thomas | |||
Name: | Jonathan S. Thomas | |||
Title: | President | |||
Date: | July 29, 2014 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
(principal executive officer) | |||
Date: | July 29, 2014 |
By: | /s/ C. Jean Wade | ||
Name: | C. Jean Wade | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | July 29, 2014 |