UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-06247 | |||||
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 11-30 | |||||
Date of reporting period: | 11-30-2010 |
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT NOVEMBER 30, 2010
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Emerging Markets Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 15 |
Statement of Operations | 16 |
Statement of Changes in Net Assets | 17 |
Notes to Financial Statements | 18 |
Financial Highlights | 24 |
Report of Independent Registered Public Accounting Firm | 30 |
Other Information | |
Proxy Voting Results | 31 |
Management | 32 |
Additional Information | 35 |
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.
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
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Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
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Total Returns as of November 30, 2010 | ||||||||||
Average Annual Returns | ||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||
Investor Class | TWMIX | 16.21 | % | 10.58 | % | 11.84 | % | 8.32 | % | 9/30/97 |
MSCI Emerging Markets Growth Index | — | 16.50 | % | 10.82 | % | N/A | (1) | N/A | — | |
MSCI Emerging Markets (Gross) Index | — | 15.65 | % | 12.85 | % | 15.71 | % | 8.66 | % | — |
Institutional Class | AMKIX | 16.42 | % | 10.80 | % | 12.05 | % | 13.16 | % | 1/28/99 |
A Class(2) No sales charge* With sales charge* | AEMMX | 15.92 9.30 | % % | 10.34 9.05 | % % | 11.57 10.93 | % % | 10.40 9.84 | % % | 5/12/99 |
B Class No sales charge* With sales charge* | ACKBX | 15.01 11.01 | % % | — — | — — | -7.88 -9.02 | % % | 9/28/07 | ||
C Class | ACECX | 15.09 | % | 9.51 | % | — | 13.02 | % | 12/18/01 | |
R Class | AEMRX | 15.66 | % | — | — | -7.42 | % | 9/28/07 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Benchmark data first available 1/1/01. |
(2) | 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. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the indices do not.
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Growth of $10,000 Over 10 Years* |
$10,000 investment made November 30, 2000 |
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*Since MSCI Emerging Markets Growth Index data is only available from 1/1/01, it is not included in the line chart.
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.78% | 1.58% | 2.03% | 2.78% | 2.78% | 2.28% |
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 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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Portfolio Managers: Patricia Ribeiro and Anthony Han
Performance Summary
The Emerging Markets portfolio returned 16.21%* for the 12 months ended November 30, 2010, compared with its benchmark, the MSCI Emerging Markets Growth Index, which returned 16.50%.
Stocks in many global markets generally struggled during the first half of the period, as several eurozone nations came close to defaulting on their sovereign debt. In the second half of the period, improving business conditions and confidence and solid corporate earnings reports in several markets helped propel stocks and push 12-month returns into positive territory. Emerging market stocks significantly outperformed their developed market counterparts, primarily because the emerging markets weren’t facing the sovereign debt problems mounting in many devel oped nations. Instead, many emerging markets focused on building their infrastructures and growing their economies.
The portfolio, which narrowly underperformed its benchmark for the period, benefited from strong stock selection across a variety of regions and sectors. Overall, our sector and country allocations were slightly negative.
Chile Detracted; India Was Top Performer
The largest detractors from a regional perspective included Chile, China, and Mexico. Stock selection dragged down relative results in Chile and China, while underweight positions in Mexico and Chile also were ineffective. Late in the period, concerns about rising inflation and slower growth rates in China, along with the Chinese government’s decision to untether its currency from the U.S. dollar, rattled investors. Several China-based stocks weakened, including our overweight position in Skyworth Digital Holdings, a television manufacturer, which was among the portfolio’s largest detractors due to falling unit sales. Analysts had expected volumes to climb, due largely to the Chinese government’s incentives to stimulate domestic demand for household appliances.
The portfolio’s largest regional contributors to relative performance included India, South Africa, and Indonesia. In each country, our stock selection was robust. In addition, our overweight positions in India and Indonesia boosted results, while an underweight to South Africa was slightly positive. In addition, our position in Taiwan was a key contributor to performance, with our overweights to Eva Airways and HTC Corp. finishing the period among the portfolio’s best performers. Eva, a leading international carrier in Taiwan, benefited from the region’s burgeoning tourism business. Cellular handset maker HTC posted considerable market share gains on growing demand for its smartphones that run on Google’s Android operating system.
Materials Lagged; Financials Were Top Contributors
Poor stock selection and underweights in the telecommunication services and materials sectors dragged down the portfolio’s relative performance. In particular, our overweight position in Hong Kong’s Fushan International Energy Group was among the portfolio’s weakest holdings. The company, which mines coking coal used for firing smelters in steel mills, saw its stock price steadily decline, despite strong operating results. Macroeconomic influences, including China’s tightening efforts, combined with falling steel prices, higher production costs, and economic uncertainty in Europe, created a challenging climate for the China’s metals and mining industry.
*All fund returns referenced in this commentary are for Investor Class shares.
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Europe’s financial woes hurt Hungary’s OTP Bank, which was the portfolio’s weakest holding. The company’s shares tumbled after Hungary’s prime minister unveiled a tax on financial institutions to help ease the country’s budget shortfall.
The portfolio’s financials sector made the greatest contribution to relative performance, driven primarily by strong stock selection in the commercial banking and insurance industries. An overweight position in the consumer discretionary sector was positive, while stock selection drove the portfolio’s outperformance in the consumer staples sector. The food and staples retailing industry was the leading consumer staples contributor, with CP ALL PCL, a Thailand-based company that operates convenience stores under the 7-Eleven trademark, among the portfolio’s top performers.
Outlook
Global economic activity is improving, but significant headwinds remain, including sovereign debt concerns in the developed world and the potential for rising inflation around the globe. So far, government responses to the crisis have varied, and this lack of coordination may lead to divergent economic performance in the year ahead. We expect further volatility, yet we will continue to focus on finding companies located in emerging market countries with sustainable growth characteristics and promising long-term outlooks. Emerging markets have held up relatively well, primarily because they have managed their economies conservatively throughout the past several years.
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Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Vale SA Preference Shares | 5.7% |
Samsung Electronics Co. Ltd. | 3.2% |
Ping An Insurance Group Co. of China Ltd. H Shares | 3.2% |
Infosys Technologies Ltd. | 2.7% |
Sberbank of Russia | 2.6% |
Hon Hai Precision Industry Co. Ltd. | 2.1% |
Itau Unibanco Holding SA Preference Shares | 1.9% |
Hyundai Heavy Industries Co. Ltd. | 1.8% |
CNOOC Ltd. | 1.8% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 1.8% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights | 100.2% |
Temporary Cash Investments | 0.2% |
Other Assets and Liabilities | (0.4)% |
Investments by Country | |
% of net assets as of 11/30/10 | |
People’s Republic of China | 15.2% |
Brazil | 14.6% |
South Korea | 11.5% |
India | 9.7% |
Taiwan (Republic of China) | 7.9% |
South Africa | 7.6% |
Hong Kong | 6.7% |
Russian Federation | 6.7% |
Indonesia | 3.8% |
Thailand | 3.2% |
Turkey | 2.8% |
Mexico | 2.3% |
Malaysia | 2.3% |
Other Countries | 5.9% |
Cash and Equivalents* | (0.2)% |
*Includes temporary cash investments and other assets and liabilities.
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Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
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 persona l accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 – 11/30/10 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,210.30 | $9.69 | 1.72% |
Institutional Class | $1,000 | $1,213.20 | $8.57 | 1.52% |
A Class | $1,000 | $1,210.30 | $11.09 | 1.97% |
B Class | $1,000 | $1,206.60 | $15.29 | 2.72% |
C Class | $1,000 | $1,205.20 | $15.28 | 2.72% |
R Class | $1,000 | $1,208.00 | $12.49 | 2.22% |
Hypothetical | ||||
Investor Class | $1,000 | $1,016.71 | $8.84 | 1.72% |
Institutional Class | $1,000 | $1,017.73 | $7.81 | 1.52% |
A Class | $1,000 | $1,015.44 | $10.12 | 1.97% |
B Class | $1,000 | $1,011.62 | $13.94 | 2.72% |
C Class | $1,000 | $1,011.62 | $13.94 | 2.72% |
R Class | $1,000 | $1,014.17 | $11.39 | 2.22% |
* 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 186, 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 |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 100.2% | ||||||||
BRAZIL — 14.6% | ||||||||
BR Malls Participacoes SA | 547,800 | $5,399,405 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 47,072 | 6,384,846 | ||||||
Hypermarcas SA(1) | 410,300 | 6,492,149 | ||||||
Hypermarcas SA Rights(1) | 410 | 34 | ||||||
Itau Unibanco Holding SA Preference Shares | 550,218 | 12,595,390 | ||||||
MRV Engenharia e Participacoes SA | 495,800 | 4,901,324 | ||||||
Natura Cosmeticos SA | 171,600 | 4,611,763 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 1,107,000 | 6,708,113 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 400,226 | 11,718,617 | ||||||
Vale SA Preference Shares | 1,345,400 | 37,664,295 | ||||||
96,475,936 | ||||||||
CANADA — 1.5% | ||||||||
Pacific Rubiales Energy Corp. | 324,909 | 10,128,185 | ||||||
HONG KONG — 6.7% | ||||||||
C C Land Holdings Ltd. | 11,119,000 | 4,166,886 | ||||||
China Merchants Holdings International Co. Ltd. | 1,325,132 | 5,230,492 | ||||||
China Overseas Land & Investment Ltd. | 3,864,000 | 7,424,358 | ||||||
CNOOC Ltd. | 5,599,000 | 12,142,427 | ||||||
Comba Telecom Systems Holdings Ltd. | 5,420,800 | 6,038,547 | ||||||
Geely Automobile Holdings Ltd. | 5,080,000 | 2,793,473 | ||||||
Xinyi Glass Holdings Ltd. | 8,718,000 | 6,668,932 | ||||||
44,465,115 | ||||||||
INDIA — 9.7% | ||||||||
Apollo Tyres Ltd. | 2,505,254 | 3,608,964 | ||||||
Ashok Leyland Ltd. | 3,865,898 | 6,036,648 | ||||||
Aurobindo Pharma Ltd. | 277,642 | 7,549,309 | ||||||
Crompton Greaves Ltd. | 870,817 | 6,358,663 | ||||||
HDFC Bank Ltd. | 98,970 | 4,929,411 | ||||||
ICICI Bank Ltd. | 298,208 | 7,422,542 | ||||||
Infosys Technologies Ltd. | 273,306 | 18,172,749 | ||||||
Mundra Port and Special Economic Zone Ltd. | 1,699,865 | 5,645,841 | ||||||
Tata Motors Ltd. | 165,876 | 4,464,391 | ||||||
64,188,518 | ||||||||
INDONESIA — 3.8% | ||||||||
PT Astra International Tbk | 1,074,500 | $6,172,963 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 4,256,000 | 4,946,646 | ||||||
PT Indofood CBP Sukses Makmur Tbk(1) | 4,449,500 | 2,511,894 | ||||||
PT Perusahaan Gas Negara | 11,529,500 | 5,487,807 | ||||||
PT Semen Gresik (Persero) Tbk | 5,578,500 | 5,681,005 | ||||||
24,800,315 | ||||||||
MALAYSIA — 2.3% | ||||||||
CIMB Group Holdings Bhd | 4,398,400 | 11,719,809 | ||||||
Supermax Corp. Bhd | 2,515,400 | 3,295,631 | ||||||
15,015,440 | ||||||||
MEXICO — 2.3% | ||||||||
America Movil SAB de CV, Series L ADR | 94,349 | 5,326,945 | ||||||
Grupo Mexico SAB de CV, Series B | 1,846,556 | 6,272,773 | ||||||
Wal-Mart de Mexico SAB de CV | 1,292,032 | 3,650,124 | ||||||
15,249,842 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 15.2% | ||||||||
AAC Acoustic Technologies Holdings, Inc. | 1,786,000 | 4,922,074 | ||||||
Anta Sports Products Ltd. | 1,553,000 | 2,895,963 | ||||||
Baidu, Inc. ADR(1) | 75,998 | 7,994,230 | ||||||
China BlueChemical Ltd. H Shares | 5,622,000 | 4,481,614 | ||||||
China Minsheng Banking Corp. Ltd. H Shares | 4,107,500 | 3,655,178 | ||||||
China Oilfield Services Ltd. H Shares | 2,428,000 | 4,440,072 | ||||||
Ctrip.com International Ltd. ADR(1) | 203,058 | 8,898,002 | ||||||
Dongfeng Motor Group Co. Ltd. H Shares | 3,426,000 | 6,521,008 | ||||||
Focus Media Holding Ltd. ADR(1) | 236,370 | 5,514,512 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 6,881,000 | 5,352,312 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares Rights(1) | 309,645 | 101,685 | ||||||
Mongolian Mining Corp.(1) | 3,060,600 | 3,358,143 | ||||||
PCD Stores Ltd. | 10,644,000 | 3,385,749 | ||||||
Ping An Insurance Group Co. of China Ltd. H Shares | 1,813,500 | 20,925,629 |
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Shares | Value | |||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 2,947,000 | $4,713,621 | ||||||
Sinopharm Group Co. H Shares | 942,800 | 3,448,187 | ||||||
Tencent Holdings Ltd. | 378,700 | 8,422,492 | ||||||
Xingda International Holdings Ltd. | 1,507,000 | 1,490,484 | ||||||
100,520,955 | ||||||||
PERU — 1.3% | ||||||||
Credicorp Ltd. | 69,486 | 8,329,287 | ||||||
POLAND — 0.5% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 251,547 | 3,487,850 | ||||||
RUSSIAN FEDERATION — 6.7% | ||||||||
CTC Media, Inc. | 263,500 | 5,931,385 | ||||||
Magnit OJSC GDR | 158,056 | 4,172,678 | ||||||
NovaTek OAO GDR | 124,538 | 11,719,026 | ||||||
Sberbank of Russia | 5,439,459 | 17,297,480 | ||||||
X5 Retail Group NV GDR(1) | 135,120 | 5,127,804 | ||||||
44,248,373 | ||||||||
SOUTH AFRICA — 7.6% | ||||||||
Aspen Pharmacare Holdings Ltd.(1) | 352,576 | 4,622,970 | ||||||
Exxaro Resources Ltd. | 207,937 | 3,693,921 | ||||||
Gold Fields Ltd. ADR | 177,404 | 2,960,873 | ||||||
Impala Platinum Holdings Ltd. | 173,391 | 4,948,406 | ||||||
JD Group Ltd. | 261,834 | 2,011,907 | ||||||
MTN Group Ltd. | 703,063 | 12,003,938 | ||||||
Naspers Ltd. N Shares | 192,833 | 9,624,318 | ||||||
Shoprite Holdings Ltd. | 334,956 | 4,556,752 | ||||||
Truworths International Ltd. | 573,111 | 5,817,770 | ||||||
50,240,855 | ||||||||
SOUTH KOREA — 11.5% | ||||||||
Doosan Infracore Co. Ltd.(1) | 494,480 | 10,662,412 | ||||||
Hyundai Heavy Industries Co. Ltd. | 37,974 | 12,167,795 | ||||||
Hyundai Motor Co. | 63,576 | 9,459,082 | ||||||
Hyundai Steel Co. | 28,186 | 2,674,193 | ||||||
LG Chem Ltd. | 33,834 | 11,322,746 | ||||||
LG Household & Health Care Ltd. | 18,260 | 6,024,194 | ||||||
POSCO | 7,726 | 3,028,693 | ||||||
Samsung Electronics Co. Ltd. | 29,402 | 20,947,086 | ||||||
76,286,201 | ||||||||
SWITZERLAND — 1.0% | ||||||||
Ferrexpo plc | 1,157,579 | 6,280,340 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 7.9% | ||||||||
AU Optronics Corp.(1) | 2,801,000 | $2,802,608 | ||||||
Eva Airways Corp.(1) | 7,309,000 | 8,320,259 | ||||||
Hon Hai Precision Industry Co. Ltd. | 3,968,697 | 14,126,257 | ||||||
HTC Corp. | 415,800 | 11,526,319 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 5,800,939 | 12,065,268 | ||||||
Wistron Corp. | 1,821,362 | 3,692,616 | ||||||
52,533,327 | ||||||||
THAILAND — 3.2% | ||||||||
Banpu PCL | 341,250 | 8,534,072 | ||||||
CP ALL PCL | 4,520,600 | 5,944,222 | ||||||
Kasikornbank PCL NVDR | 1,656,100 | 6,546,608 | ||||||
21,024,902 | ||||||||
TURKEY — 2.8% | ||||||||
Tofas Turk Otomobil Fabrikasi AS | 601,857 | 3,153,556 | ||||||
Turkiye Garanti Bankasi AS | 1,921,973 | 10,658,458 | ||||||
Turkiye Sise ve Cam Fabrikalari AS(1) | 2,837,212 | 4,829,618 | ||||||
18,641,632 | ||||||||
UNITED KINGDOM — 1.6% | ||||||||
Antofagasta plc | 350,713 | 7,173,543 | ||||||
International Personal Finance plc | 699,947 | 3,255,310 | ||||||
10,428,853 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $459,794,504) | 662,345,926 | |||||||
Temporary Cash Investments — 0.2% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 53,907 | 53,907 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 4.875%, 7/31/11, valued at $918,058), in a joint trading account at 0.14%, dated 11/30/10, due 12/1/10 (Delivery value $900,004) | 900,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $953,907) | 953,907 | |||||||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $460,748,411) | 663,299,833 | |||||||
OTHER ASSETS AND LIABILITIES — (0.4)% | (2,386,061 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $660,913,772 |
13
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 20.9% |
Information Technology | 16.7% |
Materials | 15.3% |
Consumer Discretionary | 15.0% |
Industrials | 9.6% |
Energy | 8.9% |
Consumer Staples | 7.5% |
Health Care | 2.9% |
Telecommunication Services | 2.6% |
Utilities | 0.8% |
Cash and Equivalents* | (0.2)% |
*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.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $460,748,411) | $663,299,833 | |||
Cash | 5,726 | |||
Foreign currency holdings, at value (cost of $3,447,946) | 3,451,705 | |||
Receivable for investments sold | 2,233,534 | |||
Receivable for capital shares sold | 171,365 | |||
Dividends and interest receivable | 470,995 | |||
Other assets | 252,344 | |||
669,885,502 | ||||
Liabilities | ||||
Payable for investments purchased | 5,571,817 | |||
Payable for capital shares redeemed | 2,193,907 | |||
Accrued management fees | 950,048 | |||
Distribution and service fees payable | 11,723 | |||
Accrued foreign taxes | 244,235 | |||
8,971,730 | ||||
Net Assets | $660,913,772 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $656,085,948 | |||
Accumulated net investment loss | (126,422 | ) | ||
Accumulated net realized loss | (197,340,567 | ) | ||
Net unrealized appreciation | 202,294,813 | |||
$660,913,772 |
Net assets | Shares outstanding | Net asset value per share | ||||||||
Investor Class, $0.01 Par Value | $583,978,269 | 68,997,821 | $8.46 | |||||||
Institutional Class, $0.01 Par Value | $40,968,583 | 4,735,548 | $8.65 | |||||||
A Class, $0.01 Par Value | $29,572,131 | 3,591,310 | $8.23 | * | ||||||
B Class, $0.01 Par Value | $309,618 | 37,089 | $8.35 | |||||||
C Class, $0.01 Par Value | $5,257,083 | 663,209 | $7.93 | |||||||
R Class, $0.01 Par Value | $828,088 | 98,376 | $8.42 |
*Maximum offering price $8.73 (net asset value divided by 0.9425)
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $891,885) | $10,609,922 | |||
Interest | 3,849 | |||
10,613,771 | ||||
Expenses: | ||||
Management fees | 10,642,168 | |||
Distribution and service fees: | ||||
A Class | 60,002 | |||
B Class | 2,570 | |||
C Class | 52,007 | |||
R Class | 3,227 | |||
Directors’ fees and expenses | 19,731 | |||
Other expenses | 41,066 | |||
10,820,771 | ||||
Net investment income (loss) | (207,000 | ) | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 72,204,705 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $251,214) | 5,481,743 | |||
77,686,448 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(614,351)) | 14,932,106 | |||
Translation of assets and liabilities in foreign currencies | (492,971 | ) | ||
14,439,135 | ||||
Net realized and unrealized gain (loss) | 92,125,583 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $91,918,583 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $ (207,000 | ) | $ 533,727 | |||||
Net realized gain (loss) | 77,686,448 | (82,169,040 | ) | |||||
Change in net unrealized appreciation (depreciation) | 14,439,135 | 347,324,450 | ||||||
Net increase (decrease) in net assets resulting from operations | 91,918,583 | 265,689,137 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | — | (1,926,383 | ) | |||||
Institutional Class | — | (220,437 | ) | |||||
A Class | — | (68,022 | ) | |||||
R Class | — | (418 | ) | |||||
Decrease in net assets from distributions | — | (2,215,260 | ) | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (55,654,147 | ) | (3,779,410 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 224,631 | 222,324 | ||||||
Net increase (decrease) in net assets | 36,489,067 | 259,916,791 | ||||||
Net Assets | ||||||||
Beginning of period | 624,424,705 | 364,507,914 | ||||||
End of period | $660,913,772 | $624,424,705 | ||||||
Accumulated net investment loss | $(126,422 | ) | — |
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing at least 80% of its assets in equity securities of companies located in emerging market countries. The fund is authorized to issue the Investor Class, the Institutional Class, the A Class, the B Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. 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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
18
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
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.
19
Distributions to Shareholders — Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — The fund may impose a 2.00% redemption fee on shares held less than 180 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 9), 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 as sets, 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 include the assets of NT Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.25% to 1.85% for the Investor Class, A Class, B Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.71% for the Investor Class, A Class, B Class, C Class and R Class and 1.51% for the Institutional Class.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 9), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay American Century Investment Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each 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 year ended November 30, 2010, are detailed in the Statement of Operations.
20
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $537,502,493 and $579,259,475, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010 | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 235,000,000 | 235,000,000 | ||||||||||||||
Sold | 10,049,637 | $78,127,996 | 19,353,332 | $109,588,071 | ||||||||||||
Issued in reinvestment of distributions | — | — | 411,216 | 1,603,788 | ||||||||||||
Redeemed | (18,943,255 | ) | (143,285,753 | ) | (17,730,654 | ) | (92,632,289 | ) | ||||||||
(8,893,618 | ) | (65,157,757 | ) | 2,033,894 | 18,559,570 | |||||||||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 2,068,557 | 15,260,457 | 1,317,412 | 7,262,735 | ||||||||||||
Issued in reinvestment of distributions | — | — | 55,526 | 220,437 | ||||||||||||
Redeemed | (1,073,145 | ) | (8,148,864 | ) | (4,026,999 | ) | (25,605,195 | ) | ||||||||
995,412 | 7,111,593 | (2,654,061 | ) | (18,122,023 | ) | |||||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 1,865,594 | 14,476,416 | 1,737,602 | 8,969,379 | ||||||||||||
Issued in reinvestment of distributions | — | — | 17,381 | 66,223 | ||||||||||||
Redeemed | (1,549,076 | ) | (11,528,392 | ) | (2,684,625 | ) | (13,476,300 | ) | ||||||||
316,518 | 2,948,024 | (929,642 | ) | (4,440,698 | ) | |||||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 8,745 | 69,194 | 20,988 | 121,866 | ||||||||||||
Redeemed | (4,918 | ) | (35,138 | ) | (14,744 | ) | (73,057 | ) | ||||||||
3,827 | 34,056 | 6,244 | 48,809 | |||||||||||||
C Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 134,226 | 979,767 | 260,381 | 1,420,013 | ||||||||||||
Redeemed | (250,782 | ) | (1,785,645 | ) | (292,711 | ) | (1,421,591 | ) | ||||||||
(116,556 | ) | (805,878 | ) | (32,330 | ) | (1,578 | ) | |||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 69,308 | 533,453 | 59,323 | 312,438 | ||||||||||||
Issued in reinvestment of distributions | — | — | 107 | 418 | ||||||||||||
Redeemed | (41,838 | ) | (317,638 | ) | (22,963 | ) | (136,346 | ) | ||||||||
27,470 | 215,815 | 36,467 | 176,510 | |||||||||||||
Net increase (decrease) | (7,666,947 | ) | $(55,654,147 | ) | (1,539,428 | ) | $(3,779,410 | ) |
21
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $63,058,697 | $599,287,229 | — | |||||||||
Temporary Cash Investments | 53,907 | 900,000 | — | |||||||||
Total Value of Investment Securities | $63,112,604 | $600,187,229 | — |
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 tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | — | $2,215,260 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
22
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $464,269,089 | |||
Gross tax appreciation of investments | $204,193,748 | |||
Gross tax depreciation of investments | (5,163,004 | ) | ||
Net tax appreciation (depreciation) of investments | $199,030,744 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(256,609 | ) | ||
Net tax appreciation (depreciation) | $198,774,135 | |||
Undistributed ordinary income | — | |||
Accumulated capital losses | $(193,823,726 | ) | ||
Currency loss deferral | $(122,585 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
The accumulated capital losses 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 of $(76,617,325) and $(117,206,401) expire in 2016 and 2017, respectively.
The currency loss deferral represents net foreign currency losses incurred in the one-month period ended November 30, 2010. The fund has elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes.
9. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement.
23
Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.28 | $4.17 | $12.69 | $10.06 | $8.25 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | — | (2) | 0.01 | 0.09 | 0.10 | 0.11 | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | 3.13 | (7.21 | ) | 4.06 | 3.11 | ||||||||||||||
Total From Investment Operations | 1.18 | 3.14 | (7.12 | ) | 4.16 | 3.22 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.03 | ) | (0.10 | ) | (0.13 | ) | (0.05 | ) | |||||||||||
From Net Realized Gains | — | — | (1.31 | ) | (1.42 | ) | (1.37 | ) | ||||||||||||
Total Distributions | — | (0.03 | ) | (1.41 | ) | (1.55 | ) | (1.42 | ) | |||||||||||
Redemption Fees(1) | — | (2) | — | (2) | 0.01 | 0.02 | 0.01 | |||||||||||||
Net Asset Value, End of Period | $8.46 | $7.28 | $4.17 | $12.69 | $10.06 | |||||||||||||||
Total Return(3) | 16.21 | % | 75.36 | % | (62.66 | )% | 48.81 | % | 46.10 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.72 | % | 1.78 | % | 1.66 | % | 1.66 | % | 1.80 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.02 | )% | 0.11 | % | 1.06 | % | 0.96 | % | 1.31 | % | ||||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||
Net Assets, End of Period (in thousands) | $583,978 | $567,248 | $316,695 | $1,070,138 | $523,813 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
See Notes to Financial Statements.
24
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.43 | $4.26 | $12.92 | $10.21 | $8.36 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.02 | 0.02 | 0.12 | 0.12 | 0.12 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.20 | 3.18 | (7.35 | ) | 4.14 | 3.16 | ||||||||||||||
Total From Investment Operations | 1.22 | 3.20 | (7.23 | ) | 4.26 | 3.28 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.03 | ) | (0.13 | ) | (0.15 | ) | (0.07 | ) | |||||||||||
From Net Realized Gains | — | — | (1.31 | ) | (1.42 | ) | (1.37 | ) | ||||||||||||
Total Distributions | — | (0.03 | ) | (1.44 | ) | (1.57 | ) | (1.44 | ) | |||||||||||
Redemption Fees(1) | — | (2) | — | (2) | 0.01 | 0.02 | 0.01 | |||||||||||||
Net Asset Value, End of Period | $8.65 | $7.43 | $4.26 | $12.92 | $10.21 | |||||||||||||||
Total Return(3) | 16.42 | % | 75.92 | % | (62.63 | )% | 49.21 | % | 46.31 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.52 | % | 1.58 | % | 1.46 | % | 1.46 | % | 1.60 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.18 | % | 0.31 | % | 1.26 | % | 1.16 | % | 1.51 | % | ||||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||
Net Assets, End of Period (in thousands) | $40,969 | $27,787 | $27,235 | $74,897 | $85,886 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
See Notes to Financial Statements.
25
A Class(1) | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.10 | $4.07 | $12.40 | $9.85 | $8.11 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.02 | ) | (0.01 | ) | 0.07 | 0.07 | 0.11 | |||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.15 | 3.06 | (7.03 | ) | 3.99 | 3.02 | ||||||||||||||
Total From Investment Operations | 1.13 | 3.05 | (6.96 | ) | 4.06 | 3.13 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.02 | ) | (0.07 | ) | (0.11 | ) | (0.03 | ) | |||||||||||
From Net Realized Gains | — | — | (1.31 | ) | (1.42 | ) | (1.37 | ) | ||||||||||||
Total Distributions | — | (0.02 | ) | (1.38 | ) | (1.53 | ) | (1.40 | ) | |||||||||||
Redemption Fees(2) | — | (3) | — | (3) | 0.01 | 0.02 | 0.01 | |||||||||||||
Net Asset Value, End of Period | $8.23 | $7.10 | $4.07 | $12.40 | $9.85 | |||||||||||||||
Total Return(4) | 15.92 | % | 75.24 | % | (62.78 | )% | 48.61 | % | 45.59 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.97 | % | 2.03 | % | 1.91 | % | 1.91 | % | 2.05 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.27 | )% | (0.14 | )% | 0.81 | % | 0.71 | % | 1.06 | % | ||||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||
Net Assets, End of Period (in thousands) | $29,572 | $23,260 | $17,105 | $36,795 | $9,905 |
(1) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Per-share amount was less than $0.005. |
(4) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
26
B Class | ||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||
2010 | 2009 | 2008 | 2007(1) | |||||||||||||
Per-Share Data | ||||||||||||||||
Net Asset Value, Beginning of Period | $7.26 | $4.17 | $12.67 | $12.15 | ||||||||||||
Income From Investment Operations | ||||||||||||||||
Net Investment Income (Loss)(2) | (0.08 | ) | (0.06 | ) | 0.02 | (0.03 | ) | |||||||||
Net Realized and Unrealized Gain (Loss) | 1.17 | 3.15 | (7.24 | ) | 0.53 | |||||||||||
Total From Investment Operations | 1.09 | 3.09 | (7.22 | ) | 0.50 | |||||||||||
Distributions | ||||||||||||||||
From Net Realized Gains | — | — | (1.29 | ) | — | |||||||||||
Redemption Fees(2) | — | (3) | — | (3) | 0.01 | 0.02 | ||||||||||
Net Asset Value, End of Period | $8.35 | $7.26 | $4.17 | $12.67 | ||||||||||||
Total Return(4) | 15.01 | % | 74.10 | % | (63.09 | )% | 4.28 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.72 | % | 2.78 | % | 2.67 | % | 2.58 | %(5) | ||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (1.02 | )% | (0.89 | )% | 0.05 | % | (1.30 | )%(5) | ||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | %(6) | ||||||||
Net Assets, End of Period (in thousands) | $310 | $241 | $113 | $54 |
(1) | September 28, 2007 (commencement of sale) through November 30, 2007. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Per-share amount was less than $0.005. |
(4) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(5) | Annualized. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. |
See Notes to Financial Statements.
27
C Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.89 | $3.96 | $12.10 | $9.64 | $7.95 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.07 | ) | (0.05 | ) | 0.01 | (0.01 | ) | 0.03 | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.11 | 2.98 | (6.87 | ) | 3.90 | 2.99 | ||||||||||||||
Total From Investment Operations | 1.04 | 2.93 | (6.86 | ) | 3.89 | 3.02 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | — | — | (0.03 | ) | — | ||||||||||||||
From Net Realized Gains | — | — | (1.29 | ) | (1.42 | ) | (1.34 | ) | ||||||||||||
Total Distributions | — | — | (1.29 | ) | (1.45 | ) | (1.34 | ) | ||||||||||||
Redemption Fees(1) | — | (2) | — | (2) | 0.01 | 0.02 | 0.01 | |||||||||||||
Net Asset Value, End of Period | $7.93 | $6.89 | $3.96 | $12.10 | $9.64 | |||||||||||||||
Total Return(3) | 15.09 | % | 73.99 | % | (63.09 | )% | 47.39 | % | 44.59 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.72 | % | 2.78 | % | 2.66 | % | 2.66 | % | 2.80 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (1.02 | )% | (0.89 | )% | 0.06 | % | (0.04 | )% | 0.31 | % | ||||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||
Net Assets, End of Period (in thousands) | $5,257 | $5,372 | $3,217 | $9,098 | $2,581 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
28
R Class | ||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||
2010 | 2009 | 2008 | 2007(1) | |||||||||||||
Per-Share Data | ||||||||||||||||
Net Asset Value, Beginning of Period | $7.28 | $4.17 | $12.68 | $12.15 | ||||||||||||
Income From Investment Operations | ||||||||||||||||
Net Investment Income (Loss)(2) | (0.04 | ) | (0.02 | ) | 0.05 | (0.01 | ) | |||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | 3.14 | (7.22 | ) | 0.52 | |||||||||||
Total From Investment Operations | 1.14 | 3.12 | (7.17 | ) | 0.51 | |||||||||||
Distributions | ||||||||||||||||
From Net Investment Income | — | (0.01 | ) | (0.04 | ) | — | ||||||||||
From Net Realized Gains | — | — | (1.31 | ) | — | |||||||||||
Total Distributions | — | (0.01 | ) | (1.35 | ) | — | ||||||||||
Redemption Fees(2) | — | (3) | — | (3) | 0.01 | 0.02 | ||||||||||
Net Asset Value, End of Period | $8.42 | $7.28 | $4.17 | $12.68 | ||||||||||||
Total Return(4) | 15.66 | % | 74.94 | % | (62.92 | )% | 4.36 | % | ||||||||
Ratios/Supplemental Data | ||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.22 | % | 2.28 | % | 2.19 | % | 2.08 | %(5) | ||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.52 | )% | (0.39 | )% | 0.53 | % | (0.68 | )%(5) | ||||||||
Portfolio Turnover Rate | 87 | % | 126 | % | 121 | % | 85 | %(6) | ||||||||
Net Assets, End of Period (in thousands) | $828 | $516 | $144 | $27 |
(1) | September 28, 2007 (commencement of sale) through November 30, 2007. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Per-share amount was less than $0.005. |
(4) | 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. |
(5) | Annualized. |
(6) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. |
See Notes to Financial Statements.
29
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Emerging Markets Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Emerging Markets Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
30
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor, A, B, C and R Classes | For: | 417,962,577 | |
Against: | 7,589,220 | ||
Abstain: | 8,686,345 | ||
Broker Non-Vote: | 36,103,693 | ||
Institutional Class | For: | 25,454,770 | |
Against: | 0 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 13,946 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
31
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
32
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
33
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
34
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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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36
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/amcentlogo.jpg)
Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70205 1101
ANNUAL REPORT NOVEMBER 30, 2010
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/amcentlogo.jpg)
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/frontpagebanner.jpg)
Global Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 14 |
Statement of Operations | 15 |
Statement of Changes in Net Assets | 16 |
Notes to Financial Statements | 17 |
Financial Highlights | 23 |
Report of Independent Registered Public Accounting Firm | 29 |
Other Information | |
Proxy Voting Results | 30 |
Management | 31 |
Additional Information | 34 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
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Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
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Total Returns as of November 30, 2010 | ||||||||||
Average Annual Returns | ||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||
Investor Class | TWGGX | 8.61 | % | 3.48 | % | 2.70 | % | 7.44 | % | 12/1/98 |
MSCI World Index(1) | — | 5.98 | % | 1.43 | % | 1.75 | % | 2.41 | %(2) | — |
MSCI World Free Index | — | 5.98 | % | 1.43 | % | 1.75 | % | 2.40 | %(2) | — |
Institutional Class | AGGIX | 8.68 | % | 3.68 | % | 2.91 | % | 1.75 | % | 8/1/00 |
A Class(3) No sales charge* With sales charge* | AGGRX | 8.20 1.96 | % % | 3.21 1.99 | % % | 2.42 1.82 | % % | 6.30 5.77 | % % | 2/5/99 |
B Class No sales charge* With sales charge* | ACWBX | 7.46 3.46 | % % | — — | — — | 2.13 1.76 | % % | 12/1/05 | ||
C Class | AGLCX | 7.43 | % | 2.46 | % | — | 5.36 | % | 3/1/02 | |
R Class | AGORX | 8.08 | % | 2.98 | % | — | 3.88 | % | 7/29/05 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | In November 2010, the fund’s benchmark changed from the MSCI World Free Index to the MSCI World Index. Since 2004 these indices have been identically constructed. This change merely updates the fund’s benchmark to the more commonly used index. The fund’s investment process remains unchanged. |
(2) | Since 11/30/98, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the indices do not.
5
Growth of $10,000 Over 10 Years |
$10,000 investment made November 30, 2000 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/globalgrowthchart.jpg)
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.22% | 1.02% | 1.47% | 2.22% | 2.22% | 1.72% |
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 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.
6
Portfolio Commentary |
Portfolio Managers: Keith Creveling and Brent Puff
Performance Summary
The Global Growth portfolio returned 8.61%* for the 12 months ended November 30, 2010, compared with its benchmark, the MSCI World Index, which returned 5.98%.
Stocks in many global markets generally struggled during the first half of the period, as several eurozone nations came close to defaulting on their sovereign debt. In the second half of the period, modestly improving economic conditions and continued strength in corporate earnings helped propel stocks and push most regional 12-month returns into positive territory. Within the developed markets, growth stocks sharply outpaced their value counterparts, while small- and mid-cap stocks significantly outperformed large-cap stocks. Emerging market stocks outperformed their developed market counterparts, particularly in Europe, where the performance disparity was the greatest. As a whole, performance in the European market remained negative for the 12-month period, as sovereign debt concerns in several nations weighed on inve stor sentiment and stock returns. Europe finished the period as the worst performer of the developed world. Returns in the U.S. market were robust, but they modestly lagged those of the developing world.
Overall, strong stock selection in a variety of regions and market sectors accounted for the bulk of the portfolio’s outperformance.
U.S. Was Top Contributor
From a geographical perspective, our overweight position in the United States, which comprised nearly half the portfolio on November 30, 2010, contributed the most to relative performance, due to strong stock selection. In particular, Apple, the personal technology developer, was the portfolio’s top performer, advancing on strong demand for its two new blockbuster products: the iPad tablet computer and the iPhone 4. In addition, our investment in South Korean auto manufacturer Hyundai Motor Co. was a top contributor to performance. Hyundai’s vehicle lineup, which skews toward small, fuel-efficient, affordable automobiles, drove marketshare gains in key markets around the world. Stock selection in Italy rounded out the top-three country contributors, led by our overweight position in Saipem, a global oil and gas services company.
At the opposite end of the performance spectrum, our investment in Brazilian oil and gas company Petroleo Brasileiro and underweight positions in Hong Kong and Denmark led the country-specific detractors. Our position in Petroleo Brasileiro faltered due to investor uncertainty surrounding the cost of acquiring and exploiting Brazil’s offshore, pre-salt oil and gas resources.
7
Industrials Led All Sectors
Favorable stock selection combined with an overweight position pushed the portfolio’s industrials sector into the top-performing spot for the 12-month period. Japan-based Komatsu, a manufacturer of construction and mining equipment, was the portfolio’s leading contributor, advancing on robust demand from China and Latin America, where infrastructure development remains strong.
Stock selection and an overweight position helped generate positive results for the portfolio’s consumer discretionary sector. In particular, our holdings in the automobile and luxury goods industries fared well. The portfolio’s energy sector also was a top contributor, primarily driven by our position in Saipem.
Staples, Materials Stocks Lagged
Consumer staples and materials were the only sectors that made negative contributions to the portfolio’s relative performance. Stock selection combined with an underweight position led to lagging results among consumer staples stocks, while stock selection and an underweight position dragged down performance in the materials sector.
As a whole, the financials sector was a positive contributor to the portfolio’s relative performance, but select overweight positions within the commercial banking industry were among the portfolio’s leading detractors. Specifically, Europe’s sovereign debt issues weighed on the stock performance of United Kingdom-based Barclays and Spain’s Banco Santander.
Outlook
Global economic activity is improving, corporate earnings momentum remains strong, and equity valuations remain favorable. Although headwinds remain—namely, the mounting sovereign debt in developed nations and the potential for inflation to gather steam—we continue to focus on finding attractive investment opportunities that meet our threshold for improving, sustainable growth.
8
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Apple, Inc. | 3.7% |
BHP Billiton Ltd. | 2.8% |
EMC Corp. | 2.6% |
Danaher Corp. | 2.3% |
Union Pacific Corp. | 2.2% |
Danone SA | 2.2% |
Hyundai Motor Co. | 2.1% |
Express Scripts, Inc. | 2.1% |
Schlumberger Ltd. | 2.0% |
American Tower Corp., Class A | 2.0% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights(1) | 49.8% |
Domestic Common Stocks | 49.7% |
Total Equity Exposure | 99.5% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | 0.2% |
(1) | Includes depositary shares, dual listed securities and foreign ordinary shares. |
Investments by Country | |
% of net assets as of 11/30/10 | |
United States | 49.7% |
United Kingdom | 10.7% |
Switzerland | 7.9% |
Japan | 4.8% |
France | 4.4% |
Australia | 4.1% |
People’s Republic of China | 3.6% |
South Korea | 2.1% |
Other Countries | 12.2% |
Cash and Equivalents(2) | 0.5% |
(2) | Includes temporary cash investments and other assets and liabilities. |
9
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 - 11/30/10 | Annualized Expense Ratio* | ||
Actual | |||||
Investor Class | $1,000 | $1,150.50 | $6.30 | 1.15% | |
Institutional Class | $1,000 | $1,152.00 | $5.21 | 0.95% | |
A Class | $1,000 | $1,148.40 | $7.66 | 1.40% | |
B Class | $1,000 | $1,144.70 | $11.75 | 2.15% | |
C Class | $1,000 | $1,145.20 | $11.75 | 2.15% | |
R Class | $1,000 | $1,148.20 | $9.03 | 1.65% | |
Hypothetical | |||||
Investor Class | $1,000 | $1,019.62 | $5.92 | 1.15% | |
Institutional Class | $1,000 | $1,020.64 | $4.89 | 0.95% | |
A Class | $1,000 | $1,018.35 | $7.20 | 1.40% | |
B Class | $1,000 | $1,014.52 | $11.04 | 2.15% | |
C Class | $1,000 | $1,014.52 | $11.04 | 2.15% | |
R Class | $1,000 | $1,017.07 | $8.48 | 1.65% |
*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 186, 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 |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 99.5% | ||||||||
AUSTRALIA — 4.1% | ||||||||
BHP Billiton Ltd. | 296,750 | $12,156,746 | ||||||
QR National Ltd.(1) | 585,826 | 1,572,240 | ||||||
Wesfarmers Ltd. | 129,160 | 3,894,744 | ||||||
17,623,730 | ||||||||
AUSTRIA — 0.5% | ||||||||
Erste Group Bank AG | 52,530 | 2,054,802 | ||||||
BELGIUM — 0.9% | ||||||||
Anheuser-Busch InBev NV | 74,710 | 4,065,774 | ||||||
BRAZIL — 1.0% | ||||||||
Banco Santander Brasil SA ADR | 341,200 | 4,452,660 | ||||||
DENMARK — 0.4% | ||||||||
Carlsberg A/S B Shares | 20,310 | 1,917,056 | ||||||
FRANCE — 4.4% | ||||||||
Cie Generale d’Optique Essilor International SA | 41,850 | 2,614,856 | ||||||
Danone SA | 161,230 | 9,443,968 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 16,030 | 2,431,385 | ||||||
Pernod-Ricard SA | 25,870 | 2,108,523 | ||||||
Safran SA | 68,320 | 2,140,359 | ||||||
18,739,091 | ||||||||
GERMANY — 1.3% | ||||||||
Bayerische Motoren Werke AG | 39,910 | 3,001,074 | ||||||
Fresenius Medical Care AG & Co. KGaA | 46,750 | 2,698,610 | ||||||
5,699,684 | ||||||||
HONG KONG — 0.8% | ||||||||
CNOOC Ltd. | 734,000 | 1,591,809 | ||||||
Li & Fung Ltd. | 288,000 | 1,795,109 | ||||||
3,386,918 | ||||||||
INDIA — 1.1% | ||||||||
Infosys Technologies Ltd. ADR | 37,110 | 2,454,826 | ||||||
Larsen & Toubro Ltd. | 49,460 | 2,101,983 | ||||||
4,556,809 | ||||||||
INDONESIA — 0.7% | ||||||||
PT Bank Mandiri (Persero) Tbk | 3,930,500 | 2,784,503 | ||||||
ISRAEL — 0.4% | ||||||||
Teva Pharmaceutical Industries Ltd. ADR | 37,590 | 1,881,004 | ||||||
ITALY — 1.7% | ||||||||
Saipem SpA | 170,890 | 7,111,670 | ||||||
JAPAN — 4.8% | ||||||||
Komatsu Ltd. | 301,500 | $8,350,783 | ||||||
Nitori Holdings Co. Ltd. | 17,600 | 1,549,910 | ||||||
ORIX Corp. | 55,040 | 4,702,306 | ||||||
Rakuten, Inc. | 8,072 | 6,182,521 | ||||||
20,785,520 | ||||||||
NETHERLANDS — 0.9% | ||||||||
ASML Holding NV New York Shares | 113,160 | 3,692,411 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 3.6% | ||||||||
Baidu, Inc. ADR(1) | 50,160 | 5,276,330 | ||||||
China Unicom (Hong Kong) Ltd. | 2,460,000 | 3,313,750 | ||||||
Ctrip.com International Ltd. ADR(1) | 74,130 | 3,248,377 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 4,712,000 | 3,665,179 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares Rights(1) | 212,040 | 69,632 | ||||||
15,573,268 | ||||||||
POLAND — 0.7% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 203,830 | 2,826,225 | ||||||
PORTUGAL — 0.1% | ||||||||
Jeronimo Martins SGPS SA | 43,360 | 613,490 | ||||||
SOUTH KOREA — 2.1% | ||||||||
Hyundai Motor Co. | 61,030 | 9,080,279 | ||||||
SWEDEN — 1.0% | ||||||||
Atlas Copco AB A Shares | 193,830 | 4,280,171 | ||||||
SWITZERLAND — 7.9% | ||||||||
ABB Ltd.(1) | 167,100 | 3,238,275 | ||||||
Adecco SA | 118,620 | 6,754,479 | ||||||
Holcim Ltd. | 44,480 | 2,865,174 | ||||||
Nestle SA | 118,630 | 6,447,732 | ||||||
Novartis AG | 53,680 | 2,848,065 | ||||||
Sonova Holding AG | 17,800 | 2,222,229 | ||||||
Swatch Group AG (The) | 8,980 | 3,605,779 | ||||||
Xstrata plc | 293,050 | 5,889,254 | ||||||
33,870,987 | ||||||||
TURKEY — 0.7% | ||||||||
Turkiye Garanti Bankasi AS | 506,330 | 2,807,894 | ||||||
UNITED KINGDOM — 10.7% | ||||||||
Admiral Group plc | 171,100 | 4,066,581 | ||||||
Antofagasta plc | 197,120 | 4,031,926 | ||||||
ARM Holdings plc | 340,120 | 2,093,939 | ||||||
Barclays plc | 1,732,990 | 6,904,726 | ||||||
BG Group plc | 354,450 | 6,403,689 |
12
Shares | Value | |||||||
Capita Group plc (The) | 305,300 | $3,096,210 | ||||||
Compass Group plc | 617,450 | 5,335,092 | ||||||
HSBC Holdings plc | 527,400 | 5,318,292 | ||||||
Intertek Group plc | 15,436 | 435,540 | ||||||
Petrofac Ltd. | 98,060 | 2,121,657 | ||||||
Reckitt Benckiser Group plc | 120,215 | 6,357,606 | ||||||
46,165,258 | ||||||||
UNITED STATES — 49.7% | ||||||||
Air Products & Chemicals, Inc. | 80,440 | 6,935,537 | ||||||
Allergan, Inc. | 68,640 | 4,548,773 | ||||||
Amazon.com, Inc.(1) | 41,210 | 7,228,234 | ||||||
American Express Co. | 192,240 | 8,308,613 | ||||||
American Tower Corp., Class A(1) | 168,920 | 8,542,284 | ||||||
Apache Corp. | 33,440 | 3,599,482 | ||||||
Apple, Inc.(1) | 50,770 | 15,797,086 | ||||||
Celgene Corp.(1) | 40,340 | 2,395,389 | ||||||
Cerner Corp.(1) | 12,410 | 1,090,343 | ||||||
Cisco Systems, Inc.(1) | 180,320 | 3,454,931 | ||||||
Coach, Inc. | 80,670 | 4,561,082 | ||||||
Colgate-Palmolive Co. | 25,970 | 1,988,004 | ||||||
Danaher Corp. | 226,420 | 9,792,665 | ||||||
Discovery Communications, Inc., Class A(1) | 47,120 | 1,921,554 | ||||||
EMC Corp.(1) | 523,560 | 11,251,304 | ||||||
Equinix, Inc.(1) | 35,390 | 2,746,264 | ||||||
Expeditors International of Washington, Inc. | 152,920 | 8,089,468 | ||||||
Express Scripts, Inc.(1) | 174,230 | 9,075,641 | ||||||
Fifth Third Bancorp. | 226,220 | 2,703,329 | ||||||
Google, Inc., Class A(1) | 15,210 | 8,452,349 | ||||||
Harley-Davidson, Inc. | 116,480 | 3,643,494 | ||||||
Home Depot, Inc. (The) | 91,740 | 2,771,465 | ||||||
IntercontinentalExchange, Inc.(1) | 68,008 | 7,664,502 | ||||||
Liberty Global, Inc., Class A(1) | 75,260 | 2,653,668 | ||||||
MasterCard, Inc., Class A | 12,710 | 3,012,651 | ||||||
Occidental Petroleum Corp. | 89,480 | 7,889,452 | ||||||
Oracle Corp. | 269,080 | 7,275,923 | ||||||
PACCAR, Inc. | 80,330 | 4,326,574 | ||||||
PNC Financial Services Group, Inc. | 77,864 | 4,192,976 | ||||||
Precision Castparts Corp. | 50,120 | 6,920,068 | ||||||
priceline.com, Inc.(1) | 760 | 299,478 | ||||||
Schlumberger Ltd. | 113,360 | 8,767,262 | ||||||
Starbucks Corp. | 104,040 | 3,183,624 | ||||||
SYSCO Corp. | 137,120 | 3,979,222 | ||||||
Union Pacific Corp. | 106,220 | $9,571,484 | ||||||
United Parcel Service, Inc., Class B | 65,170 | 4,570,372 | ||||||
Visa, Inc., Class A | 41,751 | 3,083,311 | ||||||
Walt Disney Co. (The) | 114,490 | 4,180,030 | ||||||
Whole Foods Market, Inc.(1) | 65,869 | 3,110,334 | ||||||
213,578,222 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $340,161,291) | 427,547,426 | |||||||
Temporary Cash Investments — 0.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 82,994 | 82,994 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $1,430,316), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $1,400,008) | 1,400,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,482,994) | 1,482,994 | |||||||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $341,644,285) | 429,030,420 | |||||||
OTHER ASSETS AND LIABILITIES — 0.2% | 884,774 | |||||||
TOTAL NET ASSETS — 100.0% | $429,915,194 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 17.5% |
Information Technology | 16.2% |
Consumer Discretionary | 15.5% |
Financials | 14.6% |
Consumer Staples | 10.2% |
Energy | 8.7% |
Materials | 7.4% |
Health Care | 6.6% |
Telecommunication Services | 2.8% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
(1) | Non-income producing. |
See Notes to Financial Statements.
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $341,644,285) | $429,030,420 | |||
Foreign currency holdings, at value (cost of $4,574) | 4,931 | |||
Receivable for investments sold | 3,320,435 | |||
Receivable for capital shares sold | 162,243 | |||
Dividends and interest receivable | 656,858 | |||
Other assets | 37,812 | |||
433,212,699 | ||||
Liabilities | ||||
Payable for investments purchased | 2,677,532 | |||
Payable for capital shares redeemed | 147,405 | |||
Accrued management fees | 406,327 | |||
Distribution and service fees payable | 11,910 | |||
Accrued foreign taxes | 54,331 | |||
3,297,505 | ||||
Net Assets | $429,915,194 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $432,700,183 | |||
Undistributed net investment income | 879,180 | |||
Accumulated net realized loss | (91,036,866 | ) | ||
Net unrealized appreciation | 87,372,697 | |||
$429,915,194 |
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Investor Class, $0.01 Par Value | $344,949,724 | 41,030,271 | $8.41 | |||||||||
Institutional Class, $0.01 Par Value | $45,459,333 | 5,353,250 | $8.49 | |||||||||
A Class, $0.01 Par Value | $33,641,349 | 4,061,637 | $8.28 | * | ||||||||
B Class, $0.01 Par Value | $795,322 | 98,528 | $8.07 | |||||||||
C Class, $0.01 Par Value | $4,579,449 | 586,606 | $7.81 | |||||||||
R Class, $0.01 Par Value | $490,017 | 59,144 | $8.29 |
*Maximum offering price $8.79 (net asset value divided by 0.9425)
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $295,065) | $6,273,091 | |||
Interest | 3,286 | |||
6,276,377 | ||||
Expenses: | ||||
Management fees | 4,763,005 | |||
Distribution and service fees: | ||||
A Class | 84,769 | |||
B Class | 8,007 | |||
C Class | 37,930 | |||
R Class | 2,222 | |||
Directors’ fees and expenses | 14,065 | |||
Other expenses | 19,202 | |||
4,929,200 | ||||
Net investment income (loss) | 1,347,177 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $98,180) | 27,700,876 | |||
Foreign currency transactions | 1,902,482 | |||
29,603,358 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(48,111)) | 8,091,197 | |||
Translation of assets and liabilities in foreign currencies | (5,514,460 | ) | ||
2,576,737 | ||||
Net realized and unrealized gain (loss) | 32,180,095 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $33,527,272 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $1,347,177 | $2,186,335 | ||||||
Net realized gain (loss) | 29,603,358 | (61,414,112 | ) | |||||
Change in net unrealized appreciation (depreciation) | 2,576,737 | 164,334,702 | ||||||
Net increase (decrease) in net assets resulting from operations | 33,527,272 | 105,106,925 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (2,545,624 | ) | (63,581 | ) | ||||
Institutional Class | (512,165 | ) | (59,013 | ) | ||||
A Class | (82,118 | ) | — | |||||
Decrease in net assets from distributions | (3,139,907 | ) | (122,594 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (31,398,727 | ) | (2,669,083 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 14,569 | 12,362 | ||||||
Net increase (decrease) in net assets | (996,793 | ) | 102,327,610 | |||||
Net Assets | ||||||||
Beginning of period | 430,911,987 | 328,584,377 | ||||||
End of period | $429,915,194 | $430,911,987 | ||||||
Undistributed net investment income | $879,180 | $2,557,741 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing primarily in equity securities of issuers in the United States and other developed countries. The fund is authorized to issue the Investor Class, the Institutional Class, the A Class, the B Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent deferred sales charge. The sha re 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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
17
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, 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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
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.
18
Distributions to Shareholders — Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 9), 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 fu nd’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 1.05% to 1.30% for the Investor Class, A Class, B Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.15% for the Investor Class, A Class, B Class, C Class and R Class and 0.95% for the Institutional Class.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 9), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay American Century Investment Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each 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 service s. 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 year ended November 30, 2010, are detailed in the Statement of Operations.
19
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $415,601,121 and $447,191,984, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010 | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||||||||
Sold | 2,860,976 | $22,458,592 | 5,400,539 | $34,671,769 | ||||||||||||
Issued in reinvestment of distributions | 263,938 | 2,088,844 | 10,253 | 52,087 | ||||||||||||
Redeemed | (6,501,756 | ) | (50,811,427 | ) | (7,583,471 | ) | (47,853,604 | ) | ||||||||
(3,376,842 | ) | (26,263,991 | ) | (2,172,679 | ) | (13,129,748 | ) | |||||||||
Institutional Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 812,187 | 6,377,294 | 1,749,631 | 10,833,115 | ||||||||||||
Issued in reinvestment of distributions | 63,922 | 510,882 | 11,450 | 58,854 | ||||||||||||
Redeemed | (1,188,547 | ) | (9,210,872 | ) | (868,863 | ) | (5,358,928 | ) | ||||||||
(312,438 | ) | (2,322,696 | ) | 892,218 | 5,533,041 | |||||||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 1,033,001 | 8,031,650 | 2,253,267 | 13,745,515 | ||||||||||||
Issued in reinvestment of distributions | 10,288 | 80,224 | — | — | ||||||||||||
Redeemed | (1,511,064 | ) | (11,713,971 | ) | (1,589,618 | ) | (9,705,190 | ) | ||||||||
(467,775 | ) | (3,602,097 | ) | 663,649 | 4,040,325 | |||||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 2,143 | 18,252 | 59,034 | 406,476 | ||||||||||||
Redeemed | (16,767 | ) | (123,192 | ) | (20,190 | ) | (111,170 | ) | ||||||||
(14,624 | ) | (104,940 | ) | 38,844 | 295,306 | |||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 343,317 | 2,611,325 | 185,636 | 1,218,550 | ||||||||||||
Redeemed | (243,114 | ) | (1,735,817 | ) | (129,006 | ) | (729,428 | ) | ||||||||
100,203 | 875,508 | 56,630 | 489,122 | |||||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 28,084 | 221,956 | 26,932 | 176,194 | ||||||||||||
Redeemed | (26,494 | ) | (202,467 | ) | (12,873 | ) | (73,323 | ) | ||||||||
1,590 | 19,489 | 14,059 | 102,871 | |||||||||||||
Net increase (decrease) | (4,069,886 | ) | $(31,398,727 | ) | (507,279 | ) | $(2,669,083 | ) |
20
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $21,005,608 | $192,963,596 | — | |||||||||
Domestic Common Stocks | 213,578,222 | — | — | |||||||||
Temporary Cash Investments | 82,994 | 1,400,000 | — | |||||||||
Total Value of Investment Securities | $234,666,824 | $194,363,596 | — |
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 tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $3,139,907 | $122,594 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
21
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $346,176,114 | |
Gross tax appreciation of investments | $88,324,764 | |
Gross tax depreciation of investments | (5,470,458 | ) |
Net tax appreciation (depreciation) of investments | $82,854,306 | |
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(12,479 | ) |
Net tax appreciation (depreciation) | $82,841,827 | |
Undistributed ordinary income | $2,196,697 | |
Accumulated capital losses | $(87,823,513 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains (losses) on certain forward foreign currency exchange contracts and investments in passive foreign investment companies.
The accumulated capital losses 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 of $(11,658,423) and $(76,165,090) expire in 2016 and 2017, respectively.
9. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement.
10. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
For corporate taxpayers, the fund hereby designates $2,362,696, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended November 30, 2010 as qualified for the corporate dividends received deduction.
22
Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.80 | $5.90 | $12.69 | $10.52 | $8.88 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.03 | 0.04 | 0.04 | 0.03 | — | (2) | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.64 | 1.86 | (4.75 | ) | 2.41 | 1.70 | ||||||||||||||
Total From Investment Operations | 0.67 | 1.90 | (4.71 | ) | 2.44 | 1.70 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.06 | ) | — | (2) | — | (0.05 | ) | (0.06 | ) | |||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Total Distributions | (0.06 | ) | — | (2) | (2.08 | ) | (0.27 | ) | (0.06 | ) | ||||||||||
Net Asset Value, End of Period | $8.41 | $7.80 | $5.90 | $12.69 | $10.52 | |||||||||||||||
Total Return(3) | 8.61 | % | 32.24 | % | (44.01 | )% | 23.73 | % | 19.30 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.16 | % | 1.22 | % | 1.26 | % | 1.30 | % | 1.31 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.33 | % | 0.62 | % | 0.40 | % | 0.29 | % | (0.05 | )% | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $344,950 | $346,590 | $274,599 | $481,553 | $418,185 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
See Notes to Financial Statements.
23
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.90 | $5.97 | $12.79 | $10.60 | $8.95 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.04 | 0.05 | 0.07 | 0.06 | 0.01 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.64 | 1.89 | (4.81 | ) | 2.42 | 1.72 | ||||||||||||||
Total From Investment Operations | 0.68 | 1.94 | (4.74 | ) | 2.48 | 1.73 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.09 | ) | (0.01 | ) | — | (0.07 | ) | (0.08 | ) | |||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Total Distributions | (0.09 | ) | (0.01 | ) | (2.08 | ) | (0.29 | ) | (0.08 | ) | ||||||||||
Net Asset Value, End of Period | $8.49 | $7.90 | $5.97 | $12.79 | $10.60 | |||||||||||||||
Total Return(2) | 8.68 | % | 32.61 | % | (43.88 | )% | 23.99 | % | 19.50 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 0.96 | % | 1.02 | % | 1.05 | % | 1.10 | % | 1.11 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.53 | % | 0.82 | % | 0.61 | % | 0.49 | % | 0.15 | % | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $45,459 | $44,752 | $28,477 | $16,298 | $8,540 |
(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. |
See Notes to Financial Statements.
24
A Class(1) | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.67 | $5.81 | $12.56 | $10.41 | $8.79 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.01 | 0.02 | 0.01 | 0.01 | (0.03 | ) | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.62 | 1.84 | (4.68 | ) | 2.38 | 1.69 | ||||||||||||||
Total From Investment Operations | 0.63 | 1.86 | (4.67 | ) | 2.39 | 1.66 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.02 | ) | — | — | (0.02 | ) | (0.04 | ) | ||||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Total Distributions | (0.02 | ) | — | (2.08 | ) | (0.24 | ) | (0.04 | ) | |||||||||||
Net Asset Value, End of Period | $8.28 | $7.67 | $5.81 | $12.56 | $10.41 | |||||||||||||||
Total Return(3) | 8.20 | % | 32.01 | % | (44.17 | )% | 23.74 | % | 18.97 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.41 | % | 1.47 | % | 1.51 | % | 1.55 | % | 1.56 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.08 | % | 0.37 | % | 0.15 | % | 0.04 | % | (0.30 | )% | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $33,641 | $34,744 | $22,447 | $18,402 | $5,571 |
(1) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
25
B Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.51 | $5.73 | $12.50 | $10.42 | $9.02 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.05 | ) | (0.03 | ) | (0.05 | ) | (0.08 | ) | (0.11 | ) | ||||||||||
Net Realized and Unrealized Gain (Loss) | 0.61 | 1.81 | (4.64 | ) | 2.38 | 1.57 | ||||||||||||||
Total From Investment Operations | 0.56 | 1.78 | (4.69 | ) | 2.30 | 1.46 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | — | — | — | (0.06 | ) | ||||||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Total Distributions | — | — | (2.08 | ) | (0.22 | ) | (0.06 | ) | ||||||||||||
Net Asset Value, End of Period | $8.07 | $7.51 | $5.73 | $12.50 | $10.42 | |||||||||||||||
Total Return(2) | 7.46 | % | 31.06 | % | (44.62 | )% | 22.51 | % | 16.29 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.16 | % | 2.22 | % | 2.26 | % | 2.30 | % | 2.31 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.67 | )% | (0.38 | )% | (0.60 | )% | (0.71 | )% | (1.05 | )% | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $795 | $850 | $426 | $639 | $352 |
(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. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
26
C Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.27 | $5.54 | $12.16 | $10.14 | $8.59 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.05 | ) | (0.02 | ) | (0.05 | ) | (0.07 | ) | (0.10 | ) | ||||||||||
Net Realized and Unrealized Gain (Loss) | 0.59 | 1.75 | (4.49 | ) | 2.31 | 1.65 | ||||||||||||||
Total From Investment Operations | 0.54 | 1.73 | (4.54 | ) | 2.24 | 1.55 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Net Asset Value, End of Period | $7.81 | $7.27 | $5.54 | $12.16 | $10.14 | |||||||||||||||
Total Return(2) | 7.43 | % | 31.23 | % | (44.64 | )% | 22.54 | % | 18.04 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.16 | % | 2.22 | % | 2.26 | % | 2.30 | % | 2.31 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.67 | )% | (0.38 | )% | (0.60 | )% | (0.71 | )% | (1.05 | )% | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $4,579 | $3,535 | $2,382 | $2,625 | $1,050 |
(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. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
27
R Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.67 | $5.82 | $12.62 | $10.47 | $8.86 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.01 | ) | — | (2) | (0.01 | ) | 0.02 | (0.05 | ) | |||||||||||
Net Realized and Unrealized Gain (Loss) | 0.63 | 1.85 | (4.71 | ) | 2.35 | 1.71 | ||||||||||||||
Total From Investment Operations | 0.62 | 1.85 | (4.72 | ) | 2.37 | 1.66 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | — | — | — | (0.05 | ) | ||||||||||||||
From Net Realized Gains | — | — | (2.08 | ) | (0.22 | ) | — | |||||||||||||
Total Distributions | — | — | (2.08 | ) | (0.22 | ) | (0.05 | ) | ||||||||||||
Net Asset Value, End of Period | $8.29 | $7.67 | $5.82 | $12.62 | $10.47 | |||||||||||||||
Total Return(3) | 8.08 | % | 31.79 | % | (44.40 | )% | 23.08 | % | 18.79 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.66 | % | 1.72 | % | 1.76 | % | 1.80 | % | 1.81 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.17 | )% | 0.12 | % | (0.10 | )% | (0.21 | )% | (0.55 | )% | ||||||||||
Portfolio Turnover Rate | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $490 | $442 | $253 | $202 | $32 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
See Notes to Financial Statements.
28
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Global Growth Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Global Growth Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
29
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor, A, B, C and R Classes | For: | 262,938,470 | |
Against: | 3,614,781 | ||
Abstain: | 5,348,477 | ||
Broker Non-Vote: | 29,114,635 | ||
Institutional Class | For: | 27,846,550 | |
Against: | 128,409 | ||
Abstain: | 80,516 | ||
Broker Non-Vote: | 1,515,505 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
30
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
31
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
32
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com . It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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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Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70203 1101
ANNUAL REPORT NOVEMBER 30, 2010
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![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/frontpagebanner.jpg)
International Discovery Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 15 |
Statement of Operations | 16 |
Statement of Changes in Net Assets | 17 |
Notes to Financial Statements | 18 |
Financial Highlights | 25 |
Report of Independent Registered Public Accounting Firm | 30 |
Other Information | |
Proxy Voting Results | 31 |
Management | 32 |
Additional Information | 35 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
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Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
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Performance |
Total Returns as of November 30, 2010 | ||||||||||
Average Annual Returns | ||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||
Investor Class | TWEGX | 15.80 | % | 5.11 | % | 6.66 | % | 11.80 | % | 4/1/94 |
MSCI All Country World ex-U.S. Mid Cap Growth Index | — | 11.24 | % | 3.84 | % | 4.91 | % | N/A | (1) | — |
Institutional Class | TIDIX | 16.06 | % | 5.33 | % | 6.88 | % | 10.42 | % | 1/2/98 |
A Class(2) No sales charge* With sales charge* | ACIDX | 15.53 8.90 | % % | 4.87 3.63 | % % | 6.41 5.78 | % % | 8.39 7.87 | % % | 4/28/98 |
C Class No sales charge* With sales charge* | TWECX | — — | — — | — — | 15.53 14.53 | %(3) %(3) | 3/1/10 | |||
R Class | TWERX | — | — | — | 16.00 | %(3) | 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 for equity funds 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) | Benchmark data first available June 1994. |
(2) | 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. |
(3) | Total returns for periods less than one year are not annualized. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. International investing involves special risks, such as pol itical 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.
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Growth of $10,000 Over 10 Years |
$10,000 investment made November 30, 2000 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/intldiscochart.jpg)
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.48% | 1.28% | 1.73% | 2.48% | 1.98% |
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 pol itical 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.
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Portfolio Commentary |
Portfolio Managers: Mark Kopinski and Brian Brady
Performance Summary
The International Discovery portfolio returned 15.80%* for the 12 months ended November 30, 2010, compared with its benchmark, the MSCI All Country World ex-U.S. Mid Cap Growth Index, which returned 11.24%.
Stocks in many global markets generally struggled during the first half of the period, as several eurozone nations came close to defaulting on their sovereign debt. In the second half of the period, improving business conditions and confidence and solid corporate earnings reports in several markets helped propel stocks and push 12-month returns into positive territory. Within the developed markets, growth stocks sharply outpaced their value counterparts, while small- and mid-cap stocks significantly outperformed large-cap stocks. Overall, emerging market stocks sharply outperformed their developed market counterparts.
Earnings growth, which is an important component of the portfolio’s investment process, performed well during the period, which accounted for the portfolio’s strong performance. More specifically, robust stock selection helped push the portfolio ahead of the index for the 12-month period.
U.K. Was the Top Contributor
From a regional perspective, our exposure to Europe made the greatest contribution to relative performance, with stock selection in the United Kingdom, Spain, and Belgium leading the way. Our overweight position in U.K.-based ARM Holdings, a developer and licenser of semiconductor chip technology used in smartphones, was the portfolio’s top contributor to relative performance. The company’s stock advanced on soaring revenues and margins stemming from licensing deals with Apple and Microsoft. In addition, the company benefited from mergers-and-acquisitions activity in the wireless semiconductor chip space.
At the opposite end of the performance spectrum, stock selection in Japan and Singapore and an overweight position in Norway detracted the most from results. Our portfolio-only position in Norway’s Storebrand, an insurance, banking, and asset-management company, represented the portfolio’s largest detractor to relative performance for the 12 months. The company, which markets its services in Norway and Sweden, reported lackluster results midway through the period, partly due to falling interest rates in Sweden. The company’s board of directors also voted to forego paying a dividend for its most recently completed fiscal year. In addition, our portfolio-only position in Japan’s Gree, Inc., an internet-based social networking company, also was a leading performance detractor for the period.
*All fund returns referenced in this commentary are for Investor Class shares.
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Growth Sectors Outperformed
The portfolio’s industrials, information technology, and consumer discretionary sectors represented the largest contributors to relative performance, primarily due to strong stock selection. Our portfolio-only position in U.K.-based Weir Group was among the portfolio’s top-three contributors. The company, which makes pumps for the mining industry, saw its stock price advance on rising order trends. In the consumer discretionary sector, our portfolio-only positions in Thailand-based Indorama Ventures and South Korea-based Kia Motors were among the portfolio’s top performers. Indorama, a producer of acrylic fibers, advanced on expansion efforts in Latin and Central America, while automaker Kia experienced strong global sales growth, particularly in China.
Consumer Staples, Health Care Lagged
Although the consumer staples sector’s return was positive on an absolute basis, an underweight position led to lagging relative performance. Similarly, the portfolio’s health care sector posted positive absolute performance but lagged slightly on a relative basis, primarily due to stock selection.
Outlook
Global economic activity is improving, but headwinds remain—namely, the mounting sovereign debt in developed nations and the potential for inflation throughout the world. Given this outlook, we currently favor companies benefiting from the corporate investment cycle and those with significant exposure to emerging markets. Among sectors, the portfolio remains heavily exposed to industrials and information technology, which we believe should benefit in the move from economic recovery to expansion. We expect further volatility throughout the international stock markets, yet we will continue to seek small- to medium-sized companies located around the world (excluding the United States) offering promising growth characteristics.
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Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Lanxess AG | 2.2% |
Fuji Heavy Industries Ltd. | 2.2% |
Experian plc | 2.1% |
Technip SA | 2.0% |
Iluka Resources Ltd. | 2.0% |
Coloplast A/S B Shares | 1.9% |
Modern Times Group AB B Shares | 1.9% |
Metso Oyj | 1.9% |
Umicore | 1.9% |
Pacific Rubiales Energy Corp. | 1.9% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights | 99.5% |
Temporary Cash Investments | 0.9% |
Other Assets and Liabilities | (0.4)% |
Investments by Country | |
% of net assets as of 11/30/10 | |
United Kingdom | 10.1% |
Germany | 8.1% |
Canada | 7.6% |
France | 7.1% |
Japan | 6.5% |
Sweden | 5.8% |
People’s Republic of China | 5.4% |
Denmark | 5.3% |
Australia | 4.4% |
Belgium | 4.1% |
South Korea | 3.7% |
Finland | 3.4% |
Switzerland | 3.4% |
India | 3.4% |
Taiwan (Republic of China) | 2.6% |
Ireland | 2.1% |
Other Countries | 16.5% |
Cash and Equivalents* | 0.5% |
* | Includes temporary cash investments and other assets and liabilities. |
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Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 - 11/30/10 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,219.80 | $8.09 | 1.43% |
Institutional Class | $1,000 | $1,222.80 | $6.97 | 1.23% |
A Class | $1,000 | $1,219.40 | $9.50 | 1.68% |
C Class | $1,000 | $1,213.80 | $13.71 | 2.43% |
R Class | $1,000 | $1,217.30 | $10.90 | 1.93% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.19 | $7.35 | 1.43% |
Institutional Class | $1,000 | $1,019.21 | $6.33 | 1.23% |
A Class | $1,000 | $1,016.92 | $8.63 | 1.68% |
C Class | $1,000 | $1,013.10 | $12.46 | 2.43% |
R Class | $1,000 | $1,015.64 | $9.91 | 1.93% |
*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 186, 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 |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 99.5% | ||||||||
AUSTRALIA — 4.4% | ||||||||
Amcor Ltd. | 791,400 | $4,892,692 | ||||||
Atlas Iron Ltd.(1) | 1,155,800 | 3,234,876 | ||||||
Coca-Cola Amatil Ltd. | 460,900 | 4,921,347 | ||||||
Equinox Minerals Ltd.(1) | 663,500 | 3,593,201 | ||||||
Iluka Resources Ltd.(1) | 2,657,900 | 19,234,359 | ||||||
Incitec Pivot Ltd. | 1,990,200 | 7,134,449 | ||||||
43,010,924 | ||||||||
AUSTRIA — 1.2% | ||||||||
Andritz AG | 154,900 | 12,293,294 | ||||||
BELGIUM — 4.1% | ||||||||
Bekaert SA | 180,600 | 17,162,462 | ||||||
Telenet Group Holding NV(1) | 130,600 | 4,730,604 | ||||||
Umicore | 391,800 | 18,593,538 | ||||||
40,486,604 | ||||||||
BRAZIL — 1.4% | ||||||||
Duratex SA | 233,500 | 2,669,194 | ||||||
Localiza Rent a Car SA | 275,700 | 4,528,002 | ||||||
Totvs SA | 69,800 | 6,935,220 | ||||||
14,132,416 | ||||||||
CANADA — 7.6% | ||||||||
Agrium, Inc. | 179,700 | 14,417,331 | ||||||
First Quantum Minerals Ltd. | 82,200 | 7,302,752 | ||||||
Niko Resources Ltd. | 45,800 | 4,111,761 | ||||||
Pacific Rubiales Energy Corp. | 595,900 | 18,575,617 | ||||||
Silver Wheaton Corp.(1) | 374,900 | 13,841,225 | ||||||
Valeant Pharmaceuticals International, Inc. | 90,100 | 2,330,887 | ||||||
Western Coal Corp.(1) | 1,369,000 | 13,829,361 | ||||||
74,408,934 | ||||||||
CAYMAN ISLANDS — 1.1% | ||||||||
Herbalife Ltd. | 150,300 | 10,315,089 | ||||||
DENMARK — 5.3% | ||||||||
Coloplast A/S B Shares | 142,700 | 18,986,407 | ||||||
Danisco A/S | 152,800 | 11,671,252 | ||||||
FLSmidth & Co. A/S | 112,500 | 9,247,407 | ||||||
Pandora A/S(1) | 222,300 | 11,614,117 | ||||||
51,519,183 | ||||||||
FINLAND — 3.4% | ||||||||
KONE Oyj B Shares | 211,400 | 11,055,889 | ||||||
Metso Oyj | 364,000 | 18,696,437 | ||||||
Nokian Renkaat Oyj | 116,300 | 3,742,378 | ||||||
33,494,704 | ||||||||
FRANCE — 7.1% | ||||||||
Bureau Veritas SA | 207,400 | $15,113,762 | ||||||
Edenred(1) | 178,700 | 3,975,821 | ||||||
Publicis Groupe SA | 118,419 | 5,291,597 | ||||||
Safran SA | 511,400 | 16,021,362 | ||||||
SEB SA | 68,500 | 6,317,512 | ||||||
Technip SA | 251,600 | 19,536,577 | ||||||
Vallourec SA | 33,800 | 3,210,267 | ||||||
69,466,898 | ||||||||
GERMANY — 8.1% | ||||||||
adidas AG | 252,000 | 15,818,972 | ||||||
Brenntag AG(1) | 67,900 | 5,984,543 | ||||||
Hugo Boss AG Preference Shares | 55,500 | 3,256,288 | ||||||
Infineon Technologies AG(1) | 1,713,600 | 15,227,821 | ||||||
Lanxess AG | 308,300 | 21,718,247 | ||||||
ProSiebenSat.1 Media AG Preference Shares | 433,600 | 11,487,452 | ||||||
Symrise AG | 237,900 | 5,995,470 | ||||||
79,488,793 | ||||||||
HONG KONG — 1.9% | ||||||||
Brilliance China Automotive Holdings Ltd.(1) | 14,244,000 | 13,115,684 | ||||||
Lee & Man Paper Manufacturing Ltd. | 4,103,000 | 3,244,314 | ||||||
Wing Hang Bank Ltd. | 195,000 | 2,558,950 | ||||||
18,918,948 | ||||||||
INDIA — 3.4% | ||||||||
Bajaj Auto Ltd. | 226,600 | 7,785,934 | ||||||
Canara Bank | 332,800 | 5,378,036 | ||||||
Cummins India Ltd. | 233,900 | 4,053,808 | ||||||
Exide Industries Ltd. | 480,652 | 1,690,165 | ||||||
Shriram Transport Finance Co. Ltd. | 264,300 | 4,680,330 | ||||||
Yes Bank Ltd. | 1,390,600 | 9,278,243 | ||||||
32,866,516 | ||||||||
IRELAND — 2.1% | ||||||||
Experian plc | 1,833,100 | 20,942,765 | ||||||
ISRAEL — 1.2% | ||||||||
Mellanox Technologies Ltd.(1) | 482,900 | 11,507,507 | ||||||
ITALY — 1.0% | ||||||||
Exor SpA | 380,500 | 10,031,272 | ||||||
JAPAN — 6.5% | ||||||||
Fuji Heavy Industries Ltd. | 2,847,000 | 21,091,409 | ||||||
Gree, Inc. | 412,700 | 5,029,920 | ||||||
Makita Corp. | 168,000 | 6,072,410 |
12
Shares | Value | |||||||
NGK Spark Plug Co. Ltd. | 536,000 | $7,711,124 | ||||||
Nippon Shokubai Co. Ltd. | 384,000 | 3,620,217 | ||||||
Omron Corp. | 295,900 | 7,297,617 | ||||||
Sumitomo Heavy Industries Ltd. | 1,247,000 | 7,658,717 | ||||||
Teijin Ltd. | 1,223,000 | 4,939,348 | ||||||
63,420,762 | ||||||||
NETHERLANDS — 1.0% | ||||||||
Koninklijke Vopak NV | 220,200 | 10,122,691 | ||||||
NORWAY — 1.8% | ||||||||
Petroleum Geo-Services ASA(1) | 546,600 | 6,634,200 | ||||||
Schibsted ASA | 448,900 | 10,947,370 | ||||||
17,581,570 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 5.4% | ||||||||
China National Building Material Co. Ltd. H Shares | 3,050,000 | 7,030,817 | ||||||
China Yurun Food Group Ltd. | 2,107,000 | 7,529,749 | ||||||
Focus Media Holding Ltd. ADR(1) | 534,200 | 12,462,886 | ||||||
Hengan International Group Co. Ltd. | 633,000 | 5,836,731 | ||||||
Mongolian Mining Corp.(1) | 5,425,100 | 5,952,512 | ||||||
New Oriental Education & Technology Group ADR(1) | 51,000 | 5,395,800 | ||||||
Spreadtrum Communication, Inc. ADR(1) | 192,900 | 3,153,915 | ||||||
Winsway Coking Coal Holdings Ltd.(1) | 10,799,000 | 5,576,746 | ||||||
52,939,156 | ||||||||
RUSSIAN FEDERATION — 0.5% | ||||||||
Mail.ru Group Ltd. GDR(1) | 123,900 | 5,079,900 | ||||||
SINGAPORE — 1.0% | ||||||||
Global Logistic Properties Ltd.(1) | 5,873,000 | 9,874,700 | ||||||
SOUTH AFRICA — 0.9% | ||||||||
Truworths International Ltd. | 863,900 | 8,769,631 | ||||||
SOUTH KOREA — 3.7% | ||||||||
Amorepacific Corp. | 4,500 | 4,215,111 | ||||||
Celltrion, Inc.(1) | 183,300 | 5,114,503 | ||||||
Hyundai Steel Co. | 93,300 | 8,851,993 | ||||||
Lock & Lock Co. Ltd. | 118,800 | 3,878,368 | ||||||
NCSoft Corp. | 66,200 | 14,160,428 | ||||||
36,220,403 | ||||||||
SPAIN — 1.7% | ||||||||
Amadeus IT Holding SA A Shares(1) | 876,800 | 16,844,327 | ||||||
SWEDEN — 5.8% | ||||||||
Hexagon AB B Shares | 490,000 | $9,280,448 | ||||||
Hexagon AB B Shares Rights(1) | 490,000 | 1,374,881 | ||||||
Modern Times Group AB B Shares | 258,500 | 18,874,247 | ||||||
Swedbank AB A Shares(1) | 1,048,000 | 13,247,432 | ||||||
Swedish Match AB | 498,000 | 13,914,274 | ||||||
56,691,282 | ||||||||
SWITZERLAND — 3.4% | ||||||||
Clariant AG(1) | 323,000 | 5,831,475 | ||||||
Informa plc | 1,849,200 | 11,370,165 | ||||||
Sulzer AG | 121,600 | 15,811,089 | ||||||
33,012,729 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.6% | ||||||||
Eva Airways Corp.(1) | 5,368,000 | 6,110,706 | ||||||
President Chain Store Corp. | 499,000 | 2,013,516 | ||||||
Synnex Technology International Corp. | 2,816,000 | 7,048,661 | ||||||
Wintek Corp.(1) | 5,778,000 | 10,311,595 | ||||||
25,484,478 | ||||||||
THAILAND — 1.3% | ||||||||
Banpu PCL | 203,900 | 5,099,186 | ||||||
Indorama Ventures PCL | 4,385,700 | 7,797,929 | ||||||
12,897,115 | ||||||||
TURKEY — 0.5% | ||||||||
Turkiye Vakiflar Bankasi Tao, Class D | 1,868,900 | 5,182,069 | ||||||
UNITED KINGDOM — 10.1% | ||||||||
Acergy SA | 598,400 | 11,905,774 | ||||||
Admiral Group plc | 351,200 | 8,347,067 | ||||||
Aggreko plc | 531,100 | 12,102,357 | ||||||
ARM Holdings plc | 1,484,215 | 9,137,527 | ||||||
Burberry Group plc | 453,600 | 7,027,299 | ||||||
GKN plc | 1,001,900 | 2,929,802 | ||||||
International Power plc | 990,100 | 6,275,708 | ||||||
Man Group plc | 2,585,300 | 10,652,437 | ||||||
Michael Page International plc | 1,398,700 | 10,371,123 | ||||||
Petrofac Ltd. | 594,300 | 12,858,459 | ||||||
Weir Group plc (The) | 278,100 | 7,526,729 | ||||||
99,134,282 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $809,099,924) | 976,138,942 |
13
Shares | Value | |||||||
Temporary Cash Investments — 0.9% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 89,556 | $89,556 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $8,581,897), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $8,400,049) | 8,400,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,489,556) | 8,489,556 | |||||||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $817,589,480) | 984,628,498 | |||||||
OTHER ASSETS AND LIABILITIES — (0.4)% | (4,012,483 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $980,616,015 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 23.3% |
Consumer Discretionary | 19.8% |
Materials | 18.9% |
Information Technology | 11.4% |
Financials | 8.1% |
Energy | 8.0% |
Consumer Staples | 6.2% |
Health Care | 2.7% |
Utilities | 0.6% |
Telecommunication Services | 0.5% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt |
GDR = Global Depositary Receipt |
(1) | Non-income producing. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $817,589,480) | $984,628,498 | |||
Foreign currency holdings, at value (cost of $221,810) | 223,168 | |||
Receivable for investments sold | 4,881,015 | |||
Receivable for capital shares sold | 203,503 | |||
Dividends and interest receivable | 985,702 | |||
Other assets | 125,987 | |||
991,047,873 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 1,899,569 | |||
Payable for investments purchased | 5,964,620 | |||
Payable for capital shares redeemed | 642,872 | |||
Accrued management fees | 1,151,297 | |||
Distribution and service fees payable | 1,060 | |||
Accrued foreign taxes | 772,440 | |||
10,431,858 | ||||
Net Assets | $980,616,015 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $1,207,798,390 | |||
Accumulated net investment loss | (368,804 | ) | ||
Accumulated net realized loss | (393,076,528 | ) | ||
Net unrealized appreciation | 166,262,957 | |||
$980,616,015 |
Net assets | Shares outstanding | Net asset value per share | |||||||
Investor Class, $0.01 Par Value | $878,529,919 | 88,913,028 | $9.88 | ||||||
Institutional Class, $0.01 Par Value | $97,166,732 | 9,729,067 | $9.99 | ||||||
A Class, $0.01 Par Value | $4,813,811 | 497,906 | $9.67 | * | |||||
C Class, $0.01 Par Value | $76,559 | 7,793 | $9.82 | ||||||
R Class, $0.01 Par Value | $28,994 | 2,941 | $9.86 |
*Maximum offering price $10.26 (net asset value divided by 0.9425)
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $1,194,038) | $13,404,314 | |||
Interest | 9,360 | |||
13,413,674 | ||||
Expenses: | ||||
Management fees | 13,228,453 | |||
Distribution and service fees: | ||||
A Class | 13,168 | |||
C Class | 382 | |||
R Class | 100 | |||
Directors’ fees and expenses | 28,417 | |||
Other expenses | 35,693 | |||
13,306,213 | ||||
Net investment income (loss) | 107,461 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $220,934) | 171,205,384 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $410,644) | 6,565,419 | |||
177,770,803 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $505,589) | 3,306,020 | |||
Translation of assets and liabilities in foreign currencies | (45,258,949 | ) | ||
(41,952,929 | ) | |||
Net realized and unrealized gain (loss) | 135,817,874 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $135,925,335 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $107,461 | $1,207,984 | ||||||
Net realized gain (loss) | 177,770,803 | (83,552,531 | ) | |||||
Change in net unrealized appreciation (depreciation) | (41,952,929 | ) | 354,090,852 | |||||
Net increase (decrease) in net assets resulting from operations | 135,925,335 | 271,746,305 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (1,891,482 | ) | (6,272,184 | ) | ||||
Institutional Class | (506,500 | ) | (623,699 | ) | ||||
A Class | — | (57,587 | ) | |||||
Decrease in net assets from distributions | (2,397,982 | ) | (6,953,470 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (112,046,954 | ) | (85,394,901 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 98,785 | 162,422 | ||||||
Net increase (decrease) in net assets | 21,579,184 | 179,560,356 | ||||||
Net Assets | ||||||||
Beginning of period | 959,036,831 | 779,476,475 | ||||||
End of period | $980,616,015 | $959,036,831 | ||||||
Accumulated undistributed net investment income (loss) | $(368,804 | ) | $909,682 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing primarily in equity securities of companies that are small-to medium-sized at time of purchase and are located in foreign developed countries or emerging market countries. The fund is authorized to issue the Investor Class, the Institutional Class, the A Class (formerly Advisor Class), the C Class and the R Class. The A Class may incur an initial sales ch arge. 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. Sale of the C Class and R Class commenced on March 1, 2010.
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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
18
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
19
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 to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — The fund may impose a 2.00% redemption fee on shares held less than 180 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 9), 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 fu nd’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 1.20% to 1.75% for the Investor Class, A Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.42% for the Investor Class, A Class, C Class and R Class and 1.22% for the Institutional Class.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 9), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
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 American Century Investment Services, Inc. (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 year ended November 30, 2010, are detailed in the Statement of Operations.
20
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $1,831,029,412 and $1,931,646,062, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010(1) | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 400,000,000 | 400,000,000 | ||||||||||||||
Sold | 5,837,481 | $53,064,107 | 8,973,349 | $62,070,331 | ||||||||||||
Issued in reinvestment of distributions | 203,829 | 1,811,258 | 1,112,979 | 6,032,128 | ||||||||||||
Redeemed | (19,175,078 | ) | (171,056,059 | ) | (21,983,823 | ) | (150,599,718 | ) | ||||||||
(13,133,768 | ) | (116,180,694 | ) | (11,897,495 | ) | (82,497,259 | ) | |||||||||
Institutional Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||||||||
Sold | 2,373,343 | 22,884,811 | 2,436,097 | 16,480,062 | ||||||||||||
Issued in reinvestment of distributions | 53,799 | 482,824 | 107,347 | 588,261 | ||||||||||||
Redeemed | (1,913,932 | ) | (17,129,073 | ) | (2,014,567 | ) | (13,522,357 | ) | ||||||||
513,210 | 6,238,562 | 528,877 | 3,545,966 | |||||||||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 163,936 | 1,475,514 | 245,044 | 1,614,204 | ||||||||||||
Issued in reinvestment of distributions | — | — | 10,693 | 56,778 | ||||||||||||
Redeemed | (423,496 | ) | (3,674,496 | ) | (1,230,260 | ) | (8,114,590 | ) | ||||||||
(259,560 | ) | (2,198,982 | ) | (974,523 | ) | (6,443,608 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | N/A | ||||||||||||||
Sold | 7,793 | 69,160 | ||||||||||||||
R Class/Shares Authorized | 10,000,000 | N/A | ||||||||||||||
Sold | 2,941 | 25,000 | ||||||||||||||
Net increase (decrease) | (12,869,384 | ) | $(112,046,954 | ) | (12,343,141 | ) | $(85,394,901 | ) |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010 for the C Class and R Class. |
21
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $59,583,415 | $916,555,527 | — | |||||||||
Temporary Cash Investments | 89,556 | 8,400,000 | — | |||||||||
Total Value of Investment Securities | $59,672,971 | $924,955,527 | — |
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 smaller companies. Because of this, the fund may be subject to greater risk and market fluctuations than a fund investing in larger, more established companies.
8. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $2,397,982 | $6,953,470 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
22
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $821,345,622 | |||
Gross tax appreciation of investments | $174,172,313 | |||
Gross tax depreciation of investments | (10,889,437 | ) | ||
Net tax appreciation (depreciation) of investments | $163,282,876 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(770,484 | ) | ||
Net tax appreciation (depreciation) | $162,512,392 | |||
Undistributed ordinary income | — | |||
Accumulated capital losses | $(389,320,386 | ) | ||
Currency loss deferral | $(374,381 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains (losses) on certain forward foreign currency exchange contracts.
The accumulated capital losses 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 of $(147,835,731) and $(241,484,655) expire in 2016 and 2017, respectively.
The currency loss deferral represents net foreign currency losses incurred in the one-month period ended November 30, 2010. The fund has elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes.
9. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement. Management agreements for new share classes that were launched after February 16, 2010 did not terminate, were not replaced by interim agreements, and did not require approval of new agreements.
23
10. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
For corporate taxpayers, the fund hereby designates $10,941, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended November 30, 2010 as qualified for the corporate dividends received deduction.
For the fiscal year ended November 30, 2010, the fund intends to pass through to shareholders $1,488,327, or up to the maximum amount allowable, as a foreign tax credit which represents taxes paid on income derived from sources within foreign countries or possessions of the United States. During the fiscal year ended November 30, 2010, the fund earned $14,598,352 from income derived from foreign sources. Foreign source income and foreign tax expense per outstanding share on November 30, 2010 are $0.1472 and $0.0150, respectively.
24
Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.55 | $6.26 | $18.40 | $18.01 | $15.94 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | — | (2) | 0.01 | 0.06 | 0.05 | (0.02 | ) | |||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.35 | 2.34 | (8.09 | ) | 4.60 | 5.00 | ||||||||||||||
Total From Investment Operations | 1.35 | 2.35 | (8.03 | ) | 4.65 | 4.98 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.02 | ) | (0.06 | ) | (0.06 | ) | — | (0.13 | ) | |||||||||||
From Net Realized Gains | — | — | (4.05 | ) | (4.26 | ) | (2.78 | ) | ||||||||||||
Total Distributions | (0.02 | ) | (0.06 | ) | (4.11 | ) | (4.26 | ) | (2.91 | ) | ||||||||||
Net Asset Value, End of Period | $9.88 | $8.55 | $6.26 | $18.40 | $18.01 | |||||||||||||||
Total Return(3) | 15.80 | % | 38.06 | % | (55.48 | )% | 32.18 | % | 36.41 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.43 | % | 1.48 | % | 1.37 | % | 1.36 | % | 1.41 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.00 | %(4) | 0.13 | % | 0.51 | % | 0.30 | % | (0.11 | )% | ||||||||||
Portfolio Turnover Rate | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||
Net Assets, End of Period (in thousands) | $878,530 | $872,865 | $713,764 | $1,758,335 | $1,446,955 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
(4) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
25
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.66 | $6.34 | $18.59 | $18.16 | $16.06 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.02 | 0.02 | 0.08 | 0.09 | 0.04 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.36 | 2.37 | (8.18 | ) | 4.64 | 5.00 | ||||||||||||||
Total From Investment Operations | 1.38 | 2.39 | (8.10 | ) | 4.73 | 5.04 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.05 | ) | (0.07 | ) | (0.10 | ) | — | (0.16 | ) | |||||||||||
From Net Realized Gains | — | — | (4.05 | ) | (4.30 | ) | (2.78 | ) | ||||||||||||
Total Distributions | (0.05 | ) | (0.07 | ) | (4.15 | ) | (4.30 | ) | (2.94 | ) | ||||||||||
Net Asset Value, End of Period | $9.99 | $8.66 | $6.34 | $18.59 | $18.16 | |||||||||||||||
Total Return(2) | 16.06 | % | 38.32 | % | (55.37 | )% | 32.45 | % | 36.65 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.23 | % | 1.28 | % | 1.17 | % | 1.16 | % | 1.21 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.20 | % | 0.33 | % | 0.71 | % | 0.50 | % | 0.09 | % | ||||||||||
Portfolio Turnover Rate | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||
Net Assets, End of Period (in thousands) | $97,167 | $79,830 | $55,091 | $145,723 | $105,849 |
(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. |
See Notes to Financial Statements.
26
A Class(1) | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.37 | $6.13 | $18.08 | $17.76 | $15.75 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.02 | ) | — | (3) | 0.06 | 0.07 | (0.08 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.32 | 2.29 | (7.95 | ) | 4.46 | 4.96 | ||||||||||||||
Total From Investment Operations | 1.30 | 2.29 | (7.89 | ) | 4.53 | 4.88 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.05 | ) | (0.01 | ) | — | (0.09 | ) | ||||||||||||
From Net Realized Gains | — | — | (4.05 | ) | (4.21 | ) | (2.78 | ) | ||||||||||||
Total Distributions | — | (0.05 | ) | (4.06 | ) | (4.21 | ) | (2.87 | ) | |||||||||||
Net Asset Value, End of Period | $9.67 | $8.37 | $6.13 | $18.08 | $17.76 | |||||||||||||||
Total Return(4) | 15.53 | % | 37.71 | % | (55.56 | )% | 31.83 | % | 36.08 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.68 | % | 1.73 | % | 1.63 | % | 1.61 | % | 1.66 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.25 | )% | (0.12 | )% | 0.25 | % | 0.05 | % | (0.36 | )% | ||||||||||
Portfolio Turnover Rate | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||
Net Assets, End of Period (in thousands) | $4,814 | $6,342 | $10,622 | $2,494 | $7 |
(1) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Per-share amount was less than $0.005. |
(4) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
27
C Class | ||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||
2010(1) | ||||
Per-Share Data | ||||
Net Asset Value, Beginning of Period | $8.50 | |||
Income From Investment Operations | ||||
Net Investment Income (Loss)(2) | (0.05 | ) | ||
Net Realized and Unrealized Gain (Loss) | 1.37 | |||
Total From Investment Operations | 1.32 | |||
Net Asset Value, End of Period | $9.82 | |||
Total Return(3) | 15.53 | % | ||
Ratios/Supplemental Data | ||||
Ratio of Operating Expenses to Average Net Assets | 2.43 | %(4) | ||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.77 | )%(4) | ||
Portfolio Turnover Rate | 199 | %(5) | ||
Net Assets, End of Period (in thousands) | $77 |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements.
28
R Class | ||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||
2010(1) | ||||
Per-Share Data | ||||
Net Asset Value, Beginning of Period | $8.50 | |||
Income From Investment Operations | ||||
Net Investment Income (Loss)(2) | (0.01 | ) | ||
Net Realized and Unrealized Gain (Loss) | 1.37 | |||
Total From Investment Operations | 1.36 | |||
Net Asset Value, End of Period | $9.86 | |||
Total Return(3) | 16.00 | % | ||
Ratios/Supplemental Data | ||||
Ratio of Operating Expenses to Average Net Assets | 1.93 | %(4) | ||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.16 | )%(4) | ||
Portfolio Turnover Rate | 199 | %(5) | ||
Net Assets, End of Period (in thousands) | $29 |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | 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. |
(4) | Annualized. |
(5) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements. |
29
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Discovery Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Discovery Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
30
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor and A Classes | For: | 576,165,190 | |
Against: | 13,154,779 | ||
Abstain: | 18,761,959 | ||
Broker Non-Vote: | 29,916,928 | ||
Institutional Class | For: | 71,851,460 | |
Against: | 2,460 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 10,252 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
31
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
32
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
33
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
34
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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.
35
Notes |
36
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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 Device for the Deaf | 1-800-634-4113 |
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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70206 1101
ANNUAL REPORT NOVEMBER 30, 2010
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![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/frontpagebanner.jpg)
International Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 15 |
Statement of Operations | 16 |
Statement of Changes in Net Assets | 17 |
Notes to Financial Statements | 18 |
Financial Highlights | 26 |
Report of Independent Registered Public Accounting Firm | 32 |
Other Information | |
Proxy Voting Results | 33 |
Management | 34 |
Additional Information | 37 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
3
Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
4
Performance |
Total Returns as of November 30, 2010 | ||||||||||
Average Annual Returns | ||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||
Investor Class | TWIEX | 7.28 | % | 3.61 | % | 1.48 | % | 7.85 | % | 5/9/91 |
MSCI EAFE Index | — | 1.11 | % | 1.80 | % | 3.06 | % | 5.12 | %(1) | — |
MSCI EAFE Growth Index | — | 6.14 | % | 2.96 | % | 2.10 | % | 3.68 | %(1) | — |
Institutional Class | TGRIX | 7.38 | % | 3.79 | % | 1.68 | % | 5.18 | % | 11/20/97 |
A Class(2) No sales charge* With sales charge* | TWGAX | 6.98 0.85 | % % | 3.33 2.12 | % % | 1.21 0.62 | % % | 5.84 5.40 | % % | 10/2/96 |
B Class No sales charge* With sales charge* | CBIGX | 6.15 2.15 | % % | 2.58 2.40 | % % | — — | 7.77 7.77 | % % | 1/31/03 | |
C Class | AIWCX | 6.18 | % | 2.57 | % | — | 1.85 | % | 6/4/01 | |
R Class | ATGRX | 6.75 | % | 3.09 | % | — | 6.96 | % | 8/29/03 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
(1) | Since 4/30/91, the date nearest the Investor Class’s inception for which data are available. |
(2) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the indices do not.
5
Growth of $10,000 Over 10 Years |
$10,000 investment made November 30, 2000 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/intlgrowthchart.jpg)
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.40% | 1.20% | 1.65% | 2.40% | 2.40% | 1.90% |
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 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.
6
Portfolio Commentary |
Portfolio Managers: Alex Tedder and Raj Gandhi
Performance Summary
The International Growth portfolio returned 7.28%* for the 12 months ended November 30, 2010, compared with its benchmarks, the MSCI EAFE Index and the MSCI EAFE Growth Index, which returned 1.11% and 6.14%, respectively.
After several eurozone nations came close to defaulting on their sovereign debt during the first half of the reporting period, international stocks generally rebounded to finish the year with gains. In many markets, improving business conditions and confidence and solid corporate earnings reports helped propel stocks. Within the developed markets, growth stocks sharply outpaced their value counterparts, while small- and mid-cap stocks significantly outperformed large-cap stocks.
Overall, stock selection, particularly in the financials and energy sectors, drove the portfolio’s outperformance relative to the benchmark. Our sector allocations, including an underweight in financials and an overweight in consumer discretionary stocks, also had an overall positive influence on the portfolio’s relative performance.
European Nations, Emerging Markets Were Top Contributors
From a regional perspective, Europe contributed the most to relative performance, with stock selection in Italy, France, and the United Kingdom generating positive results. In Italy, our overweight position in Saipem, an oil and gas services company, drove results, while our overweight position in luxury goods company LVMH Moet Hennessy Louis Vuitton SA led performance in France. Overall, the developing markets sharply outperformed their developed market counterparts. Specifically, our portfolio-only positions in Taiwan, China, South Korea, and India contributed positively to the portfolio’s performance.
At the opposite end of the spectrum, modest exposure to Singapore and Hong Kong detracted from relative performance, primarily due to weak stock selection.
Financials, Information Technology Led Sector Results
The portfolio’s financials stocks led all sectors on a relative basis. In general, the financials sector continued to struggle, primarily due to the debt problems plaguing several countries in Europe. But, late in the period, European regulators announced that all but seven of 91 of the continent’s largest banks passed the stress test administered to analyze the financial soundness of the beleaguered banking industry, which helped spark a recovery in the sector. Our stock selection in the commercial banking and insurance industries drove the sector’s outperformance.
Propelled by strong stock selection and investor interest in traditional growth sectors, the portfolio’s information technology segment also helped drive relative performance. In particular, our selections in the communications equipment and semiconductor industries generated solid results. HTC, the Taiwan-based cellular handset maker, was the portfolio’s top-performing stock. The company, a portfolio-only holding, posted considerable market share gains on growing demand for its smartphones that run on Google’s Android operating system. Our overweighted position in United Kingdom-based ARM Holdings, which develops and licenses semiconductor chip technology, represented the second-best contributor to portfolio performance. The company’s stock surged on soaring revenues and margins stemming from licensing deals with smartphone makers, including Apple. It also announced a new licensing deal with software giant Microsoft and benefited from mergers-and-acquisitions activity in the wireless semiconductor chip space.
*All fund returns referenced in this commentary are for Investor Class shares.
7
Our portfolio-only position in Hyundai Motor Co. continued to deliver strong results, landing the South Korean automaker among the portfolio’s top contributors for the 12-month period. With its line of affordable cars, Hyundai continued to gain market share in a difficult economic climate for automakers.
Materials, Consumer Staples Sectors Lagged
The materials sector represented the portfolio’s largest detractor to relative performance. Stock selection dragged down results, particularly in the metals and mining segment. Specifically, our overweighted position in United Kingdom-based Lonmin was the worst performer. The company, which operates South African mines specializing in platinum and palladium production, faced a spring slump in both metals’ prices while contending with a lengthy delay in the restart of its largest smelter, which broke down in late March.
Additionally, in the sector’s construction materials segment, German cement producer HeidelbergCement was among the portfolio’s largest performance detractors. In addition to suffering from plunging operating income in 2009, the company faced waning demand in the U.S. and Europe throughout much of 2010.
The portfolio’s consumer staples sector also detracted from performance. While stock selection was positive, a slightly overweighted position relative to the benchmark led to underperformance.
Outlook
Global economic activity is improving, but sovereign debt concerns in Europe, combined with the potential for rising inflation throughout the world, remain headwinds. The varied government responses may lead to divergent economic performance in the months ahead. We expect further volatility throughout the international stock markets, yet we will continue to focus on finding companies located in developed countries around the world (excluding the United States) with sustainable growth characteristics and promising long-term outlooks.
8
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
BHP Billiton Ltd. | 2.2% |
HSBC Holdings plc (Hong Kong) | 1.9% |
Nestle SA | 1.8% |
BG Group plc | 1.8% |
Saipem SpA | 1.8% |
Vodafone Group plc | 1.6% |
Xstrata plc | 1.5% |
Mitsubishi Corp. | 1.3% |
SOFTBANK CORP. | 1.3% |
Siemens AG | 1.3% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights | 99.5% |
Temporary Cash Investments | 0.6% |
Other Assets and Liabilities | (0.1)% |
Investments by Country | |
% of net assets as of 11/30/10 | |
United Kingdom | 19.1% |
Japan | 11.8% |
Switzerland | 10.8% |
France | 8.7% |
Germany | 7.6% |
Sweden | 4.3% |
People’s Republic of China | 3.8% |
Australia | 3.2% |
Netherlands | 3.2% |
Taiwan (Republic of China) | 2.5% |
Hong Kong | 2.2% |
Spain | 2.0% |
Other Countries | 20.3% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities. |
9
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
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 persona l accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
10
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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 – 11/30/10 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,175.80 | $7.43 | 1.34% |
Institutional Class | $1,000 | $1,177.10 | $6.32 | 1.14% |
A Class | $1,000 | $1,174.70 | $8.81 | 1.59% |
B Class | $1,000 | $1,169.90 | $12.94 | 2.34% |
C Class | $1,000 | $1,171.10 | $12.94 | 2.34% |
R Class | $1,000 | $1,172.70 | $10.19 | 1.84% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.65 | $6.89 | 1.34% |
Institutional Class | $1,000 | $1,019.67 | $5.87 | 1.14% |
A Class | $1,000 | $1,017.38 | $8.17 | 1.59% |
B Class | $1,000 | $1,013.56 | $12.01 | 2.34% |
C Class | $1,000 | $1,013.56 | $12.01 | 2.34% |
R Class | $1,000 | $1,016.10 | $9.45 | 1.84% |
*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 186, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
11
Schedule of Investments |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 99.5% | ||||||||
AUSTRALIA — 3.2% | ||||||||
BHP Billiton Ltd. | 866,526 | $35,498,355 | ||||||
Wesfarmers Ltd. | 519,711 | 15,671,579 | ||||||
51,169,934 | ||||||||
AUSTRIA — 0.5% | ||||||||
Erste Group Bank AG | 192,142 | 7,515,968 | ||||||
BELGIUM — 1.2% | ||||||||
Anheuser-Busch InBev NV | 173,069 | 9,418,544 | ||||||
Umicore | 214,684 | 10,188,196 | ||||||
19,606,740 | ||||||||
BERMUDA — 1.0% | ||||||||
Seadrill Ltd. | 309,270 | 9,468,821 | ||||||
Signet Jewelers Ltd.(1) | 165,150 | 6,577,924 | ||||||
16,046,745 | ||||||||
BRAZIL — 1.8% | ||||||||
Banco Santander Brasil SA ADR | 983,670 | 12,836,894 | ||||||
Vale SA Preference Shares | 595,400 | 16,668,144 | ||||||
29,505,038 | ||||||||
CANADA — 0.8% | ||||||||
Canadian National Railway Co. | 197,969 | 12,647,028 | ||||||
DENMARK — 1.3% | ||||||||
Carlsberg A/S B Shares | 57,909 | 5,466,015 | ||||||
Novo Nordisk A/S B Shares | 163,517 | 16,174,718 | ||||||
21,640,733 | ||||||||
FINLAND — 1.0% | ||||||||
Fortum Oyj | 598,081 | 15,782,973 | ||||||
FRANCE — 8.7% | ||||||||
Accor SA | 309,497 | 13,082,747 | ||||||
Air Liquide SA | 144,697 | 16,941,719 | ||||||
BNP Paribas | 278,149 | 16,463,940 | ||||||
Cie Generale d’Optique Essilor International SA | 51,083 | 3,191,749 | ||||||
Danone SA | 238,556 | 13,973,300 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 119,996 | 18,200,650 | ||||||
Pernod-Ricard SA | 65,667 | 5,352,160 | ||||||
Publicis Groupe SA | 219,798 | 9,821,755 | ||||||
Safran SA | 464,250 | 14,544,227 | ||||||
Schneider Electric SA | 126,367 | 17,739,919 | ||||||
Total SA | 242,473 | 11,744,601 | ||||||
141,056,767 | ||||||||
GERMANY — 7.6% | ||||||||
adidas AG | 116,031 | 7,283,695 | ||||||
Allianz SE | 151,370 | 16,603,052 | ||||||
BASF SE | 224,750 | 16,774,862 | ||||||
Bayerische Motoren Werke AG | 174,818 | $13,145,621 | ||||||
Daimler AG(1) | 223,131 | 14,444,107 | ||||||
Deutsche Boerse AG | 50,339 | 3,044,309 | ||||||
Fresenius Medical Care AG & Co. KGaA | 201,164 | 11,612,048 | ||||||
Metro AG | 181,503 | 13,019,254 | ||||||
SAP AG | 135,654 | 6,328,519 | ||||||
Siemens AG | 192,463 | 21,057,884 | ||||||
123,313,351 | ||||||||
HONG KONG — 2.2% | ||||||||
CNOOC Ltd. | 3,799,000 | 8,238,807 | ||||||
Li & Fung Ltd. | 2,952,000 | 18,399,866 | ||||||
Link Real Estate Investment Trust (The) | 1,360,000 | 4,264,723 | ||||||
Sun Hung Kai Properties Ltd. | 295,000 | 4,877,980 | ||||||
35,781,376 | ||||||||
INDIA — 1.4% | ||||||||
Housing Development Finance Corp. Ltd. | 299,190 | 4,477,254 | ||||||
Infosys Technologies Ltd. | 214,370 | 14,253,958 | ||||||
Larsen & Toubro Ltd. | 93,370 | 3,968,098 | ||||||
22,699,310 | ||||||||
INDONESIA — 0.9% | ||||||||
PT Bank Mandiri (Persero) Tbk | 7,592,000 | 5,378,437 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 4,778,500 | 5,553,935 | ||||||
PT United Tractors Tbk | 1,677,000 | 4,269,537 | ||||||
15,201,909 | ||||||||
IRELAND — 0.8% | ||||||||
Ryanair Holdings plc ADR | 401,712 | 12,264,267 | ||||||
ISRAEL — 0.5% | ||||||||
Teva Pharmaceutical Industries Ltd. ADR | 168,052 | 8,409,322 | ||||||
ITALY — 1.8% | ||||||||
Saipem SpA | 680,673 | 28,326,536 | ||||||
JAPAN — 11.8% | ||||||||
Canon, Inc. | 392,600 | 18,506,476 | ||||||
FANUC CORP. | 84,900 | 12,163,353 | ||||||
Fujitsu Ltd. | 872,000 | 5,595,221 | ||||||
Komatsu Ltd. | 704,400 | 19,510,087 | ||||||
Mitsubishi Corp. | 853,500 | 21,579,711 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 2,376,400 | 11,244,526 | ||||||
Murata Manufacturing Co. Ltd. | 79,300 | 4,841,952 | ||||||
Nissan Motor Co. Ltd. | 1,934,300 | 18,143,452 | ||||||
Nitori Holdings Co. Ltd. | 115,100 | 10,136,062 |
12
Shares | Value | |||||||
ORIX Corp. | 146,790 | $12,540,907 | ||||||
Rakuten, Inc. | 9,240 | 7,077,118 | ||||||
SOFTBANK CORP. | 617,600 | 21,400,884 | ||||||
Sumitomo Realty & Development Co. Ltd. | 567,000 | 12,208,555 | ||||||
Unicharm Corp. | 296,900 | 11,600,705 | ||||||
Yahoo Japan Corp. | 12,407 | 4,447,485 | ||||||
190,996,494 | ||||||||
LUXEMBOURG — 0.3% | ||||||||
Millicom International Cellular SA | 54,133 | 4,697,662 | ||||||
MACAU — 0.3% | ||||||||
Wynn Macau Ltd. | 2,406,385 | 4,877,786 | ||||||
NETHERLANDS — 3.2% | ||||||||
ASML Holding NV | 300,404 | 9,717,290 | ||||||
CNH Global NV(1) | 199,095 | 8,246,515 | ||||||
Royal Dutch Shell plc B Shares | 700,394 | 20,786,283 | ||||||
Unilever NV CVA | 427,958 | 12,071,252 | ||||||
50,821,340 | ||||||||
NORWAY — 1.6% | ||||||||
Petroleum Geo-Services ASA(1) | 337,130 | 4,091,818 | ||||||
Telenor ASA | 586,078 | 8,424,700 | ||||||
Yara International ASA | 283,329 | 13,486,211 | ||||||
26,002,729 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 3.8% | ||||||||
Baidu, Inc. ADR(1) | 140,634 | 14,793,290 | ||||||
China Unicom (Hong Kong) Ltd. ADR | 499,598 | 6,714,597 | ||||||
Ctrip.com International Ltd. ADR(1) | 201,218 | 8,817,373 | ||||||
Focus Media Holding Ltd. ADR(1) | 241,795 | 5,641,077 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 12,887,000 | 10,024,015 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares Rights(1) | 789,435 | 259,245 | ||||||
Lenovo Group Ltd. | 13,892,000 | 9,338,739 | ||||||
ZTE Corp. H Shares | 1,335,200 | 4,909,140 | ||||||
60,497,476 | ||||||||
POLAND — 1.2% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 1,351,095 | 18,733,743 | ||||||
RUSSIAN FEDERATION — 1.3% | ||||||||
Magnit OJSC GDR | 379,384 | 10,015,738 | ||||||
Sberbank of Russia | 3,416,730 | 10,865,201 | ||||||
20,880,939 | ||||||||
SINGAPORE — 0.3% | ||||||||
United Overseas Bank Ltd. | 304,457 | 4,265,880 | ||||||
SOUTH KOREA — 1.7% | ||||||||
Hyundai Motor Co. | 122,673 | $18,251,762 | ||||||
Samsung Electronics Co. Ltd. | 12,593 | 8,971,725 | ||||||
27,223,487 | ||||||||
SPAIN — 2.0% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 396,614 | 3,643,415 | ||||||
Banco Santander SA | 874,668 | 8,288,148 | ||||||
Inditex SA | 148,978 | 11,227,695 | ||||||
Telefonica SA | 449,444 | 9,561,939 | ||||||
32,721,197 | ||||||||
SWEDEN — 4.3% | ||||||||
Alfa Laval AB | 563,833 | 9,901,160 | ||||||
Atlas Copco AB A Shares | 858,194 | 18,950,714 | ||||||
Swedbank AB A Shares(1) | 1,123,401 | 14,200,551 | ||||||
Telefonaktiebolaget LM Ericsson B Shares | 807,424 | 8,329,285 | ||||||
Volvo AB B Shares(1) | 1,204,452 | 17,485,735 | ||||||
68,867,445 | ||||||||
SWITZERLAND — 10.8% | ||||||||
Adecco SA | 99,080 | 5,641,829 | ||||||
Givaudan SA | 12,109 | 12,137,353 | ||||||
Holcim Ltd. | 100,081 | 6,446,706 | ||||||
Kuehne + Nagel International AG | 73,331 | 9,403,377 | ||||||
Nestle SA | 532,043 | 28,917,397 | ||||||
Novartis AG | 389,503 | 20,665,605 | ||||||
Roche Holding AG | 105,192 | 14,442,742 | ||||||
SGS SA | 8,043 | 13,166,591 | ||||||
Sonova Holding AG | 68,713 | 8,578,428 | ||||||
Swatch Group AG (The) | 44,366 | 17,814,475 | ||||||
UBS AG(1) | 824,914 | 12,353,368 | ||||||
Xstrata plc | 1,196,171 | 24,038,748 | ||||||
173,606,619 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.5% | ||||||||
AU Optronics Corp.(1) | 6,902,000 | 6,905,962 | ||||||
Hon Hai Precision Industry Co. Ltd. | 2,654,760 | 9,449,404 | ||||||
HTC Corp. | 703,000 | 19,487,739 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 475,090 | 5,107,218 | ||||||
40,950,323 | ||||||||
TURKEY — 0.6% | ||||||||
Turkiye Garanti Bankasi AS | 1,769,680 | 9,813,905 | ||||||
UNITED KINGDOM — 19.1% | ||||||||
Admiral Group plc | 535,810 | 12,734,744 | ||||||
Antofagasta plc | 896,257 | 18,332,191 | ||||||
ARM Holdings plc | 2,136,339 | 13,152,309 | ||||||
Barclays plc | 4,624,695 | 18,426,104 |
13
Shares | Value | |||||||
BG Group plc | 1,573,357 | $28,425,136 | ||||||
British Airways plc(1) | 1,402,674 | 5,576,653 | ||||||
British American Tobacco plc | 357,177 | 12,947,581 | ||||||
Burberry Group plc | 413,811 | 6,410,877 | ||||||
Capita Group plc (The) | 393,012 | 3,985,745 | ||||||
Carnival plc | 345,725 | 14,100,013 | ||||||
Compass Group plc | 1,651,264 | 14,267,787 | ||||||
HSBC Holdings plc (Hong Kong) | 3,073,612 | 31,250,295 | ||||||
International Power plc | 622,975 | 3,948,701 | ||||||
Lloyds Banking Group plc(1) | 5,554,288 | 5,219,072 | ||||||
Petrofac Ltd. | 495,304 | 10,716,551 | ||||||
Reckitt Benckiser Group plc | 280,852 | 14,852,942 | ||||||
Reed Elsevier plc | 781,019 | 6,183,515 | ||||||
Rolls-Royce Group plc C Shares(1) | 59,174,912 | 92,044 | ||||||
Schroders plc | 719,046 | 17,850,304 | ||||||
Standard Chartered plc | 618,992 | 16,666,260 | ||||||
Tesco plc | 2,833,838 | 18,261,902 | ||||||
Tullow Oil plc | 174,494 | 3,113,150 | ||||||
Vodafone Group plc | 10,251,517 | 25,632,748 | ||||||
Wolseley plc(1) | 239,167 | 6,383,731 | ||||||
308,530,355 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $1,269,362,793) | 1,604,455,377 | |||||||
Temporary Cash Investments — 0.6% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 47,694 | 47,694 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $8,990,559), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $8,800,051) | 8,800,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $8,847,694) | 8,847,694 | |||||||
TOTAL INVESTMENT SECURITIES — 100.1% (Cost $1,278,210,487) | 1,613,303,071 | |||||||
OTHER ASSETS AND LIABILITIES — (0.1)% | (1,492,534 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $1,611,810,537 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 19.3% |
Consumer Discretionary | 15.1% |
Industrials | 14.8% |
Consumer Staples | 10.6% |
Materials | 10.6% |
Information Technology | 10.2% |
Energy | 7.8% |
Health Care | 5.2% |
Telecommunication Services | 4.7% |
Utilities | 1.2% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities.
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.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $1,278,210,487) | $1,613,303,071 | |||
Foreign currency holdings, at value (cost of $84,131) | 84,078 | |||
Receivable for investments sold | 12,672,826 | |||
Receivable for capital shares sold | 520,688 | |||
Dividends and interest receivable | 5,327,647 | |||
Other assets | 1,492,807 | |||
1,633,401,117 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 16,946 | |||
Payable for investments purchased | 17,128,072 | |||
Payable for capital shares redeemed | 1,979,385 | |||
Accrued management fees | 1,813,328 | |||
Distribution and service fees payable | 44,667 | |||
Accrued foreign taxes | 608,182 | |||
21,590,580 | ||||
Net Assets | $1,611,810,537 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $1,611,004,138 | |||
Undistributed net investment income | 18,737,564 | |||
Accumulated net realized loss | (352,494,327 | ) | ||
Net unrealized appreciation | 334,563,162 | |||
$1,611,810,537 |
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Investor Class, $0.01 Par Value | $1,320,906,021 | 128,258,634 | $10.30 | |||||||||
Institutional Class, $0.01 Par Value | $98,610,229 | 9,569,355 | $10.30 | |||||||||
A Class, $0.01 Par Value | $183,990,215 | 17,876,260 | $10.29 | * | ||||||||
B Class, $0.01 Par Value | $1,232,790 | 120,963 | $10.19 | |||||||||
C Class, $0.01 Par Value | $2,690,696 | 265,652 | $10.13 | |||||||||
R Class, $0.01 Par Value | $4,380,586 | 424,474 | $10.32 |
* Maximum offering price $10.92 (net asset value divided by 0.9425)
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $3,095,024) | $33,739,327 | |||
Interest | 3,598 | |||
33,742,925 | ||||
Expenses: | ||||
Management fees | 20,223,069 | |||
Distribution and service fees: | ||||
A Class | 444,568 | |||
B Class | 13,095 | |||
C Class | 28,201 | |||
R Class | 23,607 | |||
Directors’ fees and expenses | 51,521 | |||
Other expenses | 63,097 | |||
20,847,158 | ||||
Net investment income (loss) | 12,895,767 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $23,458) | 119,015,936 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $151,106) | 14,580,955 | |||
133,596,891 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $608,182) | 14,467,110 | |||
Translation of assets and liabilities in foreign currencies | (62,818,037 | ) | ||
(48,350,927 | ) | |||
Net realized and unrealized gain (loss) | 85,245,964 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $98,141,731 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $12,895,767 | $15,019,787 | ||||||
Net realized gain (loss) | 133,596,891 | (172,012,014 | ) | |||||
Change in net unrealized appreciation (depreciation) | (48,350,927 | ) | 593,662,338 | |||||
Net increase (decrease) in net assets resulting from operations | 98,141,731 | 436,670,111 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (19,906,669 | ) | (18,150,440 | ) | ||||
Institutional Class | (1,322,640 | ) | (723,098 | ) | ||||
A Class | (1,881,933 | ) | (2,178,683 | ) | ||||
B Class | — | (9,776 | ) | |||||
C Class | — | (24,583 | ) | |||||
R Class | (29,305 | ) | (35,665 | ) | ||||
Decrease in net assets from distributions | (23,140,547 | ) | (21,122,245 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | 2,472,875 | (85,157,099 | ) | |||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 47,277 | 39,738 | ||||||
Net increase (decrease) in net assets | 77,521,336 | 330,430,505 | ||||||
Net Assets | ||||||||
Beginning of period | 1,534,289,201 | 1,203,858,696 | ||||||
End of period | $1,611,810,537 | $1,534,289,201 | ||||||
Undistributed net investment income | $18,737,564 | $21,121,448 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing primarily in equity securities of companies in at least three developed countries (excluding the United States). The fund is authorized to issue the Investor Class, the Institutional Class, the A Class, the B Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class, B Class and C Class may be subject to a contingent defe rred 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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
18
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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.
19
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
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 to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 10), 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 f und’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 include the assets of NT International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.10% to 1.50% for the Investor Class, A Class, B Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.34% for the Investor Class, A Class, B Class, C Class and R Class and 1.14% for the Institutional Class.
20
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 10), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay American Century Investment Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each 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 year ended November 30, 2010, are detailed in the Statement of Operations.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $1,954,797,171 and $2,035,916,506, respectively.
21
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010 | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 1,050,000,000 | 1,000,000,000 | ||||||||||||||
Sold | 8,998,458 | $87,341,556 | 12,516,913 | $96,703,854 | ||||||||||||
Issued in connection with reorganization (Note 9) | 6,962,925 | 74,712,185 | — | — | ||||||||||||
Issued in reinvestment of distributions | 1,715,678 | 16,876,319 | 2,043,214 | 15,589,724 | ||||||||||||
Redeemed | (20,641,413 | ) | (195,052,248 | ) | (25,833,107 | ) | (196,779,172 | ) | ||||||||
(2,964,352 | ) | (16,122,188 | ) | (11,272,980 | ) | (84,485,594 | ) | |||||||||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||||||||
Sold | 4,557,606 | 41,463,495 | 3,533,605 | 25,915,890 | ||||||||||||
Issued in reinvestment of distributions | 124,940 | 1,229,822 | 88,473 | 675,052 | ||||||||||||
Redeemed | (1,958,144 | ) | (18,855,853 | ) | (1,961,908 | ) | (14,985,413 | ) | ||||||||
2,724,402 | 23,837,464 | 1,660,170 | 11,605,529 | |||||||||||||
A Class/Shares Authorized | 125,000,000 | 125,000,000 | ||||||||||||||
Sold | 4,383,626 | 42,679,057 | 5,639,882 | 42,702,246 | ||||||||||||
Issued in reinvestment of distributions | 128,516 | 1,263,884 | 210,171 | 1,601,500 | ||||||||||||
Redeemed | (4,926,258 | ) | (47,071,221 | ) | (7,312,770 | ) | (56,894,013 | ) | ||||||||
(414,116 | ) | (3,128,280 | ) | (1,462,717 | ) | (12,590,267 | ) | |||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 530 | 5,119 | 18,871 | 154,787 | ||||||||||||
Issued in reinvestment of distributions | — | — | 971 | 7,361 | ||||||||||||
Redeemed | (31,944 | ) | (307,445 | ) | (39,492 | ) | (266,327 | ) | ||||||||
(31,414 | ) | (302,326 | ) | (19,650 | ) | (104,179 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 20,492 | 198,669 | 36,318 | 302,120 | ||||||||||||
Issued in reinvestment of distributions | — | — | 2,254 | 16,969 | ||||||||||||
Redeemed | (74,746 | ) | (691,551 | ) | (177,382 | ) | (1,285,116 | ) | ||||||||
(54,254 | ) | (492,882 | ) | (138,810 | ) | (966,027 | ) | |||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 136,723 | 1,333,762 | 318,322 | 2,509,562 | ||||||||||||
Issued in reinvestment of distributions | 2,819 | 27,821 | 4,389 | 33,532 | ||||||||||||
Redeemed | (274,140 | ) | (2,680,496 | ) | (146,076 | ) | (1,159,655 | ) | ||||||||
(134,598 | ) | (1,318,913 | ) | 176,635 | 1,383,439 | |||||||||||
Net increase (decrease) | (874,332 | ) | $2,472,875 | (11,057,352 | ) | $(85,157,099 | ) |
22
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $94,106,139 | $1,510,349,238 | — | |||||||||
Temporary Cash Investments | 47,694 | 8,800,000 | — | |||||||||
Total Value of Investment Securities | $94,153,833 | $1,519,149,238 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
On December 21, 2010, the fund declared and paid the following per-share distributions from net investment income to shareholders of record on December 20, 2010:
Investor | Institutional | A | B | C | R |
$0.0685 | $0.0904 | $0.0412 | — | — | $0.0138 |
The tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $23,140,547 | $21,122,245 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
23
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $1,317,079,742 | |||
Gross tax appreciation of investments | $315,338,764 | |||
Gross tax depreciation of investments | (19,115,435 | ) | ||
Net tax appreciation (depreciation) of investments | $296,223,329 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(550,276 | ) | ||
Net tax appreciation (depreciation) | $295,673,053 | |||
Undistributed ordinary income | $22,963,092 | |||
Accumulated capital losses | $(317,829,746 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
The accumulated capital losses 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 of $(8,397,447), $(36,440,654) and $(272,991,645) expire in 2015, 2016 and 2017, respectively.
9. Reorganization Plan
On June 10, 2010, the Board of Directors approved a plan of reorganization (the reorganization), pursuant to which International Growth acquired all of the assets of International Stock Fund (International Stock), one fund in a series issued by the corporation, in exchange for shares of equal value of International Growth and assumption by International Growth of certain ordinary course liabilities of International Stock. The financial statements and performance history of International Growth were carried over post-reorganization. The reorganization was effective at the close of business on October 29, 2010.
The reorganization was accomplished by a tax-free exchange of shares. On October 29, 2010, International Stock exchanged its shares for shares of International Growth as follows:
Original Fund/Class | Shares Exchanged | New Fund/Class | Shares Received | |
International Stock — Investor Class | 6,294,203 | International Growth — Investor Class | 6,962,925 |
The net assets of International Stock and International Growth immediately before the reorganization were $74,712,185 and $1,612,017,503, respectively. International Stock’s unrealized appreciation of $16,115,391 was combined with that of International Growth. Immediately after the reorganization, the combined net assets were $1,686,729,688. International Growth acquired capital loss carryovers of $(24,021,757) from International Stock.
Assuming the reorganization had been completed on December 1, 2009, the beginning of the annual reporting period, the pro forma results of operations for the year ended November 30, 2010, are as follows:
Net investment income (loss) | $13,368,410 | |||
Net realized and unrealized gain (loss) | 92,089,745 | |||
Net increase (decrease) in Net Assets Resulting from Operations | $105,458,155 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of International Stock that have been included in the Statement of Operations since October 29, 2010.
24
10. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement.
11. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
For the fiscal year ended November 30, 2010, the fund intends to pass through to shareholders $3,303,971, or up to the maximum amount allowable, as a foreign tax credit which represents taxes paid on income derived from sources within foreign countries or possessions of the United States. During the fiscal year ended November 30, 2010, the fund earned $36,849,272 from income derived from foreign sources. Foreign source income and foreign tax expense per outstanding share on November 30, 2010 are $0.0211 and $0.2354, respectively.
25
Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.75 | $7.15 | $14.87 | $12.17 | $9.75 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.09 | 0.09 | 0.14 | 0.13 | 0.06 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.61 | 2.64 | (6.96 | ) | 2.66 | 2.54 | ||||||||||||||
Total From Investment Operations | 0.70 | 2.73 | (6.82 | ) | 2.79 | 2.60 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.15 | ) | (0.13 | ) | (0.11 | ) | (0.09 | ) | (0.18 | ) | ||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | (0.15 | ) | (0.13 | ) | (0.90 | ) | (0.09 | ) | (0.18 | ) | ||||||||||
Net Asset Value, End of Period | $10.30 | $9.75 | $7.15 | $14.87 | $12.17 | |||||||||||||||
Total Return(2) | 7.28 | % | 38.66 | % | (48.67 | )% | 23.09 | % | 27.03 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.35 | % | 1.38 | % | 1.31 | % | 1.27 | % | 1.26 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.87 | % | 1.18 | % | 1.18 | % | 0.94 | % | 0.52 | % | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $1,320,906 | $1,279,615 | $1,018,753 | $2,267,093 | $2,352,967 |
(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. |
See Notes to Financial Statements.
26
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.78 | $7.17 | $14.91 | $12.20 | $9.78 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.10 | 0.11 | 0.15 | 0.17 | 0.07 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.61 | 2.64 | (6.96 | ) | 2.66 | 2.55 | ||||||||||||||
Total From Investment Operations | 0.71 | 2.75 | (6.81 | ) | 2.83 | 2.62 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.19 | ) | (0.14 | ) | (0.14 | ) | (0.12 | ) | (0.20 | ) | ||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | (0.19 | ) | (0.14 | ) | (0.93 | ) | (0.12 | ) | (0.20 | ) | ||||||||||
Net Asset Value, End of Period | $10.30 | $9.78 | $7.17 | $14.91 | $12.20 | |||||||||||||||
Total Return(2) | 7.38 | % | 38.96 | % | (48.55 | )% | 23.36 | % | 27.19 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.15 | % | 1.18 | % | 1.11 | % | 1.07 | % | 1.06 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.07 | % | 1.38 | % | 1.38 | % | 1.14 | % | 0.72 | % | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $98,610 | $66,920 | $37,160 | $80,452 | $125,814 |
(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. |
See Notes to Financial Statements.
27
A Class(1) | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.72 | $7.13 | $14.82 | $12.12 | $9.72 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.06 | 0.07 | 0.11 | 0.08 | 0.03 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.61 | 2.63 | (6.94 | ) | 2.68 | 2.52 | ||||||||||||||
Total From Investment Operations | 0.67 | 2.70 | (6.83 | ) | 2.76 | 2.55 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.10 | ) | (0.11 | ) | (0.07 | ) | (0.06 | ) | (0.15 | ) | ||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | (0.10 | ) | (0.11 | ) | (0.86 | ) | (0.06 | ) | (0.15 | ) | ||||||||||
Net Asset Value, End of Period | $10.29 | $9.72 | $7.13 | $14.82 | $12.12 | |||||||||||||||
Total Return(3) | 6.98 | % | 38.30 | % | (48.79 | )% | 22.87 | % | 26.57 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.60 | % | 1.63 | % | 1.56 | % | 1.52 | % | 1.51 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.62 | % | 0.93 | % | 0.93 | % | 0.69 | % | 0.27 | % | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $183,990 | $177,804 | $140,798 | $241,579 | $336,497 |
(1) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
28
B Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.60 | $7.04 | $14.68 | $12.04 | $9.65 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.01 | ) | 0.01 | 0.02 | — | (2) | (0.05 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.60 | 2.61 | (6.87 | ) | 2.64 | 2.52 | ||||||||||||||
Total From Investment Operations | 0.59 | 2.62 | (6.85 | ) | 2.64 | 2.47 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.06 | ) | — | — | (0.08 | ) | |||||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | — | (0.06 | ) | (0.79 | ) | — | (0.08 | ) | ||||||||||||
Net Asset Value, End of Period | $10.19 | $9.60 | $7.04 | $14.68 | $12.04 | |||||||||||||||
Total Return(3) | 6.15 | % | 37.36 | % | (49.18 | )% | 21.93 | % | 25.71 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.35 | % | 2.38 | % | 2.31 | % | 2.27 | % | 2.26 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.13 | )% | 0.18 | % | 0.18 | % | (0.06 | )% | (0.48 | )% | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $1,233 | $1,463 | $1,211 | $3,320 | $2,699 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
29
C Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.54 | $7.00 | $14.60 | $11.97 | $9.60 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.01 | ) | 0.01 | 0.02 | — | (2) | (0.05 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.60 | 2.59 | (6.83 | ) | 2.63 | 2.50 | ||||||||||||||
Total From Investment Operations | 0.59 | 2.60 | (6.81 | ) | 2.63 | 2.45 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | — | (0.06 | ) | — | — | (0.08 | ) | |||||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | — | (0.06 | ) | (0.79 | ) | — | (0.08 | ) | ||||||||||||
Net Asset Value, End of Period | $10.13 | $9.54 | $7.00 | $14.60 | $11.97 | |||||||||||||||
Total Return(3) | 6.18 | % | 37.29 | % | (49.18 | )% | 21.97 | % | 25.64 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.35 | % | 2.38 | % | 2.31 | % | 2.27 | % | 2.26 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.13 | )% | 0.18 | % | 0.18 | % | (0.06 | )% | (0.48 | )% | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $2,691 | $3,051 | $3,210 | $7,318 | $6,250 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
See Notes to Financial Statements.
30
R Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.72 | $7.13 | $14.81 | $12.12 | $9.71 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | 0.03 | 0.06 | 0.09 | 0.07 | 0.01 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.62 | 2.62 | (6.96 | ) | 2.65 | 2.53 | ||||||||||||||
Total From Investment Operations | 0.65 | 2.68 | (6.87 | ) | 2.72 | 2.54 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.05 | ) | (0.09 | ) | (0.02 | ) | (0.03 | ) | (0.13 | ) | ||||||||||
From Net Realized Gains | — | — | (0.79 | ) | — | — | ||||||||||||||
Total Distributions | (0.05 | ) | (0.09 | ) | (0.81 | ) | (0.03 | ) | (0.13 | ) | ||||||||||
Net Asset Value, End of Period | $10.32 | $9.72 | $7.13 | $14.81 | $12.12 | |||||||||||||||
Total Return(2) | 6.75 | % | 37.97 | % | (48.92 | )% | 22.48 | % | 26.39 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.85 | % | 1.88 | % | 1.81 | % | 1.77 | % | 1.76 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.37 | % | 0.68 | % | 0.68 | % | 0.44 | % | 0.02 | % | ||||||||||
Portfolio Turnover Rate | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||
Net Assets, End of Period (in thousands) | $4,381 | $5,436 | $2,727 | $4,042 | $2,106 |
(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. |
See Notes to Financial Statements.
31
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of asset and liabilities, including the schedule of investments, of International Growth Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Growth Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
32
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor, A, B, C and R Classes | For: | 888,157,189 | |
Against: | 17,832,892 | ||
Abstain: | 40,847,287 | ||
Broker Non-Vote: | 80,649,014 | ||
Institutional Class | For: | 51,273,686 | |
Against: | 60,104 | ||
Abstain: | 84,835 | ||
Broker Non-Vote: | 2,313,540 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
33
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
34
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst
& Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
35
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
36
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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.
37
Notes |
38
Notes |
39
Notes |
40
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/amcentlogo.jpg)
Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70202 1101
ANNUAL REPORT NOVEMBER 30, 2010
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International Opportunities Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 15 |
Statement of Operations | 16 |
Statement of Changes in Net Assets | 17 |
Notes to Financial Statements | 18 |
Financial Highlights | 25 |
Report of Independent Registered Public Accounting Firm | 30 |
Other Information | |
Proxy Voting Results | 31 |
Management | 32 |
Additional Information | 35 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors – working on behalf of shareholders – to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
3
Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
4
Performance |
Total Returns as of November 30, 2010 | ||||||||
Average Annual Returns | ||||||||
Ticker Symbol | 1 year | 5 years | Since Inception | Inception Date | ||||
Investor Class | AIOIX | 16.72 | % | 4.80 | % | 13.47 | % | 6/1/01 |
MSCI All Country World ex-U.S. Small Cap Growth Index | — | 19.40 | % | 6.20 | % | 8.55 | %(1) | — |
Institutional Class | ACIOX | 17.04 | % | 5.03 | % | 17.24 | % | 1/9/03 |
A Class No sales charge* With sales charge* | AIVOX | — — | — — | 14.87 8.20 | %(2) %(2) | 3/1/10 | ||
C Class No sales charge* With sales charge* | AIOCX | — — | — — | 14.34 13.34 | %(2) %(2) | 3/1/10 | ||
R Class | AIORX | — | — | 14.77 | %(2) | 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 for equity funds 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) | Since 5/31/01, the date nearest the Investor Class’s inception for which data are available. |
(2) | Total returns for periods less than one year are not annualized. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. 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 port folio turnover and high transaction costs. 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.
5
Growth of $10,000 Over Life of Class |
$10,000 investment made June 1, 2001 |
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*From 6/1/01, the Investor Class’s inception date. Index data from 5/31/01, the date nearest the Investor Class’s inception for which data are available. Not annualized.
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.95% | 1.75% | 2.20% | 2.95% | 2.45% |
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 port folio turnover and high transaction costs. 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.
6
Portfolio Commentary |
Portfolio Managers: Mark Kopinski and Trevor Gurwich
Performance Summary
The International Opportunities portfolio returned 16.72%* for the 12 months ended November 30, 2010, compared with its benchmark, the MSCI All Country World ex-U.S. Small Cap Growth Index, which returned 19.40%.
Stocks in many global markets generally struggled during the first half of the period, as several eurozone nations came close to defaulting on their sovereign debt. In the second half of the period, improving business conditions and
confidence and solid corporate earnings reports in several markets helped propel stocks and push 12-month returns into positive territory. Within the developed markets, growth stocks sharply outpaced their value counterparts, while small- and mid-cap stocks significantly outperformed large-cap stocks. Overall, emerging market stocks sharply outperformed their developed market counterparts.
The portfolio’s underperformance compared with the benchmark primarily was due to the impact of foreign currency values versus the U.S. dollar. The portfolio’s overweight to Europe primarily accounted for the negative currency effect, as the euro weakened during the period. Overall, our country and sector allocations were slightly negative, while stock selection was a positive influence on relative performance.
Norway, Germany Led Country Detractors
From a country perspective, Norway, Germany, and Canada were the weakest performers, with stock selection detracting from relative results. Our portfolio-only position in Canada’s DragonWave, a wireless network equipment producer, was among the portfolio’s largest performance detractors for the period. The company’s stock faltered in the wake of uncertainties regarding the diversification of future revenue prospects. In addition, our overweight position in Germany’s Kloeckner & Co., a producer and distributor of steel and metal products, was among the top detractors for the period. The company’s stock faltered on concerns about a rising U.S. dollar and falling euro exerting upward pressure on prices for steel and other raw materials, thereby cooling demand.
At the opposite end of the performance spectrum, Japan, Mexico and Switzerland made the greatest positive contributions to the portfolio’s relative performance. Stock selection was strong in each nation, while an underweight position in Japan also contributed favorably. Our overweight position in Mexico-based Genomma Lab Internacional, a developer of over-the-counter drugs, was the portfolio’s top contributor to relative performance. The company announced strong gains in net income and revenues, buoyed by large sales volumes in products launched within the last two years.
7
Industrials Stocks Lagged, Consumer Discretionary Outperformed
The industrials, information technology, and financials sectors represented the portfolio’s weakest contributors, as negative stock selection weighed on relative performance. In the industrials sector, our overweight position in U.K.-based Connaught, a building maintenance firm that manages public housing facilities, dragged down performance. The company’s stock plummeted after stating the U.K. government’s budget tightening efforts would slash the company’s revenues and cash flow in 2010 and possibly in 2011.
On a positive note, strong stock selection lifted results in the consumer discretionary, health care, and materials sectors. In the consumer discretionary sector, our overweight position in Brazil’s Cia Hering, a textile maker and apparel retailer, drove performance and finished the period as a leading contributor to relative performance. The company has benefited from the robust Brazilian economy, where almost all of its business occurs. In addition, our portfolio-only position in L‘Occitane International SA, a Luxembourg-based maker of beauty products, helped lift results, as investors remained optimistic about growing demand for the company’s established brands. L’Occitane went public in April and was one of a handful of initial public offerings (IPOs) we participated in during the period.
Outlook
Global economic activity is improving, but headwinds remain—namely, the mounting sovereign debt in developed nations and the potential for inflation throughout the world. Given this outlook, we currently favor companies benefiting from the corporate investment cycle and those with significant exposure to emerging markets. Among sectors, the portfolio remains heavily exposed to industrials and information technology, which we believe should benefit in the move from economic recovery to expansion. We expect further volatility throughout the international stock markets, yet we will continue to seek small-capitalization companies located around the world (excluding the United States) offering promising growth characteristics.
8
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Acergy SA | 2.0% |
Clicks Group Ltd. | 2.0% |
Nabtesco Corp. | 2.0% |
Telenet Group Holding NV | 1.9% |
Croda International plc | 1.9% |
GKN plc | 1.8% |
Safilo Group SpA | 1.7% |
Campbell Brothers Ltd. | 1.6% |
ASOS plc | 1.6% |
Pirelli & C SpA | 1.6% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks | 99.5% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | 0.2% |
Investments by Country | |
% of net assets as of 11/30/10 | |
United Kingdom | 18.5% |
Canada | 12.2% |
Japan | 8.6% |
People’s Republic of China | 6.5% |
Germany | 5.8% |
Australia | 4.3% |
Italy | 4.0% |
Brazil | 3.4% |
Switzerland | 3.2% |
Denmark | 3.1% |
Turkey | 3.0% |
Taiwan (Republic of China) | 2.4% |
India | 2.4% |
South Africa | 2.4% |
Mexico | 2.2% |
Norway | 2.1% |
Other Countries | 15.4% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities. |
9
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
10
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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 – 11/30/10 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,219.00 | $10.63 | 1.88% |
Institutional Class | $1,000 | $1,221.60 | $9.51 | 1.68% |
A Class | $1,000 | $1,216.60 | $12.03 | 2.13% |
C Class | $1,000 | $1,213.90 | $16.25 | 2.88% |
R Class | $1,000 | $1,216.20 | $13.44 | 2.38% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.90 | $9.66 | 1.88% |
Institutional Class | $1,000 | $1,016.92 | $8.63 | 1.68% |
A Class | $1,000 | $1,014.63 | $10.93 | 2.13% |
C Class | $1,000 | $1,010.80 | $14.76 | 2.88% |
R Class | $1,000 | $1,013.35 | $12.21 | 2.38% |
*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 186, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
11
Schedule of Investments |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks — 99.5% | ||||||||
AUSTRALIA — 4.3% | ||||||||
Atlas Iron Ltd.(1) | 188,814 | $528,456 | ||||||
Campbell Brothers Ltd. | 46,823 | 1,682,994 | ||||||
Flight Centre Ltd. | 40,698 | 887,846 | ||||||
Iluka Resources Ltd.(1) | 73,726 | 533,531 | ||||||
PanAust Ltd.(1) | 1,186,411 | 818,766 | ||||||
4,451,593 | ||||||||
BELGIUM — 1.9% | ||||||||
Telenet Group Holding NV(1) | 54,946 | 1,990,259 | ||||||
BRAZIL — 3.4% | ||||||||
Banco do Estado do Rio Grande do Sul Preference Shares, Class B | 80,300 | 912,777 | ||||||
Cia Hering | 65,300 | 1,149,777 | ||||||
Mills Estruturas e Servicos de Engenharia SA(1) | 99,600 | 1,437,711 | ||||||
3,500,265 | ||||||||
CANADA — 12.2% | ||||||||
Consolidated Thompson Iron Mines Ltd.(1) | 86,162 | 1,001,327 | ||||||
Continental Gold Ltd.(1) | 27,231 | 278,531 | ||||||
Detour Gold Corp.(1) | 27,700 | 850,253 | ||||||
Eastern Platinum Ltd.(1) | 321,897 | 486,036 | ||||||
Gran Tierra Energy, Inc.(1) | 165,854 | 1,238,929 | ||||||
Grande Cache Coal Corp.(1) | 150,753 | 1,405,393 | ||||||
Legacy Oil + Gas, Inc.(1) | 86,820 | 1,176,432 | ||||||
Major Drilling Group International, Inc. | 39,243 | 1,303,194 | ||||||
Quadra FNX Mining Ltd.(1) | 66,526 | 899,499 | ||||||
SEMAFO, Inc.(1) | 121,073 | 1,462,476 | ||||||
SXC Health Solutions Corp.(1) | 8,720 | 333,408 | ||||||
Trican Well Service Ltd. | 67,431 | 1,296,662 | ||||||
Ventana Gold Corp.(1) | 58,202 | 781,281 | ||||||
12,513,421 | ||||||||
DENMARK — 3.1% | ||||||||
Christian Hansen Holding A/S(1) | 77,710 | 1,500,839 | ||||||
FLSmidth & Co. A/S | 14,024 | 1,152,761 | ||||||
GN Store Nord A/S(1) | 63,710 | 528,129 | ||||||
3,181,729 | ||||||||
FINLAND — 1.0% | ||||||||
Outotec Oyj | 21,300 | 1,047,600 | ||||||
FRANCE — 1.0% | ||||||||
Alten Ltd. | 19,253 | 588,922 | ||||||
Ingenico | 15,943 | 473,911 | ||||||
1,062,833 | ||||||||
GERMANY — 5.8% | ||||||||
Asian Bamboo AG | 19,429 | $951,796 | ||||||
Bertrandt AG | 10,705 | 623,914 | ||||||
Dialog Semiconductor plc(1) | 42,282 | 787,039 | ||||||
ElringKlinger AG | 31,579 | 949,354 | ||||||
Gildemeister AG | 47,521 | 923,111 | ||||||
Pfeiffer Vacuum Technology AG | 6,359 | 711,933 | ||||||
Symrise AG | 39,209 | 988,131 | ||||||
5,935,278 | ||||||||
HONG KONG — 1.9% | ||||||||
Galaxy Entertainment Group Ltd.(1) | 851,000 | 864,688 | ||||||
Haier Electronics Group Co. Ltd.(1) | 669,000 | 625,483 | ||||||
KWG Property Holding Ltd. | 256,000 | 190,885 | ||||||
Oriental Watch Holdings Ltd. | 386,000 | 254,513 | ||||||
1,935,569 | ||||||||
INDIA — 2.4% | ||||||||
Corporation Bank | 40,713 | 629,040 | ||||||
Oberoi Realty Ltd.(1) | 7,991 | 46,952 | ||||||
S. Kumars Nationwide Ltd.(1) | 293,183 | 558,763 | ||||||
Strides Arcolab Ltd. | 55,420 | 472,130 | ||||||
TVS Motor Co. Ltd. | 406,840 | 724,394 | ||||||
2,431,279 | ||||||||
INDONESIA — 1.7% | ||||||||
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk | 984,000 | 1,236,263 | ||||||
PT Tower Bersama Infrastructure Tbk(1) | 1,844,000 | 556,221 | ||||||
1,792,484 | ||||||||
ISRAEL — 1.3% | ||||||||
Mellanox Technologies Ltd.(1) | 55,426 | 1,320,802 | ||||||
ITALY — 4.0% | ||||||||
Azimut Holding SpA | 26,880 | 214,234 | ||||||
Interpump Group SpA(1) | 78,801 | 487,656 | ||||||
Pirelli & C SpA | 215,821 | 1,640,258 | ||||||
Safilo Group SpA(1) | 113,838 | 1,798,330 | ||||||
4,140,478 | ||||||||
JAPAN — 8.6% | ||||||||
F.C.C. Co. Ltd. | 23,200 | 509,796 | ||||||
Hitachi Kokusai Electric, Inc. | 88,000 | 805,449 | ||||||
Horiba Ltd. | 30,200 | 804,708 | ||||||
Kakaku.com, Inc. | 108 | 527,805 | ||||||
Makino Milling Machine Co. Ltd.(1) | 145,000 | 1,067,272 | ||||||
Minebea Co. Ltd. | 156,000 | 924,555 |
12
Shares | Value | |||||||
Nabtesco Corp. | 109,000 | $2,012,247 | ||||||
Nifco, Inc. | 29,500 | 776,891 | ||||||
Sawai Pharmaceutical Co. Ltd. | 3,000 | 256,303 | ||||||
Start Today Co. Ltd. | 206 | 670,995 | ||||||
Tamron Co. Ltd. | 24,200 | 471,335 | ||||||
8,827,356 | ||||||||
LUXEMBOURG — 1.1% | ||||||||
L’Occitane International SA(1) | 407,300 | 1,098,883 | ||||||
MEXICO — 2.2% | ||||||||
Banco Compartamos SA de CV | 113,781 | 937,808 | ||||||
Genomma Lab Internacional SA de CV, Class B(1) | 573,122 | 1,340,016 | ||||||
2,277,824 | ||||||||
MULTI-NATIONAL — 0.2% | ||||||||
Market Vectors Small Cap Index ETF Trust(1) | 9,588 | 185,048 | ||||||
NETHERLANDS — 0.8% | ||||||||
Aalberts Industries NV | 48,172 | 843,525 | ||||||
NORWAY — 2.1% | ||||||||
Petroleum Geo-Services ASA(1) | 105,880 | 1,285,088 | ||||||
Schibsted ASA | 37,925 | 924,881 | ||||||
2,209,969 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 6.5% | ||||||||
51job, Inc. ADR(1) | 11,597 | 588,432 | ||||||
Ajisen (China) Holdings Ltd. | 320,000 | 539,851 | ||||||
ChinaCache International Holdings Ltd. ADR(1) | 21,790 | 603,583 | ||||||
Goodbaby International Holdings Ltd.(1) | 69,000 | 52,160 | ||||||
International Mining Machinery Holdings Ltd.(1) | 903,500 | 709,759 | ||||||
Kingdee International Software Group Co. Ltd. | 1,406,000 | 774,965 | ||||||
Mecox Lane Ltd. ADR(1) | 33,587 | 275,413 | ||||||
Shenguan Holdings Group Ltd. | 458,000 | 633,465 | ||||||
SouFun Holdings Ltd. ADR(1) | 7,370 | 542,579 | ||||||
Springland International Holdings Ltd.(1) | 475,000 | 389,049 | ||||||
Xingda International Holdings Ltd. | 1,613,000 | 1,595,323 | ||||||
6,704,579 | ||||||||
PHILIPPINES — 0.5% | ||||||||
International Container Terminal Services, Inc. | 559,500 | 524,412 | ||||||
SOUTH AFRICA — 2.4% | ||||||||
Clicks Group Ltd. | 329,541 | $2,018,759 | ||||||
Northam Platinum Ltd. | 64,380 | 403,921 | ||||||
2,422,680 | ||||||||
SOUTH KOREA — 1.6% | ||||||||
Daum Communications Corp.(1) | 2,994 | 197,551 | ||||||
Orion Corp. | 1,256 | 441,994 | ||||||
Sung Kwang Bend Co. Ltd. | 50,048 | 1,001,478 | ||||||
1,641,023 | ||||||||
SPAIN — 1.2% | ||||||||
Tecnicas Reunidas SA | 22,910 | 1,241,426 | ||||||
SWEDEN — 1.2% | ||||||||
Elekta AB B Shares | 27,844 | 937,127 | ||||||
Haldex AB(1) | 27,336 | 333,302 | ||||||
1,270,429 | ||||||||
SWITZERLAND — 3.2% | ||||||||
Clariant AG(1) | 85,298 | 1,539,979 | ||||||
Panalpina Welttransport Holding AG(1) | 9,797 | 1,125,486 | ||||||
Temenos Group AG(1) | 20,253 | 674,999 | ||||||
3,340,464 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.4% | ||||||||
J Touch Corp.(1) | 134,000 | 542,901 | ||||||
Largan Precision Co. Ltd. | 27,000 | 598,770 | ||||||
St. Shine Optical Co. Ltd. | 63,000 | 826,704 | ||||||
Young Fast Optoelectronics Co. Ltd. | 47,308 | 513,703 | ||||||
2,482,078 | ||||||||
TURKEY — 3.0% | ||||||||
Tekfen Holding AS | 336,054 | 1,345,199 | ||||||
Turk Ekonomi Bankasi AS | 442,269 | 676,387 | ||||||
Turkiye Sise ve Cam Fabrikalari AS(1) | 625,657 | 1,065,019 | ||||||
3,086,605 | ||||||||
UNITED KINGDOM — 18.5% | ||||||||
Aberdeen Asset Management plc | 184,656 | 514,130 | ||||||
Acergy SA | 105,549 | 2,100,004 | ||||||
Ashtead Group plc | 339,471 | 691,192 | ||||||
ASOS plc(1) | 80,427 | 1,655,075 | ||||||
Blinkx plc(1) | 410,194 | 453,006 | ||||||
Carphone Warehouse Group plc(1) | 94,116 | 561,416 | ||||||
Croda International plc | 87,918 | 1,988,375 | ||||||
GKN plc | 628,030 | 1,836,514 | ||||||
IG Group Holdings plc | 103,491 | 790,549 | ||||||
Imagination Technologies Group plc(1) | 135,272 | 755,368 |
13
Shares | Value | |||||||
Millennium & Copthorne Hotels plc | 99,761 | $821,642 | ||||||
Paragon Group of Cos. plc | 192,895 | 494,464 | ||||||
Premier Oil plc(1) | 39,731 | 1,134,640 | ||||||
Rightmove plc | 76,081 | 887,551 | ||||||
Rotork plc | 21,089 | 517,958 | ||||||
Spectris plc | 48,208 | 855,580 | ||||||
Spirax-Sarco Engineering plc | 26,858 | 751,137 | ||||||
SuperGroup plc(1) | 17,433 | 425,724 | ||||||
Telecity Group plc(1) | 114,260 | 832,467 | ||||||
Weir Group plc (The) | 34,866 | 943,642 | ||||||
19,010,434 | ||||||||
TOTAL COMMON STOCKS (Cost $86,125,611) | 102,470,325 | |||||||
Temporary Cash Investments — 0.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 71,951 | 71,951 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $204,331), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $200,001) | 200,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $271,951) | 271,951 | |||||||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $86,397,562) | 102,742,276 | |||||||
OTHER ASSETS AND LIABILITIES — 0.2% | 223,562 | |||||||
TOTAL NET ASSETS — 100.0% | $102,965,838 |
Market Sector Diversification | |
(as a % of net assets) | |
Consumer Discretionary | 23.7% |
Industrials | 21.4% |
Materials | 17.8% |
Information Technology | 12.3% |
Energy | 9.2% |
Financials | 5.2% |
Health Care | 4.6% |
Consumer Staples | 3.2% |
Telecommunication Services | 1.9% |
Diversified | 0.2% |
Cash and Equivalents* | 0.5% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
ETF = Exchange-Traded Fund
(1) | Non-income producing. |
See Notes to Financial Statements.
14
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $86,397,562) | $102,742,276 | |||
Foreign currency holdings, at value (cost of $1,046) | 1,046 | |||
Receivable for investments sold | 303,926 | |||
Receivable for capital shares sold | 12,664 | |||
Dividends and interest receivable | 76,322 | |||
Other assets | 10,599 | |||
103,146,833 | ||||
Liabilities | ||||
Payable for capital shares redeemed | 11,679 | |||
Accrued management fees | 159,364 | |||
Distribution and service fees payable | 78 | |||
Accrued foreign taxes | 9,874 | |||
180,995 | ||||
Net Assets | $102,965,838 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $120,445,629 | |||
Accumulated net investment loss | (572,358 | ) | ||
Accumulated net realized loss | (33,242,088 | ) | ||
Net unrealized appreciation | 16,334,655 | |||
$102,965,838 |
Net assets | Shares outstanding | Net asset value per share | ||||||||||
Investor Class, $0.01 Par Value | $102,739,215 | 16,329,897 | $6.29 | |||||||||
Institutional Class, $0.01 Par Value | $39,149 | 6,179 | $6.34 | |||||||||
A Class, $0.01 Par Value | $92,115 | 14,641 | $6.29 | * | ||||||||
C Class, $0.01 Par Value | $44,030 | 6,991 | $6.30 | |||||||||
R Class, $0.01 Par Value | $51,329 | 8,151 | $6.30 |
*Maximum offering price $6.67 (net asset value divided by 0.9425)
See Notes to Financial Statements.
15
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $85,841) | $1,325,476 | |||
Interest | 879 | |||
1,326,355 | ||||
Expenses: | ||||
Management fees | 1,832,059 | |||
Distribution and service fees: | ||||
A Class | 125 | |||
C Class | 246 | |||
R Class | 140 | |||
Directors’ fees and expenses | 2,898 | |||
Other expenses | 3,934 | |||
1,839,402 | ||||
Net investment income (loss) | (513,047 | ) | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $88,919) | 17,425,524 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $59,611) | 126,297 | |||
17,551,821 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(56,989)) | 356,692 | |||
Translation of assets and liabilities in foreign currencies | (2,887,939 | ) | ||
(2,531,247 | ) | |||
Net realized and unrealized gain (loss) | 15,020,574 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $14,507,527 |
See Notes to Financial Statements.
16
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $(513,047 | ) | $(369,299 | ) | ||||
Net realized gain (loss) | 17,551,821 | (1,646,634 | ) | |||||
Change in net unrealized appreciation (depreciation) | (2,531,247 | ) | 30,801,570 | |||||
Net increase (decrease) in net assets resulting from operations | 14,507,527 | 28,785,637 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (1,832,216 | ) | — | |||||
Institutional Class | (787 | ) | — | |||||
A Class | (169 | ) | — | |||||
R Class | (100 | ) | — | |||||
Decrease in net assets from distributions | (1,833,272 | ) | — | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (2,744,539 | ) | (2,579,078 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 34,730 | 8,832 | ||||||
Net increase (decrease) in net assets | 9,964,446 | 26,215,391 | ||||||
Net Assets | ||||||||
Beginning of period | 93,001,392 | 66,786,001 | ||||||
End of period | $102,965,838 | $93,001,392 | ||||||
Accumulated undistributed net investment income (loss) | $(572,358 | ) | $462,743 |
See Notes to Financial Statements.
17
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing primarily in equity securities of issuers in developed or emerging market countries that are small-sized companies at the time of purchase. The fund is authorized to issue 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 con tingent 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. Sale of the A Class, C Class and R Class commenced on March 1, 2010.
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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
18
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
19
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 to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — The fund may impose a 2.00% redemption fee on shares held less than 180 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 9), 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 fu nd’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 1.60% to 2.00% for the Investor Class, A Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.88% for the Investor Class, A Class, C Class and R Class and 1.68% for the Institutional Class.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 9), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
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 American Century Investment Services, Inc. (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 year ended November 30, 2010, are detailed in the Statement of Operations.
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Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $198,495,131 and $203,221,192, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010(1) | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||||||||
Sold | 2,531,933 | $14,684,338 | 2,878,583 | $13,930,223 | ||||||||||||
Issued in reinvestment of distributions | 314,167 | 1,791,301 | — | — | ||||||||||||
Redeemed | (3,437,697 | ) | (19,387,146 | ) | (3,685,056 | ) | (15,251,912 | ) | ||||||||
(591,597 | ) | (2,911,507 | ) | (806,473 | ) | (1,321,689 | ) | |||||||||
Institutional Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Issued in reinvestment of distributions | 137 | 787 | — | — | ||||||||||||
Redeemed | — | — | (328,394 | ) | (1,257,389 | ) | ||||||||||
137 | 787 | (328,394 | ) | (1,257,389 | ) | |||||||||||
A Class/Shares Authorized | 10,000,000 | N/A | ||||||||||||||
Sold | 15,078 | 85,679 | ||||||||||||||
Issued in reinvestment of distributions | 29 | 169 | ||||||||||||||
Redeemed | (466 | ) | (2,608 | ) | ||||||||||||
14,641 | 83,240 | |||||||||||||||
C Class/Shares Authorized | 10,000,000 | N/A | ||||||||||||||
Sold | 6,991 | 38,671 | ||||||||||||||
R Class/Shares Authorized | 10,000,000 | N/A | ||||||||||||||
Sold | 8,134 | 44,170 | ||||||||||||||
Issued in reinvestment of distributions | 17 | 100 | ||||||||||||||
8,151 | 44,270 | |||||||||||||||
Net increase (decrease) | (561,677 | ) | $(2,744,539 | ) | (1,134,867 | ) | $(2,579,078 | ) |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010 for the A Class, C Class and R Class. |
21
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks | $4,754,786 | $97,715,539 | — | |||||||||
Temporary Cash Investments | 71,951 | 200,000 | — | |||||||||
Total Value of Investment Securities | $4,826,737 | $97,915,539 | — |
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 smaller 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 and high transaction costs.
8. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $1,833,272 | — | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
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As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $87,740,844 | |||
Gross tax appreciation of investments | $16,956,373 | |||
Gross tax depreciation of investments | (1,954,941 | ) | ||
Net tax appreciation (depreciation) of investments | $15,001,432 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(10,059 | ) | ||
Net tax appreciation (depreciation) | $14,991,373 | |||
Undistributed ordinary income | $418,153 | |||
Accumulated capital losses | $(32,889,317 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
The accumulated capital losses 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 of $(21,113,960) and $(11,775,357) expire in 2016 and 2017, respectively.
9. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement. Management agreements for new share classes that were launched after February 16, 2010 did not terminate, were not replaced by interim agreements, and did not require approval of new agreements.
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10. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
As of November 30, 2010, the fund intends to pass through to shareholders $174,464, or up to the maximum amount allowable, as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possessions of the United States. During the fiscal year ended November 30, 2010, the fund earned $1,411,317 from income derived from foreign sources. Foreign source income and foreign tax expense per outstanding share on November 30, 2010 are $0.0862 and $0.0107, respectively.
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Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $5.49 | $3.70 | $11.37 | $11.79 | $12.27 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.03 | ) | (0.02 | ) | 0.05 | 0.02 | (0.01 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.94 | 1.81 | (5.06 | ) | 2.94 | 2.53 | ||||||||||||||
Total From Investment Operations | 0.91 | 1.79 | (5.01 | ) | 2.96 | 2.52 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.11 | ) | — | (0.05 | ) | — | (2) | (0.01 | ) | |||||||||||
From Net Realized Gains | — | — | (2.61 | ) | (3.38 | ) | (2.99 | ) | ||||||||||||
Total Distributions | (0.11 | ) | — | (2.66 | ) | (3.38 | ) | (3.00 | ) | |||||||||||
Net Asset Value, End of Period | $6.29 | $5.49 | $3.70 | $11.37 | $11.79 | |||||||||||||||
Total Return(3) | 16.72 | % | 48.38 | % | (56.46 | )% | 33.73 | % | 25.37 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.89 | % | 1.95 | % | 1.87 | % | 1.81 | % | 1.85 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.52 | )% | (0.52 | )% | 0.72 | % | 0.19 | % | (0.06 | )% | ||||||||||
Portfolio Turnover Rate | 209 | % | 244 | % | 206 | % | 149 | % | 160 | % | ||||||||||
Net Assets, End of Period (in thousands) | $102,739 | $92,968 | $65,541 | $212,157 | $180,732 |
(1) | Computed using average shares outstanding throughout the period. |
(2) | Per-share amount was less than $0.005. |
(3) | 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. |
See Notes to Financial Statements. |
25
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $5.54 | $3.72 | $11.44 | $11.85 | $12.32 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(1) | (0.02 | ) | (0.04 | ) | 0.07 | 0.06 | 0.02 | |||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.95 | 1.86 | (5.10 | ) | 2.94 | 2.54 | ||||||||||||||
Total From Investment Operations | 0.93 | 1.82 | (5.03 | ) | 3.00 | 2.56 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.13 | ) | — | (0.08 | ) | (0.03 | ) | (0.04 | ) | |||||||||||
From Net Realized Gains | — | — | (2.61 | ) | (3.38 | ) | (2.99 | ) | ||||||||||||
Total Distributions | (0.13 | ) | — | (2.69 | ) | (3.41 | ) | (3.03 | ) | |||||||||||
Net Asset Value, End of Period | $6.34 | $5.54 | $3.72 | $11.44 | $11.85 | |||||||||||||||
Total Return(2) | 17.04 | % | 48.92 | % | (56.44 | )% | 33.97 | % | 25.66 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.69 | % | 1.75 | % | 1.67 | % | 1.61 | % | 1.65 | % | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.32 | )% | (0.32 | )% | 0.92 | % | 0.39 | % | 0.14 | % | ||||||||||
Portfolio Turnover Rate | 209 | % | 244 | % | 206 | % | 149 | % | 160 | % | ||||||||||
Net Assets, End of Period (in thousands) | $39 | $33 | $1,245 | $4,513 | $1,099 |
(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. |
See Notes to Financial Statements. |
26
A Class | ||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||
2010(1) | ||||
Per-Share Data | ||||
Net Asset Value, Beginning of Period | $5.51 | |||
Income From Investment Operations | ||||
Net Investment Income (Loss)(2) | (0.02 | ) | ||
Net Realized and Unrealized Gain (Loss) | 0.84 | |||
Total From Investment Operations | 0.82 | |||
Distributions | ||||
From Net Investment Income | (0.04 | ) | ||
Net Asset Value, End of Period | $6.29 | |||
Total Return(3) | 14.87 | % | ||
Ratios/Supplemental Data | ||||
Ratio of Operating Expenses to Average Net Assets | 2.14 | %(4) | ||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.45 | )%(4) | ||
Portfolio Turnover Rate | 209 | %(5) | ||
Net Assets, End of Period (in thousands) | $92 |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements. |
27
C Class | ||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||
2010(1) | ||||
Per-Share Data | ||||
Net Asset Value, Beginning of Period | $5.51 | |||
Income From Investment Operations | ||||
Net Investment Income (Loss)(2) | (0.05 | ) | ||
Net Realized and Unrealized Gain (Loss) | 0.84 | |||
Total From Investment Operations | 0.79 | |||
Net Asset Value, End of Period | $6.30 | |||
Total Return(3) | 14.34 | % | ||
Ratios/Supplemental Data | ||||
Ratio of Operating Expenses to Average Net Assets | 2.89 | %(4) | ||
Ratio of Net Investment Income (Loss) to Average Net Assets | (1.19 | )%(4) | ||
Portfolio Turnover Rate | 209 | %(5) | ||
Net Assets, End of Period (in thousands) | $44 |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements. |
28
R Class | ||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||
2010(1) | ||||
Per-Share Data | ||||
Net Asset Value, Beginning of Period | $5.51 | |||
Income From Investment Operations | ||||
Net Investment Income (Loss)(2) | (0.03 | ) | ||
Net Realized and Unrealized Gain (Loss) | 0.84 | |||
Total From Investment Operations | 0.81 | |||
Distributions | ||||
From Net Investment Income | (0.02 | ) | ||
Net Asset Value, End of Period | $6.30 | |||
Total Return(3) | 14.77 | % | ||
Ratios/Supplemental Data | ||||
Ratio of Operating Expenses to Average Net Assets | 2.39 | %(4) | ||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.69 | )%(4) | ||
Portfolio Turnover Rate | 209 | %(5) | ||
Net Assets, End of Period (in thousands) | $51 |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | 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. |
(4) | Annualized. |
(5) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements. |
29
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Opportunities Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian. We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Opportunities Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
30
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor Class | For: | 72,595,033 | |
Against: | 838,490 | ||
Abstain: | 1,129,157 | ||
Broker Non-Vote: | 1,980,026 | ||
Institutional Class | For: | 35,713 | |
Against: | 0 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
31
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
32
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
33
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
34
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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.
35
Notes |
36
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/amcentlogo.jpg)
Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70207 1101
ANNUAL REPORT NOVEMBER 30, 2010
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/amcentlogo.jpg)
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/frontpagebanner.jpg)
International Value Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 7 |
Top Ten Holdings | 9 |
Types of Investments in Portfolio | 9 |
Investments by Country | 9 |
Shareholder Fee Example | 10 |
Financial Statements | |
Schedule of Investments | 12 |
Statement of Assets and Liabilities | 14 |
Statement of Operations | 15 |
Statement of Changes in Net Assets | 16 |
Notes to Financial Statements | 17 |
Financial Highlights | 24 |
Report of Independent Registered Public Accounting Firm | 30 |
Other Information | |
Proxy Voting Results | 31 |
Management | 33 |
Additional Information | 36 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
3
Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
4
Performance |
Total Returns as of November 30, 2010 | ||||||||||
Average Annual Returns | ||||||||||
Ticker Symbol | 1 year | 5 years | 10 years | Since Inception | Inception Date | |||||
A Class No sales charge* With sales charge* | MEQAX | -2.04 -7.70 | % % | 2.13 0.93 | %(1) %(1) | 3.61 3.00 | %(1) %(1) | 3.27 2.83 | %(1) %(1) | 3/31/97 |
MSCI EAFE Index | — | 1.11 | % | 1.80 | % | 3.06 | % | 4.24 | % | — |
Investor Class | ACEVX | -1.82 | % | — | — | -0.51 | % | 4/3/06 | ||
Institutional Class | ACVUX | -1.69 | % | — | — | -0.34 | % | 4/3/06 | ||
B Class No sales charge* With sales charge* | MEQBX | -2.76 -6.76 | % % | 1.40 1.21 | %(1) %(1) | 2.88 2.88 | %(1) %(1) | 2.57 2.57 | %(1) %(1) | 3/31/97 |
C Class | ACCOX | -2.85 | % | — | — | -1.54 | % | 4/3/06 | ||
R Class | ACVRX | -2.27 | % | — | — | -1.04 | % | 4/3/06 |
* | Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge for equity funds and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied. |
International Value acquired all the net assets of the Mason Street International Equity Fund on March 31, 2006, pursuant to a plan of reorganization approved by the acquired fund’s shareholders on March 15, 2006. Performance information prior to April 1, 2006, is that of the Mason Street International Equity Fund.
(1) | Returns would have been lower if a portion of the fees had not been waived. |
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects A Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not.
5
Growth of $10,000 Over 10 Years |
$10,000 investment made November 30, 2000* |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/intlvaluechart.jpg)
* | The A Class’s initial investment is $9,425 to reflect the maximum 5.75% initial sales charge. |
** | Ending value 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 | B Class | C Class | R Class |
1.31% | 1.11% | 1.56% | 2.31% | 2.31% | 1.81% |
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.
6
Portfolio Commentary |
Portfolio Managers: Gary Motyl and Neil Devlin
Performance Summary
International Value declined -2.04%* in the 12 months ended November 30, 2010. By comparison, its benchmark, the MSCI EAFE Index, edged up 1.11%. (Please see pages 5 and 6 for additional performance comparisons.)
The portfolio’s negative absolute returns reflect the challenging environment for international equities. It was a particularly difficult period for high-quality, value-oriented, shares—such as those in which the fund invests—which lagged more economically sensitive, growth-oriented stocks for the year. Relative to the benchmark, positioning in the utilities, energy, health care, and materials sectors detracted most. At the other end of the spectrum, financial, industrial, and consumer discretionary stocks were the leading contributors to relative return.
Utilities, Energy, Health Care Shares Hurt Most
The key theme explaining the portfolio’s relative performance was its comparatively heavy exposure to value-oriented shares that lagged the broad EAFE Index. What’s more, the portfolio’s utilities, energy, and health care shares underperformed these segments of the index. Negative sector allocation and stock selection effects made these three sectors the leading detractors from relative results for the year.
Examples of stocks that fit this general theme were electric utilities E.ON, Iberdrola, EDF, and multi-line utility GDF Suez. Looking at energy shares, the main source of weakness by far was positioning among oil, gas, and consumable fuels companies. Brazilian energy giant Petroleo Brasileiro was the number-one detractor for the fiscal year, while stakes in Total, Gazprom, and China Shenhua Energy were modest detractors. In the health care sector, pharmaceutical names detracted most as a result of stock choices. Merck KGaA (“German Merck,” as opposed to U.S.-based pharmaceutical giant Merck & Co.) was a top-10 detractor amid concern about the company’s decision to acquire life sciences company Millipore, as well as cuts to future earnings estimates and dividend payouts.
It also hurt to hold stocks of developed European markets, which struggled with the effects of the sovereign debt crisis for much of the year. For example, French and German holdings detracted most at the country level. French financial services firm AXA and France Telecom were two of the largest individual detractors for the year. In addition to E.ON and Merck KGaA, stakes in Deutsche Post and BASF were other notable German detractors, and it hurt to be unexposed to Daimler. Finally, it detracted to be underexposed to materials shares, which was among the best-performing sectors in the index for the year.
Financial Shares Helped Most
The leading contribution to the portfolio’s relative performance came from positioning among financial shares, thanks to stock selection and an underweight position in this lagging sector. In particular, it helped to be underrepresented in many of the poorest-performing commercial banks, including Banco Santander, Banco Bilbao Vizcaya Argentaria, BNP Paribas, and Societe Generale. It was a similar story in the capital market segment, which underperformed because of economic and market challenges and to which we had little exposure. Stock selection among insurance companies also benefited relative results, led by a stake in ACE, a top-10 contributor.
* | All fund returns referenced in this commentary are for A Class shares and are not reduced by sales charges. A Class shares are subject to a maximum sales charge of 5.75%. Had the sales charge been applied, returns would have been lower than those shown. |
7
Other Notable Contributors
Stock choices drove relative outperformance in the industrial, consumer discretionary, and information technology sectors. The industrial sector was home to the number-one individual contributor for the year—Chinese energy giant Shanghai Electric. British Airways and aerospace and defense firms Embraer and Rolls-Royce Group were other leading contributors in the sector.
Notable contributors in the consumer discretionary sector benefited from improving economic growth, led by automotive and industrial manufacturer Hyundai Motor, British retailer Burberry Group, and British Sky Broadcasting, among others. Elsewhere, a stake in communication giant China Telecom was a leading source of strength for the year.
Management Change
In September, Executive Vice President and Senior Portfolio Manager Neil Devlin, CFA, joined the International Value management team. Devlin currently manages institutional equity portfolios and is Vice President of Templeton Global Equity Group. He joins Templeton Global Equity Chief Investment Officer Gary Motyl, CFA, in managing the International Value Fund. Guang Yang has left the firm.
Outlook
“We believe the best way to generate outperformance over time versus our benchmark is through superior individual security selection, rather than top-down sector or industry allocation decisions. This is particularly likely to be true in an environment of modest global economic growth and fairly tight credit, which we believe ought to favor attractively valued companies with healthy balance sheets offering sustainable, growing dividend payouts,” said portfolio manager Neil Devlin. “As a result, the portfolio’s sector and industry selection as well as capitalization range allocations are primarily a result of identifying what we believe to be superior individual securities. In keeping with our value-oriented approach, the largest overweight position as of November 30, 2010, was in telecommunicatio n services shares; the information technology and energy sectors were other notable overweights. The largest sector underweights were in consumer staples, materials, and financial shares.”
8
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Royal Dutch Shell plc B Shares | 2.6% |
Vodafone Group plc | 2.5% |
AIA Group Ltd. | 2.4% |
Shanghai Electric Group Co. Ltd. H Shares | 2.3% |
China Telecom Corp. Ltd. H Shares | 2.3% |
Telenor ASA | 2.3% |
E.ON AG | 2.2% |
DBS Group Holdings Ltd. | 2.2% |
Samsung Electronics Co. Ltd. | 2.1% |
SAP AG | 2.1% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks | 95.0% |
Temporary Cash Investments | 4.4% |
Other Assets and Liabilities | 0.6% |
Investments by Country | |
% of net assets as of 11/30/10 | |
United Kingdom | 17.8% |
France | 9.9% |
Germany | 9.9% |
South Korea | 7.6% |
Netherlands | 6.6% |
Hong Kong | 6.6% |
Switzerland | 5.9% |
Japan | 5.6% |
People’s Republic of China | 5.0% |
Brazil | 4.0% |
Spain | 3.9% |
Singapore | 3.2% |
Taiwan (Republic of China) | 2.6% |
Norway | 2.3% |
Other Countries | 4.1% |
Cash and Equivalents* | 5.0% |
*Includes temporary cash investments and other assets and liabilities.
9
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
10
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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 - 11/30/10 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,132.80 | $7.17 | 1.32% |
Institutional Class | $1,000 | $1,133.00 | $6.09 | 1.12% |
A Class | $1,000 | $1,130.50 | $8.52 | 1.57% |
B Class | $1,000 | $1,128.30 | $12.58 | 2.32% |
C Class | $1,000 | $1,127.50 | $12.58 | 2.32% |
R Class | $1,000 | $1,129.30 | $9.87 | 1.82% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.75 | $6.79 | 1.32% |
Institutional Class | $1,000 | $1,019.77 | $5.76 | 1.12% |
A Class | $1,000 | $1,017.48 | $8.07 | 1.57% |
B Class | $1,000 | $1,013.66 | $11.90 | 2.32% |
C Class | $1,000 | $1,013.66 | $11.90 | 2.32% |
R Class | $1,000 | $1,016.20 | $9.35 | 1.82% |
*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 186, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
11
Schedule of Investments |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks — 95.0% | ||||||||
BRAZIL — 4.0% | ||||||||
Embraer SA ADR | 7,620 | $221,894 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 11,580 | 375,655 | ||||||
Vale SA Preference Shares ADR | 16,930 | 480,643 | ||||||
1,078,192 | ||||||||
FRANCE — 9.9% | ||||||||
Alstom SA | 2,320 | 95,569 | ||||||
AXA SA | 26,237 | 376,670 | ||||||
Cie Generale des Etablissements Michelin, Class B | 7,988 | 540,423 | ||||||
Credit Agricole SA | 8,190 | 100,368 | ||||||
France Telecom SA | 22,060 | 446,706 | ||||||
Sanofi-Aventis SA | 5,813 | 351,472 | ||||||
Total SA | 9,030 | 437,384 | ||||||
Vivendi SA | 12,620 | 307,888 | ||||||
2,656,480 | ||||||||
GERMANY — 9.9% | ||||||||
Celesio AG | 5,670 | 133,215 | ||||||
Deutsche Lufthansa AG(1) | 8,410 | 178,978 | ||||||
Deutsche Post AG | 11,140 | 178,512 | ||||||
E.ON AG | 20,850 | 598,257 | ||||||
Merck KGaA | 6,980 | 544,892 | ||||||
RHOEN-KLINIKUM AG | 6,020 | 126,513 | ||||||
SAP AG | 11,810 | 550,959 | ||||||
Siemens AG ADR | 3,040 | 333,792 | ||||||
2,645,118 | ||||||||
HONG KONG — 6.6% | ||||||||
AIA Group Ltd.(1) | 224,400 | 648,772 | ||||||
Cheung Kong Holdings Ltd. | 23,300 | 344,470 | ||||||
China Mobile Ltd. | 53,500 | 533,615 | ||||||
Hutchison Whampoa Ltd. | 23,900 | 239,151 | ||||||
1,766,008 | ||||||||
ITALY — 1.0% | ||||||||
ENI SpA | 8,670 | 174,438 | ||||||
UniCredit SpA | 48,220 | 93,325 | ||||||
267,763 | ||||||||
JAPAN — 5.6% | ||||||||
ITOCHU Corp. | 31,100 | 288,369 | ||||||
Mabuchi Motor Co. Ltd. | 2,800 | 134,664 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 44,420 | 210,184 | ||||||
Nintendo Co. Ltd. | 1,830 | 497,023 | ||||||
Nissan Motor Co. Ltd. | 7,760 | $72,788 | ||||||
Sony Corp. | 5,100 | 181,050 | ||||||
Trend Micro, Inc. | 3,400 | 105,018 | ||||||
1,489,096 | ||||||||
NETHERLANDS — 6.6% | ||||||||
Akzo Nobel NV | 4,950 | 266,202 | ||||||
ING Groep NV CVA(1) | 56,972 | 503,025 | ||||||
Koninklijke Philips Electronics NV | 4,387 | 118,390 | ||||||
Royal Dutch Shell plc B Shares | 23,125 | 686,304 | ||||||
SBM Offshore NV | 9,788 | 194,645 | ||||||
1,768,566 | ||||||||
NORWAY — 2.3% | ||||||||
Telenor ASA | 42,360 | 608,913 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 5.0% | ||||||||
China Shenhua Energy Co. Ltd. H Shares | 26,000 | 109,322 | ||||||
China Telecom Corp. Ltd. H Shares | 1,214,000 | 611,292 | ||||||
Shanghai Electric Group Co. Ltd. H Shares | 916,000 | 627,567 | ||||||
1,348,181 | ||||||||
RUSSIAN FEDERATION — 0.9% | ||||||||
OAO Gazprom ADR | 11,290 | 251,090 | ||||||
SINGAPORE — 3.2% | ||||||||
DBS Group Holdings Ltd. | 56,250 | 596,433 | ||||||
United Overseas Bank Ltd. | 19,000 | 266,217 | ||||||
862,650 | ||||||||
SOUTH KOREA — 7.6% | ||||||||
Hana Financial Group, Inc. | 15,320 | 502,122 | ||||||
Hyundai Motor Co. | 2,810 | 418,083 | ||||||
KB Financial Group, Inc. | 7,050 | 328,967 | ||||||
Samsung Electronics Co. Ltd. | 790 | 562,826 | ||||||
Shinhan Financial Group Co. Ltd. | 5,350 | 206,266 | ||||||
2,018,264 | ||||||||
SPAIN — 3.9% | ||||||||
Banco Santander SA | 8,470 | 80,260 | ||||||
Iberdrola SA | 65,568 | 450,660 | ||||||
Telefonica SA ADR | 7,860 | 503,040 | ||||||
1,033,960 | ||||||||
SWEDEN — 0.5% | ||||||||
Telefonaktiebolaget LM Ericsson B Shares | 14,000 | 144,422 |
12
Shares | Value | |||||||
SWITZERLAND — 5.9% | ||||||||
ACE Ltd. | 6,380 | $373,358 | ||||||
Basilea Pharmaceutica(1) | 1,960 | 128,011 | ||||||
Lonza Group AG | 2,680 | 206,811 | ||||||
Roche Holding AG | 4,010 | 550,568 | ||||||
Swiss Reinsurance Co. Ltd. | 6,757 | 312,115 | ||||||
1,570,863 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.6% | ||||||||
Compal Electronics, Inc. | 127,684 | 158,754 | ||||||
Lite-On Technology Corp. | 62,091 | 80,561 | ||||||
Siliconware Precision Industries Co. | 143,000 | 148,946 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 150,749 | 313,540 | ||||||
701,801 | ||||||||
THAILAND — 1.0% | ||||||||
Bangkok Bank Public Co. Ltd. | 54,200 | 263,559 | ||||||
TURKEY — 0.7% | ||||||||
Turkcell Iletisim Hizmet AS ADR | 11,530 | 196,471 | ||||||
UNITED KINGDOM — 17.8% | ||||||||
Aviva plc | 95,440 | 526,411 | ||||||
BAE Systems plc | 37,660 | 193,484 | ||||||
BP plc | 53,240 | 352,738 | ||||||
British Airways plc(1) | 110,840 | 440,670 | ||||||
GlaxoSmithKline plc | 18,590 | 350,460 | ||||||
HSBC Holdings plc (Hong Kong) | 36,400 | 370,089 | ||||||
Kingfisher plc | 145,040 | 530,166 | ||||||
Marks & Spencer Group plc | 56,340 | 326,524 | ||||||
National Grid plc | 20,232 | 178,749 | ||||||
Pearson plc | 16,290 | 234,633 | ||||||
Rolls-Royce Group plc(1) | 40,420 | 382,886 | ||||||
Rolls-Royce Group plc C Shares(1) | 2,586,880 | 4,024 | ||||||
Unilever plc | 7,335 | 202,742 | ||||||
Vodafone Group plc | 264,953 | 662,485 | ||||||
4,756,061 | ||||||||
TOTAL COMMON STOCKS (Cost $22,670,673) | 25,427,458 | |||||||
Temporary Cash Investments — 4.4% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 75,702 | $75,702 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $1,123,820), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $1,100,006) | 1,100,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,175,702) | 1,175,702 | |||||||
TOTAL INVESTMENT SECURITIES — 99.4% (Cost $23,846,375) | 26,603,160 | |||||||
OTHER ASSETS AND LIABILITIES — 0.6% | 154,547 | |||||||
TOTAL NET ASSETS — 100.0% | $26,757,707 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 22.8% |
Telecommunication Services | 13.3% |
Industrials | 12.8% |
Consumer Discretionary | 9.8% |
Energy | 9.6% |
Information Technology | 9.6% |
Health Care | 8.9% |
Utilities | 4.6% |
Materials | 2.8% |
Consumer Staples | 0.8% |
Cash and Equivalents* | 5.0% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt |
CVA = Certificaten Van Aandelen |
(1) | Non-income producing. |
See Notes to Financial Statements. |
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $23,846,375) | $26,603,160 | |||
Foreign currency holdings, at value (cost of $30,435) | 29,570 | |||
Receivable for capital shares sold | 57,854 | |||
Dividends and interest receivable | 143,072 | |||
26,833,656 | ||||
Liabilities | ||||
Payable for investments purchased | 24,755 | |||
Payable for capital shares redeemed | 16,008 | |||
Accrued management fees | 29,996 | |||
Distribution and service fees payable | 5,190 | |||
75,949 | ||||
Net Assets | $26,757,707 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $31,996,078 | |||
Undistributed net investment income | 385,617 | |||
Accumulated net realized loss | (8,383,978 | ) | ||
Net unrealized appreciation | 2,759,990 | |||
$26,757,707 |
Net assets | Shares outstanding | Net asset value per share | |||||||
Investor Class, $0.01 Par Value | $7,272,258 | 1,052,940 | $6.91 | ||||||
Institutional Class, $0.01 Par Value | $1,455,650 | 210,907 | $6.90 | ||||||
A Class, $0.01 Par Value | $15,782,822 | 2,276,588 | $6.93 | * | |||||
B Class, $0.01 Par Value | $934,335 | 138,073 | $6.77 | ||||||
C Class, $0.01 Par Value | $1,039,394 | 150,552 | $6.90 | ||||||
R Class, $0.01 Par Value | $273,248 | 39,592 | $6.90 |
*Maximum offering price $7.35 (net asset value divided by 0.9425)
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $69,707) | $827,283 | |||
Interest | 941 | |||
828,224 | ||||
Expenses: | ||||
Management fees | 358,575 | |||
Distribution and service fees: | ||||
A Class | 43,247 | |||
B Class | 11,576 | |||
C Class | 9,169 | |||
R Class | 1,017 | |||
Directors’ fees and expenses | 1,494 | |||
Other expenses | 4,886 | |||
429,964 | ||||
Net investment income (loss) | 398,260 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 217,333 | |||
Foreign currency transactions | 203,773 | |||
421,106 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | 17,559 | |||
Translation of assets and liabilities in foreign currencies | (1,846,290 | ) | ||
(1,828,731 | ) | |||
Net realized and unrealized gain (loss) | (1,407,625 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(1,009,365 | ) |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $398,260 | $792,809 | ||||||
Net realized gain (loss) | 421,106 | (6,688,028 | ) | |||||
Change in net unrealized appreciation (depreciation) | (1,828,731 | ) | 15,518,583 | |||||
Net increase (decrease) in net assets resulting from operations | (1,009,365 | ) | 9,623,364 | |||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (281,159 | ) | (55,648 | ) | ||||
Institutional Class | (73,160 | ) | (609,469 | ) | ||||
A Class | (645,217 | ) | (312,916 | ) | ||||
B Class | (28,789 | ) | (20,569 | ) | ||||
C Class | (19,261 | ) | (4,827 | ) | ||||
R Class | (4,722 | ) | (1,437 | ) | ||||
Decrease in net assets from distributions | (1,052,308 | ) | (1,004,866 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (1,004,655 | ) | (22,114,533 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 3,710 | 2,341 | ||||||
Net increase (decrease) in net assets | (3,062,618 | ) | (13,493,694 | ) | ||||
Net Assets | ||||||||
Beginning of period | 29,820,325 | 43,314,019 | ||||||
End of period | $26,757,707 | $29,820,325 | ||||||
Undistributed net investment income | $385,617 | $1,051,953 |
See Notes to Financial Statements. |
16
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing at least 80% of its assets in equity securities and at least 65% of its assets in securities from a minimum of three countries outside the United States. The fund is authorized to issue the Investor Class, the Institutional Class, the A Class, the B Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class, B Cla ss 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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
17
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, 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. The fund is no longer subject to examination by tax authorities for years prior to 2007. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
18
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 to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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 — 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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 9), 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 fu nd’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 1.10% to 1.30% for the Investor Class, A Class, B Class, C Class and R Class. The Institutional Class is 0.20% less at each point within the range. The effective annual management fee for each class for the year ended November 30, 2010 was 1.30% for the Investor Class, A Class, B Class, C Class and R Class and 1.10% for the Institutional Class.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 9), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
19
Effective July 16, 2010, ACIM has entered into a subadvisory agreement with Templeton Investment Counsel, LLC (Templeton) on behalf of the fund. Templeton makes investment decisions for the fund in accordance with the fund’s investment objectives, policies, and restrictions under the supervision of ACIM and the Board of Directors. ACIM pays all costs associated with retaining Templeton as the subadvisor of the fund. Prior to July 16, 2010, the subadvisory agreement for the fund was between ACGIM (see Note 9) and Templeton. From December 1, 2009 through September 1, 2010, Templeton had entered into a subadvisory agreement with Franklin Templeton Investments (Asia) Limited on behalf of the fund as an additional subadvisor. Templeton has assumed the subadvisory responsibilities performed by Franklin Templeton Investm ents (Asia) Limited.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, B Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay American Century Investment Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The plans provide that the B Class and C Class will each 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 year ended November 30, 2010, are detailed in the Statement of Operations.
Other Expenses — The fund’s total other expenses include the fees and expenses of the fund’s independent directors and their legal counsel, interest, and other miscellaneous expenses. A portion of these expenses was due to nonrecurring expenses paid by the fund. The impact of total other expenses to the annualized ratio of operating expenses to average net assets was 0.02%.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, ACIS, and the corporation’s transfer agent, American Century Services, LLC.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMorgan Chase Bank (JPMCB) is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $7,005,654 and $8,088,553, respectively.
20
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Year ended November 30, 2010 | Year ended November 30, 2009 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 543,874 | $3,779,102 | 673,027 | $4,620,879 | ||||||||||||
Issued in reinvestment of distributions | 38,587 | 273,798 | 9,439 | 54,649 | ||||||||||||
Redeemed | (493,578 | ) | (3,480,623 | ) | (177,325 | ) | (1,061,257 | ) | ||||||||
88,883 | 572,277 | 505,141 | 3,614,271 | |||||||||||||
Institutional Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 68,030 | 462,329 | 110,391 | 687,461 | ||||||||||||
Issued in reinvestment of distributions | 10,333 | 73,160 | 105,262 | 609,469 | ||||||||||||
Redeemed | (89,177 | ) | (600,913 | ) | (4,343,332 | ) | (26,020,480 | ) | ||||||||
(10,814 | ) | (65,424 | ) | (4,127,679 | ) | (24,723,550 | ) | |||||||||
A Class/Shares Authorized | 45,000,000 | 55,000,000 | ||||||||||||||
Sold | 899,755 | 6,485,839 | 573,706 | 3,482,243 | ||||||||||||
Issued in reinvestment of distributions | 89,337 | 636,290 | 52,914 | 307,968 | ||||||||||||
Redeemed | (1,254,749 | ) | (8,540,309 | ) | (823,600 | ) | (4,757,711 | ) | ||||||||
(265,657 | ) | (1,418,180 | ) | (196,980 | ) | (967,500 | ) | |||||||||
B Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 2,489 | 16,165 | 22,588 | 137,394 | ||||||||||||
Issued in reinvestment of distributions | 4,077 | 28,443 | 3,600 | 20,448 | ||||||||||||
Redeemed | (78,840 | ) | (534,140 | ) | (102,821 | ) | (558,503 | ) | ||||||||
(72,274 | ) | (489,532 | ) | (76,633 | ) | (400,661 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 50,000,000 | ||||||||||||||
Sold | 68,338 | 488,852 | 73,369 | 441,842 | ||||||||||||
Issued in reinvestment of distributions | 2,661 | 18,909 | 808 | 4,679 | ||||||||||||
Redeemed | (40,306 | ) | (275,068 | ) | (16,397 | ) | (95,563 | ) | ||||||||
30,693 | 232,693 | 57,780 | 350,958 | |||||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 32,079 | 225,622 | 5,090 | 29,371 | ||||||||||||
Issued in reinvestment of distributions | 667 | 4,722 | 248 | 1,437 | ||||||||||||
Redeemed | (10,043 | ) | (66,833 | ) | (2,852 | ) | (18,859 | ) | ||||||||
22,703 | 163,511 | 2,486 | 11,949 | |||||||||||||
Net increase (decrease) | (206,466 | ) | $(1,004,655 | ) | (3,835,885 | ) | $(22,114,533 | ) |
21
6. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks | $2,484,853 | $22,942,605 | — | |||||||||
Temporary Cash Investments | 75,702 | 1,100,000 | — | |||||||||
Total Value of Investment Securities | $2,560,555 | $24,042,605 | — |
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 tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $1,052,308 | $1,004,866 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
22
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $24,113,639 | |||
Gross tax appreciation of investments | $4,948,440 | |||
Gross tax depreciation of investments | (2,458,919 | ) | ||
Net tax appreciation (depreciation) of investments | $2,489,521 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $3,174 | |||
Net tax appreciation (depreciation) | $2,492,695 | |||
Undistributed ordinary income | $385,648 | |||
Accumulated capital losses | $(8,116,714 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
The accumulated capital losses 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 of $(932,933) and $(7,183,781) expire in 2016 and 2017, respectively.
9. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until new agreements were approved. The new agreements for the fund were approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. The agreements went into effect on July 16, 2010. The new agreements, which are substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on July 1 6, 2010, eliminating the need for a new subadvisory agreement with ACIM.
10. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
As of November 30, 2010, the fund intends to pass through to shareholders $85,298, or up to the maximum amount allowable, as a foreign tax credit, which represents taxes paid on income derived from sources within foreign countries or possessions of the United States. During the fiscal year ended November 30, 2010, the fund earned $896,990 from income derived from foreign sources. Foreign source income and foreign tax expense per outstanding share on November 30, 2010 are $0.2319 and $0.0220, respectively.
23
Financial Highlights |
Investor Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.33 | $5.47 | $11.48 | $14.36 | $12.85 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.11 | 0.11 | 0.19 | 0.22 | 0.15 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.24 | ) | 1.88 | (5.18 | ) | 2.09 | 1.36 | |||||||||||||
Total From Investment Operations | (0.13 | ) | 1.99 | (4.99 | ) | 2.31 | 1.51 | |||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.29 | ) | (0.13 | ) | (0.24 | ) | (0.47 | ) | — | |||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | |||||||||||||
Total Distributions | (0.29 | ) | (0.13 | ) | (1.02 | ) | (5.19 | ) | — | |||||||||||
Net Asset Value, End of Period | $6.91 | $7.33 | $5.47 | $11.48 | $14.36 | |||||||||||||||
Total Return(3) | (1.82 | )% | 36.98 | % | (47.43 | )% | 23.55 | % | 11.75 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.32 | % | 1.31 | % | 1.31 | % | 1.30 | % | 1.30 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.66 | % | 2.34 | % | 2.20 | % | 1.96 | % | 2.77 | %(4)(5) | ||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||
Net Assets, End of Period (in thousands) | $7,272 | $7,062 | $2,512 | $3,044 | $437 |
(1) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total 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. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements.
24
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.34 | $5.48 | $11.50 | $14.38 | $12.85 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.13 | 0.18 | 0.21 | 0.23 | 0.25 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.25 | ) | 1.82 | (5.19 | ) | 2.10 | 1.28 | |||||||||||||
Total From Investment Operations | (0.12 | ) | 2.00 | (4.98 | ) | 2.33 | 1.53 | |||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.32 | ) | (0.14 | ) | (0.26 | ) | (0.49 | ) | — | |||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | |||||||||||||
Total Distributions | (0.32 | ) | (0.14 | ) | (1.04 | ) | (5.21 | ) | — | |||||||||||
Net Asset Value, End of Period | $6.90 | $7.34 | $5.48 | $11.50 | $14.38 | |||||||||||||||
Total Return(3) | (1.69 | )% | 37.18 | % | (47.32 | )% | 23.77 | % | 11.91 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.12 | % | 1.11 | % | 1.11 | % | 1.10 | % | 1.10 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.86 | % | 2.54 | % | 2.40 | % | 2.16 | % | 2.97 | %(4)(5) | ||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||
Net Assets, End of Period (in thousands) | $1,456 | $1,627 | $23,847 | $45,262 | $35,574 |
(1) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total 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. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements. |
25
A Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.33 | $5.48 | $11.49 | $14.35 | $12.70 | $10.91 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.10 | 0.10 | 0.18 | 0.20 | 0.25 | 0.18 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.24 | ) | 1.86 | (5.20 | ) | 2.11 | 1.40 | 1.97 | ||||||||||||||||
Total From Investment Operations | (0.14 | ) | 1.96 | (5.02 | ) | 2.31 | 1.65 | 2.15 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.26 | ) | (0.11 | ) | (0.21 | ) | (0.45 | ) | — | (0.15 | ) | |||||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | (0.21 | ) | |||||||||||||||
Total Distributions | (0.26 | ) | (0.11 | ) | (0.99 | ) | (5.17 | ) | — | (0.36 | ) | |||||||||||||
Net Asset Value, End of Period | $6.93 | $7.33 | $5.48 | $11.49 | $14.35 | $12.70 | ||||||||||||||||||
Total Return(3) | (2.04 | )% | 36.40 | % | (47.53 | )% | 23.44 | % | 12.99 | % | 19.95 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.57 | % | 1.56 | % | 1.51 | % | 1.40 | % | 1.40 | %(4) | 1.35 | % | ||||||||||||
Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) | 1.57 | % | 1.56 | % | 1.56 | % | 1.55 | % | 1.55 | %(4) | 1.35 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.41 | % | 2.09 | % | 2.00 | % | 1.86 | % | 2.67 | %(4)(5) | 1.52 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) | 1.41 | % | 2.09 | % | 1.95 | % | 1.71 | % | 2.52 | %(4)(5) | 1.52 | % | ||||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | 7 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $15,783 | $18,644 | $15,015 | $24,558 | $19,890 | $54,617 |
(1) | April 1, 2006 through November 30, 2006. The fund’s fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund’s fiscal year end was March 31. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements. |
26
B Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.11 | $5.32 | $11.16 | $14.08 | $12.51 | $10.75 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.05 | 0.05 | 0.11 | 0.12 | 0.17 | 0.10 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.24 | ) | 1.81 | (5.05 | ) | 2.05 | 1.40 | 1.93 | ||||||||||||||||
Total From Investment Operations | (0.19 | ) | 1.86 | (4.94 | ) | 2.17 | 1.57 | 2.03 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.15 | ) | (0.07 | ) | (0.12 | ) | (0.37 | ) | — | (0.06 | ) | |||||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | (0.21 | ) | |||||||||||||||
Total Distributions | (0.15 | ) | (0.07 | ) | (0.90 | ) | (5.09 | ) | — | (0.27 | ) | |||||||||||||
Net Asset Value, End of Period | $6.77 | $7.11 | $5.32 | $11.16 | $14.08 | $12.51 | ||||||||||||||||||
Total Return(3) | (2.76 | )% | 35.36 | % | (47.84 | )% | 22.51 | % | 12.55 | % | 19.07 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.32 | % | 2.31 | % | 2.22 | % | 2.09 | % | 2.09 | %(4) | 2.08 | % | ||||||||||||
Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) | 2.32 | % | 2.31 | % | 2.31 | % | 2.30 | % | 2.30 | %(4) | 2.08 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.66 | % | 1.34 | % | 1.29 | % | 1.17 | % | 1.98 | %(4)(5) | 0.90 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) | 0.66 | % | 1.34 | % | 1.20 | % | 0.96 | % | 1.77 | %(4)(5) | 0.90 | % | ||||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | 7 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $934 | $1,495 | $1,526 | $4,059 | $4,313 | $4,917 |
(1) | April 1, 2006 through November 30, 2006. The fund’s fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund’s fiscal year end was March 31. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements. |
27
C Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.25 | $5.42 | $11.37 | $14.27 | $12.85 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.05 | 0.05 | 0.12 | 0.12 | 0.14 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.25 | ) | 1.85 | (5.17 | ) | 2.07 | 1.28 | |||||||||||||
Total From Investment Operations | (0.20 | ) | 1.90 | (5.05 | ) | 2.19 | 1.42 | |||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.15 | ) | (0.07 | ) | (0.12 | ) | (0.37 | ) | — | |||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | |||||||||||||
Total Distributions | (0.15 | ) | (0.07 | ) | (0.90 | ) | (5.09 | ) | — | |||||||||||
Net Asset Value, End of Period | $6.90 | $7.25 | $5.42 | $11.37 | $14.27 | |||||||||||||||
Total Return(3) | (2.85 | )% | 35.44 | % | (47.93 | )% | 22.28 | % | 11.05 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.32 | % | 2.31 | % | 2.31 | % | 2.30 | % | 2.30 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.66 | % | 1.34 | % | 1.20 | % | 0.96 | % | 1.77 | %(4)(5) | ||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||
Net Assets, End of Period (in thousands) | $1,039 | $869 | $337 | $222 | $41 |
(1) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges. Total returns for periods less than one year are not annualized. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements. |
28
R Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.28 | $5.45 | $11.42 | $14.31 | $12.85 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.09 | 0.09 | 0.13 | 0.11 | 0.19 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | (0.25 | ) | 1.84 | (5.14 | ) | 2.14 | 1.27 | |||||||||||||
Total From Investment Operations | (0.16 | ) | 1.93 | (5.01 | ) | 2.25 | 1.46 | |||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.22 | ) | (0.10 | ) | (0.18 | ) | (0.42 | ) | — | |||||||||||
From Net Realized Gains | — | — | (0.78 | ) | (4.72 | ) | — | |||||||||||||
Total Distributions | (0.22 | ) | (0.10 | ) | (0.96 | ) | (5.14 | ) | — | |||||||||||
Net Asset Value, End of Period | $6.90 | $7.28 | $5.45 | $11.42 | $14.31 | |||||||||||||||
Total Return(3) | (2.27 | )% | 35.90 | % | (47.61 | )% | 22.91 | % | 11.36 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.82 | % | 1.81 | % | 1.81 | % | 1.80 | % | 1.80 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.16 | % | 1.84 | % | 1.70 | % | 1.46 | % | 2.27 | %(4)(5) | ||||||||||
Portfolio Turnover Rate | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||
Net Assets, End of Period (in thousands) | $273 | $123 | $78 | $202 | $28 |
(1) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total 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. |
(4) | Annualized. |
(5) | Due to cyclical dividends and the eight-month period ended November 30, 2006, the annualized ratio of net investment income (loss) to average net assets is higher than expected. |
See Notes to Financial Statements. |
29
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of International Value Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of International Value Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
30
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Investor, A, B, C and R Classes | For: | 14,415,789 | |
Against: | 299,944 | ||
Abstain: | 397,324 | ||
Broker Non-Vote: | 6,981,238 | ||
Institutional Class | For: | 1,632,535 | |
Against: | 0 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
Proposal 3:
To approve a subadvisory agreement by and among American Century Investment Management, Inc., Templeton Investment Counsel, LLC and Franklin Templeton Investments (Asia) Limited:
For: | 16,002,947 | ||
Against: | 285,998 | ||
Abstain: | 456,646 | ||
Broker Non-Vote: | 6,981,238 |
31
Proposal 4:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
32
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
33
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
34
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
35
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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.
36
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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 Device for the Deaf | 1-800-634-4113 |
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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70204 1101
ANNUAL REPORT NOVEMBER 30, 2010
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![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/frontpagebanner.jpg)
NT Emerging Markets Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 6 |
Top Ten Holdings | 8 |
Types of Investments in Portfolio | 8 |
Investments by Country | 8 |
Shareholder Fee Example | 9 |
Financial Statements | |
Schedule of Investments | 11 |
Statement of Assets and Liabilities | 14 |
Statement of Operations | 15 |
Statement of Changes in Net Assets | 16 |
Notes to Financial Statements | 17 |
Financial Highlights | 22 |
Report of Independent Registered Public Accounting Firm | 23 |
Other Information | |
Proxy Voting Results | 24 |
Management | 25 |
Additional Information | 28 |
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 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomas.jpg)
Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/pratt.jpg)
Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors – working on behalf of shareholders – to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
3
Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
4
Performance |
Total Returns as of November 30, 2010 | ||||
Average Annual Returns | ||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |
Institutional Class | ACLKX | 15.73% | 5.13% | 5/12/06 |
MSCI Emerging Markets Growth Index | — | 16.50% | 6.30%(1) | — |
(1) | Since 4/30/06, the date nearest the Institutional Class’s inception for which data are available. |
Growth of $10,000 Over Life of Class |
$10,000 investment made May 12, 2006 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/ntemergchart.jpg)
*From 5/12/06, the Institutional Class’s inception date. Index data from 4/30/06, the date nearest the Institutional Class’s inception for which data are available. Not annualized.
Total Annual Fund Operating Expenses |
Institutional Class 1.58% |
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.
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.
5
Portfolio Commentary |
Portfolio Managers: Patricia Ribeiro and Anthony Han
Performance Summary
The NT Emerging Markets portfolio returned 15.73% for the 12 months ended November 30, 2010, compared with its benchmark, the MSCI Emerging Markets Growth Index, which returned 16.50%.
Stocks in many global markets generally struggled during the first half of the period, as several eurozone nations came close to defaulting on their sovereign debt. In the second half of the period, improving business conditions and confidence and solid corporate earnings reports in several markets helped propel stocks and push 12-month returns into positive territory. Emerging market stocks significantly outperformed their developed market counterparts, primarily because the emerging markets weren’t facing the sovereign debt problems mounting in many developed nations. Instead, many emerging markets focused on building their infrastructures and growing their economies.
The portfolio, which underperformed its benchmark for the period, benefited from strong stock selection across a variety of regions and sectors. Overall, our sector and country allocations detracted from relative performance.
Chile Detracted; India Was Top Performer
The largest detractors from a regional perspective included Chile, China, and Mexico. Stock selection dragged down relative results in Chile and China, while underweight positions in Mexico and Chile also were ineffective. Late in the period, concerns about rising inflation and slower growth rates in China, along with the Chinese government’s decision to untether its currency from the U.S. dollar, rattled investors. Several China-based stocks weakened, including our overweight position in Skyworth Digital Holdings, a television manufacturer, which was among the portfolio’s largest detractors due to falling unit sales. Analysts had expected volumes to climb, due largely to the Chinese government’s incentives to stimulate domestic demand for household appliances.
The portfolio’s largest regional contributors to relative performance included India, South Africa, and Thailand. In each country, our stock selection was robust. In addition, our overweight positions in India and Thailand boosted results, while an underweight to South Africa was slightly positive. In addition, our position in Taiwan was a key contributor, with our overweights to Eva Airways and HTC Corp. finishing the period among the best performers. Eva, a leading international carrier in Taiwan, benefited from the region’s burgeoning tourism business. Cellular handset maker HTC posted considerable market share gains on growing demand for its smartphones that run on Google’s Android operating system.
6
Materials Lagged; Financials Were Top Contributors
Poor stock selection and underweights in the materials and telecommunication services sectors dragged down the portfolio’s relative performance. In particular, our overweight position in Hong Kong’s Fushan International Energy Group was among the portfolio’s weakest holdings. The company, which mines coking coal used for firing smelters in steel mills, saw its stock price steadily decline, despite strong operating results. Macroeconomic influences, including China’s tightening efforts, combined with falling steel prices, higher production costs, and economic uncertainty in Europe, created a challenging climate for the China’s metals and mining industry.
Europe’s financial woes hurt Hungary’s OTP Bank, which was the portfolio’s weakest holding. The company’s shares tumbled after Hungary’s prime minister unveiled a tax on financial institutions to help ease the country’s budget shortfall.
The portfolio’s financials sector made the greatest contribution to relative performance, driven primarily by strong stock selection in the commercial banking and insurance industries. An overweight position in the consumer discretionary sector was positive, while stock selection drove the portfolio’s outperformance in the consumer staples sector. The food and staples retailing industry was the leading consumer staples contributor, with CP ALL PCL, a Thailand-based company that operates convenience stores under the 7-Eleven trademark, among the portfolio’s top performers.
Outlook
Global economic activity is improving, but significant headwinds remain, including sovereign debt concerns in the developed world and the potential for rising inflation around the globe. So far, government responses to the crisis have varied, and this lack of coordination may lead to divergent economic performance in the year ahead. We expect further volatility, yet we will continue to focus on finding companies located in emerging market countries with sustainable growth characteristics and promising long-term outlooks. Emerging markets have held up relatively well, primarily because they have managed their economies conservatively throughout the past several years.
7
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
Vale SA Preference Shares | 5.6% |
Ping An Insurance Group Co. of China Ltd. H Shares | 3.1% |
Samsung Electronics Co. Ltd. | 3.1% |
Infosys Technologies Ltd. | 2.7% |
Sberbank of Russia | 2.6% |
Hon Hai Precision Industry Co. Ltd. | 2.1% |
Itau Unibanco Holding SA Preference Shares | 1.9% |
Hyundai Heavy Industries Co. Ltd. | 1.8% |
CNOOC Ltd. | 1.8% |
HTC Corp. | 1.8% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights | 98.9% |
Temporary Cash Investments | 2.0% |
Other Assets and Liabilities | (0.9)% |
Investments by Country | |
% of net assets as of 11/30/10 | |
People’s Republic of China | 15.1% |
Brazil | 14.3% |
South Korea | 11.4% |
India | 9.7% |
Taiwan (Republic of China) | 7.9% |
South Africa | 7.4% |
Russian Federation | 6.6% |
Hong Kong | 6.6% |
Indonesia | 3.8% |
Thailand | 3.2% |
Turkey | 2.8% |
Mexico | 2.3% |
Malaysia | 2.2% |
Other Countries | 5.6% |
Cash and Equivalents* | 1.1% |
*Includes temporary cash investments and other assets and liabilities. |
8
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
9
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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 – 11/30/10 | Annualized Expense Ratio* | |
Actual | $1,000 | $1,209.00 | $8.56 | 1.52% |
Hypothetical | $1,000 | $1,017.73 | $7.81 | 1.52% |
*Expenses are equal to the fund’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 186, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
10
Schedule of Investments |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 98.9% | ||||||||
BRAZIL — 14.3% | ||||||||
BR Malls Participacoes SA | 76,800 | $756,981 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 5,997 | 813,433 | ||||||
Hypermarcas SA(1) | 53,100 | 840,198 | ||||||
Hypermarcas SA Rights(1) | 52 | 4 | ||||||
Itau Unibanco Holding SA Preference Shares | 75,559 | 1,729,669 | ||||||
MRV Engenharia e Participacoes SA | 66,800 | 660,364 | ||||||
Natura Cosmeticos SA | 23,300 | 626,189 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 151,600 | 918,654 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 54,996 | 1,610,283 | ||||||
Vale SA Preference Shares | 181,500 | 5,081,069 | ||||||
13,036,844 | ||||||||
CANADA — 1.6% | ||||||||
Pacific Rubiales Energy Corp. | 45,631 | 1,422,427 | ||||||
HONG KONG — 6.6% | ||||||||
C C Land Holdings Ltd. | 1,520,000 | 569,626 | ||||||
China Merchants Holdings International Co. Ltd. | 180,349 | 711,864 | ||||||
China Overseas Land & Investment Ltd. | 524,000 | 1,006,823 | ||||||
CNOOC Ltd. | 764,000 | 1,656,870 | ||||||
Comba Telecom Systems Holdings Ltd. | 691,500 | 770,302 | ||||||
Geely Automobile Holdings Ltd. | 700,000 | 384,928 | ||||||
Xinyi Glass Holdings Ltd. | 1,200,000 | 917,953 | ||||||
6,018,366 | ||||||||
INDIA — 9.7% | ||||||||
Apollo Tyres Ltd. | 340,769 | 490,897 | ||||||
Ashok Leyland Ltd. | 610,572 | 953,416 | ||||||
Aurobindo Pharma Ltd. | 38,636 | 1,050,544 | ||||||
Crompton Greaves Ltd. | 118,529 | 865,493 | ||||||
HDFC Bank Ltd. | 13,469 | 670,852 | ||||||
ICICI Bank Ltd. | 40,584 | 1,010,156 | ||||||
Infosys Technologies Ltd. | 36,684 | 2,439,204 | ||||||
Mundra Port and Special Economic Zone Ltd. | 228,890 | 760,223 | ||||||
Tata Motors Ltd. | 22,515 | 605,969 | ||||||
8,846,754 | ||||||||
INDONESIA — 3.8% | ||||||||
PT Astra International Tbk | 148,000 | $850,254 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 597,500 | 694,460 | ||||||
PT Indofood CBP Sukses Makmur Tbk(1) | 615,500 | 347,471 | ||||||
PT Perusahaan Gas Negara | 1,594,500 | 758,949 | ||||||
PT Semen Gresik (Persero) Tbk | 754,500 | 768,364 | ||||||
3,419,498 | ||||||||
MALAYSIA — 2.2% | ||||||||
CIMB Group Holdings Bhd | 593,300 | 1,580,885 | ||||||
Supermax Corp. Bhd | 343,925 | 450,604 | ||||||
2,031,489 | ||||||||
MEXICO — 2.3% | ||||||||
America Movil SAB de CV, Series L ADR | 12,911 | 728,955 | ||||||
Grupo Mexico SAB de CV, Series B | 251,323 | 853,747 | ||||||
Wal-Mart de Mexico SAB de CV | 171,848 | 485,489 | ||||||
2,068,191 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 15.1% | ||||||||
AAC Acoustic Technologies Holdings, Inc. | 248,000 | 683,468 | ||||||
Anta Sports Products Ltd. | 212,000 | 395,328 | ||||||
Baidu, Inc. ADR(1) | 10,433 | 1,097,447 | ||||||
China BlueChemical Ltd. H Shares | 764,000 | 609,027 | ||||||
China Minsheng Banking Corp. Ltd. H Shares | 572,500 | 509,456 | ||||||
China Oilfield Services Ltd. H Shares | 330,000 | 603,469 | ||||||
Ctrip.com International Ltd. ADR(1) | 27,919 | 1,223,411 | ||||||
Dongfeng Motor Group Co. Ltd. H Shares | 466,000 | 886,979 | ||||||
Focus Media Holding Ltd. ADR(1) | 32,629 | 761,235 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 891,000 | 693,055 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares Rights(1) | 40,095 | 13,167 | ||||||
Mongolian Mining Corp.(1) | 421,300 | 462,257 | ||||||
PCD Stores Ltd. | 1,450,000 | 461,230 | ||||||
Ping An Insurance Group Co. of China Ltd. H Shares | 247,500 | 2,855,855 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 411,000 | 657,380 |
11
Shares | Value | |||||||
Sinopharm Group Co. H Shares | 128,400 | $469,609 | ||||||
Tencent Holdings Ltd. | 51,400 | 1,143,164 | ||||||
Xingda International Holdings Ltd. | 212,000 | 209,677 | ||||||
13,735,214 | ||||||||
PERU — 1.2% | ||||||||
Credicorp Ltd. | 9,457 | 1,133,611 | ||||||
POLAND — 0.5% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 34,113 | 472,997 | ||||||
RUSSIAN FEDERATION — 6.6% | ||||||||
CTC Media, Inc. | 36,047 | 811,418 | ||||||
Magnit OJSC GDR | 21,627 | 570,953 | ||||||
NovaTek OAO GDR | 17,093 | 1,608,451 | ||||||
Sberbank of Russia | 739,854 | 2,352,736 | ||||||
X5 Retail Group NV GDR(1) | 18,357 | 696,648 | ||||||
6,040,206 | ||||||||
SOUTH AFRICA — 7.4% | ||||||||
Aspen Pharmacare Holdings Ltd.(1) | 47,492 | 622,714 | ||||||
Exxaro Resources Ltd. | 27,667 | 491,494 | ||||||
Gold Fields Ltd. ADR | 17,922 | 299,118 | ||||||
Impala Platinum Holdings Ltd. | 23,355 | 666,528 | ||||||
JD Group Ltd. | 35,634 | 273,808 | ||||||
MTN Group Ltd. | 96,388 | 1,645,707 | ||||||
Naspers Ltd. N Shares | 26,350 | 1,315,132 | ||||||
Shoprite Holdings Ltd. | 44,864 | 610,331 | ||||||
Truworths International Ltd. | 77,565 | 787,379 | ||||||
6,712,211 | ||||||||
SOUTH KOREA — 11.4% | ||||||||
Doosan Infracore Co. Ltd.(1) | 68,040 | 1,467,138 | ||||||
Hyundai Heavy Industries Co. Ltd. | 5,189 | 1,662,682 | ||||||
Hyundai Motor Co. | 8,619 | 1,282,368 | ||||||
Hyundai Steel Co. | 3,989 | 378,463 | ||||||
LG Chem Ltd. | 4,673 | 1,563,847 | ||||||
LG Household & Health Care Ltd. | 2,483 | 819,171 | ||||||
POSCO | 1,051 | 412,006 | ||||||
Samsung Electronics Co. Ltd. | 3,980 | 2,835,501 | ||||||
10,421,176 | ||||||||
SWITZERLAND — 0.9% | ||||||||
Ferrexpo plc | 145,626 | 790,081 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 7.9% | ||||||||
AU Optronics Corp.(1) | 381,000 | $381,219 | ||||||
Eva Airways Corp.(1) | 989,000 | 1,125,836 | ||||||
Hon Hai Precision Industry Co. Ltd. | 530,503 | 1,888,283 | ||||||
HTC Corp. | 59,700 | 1,654,933 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 791,774 | 1,646,796 | ||||||
Wistron Corp. | 240,828 | 488,253 | ||||||
7,185,320 | ||||||||
THAILAND — 3.2% | ||||||||
Banpu PCL | 46,400 | 1,160,384 | ||||||
CP ALL PCL | 621,900 | 817,748 | ||||||
Kasikornbank PCL NVDR | 225,100 | 889,826 | ||||||
2,867,958 | ||||||||
TURKEY — 2.8% | ||||||||
Tofas Turk Otomobil Fabrikasi AS | 82,795 | 433,822 | ||||||
Turkiye Garanti Bankasi AS | 267,292 | 1,482,289 | ||||||
Turkiye Sise ve Cam Fabrikalari AS(1) | 383,777 | 653,281 | ||||||
2,569,392 | ||||||||
UNITED KINGDOM — 1.4% | ||||||||
Antofagasta plc | 42,034 | 859,770 | ||||||
International Personal Finance plc | 95,257 | 443,021 | ||||||
1,302,791 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $65,577,817) | 90,074,526 | |||||||
Temporary Cash Investments — 2.0% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 24,874 | 24,874 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%–2.125%, 6/30/11–11/30/14, valued at $1,838,978), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $1,800,011) | 1,800,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,824,874) | 1,824,874 | |||||||
TOTAL INVESTMENT SECURITIES — 100.9% (Cost $67,402,691) | 91,899,400 | |||||||
OTHER ASSETS AND LIABILITIES — (0.9)% | (789,835 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $91,109,565 |
12
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 20.7% |
Information Technology | 16.5% |
Consumer Discretionary | 14.8% |
Materials | 14.8% |
Industrials | 9.7% |
Energy | 8.9% |
Consumer Staples | 7.3% |
Health Care | 2.8% |
Telecommunication Services | 2.6% |
Utilities | 0.8% |
Cash and Equivalents* | 1.1% |
*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.
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $67,402,691) | $91,899,400 | |||
Foreign currency holdings, at value (cost of $90,558) | 90,590 | |||
Receivable for investments sold | 317,516 | |||
Receivable for capital shares sold | 19,772 | |||
Dividends and interest receivable | 62,465 | |||
Other assets | 1,192 | |||
92,390,935 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 10,843 | |||
Payable for investments purchased | 1,005,554 | |||
Accrued management fees | 114,328 | |||
Accrued foreign taxes | 150,645 | |||
1,281,370 | ||||
Net Assets | $91,109,565 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 8,896,059 | |||
Net Asset Value Per Share | $10.24 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $70,106,329 | |||
Accumulated net investment loss | (19,219 | ) | ||
Accumulated net realized loss | (3,322,036 | ) | ||
Net unrealized appreciation | 24,344,491 | |||
$91,109,565 |
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $109,933) | $1,269,290 | |||
Interest | 1,417 | |||
1,270,707 | ||||
Expenses: | ||||
Management fees | 1,123,890 | |||
Directors’ fees and expenses | 2,173 | |||
Other expenses | 3,852 | |||
1,129,915 | ||||
Net investment income (loss) | 140,792 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $47,611) | 5,302,790 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $78,071) | 689,881 | |||
5,992,671 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(6,060)) | 6,172,705 | |||
Translation of assets and liabilities in foreign currencies | 184,146 | |||
6,356,851 | ||||
Net realized and unrealized gain (loss) | 12,349,522 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $12,490,314 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $140,792 | $154,330 | ||||||
Net realized gain (loss) | 5,992,671 | (2,001,573 | ) | |||||
Change in net unrealized appreciation (depreciation) | 6,356,851 | 25,523,096 | ||||||
Net increase (decrease) in net assets resulting from operations | 12,490,314 | 23,675,853 | ||||||
Distributions to Shareholders | ||||||||
From net investment income | (94,843 | ) | (152,834 | ) | ||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 26,050,487 | 32,244,736 | ||||||
Payments for shares redeemed | (7,646,938 | ) | (16,171,865 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 18,403,549 | 16,072,871 | ||||||
Net increase (decrease) in net assets | 30,799,020 | 39,595,890 | ||||||
Net Assets | ||||||||
Beginning of period | 60,310,545 | 20,714,655 | ||||||
End of period | $91,109,565 | $60,310,545 | ||||||
Accumulated undistributed net investment income (loss) | $(19,219 | ) | $92,099 | |||||
Transactions in Shares of the Fund | ||||||||
Sold | 2,902,783 | 5,177,295 | ||||||
Redeemed | (810,053 | ) | (2,421,624 | ) | ||||
Net increase (decrease) in shares of the fund | 2,092,730 | 2,755,671 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing at least 80% of its assets in equity securities of companies located in emerging market countries. The fund is not permitted to invest in any securities issued by companies assigned by the Global Industry Classification Standard to the tobacco industry.
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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
17
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets and liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Distributions to Shareholders — Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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.
18
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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 8), under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). 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 the daily net assets of the fund 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 as sets 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 include the assets of Emerging Markets Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 1.05% to 1.65%. The effective annual management fee for the year ended November 30, 2010 was 1.51%.
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 8), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC. The fund is wholly owned, in aggregate, by various funds in a series issued by American Century Asset Allocation Portfolios, Inc. (ACAAP). ACAAP does not invest in the fund for the purpose of exercising management or control.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $90,323,074 and $68,458,479, respectively.
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5. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $8,478,911 | $81,595,615 | — | |||||||||
Temporary Cash Investments | 24,874 | 1,800,000 | — | |||||||||
Total Value of Investment Securities | $8,503,785 | $83,395,615 | — |
6. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
7. Federal Tax Information
The tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $94,843 | $152,834 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
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As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $68,149,056 | |||
Gross tax appreciation of investments | $24,396,589 | |||
Gross tax depreciation of investments | (646,245 | ) | ||
Net tax appreciation (depreciation) of investments | $23,750,344 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(152,389 | ) | ||
Net tax appreciation (depreciation) | $23,597,955 | |||
Undistributed ordinary income | — | |||
Accumulated capital losses | $(2,576,198 | ) | ||
Currency loss deferral | $(18,521 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
The accumulated capital losses 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.
The currency loss deferral represents net foreign currency losses incurred in the one-month period ended November 30, 2010. The fund has elected to treat such losses as having been incurred in the following fiscal year for federal income tax purposes.
8. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment automatically t erminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on Ju ly 16, 2010, eliminating the need for a new subadvisory agreement.
9. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
For corporate taxpayers, the fund hereby designates $2,775, or up to the maximum amount allowable, of ordinary income distributions paid during the fiscal year ended November 30, 2010 as qualified for the corporate dividends received deduction.
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Financial Highlights |
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.86 | $5.12 | $16.19 | $11.01 | $10.00 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss) | 0.02 | (2) | 0.02 | (2) | 0.11 | (2) | 0.15 | 0.07 | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.37 | 3.74 | (8.52 | ) | 5.12 | 0.94 | ||||||||||||||
Total From Investment Operations | 1.39 | 3.76 | (8.41 | ) | 5.27 | 1.01 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.01 | ) | (0.02 | ) | (0.20 | ) | (0.09 | ) | — | |||||||||||
From Net Realized Gains | — | — | (2.46 | ) | — | — | ||||||||||||||
Total Distributions | (0.01 | ) | (0.02 | ) | (2.66 | ) | (0.09 | ) | — | |||||||||||
Net Asset Value, End of Period | $10.24 | $8.86 | $5.12 | $16.19 | $11.01 | |||||||||||||||
Total Return(3) | 15.73 | % | 73.87 | % | (61.75 | )% | 48.22 | % | 10.10 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.52 | % | 1.57 | % | 1.52 | % | 1.46 | % | 1.60 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.19 | % | 0.36 | % | 1.17 | % | 1.12 | % | 1.68 | %(4) | ||||||||||
Portfolio Turnover Rate | 94 | % | 158 | % | 157 | % | 113 | % | 59 | % | ||||||||||
Net Assets, End of Period (in thousands) | $91,110 | $60,311 | $20,715 | $28,378 | $19,844 |
(1) | May 12, 2006 (fund inception) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total 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. |
(4) | Annualized. |
See Notes to Financial Statements. |
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Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT Emerging Markets Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of NT Emerging Markets Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
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Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Institutional Class | For: | 69,676,133 | |
Against: | 0 | ||
Abstain: | 0 | ||
Broker Non-Vote: | 0 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
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Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
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James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
26
Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
27
Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com . It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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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Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70200 1101
ANNUAL REPORT NOVEMBER 30, 2010
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NT International Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Market Perspective | 4 |
International Equity Total Returns | 4 |
Performance | 5 |
Portfolio Commentary | 6 |
Top Ten Holdings | 8 |
Types of Investments in Portfolio | 8 |
Investments by Country | 8 |
Shareholder Fee Example | 9 |
Financial Statements | |
Schedule of Investments | 11 |
Statement of Assets and Liabilities | 14 |
Statement of Operations | 15 |
Statement of Changes in Net Assets | 16 |
Notes to Financial Statements | 17 |
Financial Highlights | 22 |
Report of Independent Registered Public Accounting Firm | 23 |
Other Information | |
Proxy Voting Results | 24 |
Management | 25 |
Additional Information | 28 |
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 |
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Dear Investor:
To learn more about the capital markets, your investment, and the portfolio management strategies American Century Investments provides, we encourage you to review this shareholder report for the financial reporting period ended November 30, 2010.
On the following pages, you will find investment performance and portfolio information, presented with the expert perspective and commentary of our portfolio management team. This report remains one of our most important vehicles for conveying the information you need about your investment performance, and about the market factors and strategies that affect fund returns. For additional information on the markets, we encourage you to visit the “Insights & News” tab at our Web site, americancentury.com, for updates and further expert commentary.
The top of our Web site’s home page also provides a link to “Our Story,” which, first and foremost, outlines our commitment—since 1958—to helping clients reach their financial goals. We believe strongly that we will only be successful when our clients are successful. That’s who we are.
Another important, unique facet of our story and who we are is “Profits with a Purpose,” which describes our bond with the Stowers Institute for Medical Research (SIMR). SIMR is a world-class biomedical organization—founded by our company founder James E. Stowers, Jr. and his wife Virginia—that is dedicated to researching the causes, treatment, and prevention of gene-based diseases, including cancer. Through American Century Investments’ private ownership structure, more than 40% of our profits support SIMR.
Mr. Stowers’ example of achieving financial success and using that platform to help humanity motivates our entire American Century Investments team. His story inspires us to help each of our clients achieve success. Thank you for sharing your financial journey with us.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Independent Chairman’s Letter |
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Dear Fellow Shareholders,
As regulators and the markets continue to sort out the events of the credit crisis, a consistent theme has been that financial services firms should re-examine their risk management practices. Risk management has been a regular part of American Century Investments’ activities for many years. However, recently American Century and your mutual fund board have been spending additional time focusing on our risk oversight processes.
The board’s efforts are now organized around three categories of risk: investment risk, operational risk, and enterprise risk. This approach has facilitated a realignment of many risk oversight tasks that the board has historically conducted. Investment risk tasks include a review of portfolio risk, monitoring the use of derivatives, and performance assessment. Operational risk focuses on compliance, valuation, shareholder services, and trading activities. Enterprise risk addresses the financial condition of the advisor, human resource development, and reputational risks. Risk oversight tasks are addressed in every quarterly board meeting, and a review of the advisor’s entire risk management program is undertaken annually. We acknowledge and support the approach that American Century Investments takes to its risk management responsibilities. While the board has refocused its efforts in this important oversight area, we recognize that risk oversight is a journey and we expect to continue to improve our processes.
Our September quarterly board meeting was held in the New York offices of American Century Investments. This gave the directors an opportunity to meet with the portfolio management teams for each of the global and international funds overseen by the board. Each team uses sophisticated investment tools and daily risk analysis in managing client assets. We also were impressed with the “bench strength” that has been developed under the leadership of the Global and Non-U.S. Equity CIO Mark Kopinski. These face-to-face meetings provide an opportunity for the directors—working on behalf of shareholders—to validate the advisor’s efforts and the investment management approach being followed.
I thank you for your continued confidence in American Century during this turbulent time in the economy and investment markets. If you have thoughts or questions you would like to share with the board send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/prattsignature.jpg)
Don Pratt
3
Market Perspective |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/kopinski.jpg)
Stocks Recovered from Gloomy First Half
In the first half of the 12-month period, developed international equity markets posted dismal performance stemming from fiscal problems in Europe and escalating tensions in the Middle East. In the second half of the period, however, stocks rebounded sharply, generally recovering their earlier losses. European investors generally shrugged off a fresh round of sovereign debt concerns, focusing instead on improved business confidence throughout the eurozone. In particular, corporate sentiment brightened in Germany, which also reported a considerable drop in unemployment figures. Additionally, in Japan numerous export-reliant companies cheered the government’s efforts to weaken the yen, which had reached a 15-year high versus the U.S. dollar.
Overall, developed international equity markets underperformed the U.S. and emerging markets for the 12-month period. Although they recouped most of their earlier losses, European stocks declined for the entire period. Improving economic outlooks weren’t sufficient to offset the earlier impact of the debt crises plaguing Greece, Italy, Spain, Ireland, and Portugal. Meanwhile, Japan’s stock market was a leading performer among the developed nations, benefiting from optimistic economic growth forecasts. Elsewhere in Asia, China’s booming economy showed signs of cooling.
Outlook Favors Emerging Markets, Dividends
Many economists expect the emerging markets to be among the fastest-growing economies during the next 12 months, and that sentiment is fueling strong fund flows into emerging market stocks. Nevertheless, the risks should not be overlooked. Despite their higher economic growth forecasts, emerging market economies typically are based on one or two key basic industries, where dependency on commodity exports and price volatility is generally high. Shifts in the pricing or demand for the key products that underpin their economies can lead to sudden and major reversals in profitability and growth.
In the developed markets, industries and companies associated with higher dividend yields and less sensitive to sudden changes in consumer demand (the so-called “defensive stocks”) have been doing well. With bond and money market yields unusually low, dividend yields are an attractive alternative for investors seeking income. In addition, companies showing above-average earnings growth have performed well in this slow economy. Seeking such earnings growth remains a key component of our investment process.
International Equity Total Returns | ||||
For the 12 months ended November 30, 2010 (in U.S. dollars) | ||||
MSCI EAFE Index | 1.11% | MSCI Europe Index | -2.72% | |
MSCI EAFE Growth Index | 6.14% | MSCI World Index | 5.98% | |
MSCI EAFE Value Index | -3.86% | MSCI Japan Index | 8.09% | |
MSCI Emerging Markets (Gross) Index | 15.65% |
4
Performance |
Total Returns as of November 30, 2010 | ||||
Average Annual Returns | ||||
Ticker Symbol | 1 year | Since Inception | Inception Date | |
Institutional Class | ACLNX | 7.28% | -0.57% | 5/12/06 |
MSCI EAFE Index | — | 1.11% | -2.00%(1) | — |
MSCI EAFE Growth Index | — | 6.14% | -0.79%(1) | — |
(1) | Since 4/30/06, the date nearest the Institutional Class’s inception for which data are available. |
Growth of $10,000 Over Life of Class |
$10,000 investment made May 12, 2006 |
![](https://capedge.com/proxy/N-CSR/0001437749-11-000660/ntintlgrowthchart.jpg)
*From 5/12/06, the Institutional Class’s inception date. Index data from 4/30/06, the date nearest the Institutional Class’s inception for which data are available. Not annualized.
Total Annual Fund Operating Expenses |
Institutional Class 1.19% |
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.
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.
5
Portfolio Commentary |
Portfolio Managers: Alex Tedder and Raj Gandhi
Performance Summary
The NT International Growth portfolio returned 7.28% for the 12 months ended November 30, 2010, compared with its benchmarks, the MSCI EAFE Index and the MSCI EAFE Growth Index, which returned 1.11% and 6.14%, respectively.
After several eurozone nations came close to defaulting on their sovereign debt during the first half of the reporting period, international stocks generally rebounded to finish the year with gains. In many markets, improving business conditions and confidence and solid corporate earnings reports helped propel stocks. Within the developed markets, growth stocks sharply outpaced their value counterparts, while small- and mid-cap stocks significantly outperformed large-cap stocks.
Overall, stock selection, particularly in the financials and energy sectors, drove the portfolio’s outperformance relative to the benchmark. Our sector allocations, including an underweight in financials and an overweight in consumer discretionary stocks, also had an overall positive influence on the portfolio’s relative performance.
European Nations, Emerging Markets Were Top Contributors
From a regional perspective, the portfolio’s holdings in Europe contributed the most to relative performance, due to favorable stock selection in France, Italy, and the United Kingdom. In France, our overweight position in luxury goods company LVMH Moet Hennessy Louis Vuitton SA drove performance, while in Italy, our overweight position in Saipem, an oil and gas services company, was the top contributor. Overall, the developing markets sharply outperformed their developed market counterparts. Specifically, our portfolio-only positions in Taiwan and China contributed positively to the portfolio’s performance.
At the opposite end of the spectrum, results from Singapore and the Netherlands detracted from relative performance, primarily due to weak stock selection.
Information Technology, Financials Led Sector Results
The portfolio’s financials stocks led all sectors on a relative basis. In general, the financials sector continued to struggle, primarily due to the debt problems plaguing several countries in Europe. But, late in the period, European regulators announced that all but seven of 91 of the continent’s largest banks passed the stress test administered to analyze the financial soundness of the beleaguered banking industry, which helped spark a recovery in the sector. Our stock selection in the commercial banking and insurance industries drove the sector’s outperformance.
Propelled by strong stock selection and investor interest in traditional growth stocks, the portfolio’s information technology sector was the leading contributor to performance. In particular, our selections in the semiconductor and communications equipment industries generated solid results. HTC, the Taiwan-based cellular handset maker, was the portfolio’s top-performing stock. The company, a portfolio-only holding, posted considerable market share gains on growing demand for its smartphones that run on Google’s Android operating system. Our overweighted position in United Kingdom-based ARM Holdings, which develops and licenses semiconductor chip technology, represented the second-best contributor to portfolio performance. The company’s stock surged on soaring revenues and margins stemming from licensing deals with smartphone makers, including Apple. It also announced a new licensing deal with software giant Microsoft and benefited from mergers-and-acquisitions activity in the
wireless semiconductor chip space.
6
Our portfolio-only position in Hyundai Motor Co. continued to deliver strong results, landing the South Korean automaker among the portfolio’s top contributors for the 12-month period. With its line of affordable cars, Hyundai continued to gain market share in a difficult economic climate for automakers.
Materials, Consumer Staples Sectors Lagged
The materials sector represented the portfolio’s largest detractor to relative performance. Stock selection dragged down results, particularly in the chemicals industry. Additionally, in the sector’s construction materials segment, German cement producer HeidelbergCement was among the portfolio’s largest performance detractors. In addition to suffering from plunging operating income in 2009, the company faced waning demand in the U.S. and Europe throughout much of 2010.
The portfolio’s consumer staples sector also detracted from performance. While stock selection was generally positive, an underweighted position relative to the benchmark led to underperformance. In particular, our underweighted position in Switzerland’s Nestle SA, the food and beverage company, was among the portfolio’s largest detractors for the period.
Outlook
Global economic activity is improving, but sovereign debt concerns in Europe, combined with the potential for rising inflation throughout the world, remain headwinds. The varied government responses may lead to divergent economic performance in the months ahead. We expect further volatility throughout the international stock markets, yet we will continue to focus on finding companies located in developed countries around the world (excluding the United States) with sustainable growth characteristics and promising long-term outlooks.
7
Top Ten Holdings | |
% of net assets as of 11/30/10 | |
BHP Billiton Ltd. | 2.3% |
Novartis AG | 1.7% |
Unilever NV CVA | 1.4% |
HSBC Holdings plc (Hong Kong) | 1.3% |
Saipem SpA | 1.3% |
Li & Fung Ltd. | 1.3% |
BG Group plc | 1.3% |
Volvo AB B Shares | 1.3% |
HTC Corp. | 1.3% |
BNP Paribas | 1.2% |
Types of Investments in Portfolio | |
% of net assets as of 11/30/10 | |
Foreign Common Stocks & Rights | 97.4% |
Temporary Cash Investments | 2.1% |
Other Assets and Liabilities | 0.5% |
Investments by Country | |
% of net assets as of 11/30/10 | |
United Kingdom | 15.5% |
Japan | 12.3% |
France | 9.4% |
Switzerland | 8.4% |
Germany | 7.0% |
Sweden | 4.5% |
People’s Republic of China | 4.1% |
Netherlands | 3.7% |
Taiwan (Republic of China) | 3.3% |
Australia | 3.1% |
Hong Kong | 2.8% |
Spain | 2.7% |
Other Countries | 20.6% |
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments and other assets and liabilities. |
8
Shareholder Fee Example (Unaudited) |
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from May 29, 2010 to November 30, 2010.
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) regist ered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. We will not charge the fee as long as you choose to manage your accounts exclusively online. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
9
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.
Beginning Account Value 5/29/10 | Ending Account Value 11/30/10 | Expenses Paid During Period* 5/29/10 – 11/30/10 | Annualized Expense Ratio* | |
Actual | $1,000 | $1,167.90 | $6.30 | 1.14% |
Hypothetical | $1,000 | $1,019.67 | $5.87 | 1.14% |
*Expenses are equal to the fund’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 186, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
10
Schedule of Investments |
NOVEMBER 30, 2010
Shares | Value | |||||||
Common Stocks & Rights — 97.4% | ||||||||
AUSTRALIA — 3.1% | ||||||||
BHP Billiton Ltd. | 140,931 | $5,773,420 | ||||||
Wesfarmers Ltd. | 66,863 | 2,016,215 | ||||||
7,789,635 | ||||||||
AUSTRIA — 0.7% | ||||||||
Erste Group Bank AG | 47,100 | 1,842,398 | ||||||
BELGIUM — 1.5% | ||||||||
Anheuser-Busch InBev NV | 49,008 | 2,667,052 | ||||||
Umicore | 23,800 | 1,129,470 | ||||||
3,796,522 | ||||||||
BERMUDA — 0.9% | ||||||||
Seadrill Ltd. | 56,800 | 1,739,027 | ||||||
Signet Jewelers Ltd.(1) | 12,400 | 493,892 | ||||||
2,232,919 | ||||||||
BRAZIL — 1.8% | ||||||||
Banco Santander Brasil SA ADR | 115,400 | 1,505,970 | ||||||
Vale SA Preference Shares | 107,500 | 3,009,448 | ||||||
4,515,418 | ||||||||
CANADA — 0.4% | ||||||||
Canadian National Railway Co. | 14,700 | 939,093 | ||||||
DENMARK — 1.8% | ||||||||
Carlsberg A/S B Shares | 17,800 | 1,680,137 | ||||||
Novo Nordisk A/S B Shares | 28,800 | 2,848,829 | ||||||
4,528,966 | ||||||||
FINLAND — 0.6% | ||||||||
Fortum Oyj | 53,800 | 1,419,747 | ||||||
FRANCE — 9.4% | ||||||||
Accor SA | 53,742 | 2,271,728 | ||||||
Air Liquide SA | 19,520 | 2,285,482 | ||||||
BNP Paribas | 51,870 | 3,070,241 | ||||||
Cie Generale d’Optique Essilor International SA | 17,800 | 1,112,173 | ||||||
Danone SA | 39,122 | 2,291,552 | ||||||
JC Decaux SA(1) | 41,800 | 1,049,630 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 17,200 | 2,608,847 | ||||||
Pernod-Ricard SA | 10,058 | 819,773 | ||||||
Publicis Groupe SA | 26,300 | 1,175,225 | ||||||
Safran SA | 86,500 | 2,709,910 | ||||||
Schneider Electric SA | 18,400 | 2,583,068 | ||||||
Total SA | 30,124 | 1,459,108 | ||||||
23,436,737 | ||||||||
GERMANY — 7.0% | ||||||||
adidas AG | 19,600 | 1,230,365 | ||||||
Allianz SE | 12,700 | 1,393,002 | ||||||
BASF SE | 12,500 | $932,973 | ||||||
Bayerische Motoren Werke AG | 32,200 | 2,421,312 | ||||||
Daimler AG(1) | 31,700 | 2,052,060 | ||||||
Deutsche Boerse AG | 11,500 | 695,476 | ||||||
Fresenius Medical Care AG & Co. KGaA | 45,470 | 2,624,723 | ||||||
Metro AG | 23,800 | 1,707,180 | ||||||
SAP AG | 34,700 | 1,618,822 | ||||||
Siemens AG | 25,200 | 2,757,198 | ||||||
17,433,111 | ||||||||
HONG KONG — 2.8% | ||||||||
CNOOC Ltd. | 924,000 | 2,003,858 | ||||||
Li & Fung Ltd. | 510,000 | 3,178,839 | ||||||
Link Real Estate Investment Trust (The) | 324,500 | 1,017,575 | ||||||
Sun Hung Kai Properties Ltd. | 42,000 | 694,492 | ||||||
6,894,764 | ||||||||
INDIA — 1.6% | ||||||||
HDFC Bank Ltd. | 21,900 | 1,090,776 | ||||||
Infosys Technologies Ltd. | 28,700 | 1,908,329 | ||||||
Larsen & Toubro Ltd. | 23,800 | 1,011,468 | ||||||
4,010,573 | ||||||||
INDONESIA — 1.2% | ||||||||
PT Bank Mandiri (Persero) Tbk | 2,215,000 | 1,569,183 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 524,000 | 609,033 | ||||||
PT United Tractors Tbk | 286,500 | 729,411 | ||||||
2,907,627 | ||||||||
IRELAND — 0.5% | ||||||||
Ryanair Holdings plc ADR | 36,919 | 1,127,137 | ||||||
ISRAEL — 0.9% | ||||||||
Teva Pharmaceutical Industries Ltd. ADR | 45,400 | 2,271,816 | ||||||
ITALY — 1.3% | ||||||||
Saipem SpA | 80,762 | 3,360,950 | ||||||
JAPAN — 12.3% | ||||||||
Canon, Inc. | 52,900 | 2,493,613 | ||||||
FANUC CORP. | 16,700 | 2,392,556 | ||||||
Fujitsu Ltd. | 292,000 | 1,873,629 | ||||||
Komatsu Ltd. | 106,300 | 2,944,240 | ||||||
Mitsubishi Corp. | 94,600 | 2,391,846 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 207,900 | 983,730 | ||||||
Murata Manufacturing Co. Ltd. | 12,100 | 738,810 | ||||||
Nintendo Co. Ltd. | 3,500 | 950,592 | ||||||
Nissan Motor Co. Ltd. | 305,500 | 2,865,546 |
11
Shares | Value | |||||||
Nitori Holdings Co. Ltd. | 20,500 | $1,805,293 | ||||||
ORIX Corp. | 24,200 | 2,067,511 | ||||||
Rakuten, Inc. | 3,400 | 2,604,134 | ||||||
SOFTBANK CORP. | 69,400 | 2,404,827 | ||||||
Sumitomo Realty & Development Co. Ltd. | 57,000 | 1,227,315 | ||||||
Unicharm Corp. | 42,900 | 1,676,222 | ||||||
Yahoo Japan Corp. | 3,700 | 1,326,323 | ||||||
30,746,187 | ||||||||
LUXEMBOURG — 0.4% | ||||||||
Millicom International Cellular SA | 10,606 | 920,389 | ||||||
MACAU — 0.5% | ||||||||
Wynn Macau Ltd. | 601,600 | 1,219,454 | ||||||
MEXICO — 0.3% | ||||||||
Grupo Financiero Banorte SAB de CV, Series O | 190,800 | 827,266 | ||||||
NETHERLANDS — 3.7% | ||||||||
ASML Holding NV | 49,300 | 1,594,727 | ||||||
CNH Global NV(1) | 32,400 | 1,342,008 | ||||||
Royal Dutch Shell plc, Class A | 89,163 | 2,684,544 | ||||||
Unilever NV CVA | 127,699 | 3,601,958 | ||||||
9,223,237 | ||||||||
NORWAY — 1.8% | ||||||||
Petroleum Geo-Services ASA(1) | 64,300 | 780,423 | ||||||
Statoil ASA | 40,800 | 808,473 | ||||||
Telenor ASA | 128,800 | 1,851,462 | ||||||
Yara International ASA | 23,000 | 1,094,780 | ||||||
4,535,138 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 4.1% | ||||||||
Baidu, Inc. ADR(1) | 20,000 | 2,103,800 | ||||||
China Unicom (Hong Kong) Ltd. ADR | 102,300 | 1,374,912 | ||||||
Ctrip.com International Ltd. ADR(1) | 32,564 | 1,426,954 | ||||||
Focus Media Holding Ltd. ADR(1) | 14,985 | 349,600 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 2,367,000 | 1,841,146 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares Rights(1) | 104,715 | 34,388 | ||||||
Lenovo Group Ltd. | 2,410,000 | 1,620,095 | ||||||
ZTE Corp. H Shares | 427,000 | 1,569,954 | ||||||
10,320,849 | ||||||||
POLAND — 0.8% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 153,376 | 2,126,650 | ||||||
RUSSIAN FEDERATION — 1.4% | ||||||||
Magnit OJSC GDR | 58,300 | $1,539,120 | ||||||
Sberbank of Russia | 632,000 | 2,009,760 | ||||||
3,548,880 | ||||||||
SINGAPORE — 0.5% | ||||||||
United Overseas Bank Ltd. | 96,616 | 1,353,729 | ||||||
SOUTH KOREA — 1.3% | ||||||||
Hyundai Motor Co. | 15,895 | 2,364,919 | ||||||
Samsung Electronics Co. Ltd. | 1,200 | 854,925 | ||||||
3,219,844 | ||||||||
SPAIN — 2.7% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 235,360 | 2,162,088 | ||||||
Banco Santander SA | 117,216 | 1,110,711 | ||||||
Inditex SA | 21,700 | 1,635,416 | ||||||
Telefonica SA | 84,000 | 1,787,103 | ||||||
6,695,318 | ||||||||
SWEDEN — 4.5% | ||||||||
Alfa Laval AB | 118,000 | 2,072,133 | ||||||
Atlas Copco AB A Shares | 121,500 | 2,682,973 | ||||||
Swedbank AB A Shares(1) | 151,200 | 1,911,271 | ||||||
Telefonaktiebolaget LM Ericsson B Shares | 141,700 | 1,461,759 | ||||||
Volvo AB B Shares(1) | 218,000 | 3,164,834 | ||||||
11,292,970 | ||||||||
SWITZERLAND — 8.4% | ||||||||
Adecco SA | 12,800 | 728,860 | ||||||
Givaudan SA | 2,000 | 2,004,683 | ||||||
Holcim Ltd. | 11,300 | 727,888 | ||||||
Kuehne + Nagel International AG | 15,700 | 2,013,242 | ||||||
Nestle SA | 32,200 | 1,750,122 | ||||||
Novartis AG | 78,865 | 4,184,289 | ||||||
Roche Holding AG | 19,166 | 2,631,470 | ||||||
Sonova Holding AG | 7,000 | 873,910 | ||||||
Swatch Group AG (The) | 6,200 | 2,489,513 | ||||||
UBS AG(1) | 109,600 | 1,641,297 | ||||||
Xstrata plc | 104,400 | 2,098,066 | ||||||
21,143,340 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 3.3% | ||||||||
AU Optronics Corp.(1) | 1,874,000 | 1,875,076 | ||||||
Hon Hai Precision Industry Co. Ltd. | 476,400 | 1,695,707 | ||||||
HTC Corp. | 113,550 | 3,147,700 | ||||||
Nan Ya Printed Circuit Board Corp. | 134,000 | 474,764 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 543,000 | 1,129,376 | ||||||
8,322,623 |
12
Shares | Value | |||||||
TURKEY — 0.4% | ||||||||
Turkiye Garanti Bankasi AS | 178,800 | $991,550 | ||||||
UNITED KINGDOM — 15.5% | ||||||||
Admiral Group plc | 70,441 | 1,674,191 | ||||||
Antofagasta plc | 104,513 | 2,137,726 | ||||||
ARM Holdings plc | 325,300 | 2,002,700 | ||||||
Barclays plc | 605,735 | 2,413,421 | ||||||
BG Group plc | 175,831 | 3,176,660 | ||||||
British Airways plc(1) | 231,800 | 921,574 | ||||||
Burberry Group plc | 71,666 | 1,110,270 | ||||||
Capita Group plc (The) | 154,805 | 1,569,960 | ||||||
Carnival plc | 59,613 | 2,431,251 | ||||||
Compass Group plc | 236,582 | 2,044,193 | ||||||
HSBC Holdings plc (Hong Kong) | 330,578 | 3,361,081 | ||||||
Intertek Group plc | 58,000 | 1,636,520 | ||||||
Lloyds Banking Group plc(1) | 942,100 | 885,242 | ||||||
Reckitt Benckiser Group plc | 48,877 | 2,584,875 | ||||||
Reed Elsevier plc | 119,370 | 945,081 | ||||||
Rolls-Royce Group plc C Shares(1) | 9,340,864 | 14,529 | ||||||
Schroders plc | 50,693 | 1,258,453 | ||||||
Standard Chartered plc | 46,345 | 1,247,832 | ||||||
Tesco plc | 319,453 | 2,058,628 | ||||||
Tullow Oil plc | 57,900 | 1,032,995 | ||||||
Vodafone Group plc | 1,226,500 | 3,066,723 | ||||||
Wolseley plc(1) | 42,800 | 1,142,397 | ||||||
38,716,302 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $207,459,257) | 243,711,139 | |||||||
Temporary Cash Investments — 2.1% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 59,515 | 59,515 | ||||||
Repurchase Agreement, Bank of America Securities, LLC, (collateralized by various U.S. Treasury obligations, 1.125%-2.125%, 6/30/11-11/30/14, valued at $5,312,603), in a joint trading account at 0.21%, dated 11/30/10, due 12/1/10 (Delivery value $5,200,030) | 5,200,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,259,515) | 5,259,515 | |||||||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $212,718,772) | 248,970,654 | |||||||
OTHER ASSETS AND LIABILITIES — 0.5% | 1,246,887 | |||||||
TOTAL NET ASSETS — 100.0% | $250,217,541 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 17.8% |
Consumer Discretionary | 15.9% |
Industrials | 14.7% |
Information Technology | 12.2% |
Consumer Staples | 9.7% |
Materials | 8.5% |
Energy | 6.8% |
Health Care | 6.6% |
Telecommunication Services | 4.6% |
Utilities | 0.6% |
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments and other assets and liabilities.
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.
13
Statement of Assets and Liabilities |
NOVEMBER 30, 2010 | ||||
Assets | ||||
Investment securities, at value (cost of $212,718,772) | $248,970,654 | |||
Foreign currency holdings, at value (cost $16,506) | 16,508 | |||
Receivable for capital shares sold | 1,358,550 | |||
Dividends and interest receivable | 708,104 | |||
Other assets | 1,947 | |||
251,055,763 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 32,731 | |||
Payable for investments purchased | 499,169 | |||
Accrued management fees | 234,075 | |||
Accrued foreign taxes | 72,247 | |||
838,222 | ||||
Net Assets | $250,217,541 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 27,479,622 | |||
Net Asset Value Per Share | $9.11 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $223,948,915 | |||
Undistributed net investment income | 1,878,510 | |||
Accumulated net realized loss | (11,797,005 | ) | ||
Net unrealized appreciation | 36,187,121 | |||
$250,217,541 |
See Notes to Financial Statements.
14
Statement of Operations |
YEAR ENDED NOVEMBER 30, 2010 | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $430,220) | $4,349,162 | |||
Interest | 3,229 | |||
4,352,391 | ||||
Expenses: | ||||
Management fees | 2,366,304 | |||
Directors’ fees and expenses | 6,115 | |||
Other expenses | 1,143 | |||
2,373,562 | ||||
Net investment income (loss) | 1,978,829 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $54,099) | 9,811,264 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $3,686) | 1,562,864 | |||
11,374,128 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $23,203) | 9,550,404 | |||
Translation of assets and liabilities in foreign currencies | (5,759,080 | ) | ||
3,791,324 | ||||
Net realized and unrealized gain (loss) | 15,165,452 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $17,144,281 |
See Notes to Financial Statements.
15
Statement of Changes in Net Assets |
YEARS ENDED NOVEMBER 30, 2010 AND NOVEMBER 30, 2009 | ||||||||
Increase (Decrease) in Net Assets | 2010 | 2009 | ||||||
Operations | ||||||||
Net investment income (loss) | $1,978,829 | $1,664,354 | ||||||
Net realized gain (loss) | 11,374,128 | (9,900,332 | ) | |||||
Change in net unrealized appreciation (depreciation) | 3,791,324 | 49,236,728 | ||||||
Net increase (decrease) in net assets resulting from operations | 17,144,281 | 41,000,750 | ||||||
Distributions to Shareholders | ||||||||
From net investment income | (2,270,324 | ) | (1,011,101 | ) | ||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 87,778,606 | 97,265,914 | ||||||
Payments for shares redeemed | (15,911,311 | ) | (29,638,929 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 71,867,295 | 67,626,985 | ||||||
Net increase (decrease) in net assets | 86,741,252 | 107,616,634 | ||||||
Net Assets | ||||||||
Beginning of period | 163,476,289 | 55,859,655 | ||||||
End of period | $250,217,541 | $163,476,289 | ||||||
Undistributed net investment income | $1,878,510 | $2,058,184 | ||||||
Transactions in Shares of the Fund | ||||||||
Sold | 10,301,837 | 14,216,297 | ||||||
Redeemed | (1,809,370 | ) | (4,111,431 | ) | ||||
Net increase (decrease) in shares of the fund | 8,492,467 | 10,104,866 |
See Notes to Financial Statements.
16
Notes to Financial Statements |
NOVEMBER 30, 2010
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company 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 pursues its objective by investing primarily in equity securities of companies in at least three developed countries (excluding the United States). The fund is not permitted to invest in any securities issued by companies assigned by the Global Industry Classification Standard to the tobacco industry.
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 as of 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.
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 typically valued at the closing price on the exchange where primarily traded or as of 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 is used. Depending on local convention or regulation, securities traded over-the-counter are valued at the mean of the latest bid and asked prices, the last sales price, or the official closing price. In its determination of fair value, the fund may review several factors including: market information specific to a security; news developments in U.S. and foreign markets; the performance of particular U.S. and foreign securities, indices, comparable securities, American Depositary Receipts, Exchange-Traded Funds, and other relevant market indicators.
Debt 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, and other relevant market information on the same or comparable securities.
Investments in open-end management investment companies are valued at the reported net asset value per share. Repurchase agreements are valued at cost.
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
17
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. 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 foreign currency transactions and net unrealized appreciation (depreciation) on translation of assets a nd liabilities in foreign currencies, respectively. Certain countries impose taxes on the contract amount of purchases and sales of foreign currency contracts in their currency. The fund records the foreign tax expense, if any, as a reduction to the net realized gain (loss) on foreign currency transactions.
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. The fund is no longer subject to examination by tax authorities for years prior to 2007. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Distributions to Shareholders — Distributions to shareholders are recorded on the ex-dividend date. Distributions from net investment income, if any, are generally declared and paid annually. Distributions from net realized gains, if any, are generally declared and paid twice per year. The 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.
18
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
Management Fees — Effective July 16, 2010, the corporation has entered into a management agreement with ACIM (see Note 8), under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). 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 the daily net assets of the fund 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 as sets 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 include the assets of International Growth Fund, one fund in a series issued by the corporation. The annual management fee schedule ranges from 0.90% to 1.30%. The effective annual management fee for the year ended November 30, 2010 was 1.14%
Prior to July 16, 2010, the corporation had entered into a management agreement with American Century Global Investment Management, Inc. (ACGIM) (see Note 8), under which ACGIM provided the fund with investment advisory and management services. Prior to July 16, 2010, ACGIM had entered into a subadvisory agreement with ACIM on behalf of the fund, under which ACIM made investment decisions for the cash portion of the fund in accordance with the fund’s investment objectives, policies and restrictions under the supervision of ACGIM and the Board of Directors. ACGIM paid all costs associated with retaining ACIM as the subadvisor of the fund.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc. (ACC), the parent of the corporation’s investment advisor, ACIM, the distributor of the corporation, American Century Investment Services, Inc., and the corporation’s transfer agent, American Century Services, LLC. The fund is wholly owned, in aggregate, by various funds in a series issued by American Century Asset Allocation Portfolios, Inc. (ACAAP). ACAAP does not invest in the fund for the purpose of exercising management or control.
The fund is eligible to invest in a money market fund for temporary purposes, which is managed by J.P. Morgan Investment Management, Inc. (JPMIM). The fund has a securities lending agreement with JPMorgan Chase Bank (JPMCB) and a mutual funds services agreement with J.P. Morgan Investor Services Co. (JPMIS). JPMCB is a custodian of the fund. JPMIM, JPMIS and JPMCB are wholly owned subsidiaries of JPMorgan Chase & Co. (JPM). JPM is an equity investor in ACC.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the year ended November 30, 2010, were $239,408,737 and $172,174,448, respectively.
19
5. Fair Value Measurements
The fund’s securities valuation process is based on several considerations and may use multiple inputs to determine the fair value of the positions 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 as follows:
• | Level 1 valuation inputs consist of unadjusted quoted prices in an active market for identical securities; |
• | Level 2 valuation inputs consist of direct or indirect observable market data (including quoted prices for similar securities, evaluations of subsequent market events, interest rates, prepayment speeds, credit risk, etc.); or |
• | 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 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks & Rights | $12,916,478 | $230,794,661 | — | |||||||||
Temporary Cash Investments | 59,515 | 5,200,000 | — | |||||||||
Total Value of Investment Securities | $12,975,993 | $235,994,661 | — |
6. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
7. Federal Tax Information
On December 21, 2010, the fund declared and paid a $0.0933 per-share distribution from net investment income to shareholders of record on December 20, 2010.
The tax character of distributions paid during the years ended November 30, 2010 and November 30, 2009 were as follows:
2010 | 2009 | |||||||
Distributions Paid From | ||||||||
Ordinary income | $2,270,324 | $1,011,101 | ||||||
Long-term capital gains | — | — |
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
20
As of November 30, 2010, the federal tax cost of investments and the components of distributable earnings on a tax-basis were as follows:
Federal tax cost of investments | $215,294,733 | |||
Gross tax appreciation of investments | $39,183,923 | |||
Gross tax depreciation of investments | (5,508,002 | ) | ||
Net tax appreciation (depreciation) of investments | $33,675,921 | |||
Net tax appreciation (depreciation) on translation of assets and liabilities in foreign currencies | $(64,761 | ) | ||
Net tax appreciation (depreciation) | $33,611,160 | |||
Undistributed ordinary income | $2,572,281 | |||
Accumulated capital losses | $(9,914,815 | ) |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales and the realization for tax purposes of unrealized gains on investments in passive foreign investment companies.
The accumulated capital losses 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.
8. Corporate Event
As part of a long-standing estate and business succession plan established by James E. Stowers, Jr., the founder of American Century Investments, ACC Chairman Richard W. Brown succeeded Mr. Stowers as trustee of a trust that holds a greater-than-25% voting interest in ACC, the parent corporation of the fund’s advisors. Under the 1940 Act, this is presumed to represent control of ACC even though it is less than a majority interest. The change of trustee was considered a change of control of ACC and therefore also a change of control of the fund’s advisors even though there has been no change to their management and none is anticipated. The change of control resulted in the assignment of the fund’s investment advisory and subadvisory agreements. As required by the 1940 Act, the assignment auto matically terminated such agreements, making the approval of a new agreement necessary.
On February 18, 2010, the Board of Directors approved interim investment advisory and subadvisory agreements under which the fund was managed until a new agreement was approved. The new investment advisory agreement for the fund was approved by the Board of Directors on March 29, 2010, and by shareholders at a Special Meeting of Shareholders on June 16, 2010. It went into effect on July 16, 2010. The new agreement, which is substantially identical to the terminated agreement (with the exception of the substitution of ACIM for ACGIM and different effective and termination dates), did not result in changes in the management of American Century Investments, the fund, its investment objectives, fees or services provided. In order to streamline American Century’s corporate organization, ACGIM was merged into ACIM on July 16, 2010, eliminating the need for a new subadvisory agreement.
9. Other Tax Information (Unaudited)
The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund hereby designates up to the maximum amount allowable as qualified dividend income for the fiscal year ended November 30, 2010.
21
Financial Highlights |
Institutional Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006(1) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.61 | $6.29 | $12.72 | $10.34 | $10.00 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss) | 0.08 | (2) | 0.10 | (2) | 0.16 | (2) | 0.12 | 0.03 | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.54 | 2.33 | (6.18 | ) | 2.29 | 0.31 | ||||||||||||||
Total From Investment Operations | 0.62 | 2.43 | (6.02 | ) | 2.41 | 0.34 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Investment Income | (0.12 | ) | (0.11 | ) | (0.12 | ) | (0.03 | ) | — | |||||||||||
From Net Realized Gains | — | — | (0.29 | ) | — | — | ||||||||||||||
Total Distributions | (0.12 | ) | (0.11 | ) | (0.41 | ) | (0.03 | ) | — | |||||||||||
Net Asset Value, End of Period | $9.11 | $8.61 | $6.29 | $12.72 | $10.34 | |||||||||||||||
Total Return(3) | 7.28 | % | 39.09 | % | (48.82 | )% | 23.40 | % | 3.40 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.14 | % | 1.18 | % | 1.12 | % | 1.07 | % | 1.07 | %(4) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.95 | % | 1.41 | % | 1.62 | % | 1.15 | % | 0.59 | %(4) | ||||||||||
Portfolio Turnover Rate | 85 | % | 132 | % | 119 | % | 104 | % | 65 | % | ||||||||||
Net Assets, End of Period (in thousands) | $250,218 | $163,476 | $55,860 | $67,703 | $46,380 |
(1) | May 12, 2006 (fund inception) through November 30, 2006. |
(2) | Computed using average shares outstanding throughout the period. |
(3) | Total 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. |
(4) | Annualized. |
See Notes to Financial Statements.
22
Report of Independent Registered Public Accounting Firm |
The Board of Directors and Shareholders,
American Century World Mutual Funds, Inc.:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of NT International Growth Fund, one of the funds constituting American Century World Mutual Funds, Inc. (the “Corporation”), as of November 30, 2010, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Corporation is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a tes t basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of NT International Growth Fund of American Century World Mutual Funds, Inc., as of November 30, 2010, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America.
Deloitte & Touche LLP
Kansas City, Missouri
January 21, 2011
23
Proxy Voting Results |
A special meeting of shareholders was held on June 16, 2010, to vote on the following proposals. Each proposal received the required number of votes and was adopted. A summary of voting results is listed below each proposal.
Proposal 1:
To elect one Director to the Board of Directors of American Century World Mutual Funds, Inc. (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
John R. Whitten | For: | 2,929,586,620 | |
Withhold: | 111,215,872 | ||
Abstain: | ��0 | ||
Broker Non-Vote: | 0 |
The other directors whose term of office continued after the meeting include Jonathan S. Thomas, Thomas A. Brown, Andrea C. Hall, James A. Olson, Donald H. Pratt, and M. Jeannine Strandjord.
Proposal 2:
To approve a management agreement between the fund and American Century Investment Management, Inc.:
Institutional Class | For: | 193,130,586 | |
Against: | 813,085 | ||
Abstain: | 1,147,643 | ||
Broker Non-Vote: | 0 |
Proposal 3:
To approve an amendment to the Articles of Incorporation to limit certain director liability to the extent permitted by Maryland law (the proposal was voted on by all shareholders of funds issued by American Century World Mutual Funds, Inc.):
For: | 2,615,996,754 | ||
Against: | 146,084,712 | ||
Abstain: | 88,327,689 | ||
Broker Non-Vote: | 190,393,337 |
24
Management |
The Board of Directors
The individuals listed below serve as directors of the fund. Each director will continue to serve in this capacity until death, retirement, resignation or removal from office. The mandatory retirement age for directors who are not “interested persons,” as that term is defined in the Investment Company Act (independent directors), is 72. However, the mandatory retirement age for an individual director may be extended with the approval of the remaining independent directors.
Mr. Thomas is the only director who is an “interested person” because he currently serves as President and Chief Executive Officer of American Century Companies, Inc. (ACC), the parent company of American Century Investment Management, Inc. (ACIM or the advisor).
The other directors (more than three-fourths of the total number) are independent; that is, they have never been employees, directors or officers of, and have no financial interest in, ACC or any of its wholly owned, direct or indirect, subsidiaries, including ACIM, American Century Investment Services, Inc. (ACIS) and American Century Services, LLC (ACS). The directors serve in this capacity for seven (in the case of Mr. Thomas, 15) registered investment companies in the American Century Investments family of funds.
The following presents additional information about the directors. The mailing address for each director is 4500 Main Street, Kansas City, Missouri 64111.
Independent Directors
Thomas A. Brown
Year of Birth: 1940
Position(s) with the Fund: Director
Length of Time Served: Since 1980
Principal Occupation(s) During the Past Five Years: Managing Member, Associated Investments, LLC (real estate investment company); Brown Cascade Properties, LLC (real estate investment company) (2001 to 2009)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Mechanical Engineering, University of Kansas; formerly, Chief Executive Officer, Associated Bearings Company; formerly, Area Vice President, Applied Industrial Technologies (bearings and power transmission company)
Andrea C. Hall
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1997
Principal Occupation(s) During the Past Five Years: Retired as advisor to the President, Midwest Research Institute (not-for-profit research organization) (June 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Biology, Florida State University; PhD in Biology, Georgetown University; formerly, Senior Vice President and Director of Research Operations, Midwest Research Institute
25
James A. Olson
Year of Birth: 1942
Position(s) with the Fund: Director
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: Member, Plaza Belmont LLC (private equity fund manager); Chief Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Saia, Inc. and Entertainment Properties Trust
Education/Other Professional Experience: BS in Business Administration and MBA, St. Louis University; CPA; 21 years of experience as a partner in the accounting firm of Ernst & Young LLP
Donald H. Pratt
Year of Birth: 1937
Position(s) with the Fund: Director, Chairman of the Board
Length of Time Served: Since 1995 (Chairman since 2005)
Principal Occupation(s) During the Past Five Years: Chairman and Chief Executive Officer, Western Investments, Inc. (real estate company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BS in Industrial Engineering, Wichita State University; MBA, Harvard Business School; serves on the Board of Governors of the Independent Directors Council and Investment Company Institute; formerly, Chairman of the Board, Butler Manufacturing Company (metal buildings producer)
M. Jeannine Strandjord
Year of Birth: 1945
Position(s) with the Fund: Director
Length of Time Served: Since 1994
Principal Occupation(s) During the Past Five Years: Retired, formerly, Senior Vice President, Process Excellence, Sprint Corporation (telecommunications company) (January 2005 to September 2005)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: DST Systems Inc., Euronet Worldwide Inc., Charming Shoppes, Inc.
Education/Other Professional Experience: BS in Business Administration and Accounting, University of Kansas; CPA; formerly, Senior Vice President of Financial Services and Treasurer and Chief Financial Officer, Global Markets Group; Sprint Corporation; formerly, with the accounting firm of Ernst and Whinney
John R. Whitten
Year of Birth: 1946
Position(s) with the Fund: Director
Length of Time Served: Since 2008
Principal Occupation(s) During the Past Five Years: Project Consultant, Celanese Corp. (industrial chemical company)
Number of Funds in Fund Complex Overseen by Director: 61
Other Directorships Held by Director During the Past Five Years: Rudolph Technologies, Inc.
Professional Education/Experience: BS in Business Administration, Cleveland State University; CPA; formerly, Chief Financial Officer and Treasurer, Applied Industrial Technologies, Inc.; thirteen years of experience with accounting firm Deloitte & Touche LLP
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Interested Director
Jonathan S. Thomas
Year of Birth: 1963
Position(s) with the Fund: Director and President
Length of Time Served: Since 2007
Principal Occupation(s) During the Past Five Years: President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries
Number of Funds in Fund Complex Overseen by Director: 101
Other Directorships Held by Director During the Past Five Years: None
Education/Other Professional Experience: BA in Economics, University of Massachusetts; MBA, Boston College; formerly held senior leadership roles with Fidelity Investments, Boston Financial Services, Bank of America and Morgan Stanley; serves on the Board of Governors of the Investment Company Institute
Officers
The following table presents certain information about the executive officers of the fund. Each officer serves as an officer for each of the 15 investment companies in the American Century family of funds, unless otherwise noted. No officer is compensated for his or her service as an officer of the fund. The listed officers are interested persons of the fund and are appointed or re-appointed on an annual basis. The mailing address for each of the officers listed below is 4500 Main Street, Kansas City, Missouri 64111.
Name (Year of Birth) | Offices with the Fund | Principal Occupation(s) During the Past Five Years | |
Jonathan S. Thomas (1963) | Director and President since 2007 | President and Chief Executive Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC (February 2006 to February 2007); Executive Vice President, ACC (November 2005 to February 2007). Also serves as: Chief Executive Officer and Manager, ACS; Executive Vice President, ACIM; Director, ACC, ACIM and other ACC subsidiaries | |
Barry Fink (1955) | Executive Vice President since 2007 | Chief Operating Officer and Executive Vice President, ACC (September 2007 to present); President, ACS (October 2007 to present); Managing Director, Morgan Stanley (2000 to 2007); Global General Counsel, Morgan Stanley (2000 to 2006). Also serves as: Manager, ACS and Director, ACC and certain ACC subsidiaries | |
Maryanne L. Roepke (1956) | Chief Compliance Officer since 2006 and Senior Vice President since 2000 | Chief Compliance Officer, American Century funds, ACIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995 to August 2006); and Treasurer and Chief Financial Officer, various American Century funds (July 2000 to August 2006). Also serves as: Senior Vice President, ACS | |
Charles A. Etherington (1957) | General Counsel since 2007 and Senior Vice President since 2006 | Attorney, ACC (February 1994 to present); Vice President, ACC (November 2005 to present), General Counsel, ACC (March 2007 to present); Also serves as General Counsel, ACIM, ACS, ACIS and other ACC subsidiaries; and Senior Vice President, ACIM and ACS | |
Robert J. Leach (1966) | Vice President, Treasurer and Chief Financial Officer since 2006 | Vice President, ACS (February 2000 to present); and Controller, various American Century funds (1997 to September 2006) | |
David H. Reinmiller (1963) | Vice President since 2000 | Attorney, ACC (January 1994 to present); Associate General Counsel, ACC (January 2001 to present); Chief Compliance Officer, American Century funds and ACIM (January 2001 to February 2005). Also serves as Vice President, ACIM and ACS | |
Ward D. Stauffer (1960) | Secretary since 2005 | Attorney, ACC (June 2003 to present) |
The Statement of Additional Information has additional information about the fund’s directors and is available without charge, upon request, by calling 1-800-345-2021.
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Additional Information |
Retirement Account Information
As required by law, distributions you receive from certain IRAs, or 403(b), 457 and qualified plans are subject to federal income tax withholding, unless you elect not to have withholding apply. Tax will be withheld on the total amount withdrawn even though you may be receiving amounts that are not subject to withholding, such as nondeductible contributions. In such case, excess amounts of withholding could occur. You may adjust your withholding election so that a greater or lesser amount will be withheld.
If you don’t want us to withhold on this amount, you must notify us to not withhold the federal income tax. You may notify us in writing or in certain situations by telephone or through other electronic means. You have the right to revoke your withholding election at any time and any election you make may remain in effect until revoked by filing a new election.
Remember, even if you elect not to have income tax withheld, you are liable for paying income tax on the taxable portion of your withdrawal. If you elect not to have income tax withheld or you don’t have enough income tax withheld, you may be responsible for payment of estimated tax. You may incur penalties under the estimated tax rules if your withholding and estimated tax payments are not sufficient. You can reduce or defer the income tax on a distribution by directly or indirectly rolling such distribution over to another IRA or eligible plan. You should consult your tax advisor for additional information.
State tax will be withheld if, at the time of your distribution, your address is within one of the mandatory withholding states and you have federal income tax withheld. State taxes will be withheld from your distribution in accordance with the respective state rules.
Proxy Voting Guidelines
American Century Investment Management, Inc., the fund’s investment advisor, is responsible for exercising the voting rights associated with the securities purchased and/or held by the fund. A description of the policies and procedures the advisor uses in fulfilling this responsibility is available without charge, upon request, by calling 1-800-345-2021. It is also available on American Century Investments’ website at americancentury.com and on the Securities and Exchange Commission’s website at sec.gov. Information regarding how the investment advisor voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the “About Us” page at americancentury.com. It is also available at sec.gov.
Quarterly Portfolio Disclosure
The 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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Contact Us | americancentury.com |
Automated Information Line | 1-800-345-8765 |
Investor Services Representative | 1-800-345-2021 or 816-531-5575 |
Investors Using Advisors | 1-800-378-9878 |
Business, Not-For-Profit, Employer-Sponsored Retirement Plans | 1-800-345-3533 |
Banks and Trust Companies, Broker-Dealers, Financial Professionals, Insurance Companies | 1-800-345-6488 |
Telecommunications Device for the Deaf | 1-800-634-4113 |
American Century World Mutual Funds, Inc.
Investment Advisor:
American Century 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.
American Century Investment Services, Inc., Distributor
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-ANN-70201 1101
ITEM 2. CODE OF ETHICS.
(a) | The registrant has adopted a Code of Ethics for Senior Financial Officers that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer, and persons performing similar functions. |
(b) | No response required. |
(c) | None. |
(d) | None. |
(e) | Not applicable. |
(f) | The registrant’s Code of Ethics for Senior Financial Officers was filed as Exhibit 12 (a)(1) to American Century Asset Allocation Portfolios, Inc.’s Annual Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005, and is incorporated herein by reference. |
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1) | The registrant’s board has determined that the registrant has at least one audit committee financial expert serving on its audit committee. |
(a)(2) | James A. Olson, Andrea C. Hall and Thomas A. Brown are the registrant’s designated audit committee financial experts. They are “independent” as defined in Item 3 of Form N-CSR. |
(a)(3) | Not applicable. |
(b) | No response required. |
(c) | No response required. |
(d) | No response required. |
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) | Audit Fees. |
The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were as follows:
FY 2009: $204,457
FY 2010: $184,644
(b) | Audit-Related Fees. |
The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item were as follows:
For services rendered to the registrant: |
FY 2009: $0 FY 2010: $0 |
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2009: $0 FY 2010: $0 |
(c) | Tax Fees. |
The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning were as follows:
For services rendered to the registrant: |
FY 2009: $0
FY 2010: $0
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2009: $0
FY 2010: $0
(d) | All Other Fees. |
The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item were as follows:
For services rendered to the registrant: |
FY 2009: $0 FY 2010: $0 |
Fees required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X (relating to certain engagements for non-audit services with the registrant’s investment adviser and its affiliates):
FY 2009: $0 FY 2010: $0 |
(e)(1) | In accordance with paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X, before the accountant is engaged by the registrant to render audit or non-audit services, the engagement is approved by the registrant’s audit committee. Pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, the registrant’s audit committee also pre-approves its accountant’s engagements for non-audit services with the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, if the engagement relates directly to the operations and financial reporting of the registrant. |
(e)(2) | All services described in each of paragraphs (b) through (d) of this Item were pre-approved before the engagement by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation S-X. Consequently, none of such services were required to be approved by the audit committee pursuant to paragraph (c)(7)(i)(C). |
(f) | The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was less than 50%. |
(g) | The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant were as follows: |
FY 2009: $55,065
FY 2010: $59,174
(h) | The registrant’s investment adviser and accountant have notified the registrant’s audit committee of all non-audit services that were rendered by the registrant’s accountant to the registrant’s investment adviser, its parent company, and any entity controlled by, or under common control with the investment adviser that provides services to the registrant, which services were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X. The notification provided to the registrant’s audit committee included sufficient details regarding such services to allow the registrant’s audit committee to consider the continuing independence of its principal accountant. |
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Registrant’s Code of Ethics for Senior Financial Officers, which is the subject of the disclosure required by Item 2 of Form N-CSR, was filed as Exhibit 12(a)(1) to American Century Asset Allocation Portfolios, Inc.’s Certified Shareholder Report on Form N-CSR, File No. 811-21591, on September 29, 2005. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as 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: | January 28, 2011 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
(principal executive officer) | |||
Date: | January 28, 2011 |
By: | /s/ Robert J. Leach | ||
Name: | Robert J. Leach | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | January 28, 2011 |