UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-06247 | |||||
AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. | ||||||
(Exact name of registrant as specified in charter) | ||||||
4500 MAIN STREET, KANSAS CITY, MISSOURI | 64111 | |||||
(Address of principal executive offices) | (Zip Code) | |||||
CHARLES A. ETHERINGTON 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111 | ||||||
(Name and address of agent for service) | ||||||
Registrant’s telephone number, including area code: | 816-531-5575 | |||||
Date of fiscal year end: | 11-30 | |||||
Date of reporting period: | 5-31-2011 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | MAY 31, 2011
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Emerging Markets Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 20 |
Additional Information | 26 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
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Total Returns as of May 31, 2011 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWMIX | 9.57% | 32.62% | 8.36% | 12.51% | 8.73% | 9/30/97 |
MSCI Emerging Markets Growth Index | — | 9.37% | 29.74% | 10.17% | 14.15% | N/A(3) | — |
Institutional Class | AMKIX | 9.60% | 32.96% | 8.57% | 12.72% | 13.44% | 1/28/99 |
A Class(4) No sales charge* With sales charge* | AEMMX | 9.36% 3.09% | 32.35% 24.83% | 8.12% 6.84% | 12.24% 11.58% | 10.77% 10.23% | 5/12/99 |
B Class No sales charge* With sales charge* | ACKBX | 8.98% 3.98% | 31.50% 27.50% | — — | — — | -4.64% -5.58% | 9/28/07 |
C Class No sales charge* With sales charge* | ACECX | 8.95% 7.95% | 31.31% 31.31% | 7.31% 7.31% | — — | 13.32% 13.32% | 12/18/01 |
R Class | AEMRX | 9.14% | 31.85% | — | — | -4.19% | 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 and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Benchmark data first available 1/1/01. |
(4) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.73% | 1.53% | 1.98% | 2.73% | 2.73% | 2.23% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not.
4
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Vale SA Preference Shares | 4.2% |
Samsung Electronics Co. Ltd. | 4.0% |
HTC Corp. | 3.6% |
LG Chem Ltd. | 2.7% |
Sberbank of Russia | 2.7% |
iShares MSCI Emerging Markets Index Fund | 2.5% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 2.3% |
CNOOC Ltd. | 2.2% |
Hon Hai Precision Industry Co. Ltd. | 2.2% |
MTN Group Ltd. | 1.9% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 97.4% |
Temporary Cash Investments | 3.6% |
Other Assets and Liabilities | (1.0)% |
Investments by Country | % of net assets |
South Korea | 15.6% |
People’s Republic of China | 14.3% |
Brazil | 12.4% |
Taiwan (Republic of China) | 10.5% |
Hong Kong | 8.0% |
South Africa | 6.6% |
Russian Federation | 5.7% |
Mexico | 4.2% |
India | 3.9% |
Thailand | 3.6% |
Indonesia | 3.4% |
Multi-National | 2.5% |
Turkey | 2.0% |
Other Countries | 4.7% |
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments and other assets and liabilities.
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,095.70 | $8.88 | 1.70% |
Institutional Class | $1,000 | $1,096.00 | $7.84 | 1.50% |
A Class | $1,000 | $1,093.60 | $10.18 | 1.95% |
B Class | $1,000 | $1,089.80 | $14.07 | 2.70% |
C Class | $1,000 | $1,089.50 | $14.07 | 2.70% |
R Class | $1,000 | $1,091.40 | $11.47 | 2.20% |
Hypothetical | ||||
Investor Class | $1,000 | $1,016.45 | $8.55 | 1.70% |
Institutional Class | $1,000 | $1,017.45 | $7.54 | 1.50% |
A Class | $1,000 | $1,015.21 | $9.80 | 1.95% |
B Class | $1,000 | $1,011.47 | $13.54 | 2.70% |
C Class | $1,000 | $1,011.47 | $13.54 | 2.70% |
R Class | $1,000 | $1,013.96 | $11.05 | 2.20% |
* Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
MAY 31, 2011 (UNAUDITED)
Shares | Value | |||||||
Common Stocks — 97.4% | ||||||||
BRAZIL — 12.4% | ||||||||
BR Malls Participacoes SA | 808,400 | $9,489,189 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 313,690 | 9,893,783 | ||||||
Itau Unibanco Holding SA Preference Shares | 539,818 | 12,204,283 | ||||||
Natura Cosmeticos SA | 170,700 | 4,546,230 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 1,409,100 | 8,734,589 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 288,810 | 9,028,200 | ||||||
Vale SA Preference Shares | 966,400 | 27,410,173 | ||||||
81,306,447 | ||||||||
HONG KONG — 8.0% | ||||||||
Brilliance China Automotive Holdings Ltd.(1) | 4,864,000 | 4,457,596 | ||||||
China Lumena New Materials Corp. | 8,388,000 | 3,724,502 | ||||||
China Merchants Holdings International Co. Ltd. | 1,475,132 | 6,427,388 | ||||||
China Overseas Land & Investment Ltd. | 2,168,000 | 4,551,446 | ||||||
China Unicom Ltd. | 3,888,000 | 8,587,974 | ||||||
CNOOC Ltd. | 5,632,000 | 14,246,859 | ||||||
Comba Telecom Systems Holdings Ltd. | 2,907,030 | 3,223,611 | ||||||
Xinyi Glass Holdings Ltd. | 6,752,000 | 6,892,931 | ||||||
52,112,307 | ||||||||
HUNGARY — 0.8% | ||||||||
OTP Bank plc(1) | 157,886 | 5,227,916 | ||||||
INDIA — 3.9% | ||||||||
HDFC Bank Ltd. | 140,593 | 7,491,165 | ||||||
ICICI Bank Ltd. | 294,473 | 7,069,305 | ||||||
Infosys Technologies Ltd. | 84,391 | 5,213,673 | ||||||
Sesa Goa Ltd. | 257,699 | 1,658,618 | ||||||
Tata Motors Ltd. | 177,540 | 4,317,408 | ||||||
25,750,169 | ||||||||
INDONESIA — 3.4% | ||||||||
PT Astra International Tbk | 859,500 | 5,917,386 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 9,650,000 | 7,199,559 | ||||||
PT Indofood CBP Sukses Makmur Tbk(1) | 8,105,000 | 4,795,483 | ||||||
PT Semen Gresik (Persero) Tbk | 3,870,000 | 4,398,930 | ||||||
22,311,358 | ||||||||
MALAYSIA — 0.7% | ||||||||
CIMB Group Holdings Bhd | 1,709,400 | 4,753,329 | ||||||
MEXICO — 4.2% | ||||||||
Alfa SAB de CV, Series A | 467,928 | 6,765,078 | ||||||
America Movil SAB de CV, Series L ADR | 115,595 | 6,091,857 | ||||||
Fomento Economico Mexicano SAB de CV ADR | 75,357 | 4,666,859 | ||||||
Wal-Mart de Mexico SAB de CV | 3,359,156 | 10,201,278 | ||||||
27,725,072 | ||||||||
MULTI-NATIONAL — 2.5% | ||||||||
iShares MSCI Emerging Markets Index Fund | 336,800 | 16,351,640 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 14.3% | ||||||||
51job, Inc. ADR(1) | 48,260 | 2,756,129 | ||||||
Agricultural Bank of China Ltd. H Shares(1) | 10,602,000 | 6,494,652 | ||||||
Baidu, Inc. ADR(1) | 50,320 | 6,828,927 | ||||||
China BlueChemical Ltd. H Shares | 5,554,000 | 4,432,552 | ||||||
China Liansu Group Holdings Ltd. | 4,813,000 | 4,058,556 | ||||||
China National Building Material Co. Ltd. H Shares | 4,320,000 | 8,788,918 | ||||||
China Oilfield Services Ltd. H Shares(1) | 2,368,000 | 4,728,885 | ||||||
Evergrande Real Estate Group Ltd. | 7,771,000 | 5,481,598 | ||||||
Focus Media Holding Ltd. ADR(1) | 287,264 | 8,977,000 | ||||||
Golden Eagle Retail Group Ltd. | 587,000 | 1,536,459 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares(1) | 8,654,645 | 7,262,226 | ||||||
Ping An Insurance Group Co. H Shares | 1,101,000 | 11,840,607 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 4,366,500 | 5,201,718 | ||||||
Tencent Holdings Ltd. | 318,300 | 9,175,342 | ||||||
Xingda International Holdings Ltd. | 2,603,000 | 2,785,597 | ||||||
ZTE Corp. H Shares | 955,920 | 3,410,079 | ||||||
93,759,245 | ||||||||
POLAND — 0.5% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 203,557 | 3,265,609 |
8
Shares | Value | |||||||
RUSSIAN FEDERATION — 5.7% | ||||||||
Magnit OJSC GDR | 199,649 | $6,153,327 | ||||||
NovaTek OAO GDR | 72,735 | 9,924,547 | ||||||
Rosneft Oil Co. OJSC GDR | 391,842 | 3,405,237 | ||||||
Sberbank of Russia | 4,924,766 | 17,420,325 | ||||||
36,903,436 | ||||||||
SOUTH AFRICA — 6.6% | ||||||||
Barloworld Ltd. | 640,421 | 6,843,498 | ||||||
Exxaro Resources Ltd. | 368,826 | 8,795,923 | ||||||
MTN Group Ltd. | 586,074 | 12,511,705 | ||||||
Naspers Ltd. N Shares | 61,803 | 3,689,170 | ||||||
Sasol Ltd. | 216,405 | 11,519,842 | ||||||
43,360,138 | ||||||||
SOUTH KOREA — 15.6% | ||||||||
Celltrion, Inc. | 177,666 | 6,062,685 | ||||||
CrucialTec Co. Ltd.(1) | 178,435 | 3,681,310 | ||||||
Doosan Infracore Co. Ltd.(1) | 108,900 | 2,480,850 | ||||||
Hyundai Heavy Industries Co. Ltd. | 18,192 | 8,535,790 | ||||||
Hyundai Motor Co. | 47,618 | 11,182,326 | ||||||
Hyundai Steel Co. | 38,048 | 4,207,846 | ||||||
LG Chem Ltd. | 35,618 | 17,707,530 | ||||||
LG Household & Health Care Ltd. | 17,476 | 7,152,475 | ||||||
NCSoft Corp. | 19,950 | 5,232,357 | ||||||
Samsung Electronics Co. Ltd. | 31,489 | 26,394,820 | ||||||
Samsung Heavy Industries Co. Ltd. | 216,420 | 9,241,574 | ||||||
101,879,563 | ||||||||
SWITZERLAND — 1.0% | ||||||||
Ferrexpo plc | 883,939 | 6,667,908 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 10.5% | ||||||||
Catcher Technology Co. Ltd. | 1,425,000 | 9,323,631 | ||||||
Hon Hai Precision Industry Co. Ltd. | 4,017,697 | 14,138,406 | ||||||
HTC Corp. | 544,800 | 23,285,690 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 5,729,939 | 15,318,192 | ||||||
TPK Holding Co. Ltd.(1) | 198,000 | 6,465,493 | ||||||
68,531,412 | ||||||||
THAILAND — 3.6% | ||||||||
Banpu PCL | 368,650 | 8,968,690 | ||||||
CP ALL PCL | 4,464,100 | 6,567,594 | ||||||
Kasikornbank PCL NVDR | 1,984,900 | 8,156,381 | ||||||
23,692,665 | ||||||||
TURKEY — 2.0% | ||||||||
Tofas Turk Otomobil Fabrikasi AS | 700,577 | 3,390,465 | ||||||
Turkiye Garanti Bankasi AS | 1,045,723 | 4,674,169 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 1,849,176 | 4,945,686 | ||||||
13,010,320 | ||||||||
UNITED KINGDOM — 1.7% | ||||||||
Antofagasta plc | 188,653 | 4,131,196 | ||||||
International Personal Finance plc | 1,086,105 | 6,646,876 | ||||||
10,778,072 | ||||||||
TOTAL COMMON STOCKS (Cost $431,933,800) | 637,386,606 | |||||||
Temporary Cash Investments — 3.6% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 95,235 | 95,235 | ||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 2.875%, 2/15/19, valued at $23,751,294), in a joint trading account at 0.05%, dated 5/31/11, due 6/1/11 (Delivery value $23,300,032) | 23,300,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $23,395,235) | 23,395,235 | |||||||
TOTAL INVESTMENT SECURITIES — 101.0% (Cost $455,329,035) | 660,781,841 | |||||||
OTHER ASSETS AND LIABILITIES — (1.0)% | (6,775,271 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $654,006,570 |
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 20.1% |
Financials | 19.8% |
Materials | 14.5% |
Energy | 9.4% |
Consumer Discretionary | 9.1% |
Industrials | 8.7% |
Consumer Staples | 8.2% |
Telecommunication Services | 4.2% |
Diversified | 2.5% |
Health Care | 0.9% |
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments and other assets and liabilities.
9
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depository Receipt
MSCI = Morgan Stanley Capital International
NVDR = Non-Voting Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $455,329,035) | $660,781,841 | |||
Foreign currency holdings, at value (cost of $614,474) | 615,662 | |||
Receivable for capital shares sold | 295,820 | |||
Dividends and interest receivable | 2,143,943 | |||
Other assets | 252,344 | |||
664,089,610 | ||||
Liabilities | ||||
Payable for investments purchased | 8,448,586 | |||
Payable for capital shares redeemed | 691,210 | |||
Accrued management fees | 932,054 | |||
Distribution and service fees payable | 11,190 | |||
10,083,040 | ||||
Net Assets | $654,006,570 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $589,723,733 | |||
Undistributed net investment income | 174,469 | |||
Accumulated net realized loss | (141,351,758 | ) | ||
Net unrealized appreciation | 205,460,126 | |||
$654,006,570 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $584,392,640 | 63,061,758 | $9.27 |
Institutional Class, $0.01 Par Value | $37,179,202 | 3,921,252 | $9.48 |
A Class, $0.01 Par Value | $26,186,443 | 2,908,295 | $9.00* |
B Class, $0.01 Par Value | $303,677 | 33,389 | $9.10 |
C Class, $0.01 Par Value | $5,109,509 | 591,661 | $8.64 |
R Class, $0.01 Par Value | $835,099 | 90,839 | $9.19 |
*Maximum offering price $9.55 (net asset value divided by 0.9425)
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $304,376) | $5,976,947 | |||
Interest | 943 | |||
5,977,890 | ||||
Expenses: | ||||
Management fees | 5,589,031 | |||
Distribution and service fees: | ||||
A Class | 39,055 | |||
B Class | 1,609 | |||
C Class | 26,457 | |||
R Class | 2,045 | |||
Directors’ fees and expenses | 17,447 | |||
Other expenses | 1,355 | |||
5,676,999 | ||||
Net investment income (loss) | 300,891 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 47,775,856 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $93,358) | 8,212,953 | |||
55,988,809 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(244,235)) | (3,927,297 | ) | ||
Translation of assets and liabilities in foreign currencies | 7,092,610 | |||
3,165,313 | ||||
Net realized and unrealized gain (loss) | 59,154,122 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $59,455,013 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $300,891 | $(207,000 | ) | |||||
Net realized gain (loss) | 55,988,809 | 77,686,448 | ||||||
Change in net unrealized appreciation (depreciation) | 3,165,313 | 14,439,135 | ||||||
Net increase (decrease) in net assets resulting from operations | 59,455,013 | 91,918,583 | ||||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (66,465,808 | ) | (55,654,147 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 103,593 | 224,631 | ||||||
Net increase (decrease) in net assets | (6,907,202 | ) | 36,489,067 | |||||
Net Assets | ||||||||
Beginning of period | 660,913,772 | 624,424,705 | ||||||
End of period | $654,006,570 | $660,913,772 | ||||||
Accumulated undistributed net investment income (loss) | $174,469 | $(126,422 | ) |
See Notes to Financial Statements.
13
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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
14
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.
Exchange-Traded Funds — The fund may invest in exchange-traded funds (ETFs). ETFs are a type of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. A fund may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although a lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
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 change in 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
15
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 from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund 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 six months ended May 31, 2011 was 1.69% for the Investor Class, A Class, B Class, C Class and R Class and 1.49% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, 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 six months ended May 31, 2011 are detailed in the Statement of Operations.
16
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. Various funds in a series issued by American Century Asset Allocation Portfolios, Inc. (ACAAP) own, in aggregate, 13% of the shares of the fund. 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 six months ended May 31, 2011 were $239,747,836 and $322,629,383, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 235,000,000 | 235,000,000 | ||||||||||||||
Sold | 3,926,535 | $34,933,061 | 10,049,637 | $78,127,996 | ||||||||||||
Redeemed | (9,862,598 | ) | (87,558,146 | ) | (18,943,255 | ) | (143,285,753 | ) | ||||||||
(5,936,063 | ) | (52,625,085 | ) | (8,893,618 | ) | (65,157,757 | ) | |||||||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 470,021 | 4,245,870 | 2,068,557 | 15,260,457 | ||||||||||||
Redeemed | (1,284,317 | ) | (11,730,111 | ) | (1,073,145 | ) | (8,148,864 | ) | ||||||||
(814,296 | ) | (7,484,241 | ) | 995,412 | 7,111,593 | |||||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 1,719,318 | 15,285,720 | 1,865,594 | 14,476,416 | ||||||||||||
Redeemed | (2,402,333 | ) | (20,941,780 | ) | (1,549,076 | ) | (11,528,392 | ) | ||||||||
(683,015 | ) | (5,656,060 | ) | 316,518 | 2,948,024 | |||||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 1,888 | 16,653 | 8,745 | 69,194 | ||||||||||||
Redeemed | (5,588 | ) | (48,436 | ) | (4,918 | ) | (35,138 | ) | ||||||||
(3,700 | ) | (31,783 | ) | 3,827 | 34,056 | |||||||||||
C Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 42,192 | 354,191 | 134,226 | 979,767 | ||||||||||||
Redeemed | (113,740 | ) | (955,292 | ) | (250,782 | ) | (1,785,645 | ) | ||||||||
(71,548 | ) | (601,101 | ) | (116,556 | ) | (805,878 | ) | |||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 16,334 | 144,274 | 69,308 | 533,453 | ||||||||||||
Redeemed | (23,871 | ) | (211,812 | ) | (41,838 | ) | (317,638 | ) | ||||||||
(7,537 | ) | (67,538 | ) | 27,470 | 215,815 | |||||||||||
Net increase (decrease) | (7,516,159 | ) | $(66,465,808 | ) | (7,666,947 | ) | $(55,654,147 | ) |
17
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 | $64,594,395 | $572,792,211 | — | |||||||||
Temporary Cash Investments | 95,235 | 23,300,000 | — | |||||||||
Total Value of Investment Securities | $64,689,630 | $596,092,211 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $458,297,975 | |||
Gross tax appreciation of investments | $205,231,937 | |||
Gross tax depreciation of investments | (2,748,071 | ) | ||
Net tax appreciation (depreciation) of investments | $202,483,866 |
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.
18
As of November 30, 2010, the fund had accumulated capital losses of $(193,823,726), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(76,617,325) and $(117,206,401) expire in 2016 and 2017, respectively.
The fund has elected to treat $(122,585) of net foreign currency losses incurred in the one-month period ended November 30, 2010, as having been incurred in the following fiscal year for federal income tax purposes.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
19
Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.46 | $7.28 | $4.17 | $12.69 | $10.06 | $8.25 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | — | (3) | — | (3) | 0.01 | 0.09 | 0.10 | 0.11 | ||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.81 | 1.18 | 3.13 | (7.21 | ) | 4.06 | 3.11 | |||||||||||||||||
Total From Investment Operations | 0.81 | 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(2) | — | (3) | — | (3) | — | (3) | 0.01 | 0.02 | 0.01 | |||||||||||||||
Net Asset Value, End of Period | $9.27 | $8.46 | $7.28 | $4.17 | $12.69 | $10.06 | ||||||||||||||||||
Total Return(4) | 9.57 | % | 16.21 | % | 75.36 | % | (62.66 | )% | 48.81 | % | 46.10 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.70 | %(5) | 1.72 | % | 1.78 | % | 1.66 | % | 1.66 | % | 1.80 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.10 | %(5) | (0.02 | )% | 0.11 | % | 1.06 | % | 0.96 | % | 1.31 | % | ||||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $584,393 | $583,978 | $567,248 | $316,695 | $1,070,138 | $523,813 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
20
Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.65 | $7.43 | $4.26 | $12.92 | $10.21 | �� | $8.36 | |||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.01 | 0.02 | 0.02 | 0.12 | 0.12 | 0.12 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.82 | 1.20 | 3.18 | (7.35 | ) | 4.14 | 3.16 | |||||||||||||||||
Total From Investment Operations | 0.83 | 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(2) | — | (3) | — | (3) | — | (3) | 0.01 | 0.02 | 0.01 | |||||||||||||||
Net Asset Value, End of Period | $9.48 | $8.65 | $7.43 | $4.26 | $12.92 | $10.21 | ||||||||||||||||||
Total Return(4) | 9.60 | % | 16.42 | % | 75.92 | % | (62.63 | )% | 49.21 | % | 46.31 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.50 | %(5) | 1.52 | % | 1.58 | % | 1.46 | % | 1.46 | % | 1.60 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.30 | %(5) | 0.18 | % | 0.31 | % | 1.26 | % | 1.16 | % | 1.51 | % | ||||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $37,179 | $40,969 | $27,787 | $27,235 | $74,897 | $85,886 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
21
A Class(1) | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(2) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.23 | $7.10 | $4.07 | $12.40 | $9.85 | $8.11 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | (0.01 | ) | (0.02 | ) | (0.01 | ) | 0.07 | 0.07 | 0.11 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.78 | 1.15 | 3.06 | (7.03 | ) | 3.99 | 3.02 | |||||||||||||||||
Total From Investment Operations | 0.77 | 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(3) | — | (4) | — | (4) | — | (4) | 0.01 | 0.02 | 0.01 | |||||||||||||||
Net Asset Value, End of Period | $9.00 | $8.23 | $7.10 | $4.07 | $12.40 | $9.85 | ||||||||||||||||||
Total Return(5) | 9.36 | % | 15.92 | % | 75.24 | % | (62.78 | )% | 48.61 | % | 45.59 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.95 | %(6) | 1.97 | % | 2.03 | % | 1.91 | % | 1.91 | % | 2.05 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.15 | )%(6) | (0.27 | )% | (0.14 | )% | 0.81 | % | 0.71 | % | 1.06 | % | ||||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $26,186 | $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) | Six months ended May 31, 2011 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Per-share amount was less than $0.005. |
(5) | 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. |
(6) | Annualized. |
See Notes to Financial Statements.
22
B Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007(2) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.35 | $7.26 | $4.17 | $12.67 | $12.15 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(3) | (0.04 | ) | (0.08 | ) | (0.06 | ) | 0.02 | (0.03 | ) | |||||||||||
Net Realized and Unrealized Gain (Loss) | 0.79 | 1.17 | 3.15 | (7.24 | ) | 0.53 | ||||||||||||||
Total From Investment Operations | 0.75 | 1.09 | 3.09 | (7.22 | ) | 0.50 | ||||||||||||||
Distributions | ||||||||||||||||||||
From Net Realized Gains | — | — | — | (1.29 | ) | — | ||||||||||||||
Redemption Fees(3) | — | (4) | — | (4) | — | (4) | 0.01 | 0.02 | ||||||||||||
Net Asset Value, End of Period | $9.10 | $8.35 | $7.26 | $4.17 | $12.67 | |||||||||||||||
Total Return(5) | 8.98 | % | 15.01 | % | 74.10 | % | (63.09 | )% | 4.28 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.70 | %(6) | 2.72 | % | 2.78 | % | 2.67 | % | 2.58 | %(6) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.90 | )%(6) | (1.02 | )% | (0.89 | )% | 0.05 | % | (1.30 | )%(6) | ||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | %(7) | ||||||||||
Net Assets, End of Period (in thousands) | $304 | $310 | $241 | $113 | $54 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | September 28, 2007 (commencement of sale) through November 30, 2007. |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Per-share amount was less than $0.005. |
(5) | 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. |
(6) | Annualized. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. |
See Notes to Financial Statements.
23
C Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.93 | $6.89 | $3.96 | $12.10 | $9.64 | $7.95 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.04 | ) | (0.07 | ) | (0.05 | ) | 0.01 | (0.01 | ) | 0.03 | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.75 | 1.11 | 2.98 | (6.87 | ) | 3.90 | 2.99 | |||||||||||||||||
Total From Investment Operations | 0.71 | 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(2) | — | (3) | — | (3) | — | (3) | 0.01 | 0.02 | 0.01 | |||||||||||||||
Net Asset Value, End of Period | $8.64 | $7.93 | $6.89 | $3.96 | $12.10 | $9.64 | ||||||||||||||||||
Total Return(4) | 8.95 | % | 15.09 | % | 73.99 | % | (63.09 | )% | 47.39 | % | 44.59 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.70 | %(5) | 2.72 | % | 2.78 | % | 2.66 | % | 2.66 | % | 2.80 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.90 | )%(5) | (1.02 | )% | (0.89 | )% | 0.06 | % | (0.04 | )% | 0.31 | % | ||||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | % | 115 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $5,110 | $5,257 | $5,372 | $3,217 | $9,098 | $2,581 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
24
R Class | ||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007(2) | ||||||||||||||||
Per-Share Data | ||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.42 | $7.28 | $4.17 | $12.68 | $12.15 | |||||||||||||||
Income From Investment Operations | ||||||||||||||||||||
Net Investment Income (Loss)(3) | (0.02 | ) | (0.04 | ) | (0.02 | ) | 0.05 | (0.01 | ) | |||||||||||
Net Realized and Unrealized Gain (Loss) | 0.79 | 1.18 | 3.14 | (7.22 | ) | 0.52 | ||||||||||||||
Total From Investment Operations | 0.77 | 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(3) | — | (4) | — | (4) | — | (4) | 0.01 | 0.02 | ||||||||||||
Net Asset Value, End of Period | $9.19 | $8.42 | $7.28 | $4.17 | $12.68 | |||||||||||||||
Total Return(5) | 9.14 | % | 15.66 | % | 74.94 | % | (62.92 | )% | 4.36 | % | ||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.20 | %(6) | 2.22 | % | 2.28 | % | 2.19 | % | 2.08 | %(6) | ||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.40 | )%(6) | (0.52 | )% | (0.39 | )% | 0.53 | % | (0.68 | )%(6) | ||||||||||
Portfolio Turnover Rate | 36 | % | 87 | % | 126 | % | 121 | % | 85 | %(7) | ||||||||||
Net Assets, End of Period (in thousands) | $835 | $828 | $516 | $144 | $27 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | September 28, 2007 (commencement of sale) through November 30, 2007. |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Per-share amount was less than $0.005. |
(5) | 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. |
(6) | Annualized. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. |
See Notes to Financial Statements.
25
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.
26
27
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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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72026 1107
SEMIANNUAL REPORT | MAY 31, 2011
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![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/frontpagebanner.jpg)
Global Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 20 |
Additional Information | 26 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2011 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWGGX | 14.48% | 31.71% | 4.40% | 5.28% | 8.30% | 12/1/98 |
MSCI World Index | — | 14.85% | 28.07% | 2.60% | 3.82% | 3.45%(3) | — |
Institutional Class | AGGIX | 14.70% | 32.13% | 4.61% | 5.50% | 2.97% | 8/1/00 |
A Class(4) No sales charge* With sales charge* | AGGRX | 14.42% 7.78% | 31.40% 23.84% | 4.13% 2.91% | 5.00% 4.38% | 7.20% 6.69% | 2/5/99 |
B Class No sales charge* With sales charge* | ACWBX | 14.00% 9.00% | 30.50% 26.50% | 3.36% 3.19% | — — | 4.39% 4.24% | 12/1/05 |
C Class No sales charge* With sales charge* | AGLCX | 13.96% 12.96% | 30.50% 30.50% | 3.38% 3.38% | — — | 6.56% 6.56% | 3/1/02 |
R Class | AGORX | 14.23% | 31.16% | 3.87% | — | 5.93% | 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 and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Since 11/30/98, the date nearest the Investor Class’s inception for which data are available. |
(4) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. . |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.16% | 0.96% | 1.41% | 2.16% | 2.16% | 1.66% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not.
4
Fund Characteristics |
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 3.4% |
EMC Corp. | 2.7% |
Danone SA | 2.4% |
Schlumberger Ltd. | 2.2% |
Oracle Corp. | 2.2% |
Charles Schwab Corp. (The) | 2.1% |
Johnson Controls, Inc. | 2.0% |
BHP Billiton Ltd. | 2.0% |
Google, Inc., Class A | 1.9% |
Occidental Petroleum Corp. | 1.9% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 54.4% |
Foreign Common Stocks(1) | 44.4% |
Total Equity Exposure | 98.8% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | 0.9% |
(1)Includes depositary shares, dual listed securities and foreign ordinary shares. | |
Investments by Country | % of net assets |
United States | 54.4% |
United Kingdom | 10.0% |
Switzerland | 5.6% |
Japan | 5.4% |
France | 3.7% |
People’s Republic of China | 3.2% |
Australia | 2.6% |
Germany | 2.2% |
Other Countries | 11.7% |
Cash and Equivalents(2) | 1.2% |
(2)Includes temporary cash investments and other assets and liabilities. |
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 - 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,144.80 | $5.94 | 1.11% |
Institutional Class | $1,000 | $1,147.00 | $4.87 | 0.91% |
A Class | $1,000 | $1,144.20 | $7.27 | 1.36% |
B Class | $1,000 | $1,140.00 | $11.26 | 2.11% |
C Class | $1,000 | $1,139.60 | $11.26 | 2.11% |
R Class | $1,000 | $1,142.30 | $8.60 | 1.61% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.40 | $5.59 | 1.11% |
Institutional Class | $1,000 | $1,020.39 | $4.58 | 0.91% |
A Class | $1,000 | $1,018.15 | $6.84 | 1.36% |
B Class | $1,000 | $1,014.41 | $10.60 | 2.11% |
C Class | $1,000 | $1,014.41 | $10.60 | 2.11% |
R Class | $1,000 | $1,016.90 | $8.10 | 1.61% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
Shares | Value | |||||||
Common Stocks — 98.8% | ||||||||
AUSTRALIA — 2.6% | ||||||||
BHP Billiton Ltd. | 187,220 | $8,928,457 | ||||||
Wesfarmers Ltd. | 81,030 | 2,883,470 | ||||||
11,811,927 | ||||||||
AUSTRIA — 1.0% | ||||||||
Erste Group Bank AG | 91,200 | 4,554,017 | ||||||
BRAZIL — 0.2% | ||||||||
Natura Cosmeticos SA | 34,200 | 910,844 | ||||||
CANADA — 0.3% | ||||||||
Suncor Energy, Inc. | 35,200 | 1,469,619 | ||||||
DENMARK — 0.9% | ||||||||
Carlsberg A/S B Shares | 19,960 | 2,309,551 | ||||||
Pandora A/S | 51,220 | 1,748,969 | ||||||
4,058,520 | ||||||||
FRANCE — 3.7% | ||||||||
Danone SA | 147,390 | 10,815,435 | ||||||
Pernod-Ricard SA | 34,110 | 3,457,634 | ||||||
Safran SA | 65,240 | 2,666,574 | ||||||
16,939,643 | ||||||||
GERMANY — 2.2% | ||||||||
Bayerische Motoren Werke AG | 37,760 | 3,348,226 | ||||||
Fresenius Medical Care AG & Co. KGaA | 59,650 | 4,329,923 | ||||||
Lanxess AG | 26,770 | 2,315,273 | ||||||
9,993,422 | ||||||||
HONG KONG — 1.3% | ||||||||
China Unicom Ltd. | 2,018,000 | 4,457,441 | ||||||
Li & Fung Ltd. | 700,000 | 1,556,045 | ||||||
6,013,486 | ||||||||
INDONESIA — 0.8% | ||||||||
PT Bank Mandiri (Persero) Tbk | 4,095,131 | 3,463,326 | ||||||
ITALY — 1.8% | ||||||||
Saipem SpA | 155,900 | 8,235,984 | ||||||
JAPAN — 5.4% | ||||||||
FANUC CORP. | 12,900 | 1,982,998 | ||||||
Komatsu Ltd. | 278,700 | 8,341,070 | ||||||
Nitori Holdings Co. Ltd. | 21,650 | 1,889,052 | ||||||
ORIX Corp. | 52,940 | 5,073,313 | ||||||
Rakuten, Inc. | 5,072 | 5,153,758 | ||||||
Unicharm Corp. | 54,400 | 2,201,168 | ||||||
24,641,359 | ||||||||
NETHERLANDS — 1.1% | ||||||||
ASML Holding NV New York Shares | 55,170 | 2,152,182 | ||||||
European Aeronautic Defence and Space Co. NV | 78,680 | 2,600,823 | ||||||
4,753,005 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 3.2% | ||||||||
Baidu, Inc. ADR(1) | 54,840 | 7,442,336 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares(1) | 8,344,000 | 7,001,560 | ||||||
14,443,896 | ||||||||
POLAND — 1.0% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 277,010 | 4,443,995 | ||||||
PORTUGAL — 0.5% | ||||||||
Jeronimo Martins SGPS SA | 126,360 | 2,366,030 | ||||||
RUSSIAN FEDERATION — 0.3% | ||||||||
Magnit OJSC GDR | 49,090 | 1,512,989 | ||||||
SOUTH KOREA — 1.2% | ||||||||
Hyundai Motor Co. | 22,420 | 5,264,978 | ||||||
SWEDEN — 0.5% | ||||||||
Atlas Copco AB A Shares | 84,170 | 2,226,146 | ||||||
SWITZERLAND — 5.6% | ||||||||
ABB Ltd.(1) | 136,800 | 3,674,138 | ||||||
Adecco SA(1) | 83,780 | 5,728,816 | ||||||
Holcim Ltd.(1) | 23,030 | 1,836,893 | ||||||
Novartis AG | 64,990 | 4,202,831 | ||||||
Swatch Group AG (The)(1) | 7,970 | 3,971,630 | ||||||
Xstrata plc | 268,730 | 6,313,985 | ||||||
25,728,293 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 0.2% | ||||||||
HTC Corp. | 25,000 | 1,068,543 | ||||||
TURKEY — 0.6% | ||||||||
Turkiye Garanti Bankasi AS | 602,250 | 2,691,935 | ||||||
UNITED KINGDOM — 10.0% | ||||||||
Admiral Group plc | 104,030 | 2,952,371 | ||||||
ARM Holdings plc | 236,560 | 2,241,131 | ||||||
BG Group plc | 307,490 | 7,152,691 | ||||||
Burberry Group plc | 64,730 | 1,407,544 | ||||||
Capita Group plc (The) | 383,160 | 4,646,273 | ||||||
Compass Group plc | 754,860 | 7,365,145 | ||||||
HSBC Holdings plc | 473,120 | 4,947,804 | ||||||
Intertek Group plc | 77,120 | 2,602,655 | ||||||
Petrofac Ltd. | 117,320 | 3,106,497 | ||||||
Reckitt Benckiser Group plc | 96,755 | 5,492,509 | ||||||
Rio Tinto plc | 55,700 | 3,897,258 | ||||||
45,811,878 |
8
Shares | Value | |||||||
UNITED STATES — 54.4% | ||||||||
Air Products & Chemicals, Inc. | 59,920 | $5,697,793 | ||||||
Akamai Technologies, Inc.(1) | 34,126 | 1,158,066 | ||||||
Amazon.com, Inc.(1) | 17,560 | 3,453,876 | ||||||
American Express Co. | 148,510 | 7,663,116 | ||||||
American Tower Corp., Class A(1) | 127,110 | 7,052,063 | ||||||
Apache Corp. | 39,660 | 4,941,636 | ||||||
Apple, Inc.(1) | 45,220 | 15,728,873 | ||||||
BE Aerospace, Inc.(1) | 45,760 | 1,712,339 | ||||||
Celgene Corp.(1) | 50,180 | 3,056,464 | ||||||
Cerner Corp.(1) | 16,450 | 1,975,645 | ||||||
Charles Schwab Corp. (The) | 525,020 | 9,455,610 | ||||||
CIT Group, Inc.(1) | 53,160 | 2,356,583 | ||||||
Coach, Inc. | 56,520 | 3,598,063 | ||||||
Colgate-Palmolive Co. | 72,900 | 6,380,937 | ||||||
Costco Wholesale Corp. | 16,690 | 1,376,591 | ||||||
Danaher Corp. | 140,550 | 7,664,192 | ||||||
Discovery Communications, Inc., Class A(1) | 42,900 | 1,868,724 | ||||||
EMC Corp.(1) | 426,470 | 12,141,601 | ||||||
Equinix, Inc.(1) | 35,850 | 3,635,190 | ||||||
Expeditors International of Washington, Inc. | 76,320 | 4,031,222 | ||||||
Express Scripts, Inc.(1) | 133,780 | 7,967,937 | ||||||
FactSet Research Systems, Inc. | 25,890 | 2,870,165 | ||||||
Fifth Third Bancorp. | 267,686 | 3,495,979 | ||||||
Google, Inc., Class A(1) | 16,770 | 8,871,665 | ||||||
Harley-Davidson, Inc. | 189,080 | 7,026,213 | ||||||
Home Depot, Inc. (The) | 79,370 | 2,879,544 | ||||||
IntercontinentalExchange, Inc.(1) | 53,158 | 6,413,513 | ||||||
Johnson Controls, Inc. | 234,500 | 9,286,200 | ||||||
Kraft Foods, Inc., Class A | 44,820 | 1,567,355 | ||||||
Las Vegas Sands Corp.(1) | 27,030 | 1,122,826 | ||||||
Liberty Global, Inc., Class A(1) | 99,700 | 4,491,485 | ||||||
MasterCard, Inc., Class A | 17,560 | 5,040,598 | ||||||
Occidental Petroleum Corp. | 81,490 | 8,788,697 | ||||||
Oracle Corp. | 293,620 | 10,047,676 | ||||||
Polypore International, Inc.(1) | 13,110 | 859,360 | ||||||
Precision Castparts Corp. | 51,000 | 8,012,100 | ||||||
priceline.com, Inc.(1) | 8,730 | 4,497,609 | ||||||
QUALCOMM, Inc. | 97,730 | 5,726,001 | ||||||
Rockwell Automation, Inc. | 23,010 | 1,912,361 | ||||||
Royal Caribbean Cruises Ltd.(1) | 67,140 | 2,618,460 | ||||||
Schlumberger Ltd. | 117,640 | 10,084,101 | ||||||
Starbucks Corp. | 85,590 | 3,148,856 | ||||||
SYSCO Corp. | 90,644 | 2,919,643 | ||||||
Tractor Supply Co. | 11,450 | 723,182 | ||||||
Union Pacific Corp. | 70,850 | 7,437,124 | ||||||
United Parcel Service, Inc., Class B | 43,330 | 3,184,322 | ||||||
VeriFone Systems, Inc.(1) | 50,530 | 2,432,009 | ||||||
Walt Disney Co. (The) | 93,490 | 3,891,989 | ||||||
Waters Corp.(1) | 9,990 | 984,614 | ||||||
Wells Fargo & Co. | 89,120 | 2,528,334 | ||||||
Whole Foods Market, Inc. | 44,529 | 2,723,394 | ||||||
248,501,896 | ||||||||
TOTAL COMMON STOCKS (Cost $331,063,498) | 450,905,731 | |||||||
Temporary Cash Investments — 0.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 52,980 | 52,980 | ||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 2.875%, 2/15/19, valued at $1,630,990), in a joint trading account at 0.05%, dated 5/31/11, due 6/1/11 (Delivery value $1,600,002) | 1,600,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,652,980) | 1,652,980 | |||||||
TOTAL INVESTMENT SECURITIES — 99.1% (Cost $332,716,478) | 452,558,711 | |||||||
OTHER ASSETS AND LIABILITIES — 0.9% | 3,936,691 | |||||||
TOTAL NET ASSETS — 100.0% | $456,495,402 |
9
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 18.1% |
Consumer Discretionary | 17.6% |
Industrials | 15.2% |
Financials | 14.7% |
Consumer Staples | 10.3% |
Energy | 9.6% |
Materials | 6.3% |
Health Care | 4.5% |
Telecommunication Services | 2.5% |
Cash and Equivalents* | 1.2% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements. |
10
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $332,716,478) | $452,558,711 | |||
Foreign currency holdings, at value (cost of $678,660) | 685,832 | |||
Receivable for investments sold | 5,888,853 | |||
Receivable for capital shares sold | 73,014 | |||
Dividends and interest receivable | 976,761 | |||
Other assets | 32,925 | |||
460,216,096 | ||||
Liabilities | ||||
Payable for investments purchased | 3,106,161 | |||
Payable for capital shares redeemed | 187,138 | |||
Accrued management fees | 415,949 | |||
Distribution and service fees payable | 11,446 | |||
3,720,694 | ||||
Net Assets | $456,495,402 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $400,686,038 | |||
Accumulated net investment loss | (242,062 | ) | ||
Accumulated net realized loss | (63,854,253 | ) | ||
Net unrealized appreciation | 119,905,679 | |||
$456,495,402 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $375,961,590 | 39,227,374 | $9.58 |
Institutional Class, $0.01 Par Value | $42,096,740 | 4,352,732 | $9.67 |
A Class, $0.01 Par Value | $32,891,322 | 3,478,959 | $9.45* |
B Class, $0.01 Par Value | $765,353 | 83,168 | $9.20 |
C Class, $0.01 Par Value | $4,027,108 | 452,550 | $8.90 |
R Class, $0.01 Par Value | $753,289 | 79,548 | $9.47 |
*Maximum offering price $10.03 (net asset value divided by 0.9425)
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $234,221) | $3,612,665 | |||
Interest | 1,558 | |||
3,614,223 | ||||
Expenses: | ||||
Management fees | 2,449,033 | |||
Distribution and service fees: | ||||
A Class | 42,045 | |||
B Class | 4,051 | |||
C Class | 24,295 | |||
R Class | 1,737 | |||
Directors’ fees and expenses | 12,082 | |||
Other expenses | 15 | |||
2,533,258 | ||||
Net investment income (loss) | 1,080,965 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $(32,547)) | 22,195,328 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $18,588) | 4,987,285 | |||
27,182,613 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(22,256)) | 25,109,501 | |||
Translation of assets and liabilities in foreign currencies | 7,423,481 | |||
32,532,982 | ||||
Net realized and unrealized gain (loss) | 59,715,595 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $60,796,560 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $1,080,965 | $1,347,177 | ||||||
Net realized gain (loss) | 27,182,613 | 29,603,358 | ||||||
Change in net unrealized appreciation (depreciation) | 32,532,982 | 2,576,737 | ||||||
Net increase (decrease) in net assets resulting from operations | 60,796,560 | 33,527,272 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (1,819,577 | ) | (2,545,624 | ) | ||||
Institutional Class | (300,047 | ) | (512,165 | ) | ||||
A Class | (82,583 | ) | (82,118 | ) | ||||
Decrease in net assets from distributions | (2,202,207 | ) | (3,139,907 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (32,023,603 | ) | (31,398,727 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 9,458 | 14,569 | ||||||
Net increase (decrease) in net assets | 26,580,208 | (996,793 | ) | |||||
Net Assets | ||||||||
Beginning of period | 429,915,194 | 430,911,987 | ||||||
End of period | $456,495,402 | $429,915,194 | ||||||
Accumulated undistributed net investment income (loss) | $(242,062 | ) | $879,180 |
See Notes to Financial Statements.
13
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. Global Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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 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.
14
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 change in 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.
15
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.05% 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 six months ended May 31, 2011 was 1.11% for the Investor Class, A Class, B Class, C Class and R Class and 0.91% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, 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 six months ended May 31, 2011 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.
16
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 six months ended May 31, 2011 were $137,144,238 and $173,361,002, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||||||||
Sold | 1,394,318 | $12,741,838 | 2,860,976 | $22,458,592 | ||||||||||||
Issued in reinvestment of distributions | 162,223 | 1,481,093 | 263,938 | 2,088,844 | ||||||||||||
Redeemed | (3,359,438 | ) | (30,719,482 | ) | (6,501,756 | ) | (50,811,427 | ) | ||||||||
(1,802,897 | ) | (16,496,551 | ) | (3,376,842 | ) | (26,263,991 | ) | |||||||||
Institutional Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 261,843 | 2,433,904 | 812,187 | 6,377,294 | ||||||||||||
Issued in reinvestment of distributions | 32,478 | 299,125 | 63,922 | 510,882 | ||||||||||||
Redeemed | (1,294,839 | ) | (11,928,104 | ) | (1,188,547 | ) | (9,210,872 | ) | ||||||||
(1,000,518 | ) | (9,195,075 | ) | (312,438 | ) | (2,322,696 | ) | |||||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 417,476 | 3,757,823 | 1,033,001 | 8,031,650 | ||||||||||||
Issued in reinvestment of distributions | 8,817 | 79,446 | 10,288 | 80,224 | ||||||||||||
Redeemed | (1,008,971 | ) | (9,061,826 | ) | (1,511,064 | ) | (11,713,971 | ) | ||||||||
(582,678 | ) | (5,224,557 | ) | (467,775 | ) | (3,602,097 | ) | |||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 1,909 | 16,781 | 2,143 | 18,252 | ||||||||||||
Redeemed | (17,269 | ) | (151,124 | ) | (16,767 | ) | (123,192 | ) | ||||||||
(15,360 | ) | (134,343 | ) | (14,624 | ) | (104,940 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 154,028 | 1,300,746 | 343,317 | 2,611,325 | ||||||||||||
Redeemed | (288,084 | ) | (2,455,074 | ) | (243,114 | ) | (1,735,817 | ) | ||||||||
(134,056 | ) | (1,154,328 | ) | 100,203 | 875,508 | |||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 44,763 | 402,066 | 28,084 | 221,956 | ||||||||||||
Redeemed | (24,359 | ) | (220,815 | ) | (26,494 | ) | (202,467 | ) | ||||||||
20,404 | 181,251 | 1,590 | 19,489 | |||||||||||||
Net increase (decrease) | (3,515,105 | ) | $(32,023,603 | ) | (4,069,886 | ) | $(31,398,727 | ) |
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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 | ||||||||||||
Domestic Common Stocks | $248,501,896 | — | — | |||||||||
Foreign Common Stocks | 9,594,518 | $192,809,317 | — | |||||||||
Temporary Cash Investments | 52,980 | 1,600,000 | — | |||||||||
Total Value of Investment Securities | $258,149,394 | $194,409,317 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $336,232,630 | |||
Gross tax appreciation of investments | $120,670,592 | |||
Gross tax depreciation of investments | (4,344,511 | ) | ||
Net tax appreciation (depreciation) of investments | $116,326,081 |
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.
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As of November 30, 2010, the fund had accumulated capital losses of $(87,823,513), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(11,658,423) and $(76,165,090) expire in 2016 and 2017, respectively.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.41 | $7.80 | $5.90 | $12.69 | $10.52 | $8.88 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.02 | 0.03 | 0.04 | 0.04 | 0.03 | — | (3) | |||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.20 | 0.64 | 1.86 | (4.75 | ) | 2.41 | 1.70 | |||||||||||||||||
Total From Investment Operations | 1.22 | 0.67 | 1.90 | (4.71 | ) | 2.44 | 1.70 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.05 | ) | (0.06 | ) | — | (3) | — | (0.05 | ) | (0.06 | ) | |||||||||||||
From Net Realized Gains | — | — | — | (2.08 | ) | (0.22 | ) | — | ||||||||||||||||
Total Distributions | (0.05 | ) | (0.06 | ) | — | (3) | (2.08 | ) | (0.27 | ) | (0.06 | ) | ||||||||||||
Net Asset Value, End of Period | $9.58 | $8.41 | $7.80 | $5.90 | $12.69 | $10.52 | ||||||||||||||||||
Total Return(4) | 14.48 | % | 8.61 | % | 32.24 | % | (44.01 | )% | 23.73 | % | 19.30 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.11 | %(5) | 1.16 | % | 1.22 | % | 1.26 | % | 1.30 | % | 1.31 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.49 | %(5) | 0.33 | % | 0.62 | % | 0.40 | % | 0.29 | % | (0.05 | )% | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $375,962 | $344,950 | $346,590 | $274,599 | $481,553 | $418,185 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
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Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.49 | $7.90 | $5.97 | $12.79 | $10.60 | $8.95 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.03 | 0.04 | 0.05 | 0.07 | 0.06 | 0.01 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.21 | 0.64 | 1.89 | (4.81 | ) | 2.42 | 1.72 | |||||||||||||||||
Total From Investment Operations | 1.24 | 0.68 | 1.94 | (4.74 | ) | 2.48 | 1.73 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.06 | ) | (0.09 | ) | (0.01 | ) | — | (0.07 | ) | (0.08 | ) | |||||||||||||
From Net Realized Gains | — | — | — | (2.08 | ) | (0.22 | ) | — | ||||||||||||||||
Total Distributions | (0.06 | ) | (0.09 | ) | (0.01 | ) | (2.08 | ) | (0.29 | ) | (0.08 | ) | ||||||||||||
Net Asset Value, End of Period | $9.67 | $8.49 | $7.90 | $5.97 | $12.79 | $10.60 | ||||||||||||||||||
Total Return(3) | 14.70 | % | 8.68 | % | 32.61 | % | (43.88 | )% | 23.99 | % | 19.50 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 0.91 | %(4) | 0.96 | % | 1.02 | % | 1.05 | % | 1.10 | % | 1.11 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.69 | %(4) | 0.53 | % | 0.82 | % | 0.61 | % | 0.49 | % | 0.15 | % | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $42,097 | $45,459 | $44,752 | $28,477 | $16,298 | $8,540 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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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A Class(1) | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(2) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.28 | $7.67 | $5.81 | $12.56 | $10.41 | $8.79 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.01 | 0.01 | 0.02 | 0.01 | 0.01 | (0.03 | ) | |||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | 0.62 | 1.84 | (4.68 | ) | 2.38 | 1.69 | |||||||||||||||||
Total From Investment Operations | 1.19 | 0.63 | 1.86 | (4.67 | ) | 2.39 | 1.66 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.02 | ) | (0.02 | ) | — | — | (0.02 | ) | (0.04 | ) | ||||||||||||||
From Net Realized Gains | — | — | — | (2.08 | ) | (0.22 | ) | — | ||||||||||||||||
Total Distributions | (0.02 | ) | (0.02 | ) | — | (2.08 | ) | (0.24 | ) | (0.04 | ) | |||||||||||||
Net Asset Value, End of Period | $9.45 | $8.28 | $7.67 | $5.81 | $12.56 | $10.41 | ||||||||||||||||||
Total Return(4) | 14.42 | % | 8.20 | % | 32.01 | % | (44.17 | )% | 23.74 | % | 18.97 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.36 | %(5) | 1.41 | % | 1.47 | % | 1.51 | % | 1.55 | % | 1.56 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.24 | %(5) | 0.08 | % | 0.37 | % | 0.15 | % | 0.04 | % | (0.30 | )% | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $32,891 | $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) | Six months ended May 31, 2011 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(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. |
See Notes to Financial Statements.
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B Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.07 | $7.51 | $5.73 | $12.50 | $10.42 | $9.02 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.02 | ) | (0.05 | ) | (0.03 | ) | (0.05 | ) | (0.08 | ) | (0.11 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.15 | 0.61 | 1.81 | (4.64 | ) | 2.38 | 1.57 | |||||||||||||||||
Total From Investment Operations | 1.13 | 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 | $9.20 | $8.07 | $7.51 | $5.73 | $12.50 | $10.42 | ||||||||||||||||||
Total Return(3) | 14.00 | % | 7.46 | % | 31.06 | % | (44.62 | )% | 22.51 | % | 16.29 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.11 | %(4) | 2.16 | % | 2.22 | % | 2.26 | % | 2.30 | % | 2.31 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.51 | )%(4) | (0.67 | )% | (0.38 | )% | (0.60 | )% | (0.71 | )% | (1.05 | )% | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $765 | $795 | $850 | $426 | $639 | $352 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
23
C Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $7.81 | $7.27 | $5.54 | $12.16 | $10.14 | $8.59 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.03 | ) | (0.05 | ) | (0.02 | ) | (0.05 | ) | (0.07 | ) | (0.10 | ) | ||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.12 | 0.59 | 1.75 | (4.49 | ) | 2.31 | 1.65 | |||||||||||||||||
Total From Investment Operations | 1.09 | 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 | $8.90 | $7.81 | $7.27 | $5.54 | $12.16 | $10.14 | ||||||||||||||||||
Total Return(3) | 13.96 | % | 7.43 | % | 31.23 | % | (44.64 | )% | 22.54 | % | 18.04 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.11 | %(4) | 2.16 | % | 2.22 | % | 2.26 | % | 2.30 | % | 2.31 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.51 | )%(4) | (0.67 | )% | (0.38 | )% | (0.60 | )% | (0.71 | )% | (1.05 | )% | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $4,027 | $4,579 | $3,535 | $2,382 | $2,625 | $1,050 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
24
R Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $8.29 | $7.67 | $5.82 | $12.62 | $10.47 | $8.86 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | — | (3) | (0.01 | ) | — | (3) | (0.01 | ) | 0.02 | (0.05 | ) | |||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | 0.63 | 1.85 | (4.71 | ) | 2.35 | 1.71 | |||||||||||||||||
Total From Investment Operations | 1.18 | 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 | $9.47 | $8.29 | $7.67 | $5.82 | $12.62 | $10.47 | ||||||||||||||||||
Total Return(4) | 14.23 | % | 8.08 | % | 31.79 | % | (44.40 | )% | 23.08 | % | 18.79 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.61 | %(5) | 1.66 | % | 1.72 | % | 1.76 | % | 1.80 | % | 1.81 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.01 | )%(5) | (0.17 | )% | 0.12 | % | (0.10 | )% | (0.21 | )% | (0.55 | )% | ||||||||||||
Portfolio Turnover Rate | 31 | % | 100 | % | 103 | % | 121 | % | 108 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $753 | $490 | $442 | $253 | $202 | $32 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
25
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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72024 1107
SEMIANNUAL REPORT | MAY 31, 2011
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International Discovery Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 10 |
Statement of Operations | 11 |
Statement of Changes in Net Assets | 12 |
Notes to Financial Statements | 13 |
Financial Highlights | 19 |
Additional Information | 24 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
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Total Returns as of May 31, 2011 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWEGX | 14.88% | 40.12% | 2.85% | 8.94% | 12.34% | 4/1/94 |
MSCI All Country World ex-U.S. Mid Cap Growth Index | — | 15.14% | 36.44% | 3.56% | 7.61% | N/A(3) | — |
Institutional Class | TIDIX | 14.91% | 40.51% | 3.06% | 9.16% | 11.16% | 1/2/98 |
A Class(4) No sales charge* With sales charge* | ACIDX | 14.68% 8.09% | 39.85% 31.87% | 2.61% 1.40% | 8.68% 8.03% | 9.19% 8.69% | 4/28/98 |
C Class No sales charge* With sales charge* | TWECX | 14.26% 13.26% | 38.69% 38.69% | — — | — — | 24.89% 24.89% | 3/1/10 |
R Class | TWERX | 14.50% | 39.38% | — | — | 25.51% | 3/1/10 |
*Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Benchmark data first available June 1994. |
(4) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.43% | 1.23% | 1.68% | 2.43% | 1.93% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
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.
4
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Iluka Resources Ltd. | 3.1% |
Sulzer AG | 2.9% |
Hexagon AB B Shares | 2.6% |
Technip SA | 2.5% |
Lottomatica SpA | 2.4% |
Celltrion, Inc. | 2.1% |
Xinyi Glass Holdings Ltd. | 2.1% |
Focus Media Holding Ltd. ADR | 2.0% |
Wacker Chemie AG | 1.9% |
Safran SA | 1.9% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks & Rights | 99.0% |
Other Assets and Liabilities | 1.0% |
Investments by Country | % of net assets |
United Kingdom | 11.6% |
France | 9.8% |
Germany | 8.2% |
Japan | 8.0% |
People’s Republic of China | 6.6% |
Australia | 6.2% |
Canada | 6.2% |
Sweden | 5.8% |
South Korea | 5.4% |
Hong Kong | 4.9% |
Switzerland | 4.6% |
Italy | 3.0% |
Finland | 2.6% |
Netherlands | 2.1% |
Other Countries | 14.0% |
Other Assets and Liabilities | 1.0% |
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 - 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,148.80 | $7.50 | 1.40% |
Institutional Class | $1,000 | $1,149.10 | $6.43 | 1.20% |
A Class | $1,000 | $1,146.80 | $8.83 | 1.65% |
C Class | $1,000 | $1,142.60 | $12.82 | 2.40% |
R Class | $1,000 | $1,145.00 | $10.16 | 1.90% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.95 | $7.04 | 1.40% |
Institutional Class | $1,000 | $1,018.95 | $6.04 | 1.20% |
A Class | $1,000 | $1,016.70 | $8.30 | 1.65% |
C Class | $1,000 | $1,012.96 | $12.04 | 2.40% |
R Class | $1,000 | $1,015.46 | $9.55 | 1.90% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
MAY 31, 2011 (UNAUDITED)
Shares | Value | |||||||
Common Stocks & Rights — 99.0% | ||||||||
AUSTRALIA — 6.2% | ||||||||
Amcor Ltd. | 1,092,600 | $8,443,739 | ||||||
Boart Longyear Ltd. | 2,912,100 | 13,361,994 | ||||||
Cochlear Ltd. | 86,900 | 7,423,344 | ||||||
Iluka Resources Ltd. | 2,024,300 | 33,975,770 | ||||||
Mesoblast Ltd.(1) | 593,000 | 5,152,624 | ||||||
68,357,471 | ||||||||
AUSTRIA — 1.6% | ||||||||
Andritz AG | 166,400 | 17,529,139 | ||||||
BELGIUM — 1.7% | ||||||||
Bekaert SA | 112,500 | 11,946,117 | ||||||
UCB SA | 136,100 | 6,504,969 | ||||||
18,451,086 | ||||||||
BRAZIL — 1.3% | ||||||||
CETIP SA - Balcao Organizado de Ativos e Derivativos | 666,900 | 10,144,573 | ||||||
CETIP SA - Balcao Organizado de Ativos e Derivativos Rights(1) | 4,912 | 5,293 | ||||||
Cia Hering | 180,800 | 4,112,763 | ||||||
14,262,629 | ||||||||
CANADA — 6.2% | ||||||||
Finning International, Inc. | 426,600 | 12,654,677 | ||||||
First Quantum Minerals Ltd. | 129,900 | 17,665,918 | ||||||
Gildan Activewear, Inc. | 376,300 | 14,021,190 | ||||||
IAMGOLD Corp. | 469,400 | 9,893,325 | ||||||
Open Text Corp.(1) | 209,200 | 13,650,300 | ||||||
67,885,410 | ||||||||
CAYMAN ISLANDS — 1.0% | ||||||||
Herbalife Ltd. | 200,800 | 11,301,024 | ||||||
FINLAND — 2.6% | ||||||||
Metso Oyj | 206,900 | 11,945,784 | ||||||
Nokian Renkaat Oyj | 341,100 | 16,649,806 | ||||||
28,595,590 | ||||||||
FRANCE — 9.8% | ||||||||
Alcatel-Lucent(1) | 1,878,900 | 10,635,502 | ||||||
Arkema SA | 101,700 | 11,164,427 | ||||||
Edenred | 455,700 | 13,545,826 | ||||||
Faurecia | 293,600 | 12,574,480 | ||||||
Rexel SA | 416,800 | 10,639,569 | ||||||
Safran SA | 514,700 | 21,037,486 | ||||||
Technip SA | 251,600 | 27,113,662 | ||||||
106,710,952 | ||||||||
GERMANY — 8.2% | ||||||||
Brenntag AG(1) | 33,900 | 4,037,298 | ||||||
Fraport AG | 54,100 | 4,437,162 | ||||||
Hugo Boss AG Preference Shares | 139,300 | 12,559,059 | ||||||
Kabel Deutschland Holding AG(1) | 234,700 | 16,032,042 | ||||||
Kloeckner & Co. SE | 382,900 | 11,334,147 | ||||||
Kloeckner & Co. SE Rights(1) | 382,900 | �� | 1,292,169 | |||||
Lanxess AG | 222,100 | 19,208,898 | ||||||
Wacker Chemie AG | 95,300 | 21,265,786 | ||||||
90,166,561 | ||||||||
HONG KONG — 4.9% | ||||||||
Brilliance China Automotive Holdings Ltd.(1) | 13,746,000 | 12,597,475 | ||||||
China Lumena New Materials Corp. | 17,155,600 | 7,617,557 | ||||||
China Resources Cement Holdings Ltd. | 8,392,000 | 8,284,517 | ||||||
Lonking Holdings Ltd. | 3,969,000 | 2,238,357 | ||||||
Xinyi Glass Holdings Ltd. | 22,174,000 | 22,636,826 | ||||||
53,374,732 | ||||||||
INDIA — 1.6% | ||||||||
Canara Bank | 400,400 | 4,838,316 | ||||||
Cummins India Ltd. | 143,700 | 2,194,291 | ||||||
HCL Technologies Ltd. | 301,200 | 3,449,108 | ||||||
Titan Industries Ltd. | 66,500 | 6,511,485 | ||||||
16,993,200 | ||||||||
IRELAND — 1.8% | ||||||||
Experian plc | 976,900 | 12,897,246 | ||||||
Shire plc | 210,900 | 6,671,887 | ||||||
19,569,133 | ||||||||
ISRAEL — 0.7% | ||||||||
Mellanox Technologies Ltd.(1) | 246,500 | 7,611,920 | ||||||
ITALY — 3.0% | ||||||||
Azimut Holding SpA | 455,600 | 4,937,030 | ||||||
Davide Campari-Milano SpA | 144,500 | 1,086,446 | ||||||
Lottomatica SpA(1) | 1,316,100 | 26,712,505 | ||||||
32,735,981 | ||||||||
JAPAN — 8.0% | ||||||||
Anritsu Corp. | 1,132,000 | 9,284,512 | ||||||
CyberAgent, Inc. | 1,700 | 5,811,525 | ||||||
JGC Corp. | 215,000 | 5,752,283 | ||||||
Makita Corp. | 232,900 | 9,911,462 | ||||||
NGK Insulators Ltd. | 339,000 | 5,870,272 | ||||||
Nippon Shokubai Co. Ltd. | 1,187,000 | 14,962,108 |
8
Shares | Value | |||||||
Omron Corp. | 488,000 | $12,591,439 | ||||||
Sumitomo Heavy Industries Ltd. | 363,000 | 2,515,769 | ||||||
Teijin Ltd. | 4,393,000 | 20,314,885 | ||||||
87,014,255 | ||||||||
NETHERLANDS — 2.1% | ||||||||
Chicago Bridge & Iron Co. NV New York Shares | 145,700 | 5,545,342 | ||||||
Gemalto NV | 112,500 | 5,525,477 | ||||||
NXP Semiconductor NV(1) | 411,900 | 11,751,507 | ||||||
22,822,326 | ||||||||
NORWAY — 1.6% | ||||||||
Aker Solutions ASA | 796,400 | 17,639,470 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 6.6% | ||||||||
China Yurun Food Group Ltd. | 4,259,000 | 13,887,545 | ||||||
Country Garden Holdings Co. | 9,772,000 | 4,326,999 | ||||||
Dongyue Group | 4,562,000 | 4,687,025 | ||||||
Evergrande Real Estate Group Ltd. | 5,286,000 | 3,728,700 | ||||||
Focus Media Holding Ltd. ADR(1) | 705,600 | 22,050,000 | ||||||
New Oriental Education & Technology Group ADR(1) | 35,700 | 4,134,774 | ||||||
Renren, Inc. ADR(1) | 80,726 | 1,037,329 | ||||||
Spreadtrum Communication, Inc. ADR(1) | 928,600 | 17,912,694 | ||||||
71,765,066 | ||||||||
SINGAPORE — 1.1% | ||||||||
Biosensors International Group Ltd.(1) | 2,593,000 | 2,691,365 | ||||||
SembCorp Marine Ltd. | 2,180,000 | 9,457,304 | ||||||
12,148,669 | ||||||||
SOUTH KOREA — 5.4% | ||||||||
Celltrion, Inc. | 674,800 | 23,026,916 | ||||||
Daelim Industrial Co. Ltd. | 21,800 | 2,150,088 | ||||||
Hankook Tire Co. Ltd. | 139,600 | 5,843,705 | ||||||
Hyundai Steel Co. | 131,200 | 14,509,813 | ||||||
NCSoft Corp. | 51,900 | 13,611,998 | ||||||
59,142,520 | ||||||||
SWEDEN — 5.8% | ||||||||
Hexagon AB B Shares | 1,056,100 | 28,758,397 | ||||||
Lundin Petroleum AB(1) | 1,061,300 | 14,848,134 | ||||||
Swedish Match AB | 551,600 | 19,500,130 | ||||||
63,106,661 | ||||||||
SWITZERLAND — 4.6% | ||||||||
Aryzta AG | 186,400 | 10,378,445 | ||||||
Sulzer AG | 173,600 | 31,471,775 | ||||||
Wolseley plc | 255,500 | 8,664,972 | ||||||
50,515,192 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 1.4% | ||||||||
Catcher Technology Co. Ltd. | 1,050,000 | 6,870,044 | ||||||
TPK Holding Co. Ltd.(1) | 259,000 | 8,457,387 | ||||||
15,327,431 | ||||||||
THAILAND — 0.2% | ||||||||
Banpu PCL | 112,200 | 2,729,654 | ||||||
UNITED KINGDOM — 11.6% | ||||||||
Afren plc(1) | 4,212,700 | 11,531,563 | ||||||
Aggreko plc | 651,700 | 20,094,028 | ||||||
ARM Holdings plc | 1,507,700 | 14,283,707 | ||||||
ASOS plc(1) | 112,800 | 4,408,049 | ||||||
Burberry Group plc | 476,800 | 10,367,945 | ||||||
Croda International plc | 353,700 | 11,351,761 | ||||||
IMI plc | 648,500 | 11,125,722 | ||||||
Persimmon plc | 1,054,200 | 8,323,007 | ||||||
Schroders plc | 276,400 | 7,466,662 | ||||||
Subsea 7 SA(1) | 693,300 | 18,444,961 | ||||||
Willis Group Holdings plc | 242,400 | 10,059,600 | ||||||
127,457,005 | ||||||||
TOTAL INVESTMENT SECURITIES — 99.0% (Cost $902,145,659) | 1,083,213,077 | |||||||
OTHER ASSETS AND LIABILITIES — 1.0% | 10,540,953 | |||||||
TOTAL NET ASSETS — 100.0% | $1,093,754,030 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 26.2% |
Consumer Discretionary | 19.3% |
Materials | 18.6% |
Information Technology | 12.5% |
Energy | 8.4% |
Consumer Staples | 5.1% |
Health Care | 4.7% |
Financials | 4.2% |
Other Assets and Liabilities | 1.0% |
Notes to Schedule of Investments
ADR = American Depositary Receipt
(1) | Non-income producing. |
See Notes to Financial Statements.
9
Statement of Assets and Liabilities |
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $902,145,659) | $1,083,213,077 | |||
Foreign currency holdings, at value (cost of $1,177,221) | 1,195,243 | |||
Receivable for investments sold | 16,226,793 | |||
Receivable for capital shares sold | 199,485 | |||
Dividends and interest receivable | 3,039,637 | |||
Other assets | 177,774 | |||
1,104,052,009 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 688,545 | |||
Payable for investments purchased | 7,962,695 | |||
Payable for capital shares redeemed | 372,631 | |||
Accrued management fees | 1,272,982 | |||
Distribution and service fees payable | 1,126 | |||
10,297,979 | ||||
Net Assets | $1,093,754,030 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $1,177,186,343 | |||
Undistributed net investment income | 3,069,355 | |||
Accumulated net realized loss | (267,629,606 | ) | ||
Net unrealized appreciation | 181,127,938 | |||
$1,093,754,030 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $983,542,527 | 86,692,321 | $11.35 |
Institutional Class, $0.01 Par Value | $105,522,907 | 9,192,796 | $11.48 |
A Class, $0.01 Par Value | $4,447,788 | 401,161 | $11.09* |
C Class, $0.01 Par Value | $207,600 | 18,496 | $11.22 |
R Class, $0.01 Par Value | $33,208 | 2,941 | $11.29 |
*Maximum offering price $11.77 (net asset value divided by 0.9425)
See Notes to Financial Statements.
10
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $1,199,048) | $10,755,290 | |||
Interest | 1,755 | |||
10,757,045 | ||||
Expenses: | ||||
Management fees | 7,284,826 | |||
Distribution and service fees: | ||||
A Class | 5,809 | |||
C Class | 686 | |||
R Class | 79 | |||
Directors’ fees and expenses | 25,621 | |||
Other expenses | 1,865 | |||
7,318,886 | ||||
Net investment income (loss) | 3,438,159 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $359,895) | 99,484,564 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $344,908) | 25,962,358 | |||
125,446,922 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(772,440)) | (20,912,860 | ) | ||
Translation of assets and liabilities in foreign currencies | 35,777,841 | |||
14,864,981 | ||||
Net realized and unrealized gain (loss) | 140,311,903 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $143,750,062 |
See Notes to Financial Statements.
11
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $3,438,159 | $107,461 | ||||||
Net realized gain (loss) | 125,446,922 | 177,770,803 | ||||||
Change in net unrealized appreciation (depreciation) | 14,864,981 | (41,952,929 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 143,750,062 | 135,925,335 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | — | (1,891,482 | ) | |||||
Institutional Class | — | (506,500 | ) | |||||
Decrease in net assets from distributions | — | (2,397,982 | ) | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (30,666,123 | ) | (112,046,954 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 54,076 | 98,785 | ||||||
Net increase (decrease) in net assets | 113,138,015 | 21,579,184 | ||||||
Net Assets | ||||||||
Beginning of period | 980,616,015 | 959,036,831 | ||||||
End of period | $1,093,754,030 | $980,616,015 | ||||||
Accumulated undistributed net investment income (loss) | $3,069,355 | $(368,804 | ) |
See Notes to Financial Statements.
12
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Discovery Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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 charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee. 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.
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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. 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 change in 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
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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 from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.20% 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 six months ended May 31, 2011 was 1.40% for the Investor Class, A Class, C Class and R Class and 1.20% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay 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 six months ended May 31, 2011 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 six months ended May 31, 2011 were $998,776,929 and $1,031,350,764, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010(1) | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 400,000,000 | 400,000,000 | ||||||||||||||
Sold | 5,644,118 | $61,444,719 | 5,837,481 | $53,064,107 | ||||||||||||
Issued in reinvestment of distributions | — | — | 203,829 | 1,811,258 | ||||||||||||
Redeemed | (7,864,825 | ) | (85,314,628 | ) | (19,175,078 | ) | (171,056,059 | ) | ||||||||
(2,220,707 | ) | (23,869,909 | ) | (13,133,768 | ) | (116,180,694 | ) | |||||||||
Institutional Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||||||||
Sold | 545,497 | 5,981,317 | 2,373,343 | 22,884,811 | ||||||||||||
Issued in reinvestment of distributions | — | — | 53,799 | 482,824 | ||||||||||||
Redeemed | (1,081,768 | ) | (11,860,477 | ) | (1,913,932 | ) | (17,129,073 | ) | ||||||||
(536,271 | ) | (5,879,160 | ) | 513,210 | 6,238,562 | |||||||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 48,775 | 520,037 | 163,936 | 1,475,514 | ||||||||||||
Redeemed | (145,520 | ) | (1,554,725 | ) | (423,496 | ) | (3,674,496 | ) | ||||||||
(96,745 | ) | (1,034,688 | ) | (259,560 | ) | (2,198,982 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 11,986 | 130,938 | 7,793 | 69,160 | ||||||||||||
Redeemed | (1,283 | ) | (13,304 | ) | — | — | ||||||||||
10,703 | 117,634 | 7,793 | 69,160 | |||||||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | — | — | 2,941 | 25,000 | ||||||||||||
Net increase (decrease) | (2,843,020 | ) | $(30,666,123 | ) | (12,869,384 | ) | $(112,046,954 | ) |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010 for the C Class and R Class. |
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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 | ||||||||||||
Total Value of Investment Securities | $105,054,490 | $978,158,587 | — |
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 book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $903,767,723 | |||
Gross tax appreciation of investments | $190,985,948 | |||
Gross tax depreciation of investments | (11,540,594 | ) | ||
Net tax appreciation (depreciation) of investments | $179,445,354 |
The difference between book-basis and tax-basis cost and unrealized appreciation (depreciation) is attributable primarily to the tax deferral of losses on wash sales.
As of November 30, 2010, the fund had accumulated capital losses of $(389,320,386), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any
17
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 fund has elected to treat $(374,381) of net foreign currency losses incurred in the one-month period ended November 30, 2010, as having been incurred in the following fiscal year for federal income tax purposes.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.88 | $8.55 | $6.26 | $18.40 | $18.01 | $15.94 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.03 | — | (3) | 0.01 | 0.06 | 0.05 | (0.02 | ) | ||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.44 | 1.35 | 2.34 | (8.09 | ) | 4.60 | 5.00 | |||||||||||||||||
Total From Investment Operations | 1.47 | 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 | $11.35 | $9.88 | $8.55 | $6.26 | $18.40 | $18.01 | ||||||||||||||||||
Total Return(4) | 14.88 | % | 15.80 | % | 38.06 | % | (55.48 | )% | 32.18 | % | 36.41 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.40 | %(5) | 1.43 | % | 1.48 | % | 1.37 | % | 1.36 | % | 1.41 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.63 | %(5) | 0.00 | %(6) | 0.13 | % | 0.51 | % | 0.30 | % | (0.11 | )% | ||||||||||||
Portfolio Turnover Rate | 95 | % | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $983,543 | $878,530 | $872,865 | $713,764 | $1,758,335 | $1,446,955 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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) | Ratio was less than 0.005%. |
See Notes to Financial Statements.
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Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.99 | $8.66 | $6.34 | $18.59 | $18.16 | $16.06 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.05 | 0.02 | 0.02 | 0.08 | 0.09 | 0.04 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.44 | 1.36 | 2.37 | (8.18 | ) | 4.64 | 5.00 | |||||||||||||||||
Total From Investment Operations | 1.49 | 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 | $11.48 | $9.99 | $8.66 | $6.34 | $18.59 | $18.16 | ||||||||||||||||||
Total Return(3) | 14.91 | % | 16.06 | % | 38.32 | % | (55.37 | )% | 32.45 | % | 36.65 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.20 | %(4) | 1.23 | % | 1.28 | % | 1.17 | % | 1.16 | % | 1.21 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.83 | %(4) | 0.20 | % | 0.33 | % | 0.71 | % | 0.50 | % | 0.09 | % | ||||||||||||
Portfolio Turnover Rate | 95 | % | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $105,523 | $97,167 | $79,830 | $55,091 | $145,723 | $105,849 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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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A Class(1) | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(2) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.67 | $8.37 | $6.13 | $18.08 | $17.76 | $15.75 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.01 | (0.02 | ) | — | (4) | 0.06 | 0.07 | (0.08 | ) | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.41 | 1.32 | 2.29 | (7.95 | ) | 4.46 | 4.96 | |||||||||||||||||
Total From Investment Operations | 1.42 | 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 | $11.09 | $9.67 | $8.37 | $6.13 | $18.08 | $17.76 | ||||||||||||||||||
Total Return(5) | 14.68 | % | 15.53 | % | 37.71 | % | (55.56 | )% | 31.83 | % | 36.08 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.65 | %(6) | 1.68 | % | 1.73 | % | 1.63 | % | 1.61 | % | 1.66 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.38 | %(6) | (0.25 | )% | (0.12 | )% | 0.25 | % | 0.05 | % | (0.36 | )% | ||||||||||||
Portfolio Turnover Rate | 95 | % | 199 | % | 207 | % | 175 | % | 162 | % | 148 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $4,448 | $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) | Six months ended May 31, 2011 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Per-share amount was less than $0.005. |
(5) | 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. |
(6) | Annualized. |
See Notes to Financial Statements.
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C Class | ||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||
2011(1) | 2010(2) | |||||||
Per-Share Data | ||||||||
Net Asset Value, Beginning of Period | $9.82 | $8.50 | ||||||
Income From Investment Operations | ||||||||
Net Investment Income (Loss)(3) | 0.01 | (0.05 | ) | |||||
Net Realized and Unrealized Gain (Loss) | 1.39 | 1.37 | ||||||
Total From Investment Operations | 1.40 | 1.32 | ||||||
Net Asset Value, End of Period | $11.22 | $9.82 | ||||||
Total Return(4) | 14.26 | % | 15.53 | % | ||||
Ratios/Supplemental Data | ||||||||
Ratio of Operating Expenses to Average Net Assets | 2.40 | %(5) | 2.43 | %(5) | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.37 | )%(5) | (0.77 | )%(5) | ||||
Portfolio Turnover Rate | 95 | % | 199 | %(6) | ||||
Net Assets, End of Period (in thousands) | $208 | $77 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(3) | Computed using average shares outstanding throughout the period. |
(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, 2010. |
See Notes to Financial Statements.
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R Class | ||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||
2011(1) | 2010(2) | |||||||
Per-Share Data | ||||||||
Net Asset Value, Beginning of Period | $9.86 | $8.50 | ||||||
Income From Investment Operations | ||||||||
Net Investment Income (Loss)(3) | 0.01 | (0.01 | ) | |||||
Net Realized and Unrealized Gain (Loss) | 1.42 | 1.37 | ||||||
Total From Investment Operations | 1.43 | 1.36 | ||||||
Net Asset Value, End of Period | $11.29 | $9.86 | ||||||
Total Return(4) | 14.50 | % | 16.00 | % | ||||
Ratios/Supplemental Data | ||||||||
Ratio of Operating Expenses to Average Net Assets | 1.90 | %(5) | 1.93 | %(5) | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.13 | %(5) | (0.16 | )%(5) | ||||
Portfolio Turnover Rate | 95 | % | 199 | %(6) | ||||
Net Assets, End of Period (in thousands) | $33 | $29 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(3) | Computed using average shares outstanding throughout the period. |
(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, 2010. |
See Notes to Financial Statements.
23
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.
24
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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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72027 1107
SEMIANNUAL REPORT | MAY 31, 2011
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International Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 20 |
Additional Information | 26 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2011 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWIEX | 16.63% | 37.13% | 4.04% | 4.36% | 8.48% | 5/9/91 |
MSCI EAFE Index | — | 14.92% | 30.69% | 1.73% | 5.35% | 5.71%(3) | — |
MSCI EAFE Growth Index | — | 14.36% | 33.31% | 2.86% | 4.92% | 4.28%(3) | — |
Institutional Class | TGRIX | 16.80% | 37.49% | 4.25% | 4.58% | 6.19% | 11/20/97 |
A Class(4) No sales charge* With sales charge* | TWGAX | 16.55% 9.82% | 36.90% 29.09% | 3.78% 2.55% | 4.09% 3.48% | 6.75% 6.32% | 10/2/96 |
B Class No sales charge* With sales charge* | CBIGX | 16.09% 11.09% | 35.82% 31.82% | 3.02% 2.85% | — — | 9.23% 9.23% | 1/31/03 |
C Class No sales charge* With sales charge* | AIWCX | 16.09% 15.09% | 35.95% 35.95% | 3.02% 3.02% | — — | 3.29% 3.29% | 6/4/01 |
R Class | ATGRX | 16.40% | 36.51% | 3.53% | — | 8.60% | 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 and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Since 4/30/91, the date nearest the Investor Class’s inception for which data are available. |
(4) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.35% | 1.15% | 1.60% | 2.35% | 2.35% | 1.85% |
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.
4
Fund Characteristics |
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Novartis AG | 2.1% |
Rio Tinto plc | 1.9% |
Nestle SA | 1.8% |
BHP Billiton Ltd. | 1.6% |
Xstrata plc | 1.5% |
Danone SA | 1.5% |
BG Group plc | 1.5% |
Saipem SpA | 1.5% |
Nissan Motor Co. Ltd. | 1.5% |
Hyundai Motor Co. | 1.3% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.6% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
United Kingdom | 17.0% |
Switzerland | 12.2% |
France | 11.7% |
Japan | 10.8% |
Germany | 7.3% |
Sweden | 3.9% |
Italy | 3.4% |
Netherlands | 3.1% |
Australia | 3.0% |
People’s Republic of China | 2.3% |
Hong Kong | 2.3% |
Ireland | 2.2% |
South Korea | 2.0% |
Other Countries | 18.4% |
Cash and Equivalents* | 0.4% |
*Includes temporary cash investments and other assets and liabilities. |
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,166.30 | $7.08 | 1.31% |
Institutional Class | $1,000 | $1,168.00 | $6.00 | 1.11% |
A Class | $1,000 | $1,165.50 | $8.42 | 1.56% |
B Class | $1,000 | $1,160.90 | $12.45 | 2.31% |
C Class | $1,000 | $1,160.90 | $12.45 | 2.31% |
R Class | $1,000 | $1,164.00 | $9.77 | 1.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.40 | $6.59 | 1.31% |
Institutional Class | $1,000 | $1,019.40 | $5.59 | 1.11% |
A Class | $1,000 | $1,017.15 | $7.85 | 1.56% |
B Class | $1,000 | $1,013.41 | $11.60 | 2.31% |
C Class | $1,000 | $1,013.41 | $11.60 | 2.31% |
R Class | $1,000 | $1,015.91 | $9.10 | 1.81% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
Shares | Value | |||||||
Common Stocks — 99.6% | ||||||||
AUSTRALIA — 3.0% | ||||||||
BHP Billiton Ltd. | 609,396 | $29,061,884 | ||||||
Commonwealth Bank of Australia | 162,070 | 8,776,158 | ||||||
Iluka Resources Ltd. | 281,550 | 4,725,524 | ||||||
Wesfarmers Ltd. | 326,524 | 11,619,426 | ||||||
54,182,992 | ||||||||
BELGIUM — 1.3% | ||||||||
Anheuser-Busch InBev NV | 271,909 | 16,427,013 | ||||||
Umicore SA | 136,214 | 7,517,031 | ||||||
23,944,044 | ||||||||
BERMUDA — 0.7% | ||||||||
Seadrill Ltd. | 341,530 | 12,396,189 | ||||||
CANADA — 1.3% | ||||||||
Canadian National Railway Co. | 181,019 | 14,156,794 | ||||||
Suncor Energy, Inc. | 213,830 | 8,927,515 | ||||||
23,084,309 | ||||||||
DENMARK — 1.7% | ||||||||
Christian Hansen Holding A/S | 339,710 | 8,177,867 | ||||||
Novo Nordisk A/S B Shares | 178,617 | 22,423,748 | ||||||
30,601,615 | ||||||||
FINLAND — 0.5% | ||||||||
Fortum Oyj | 280,131 | 9,390,845 | ||||||
FRANCE — 11.7% | ||||||||
Accor SA | 291,447 | 13,389,883 | ||||||
Air Liquide SA | 147,077 | 20,462,799 | ||||||
Alcatel-Lucent(1) | 1,543,670 | 8,737,934 | ||||||
BNP Paribas | 248,689 | 19,456,691 | ||||||
Cie Generale d’Optique Essilor International SA | 135,113 | 10,979,682 | ||||||
Danone SA | 368,926 | 27,071,680 | ||||||
Eutelsat Communications SA | 238,770 | 10,616,165 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 99,246 | 17,366,010 | ||||||
Pernod-Ricard SA | 108,487 | 10,997,021 | ||||||
Publicis Groupe SA | 168,918 | 9,321,070 | ||||||
Safran SA | 541,370 | 22,127,577 | ||||||
Schneider Electric SA | 102,817 | 16,974,541 | ||||||
Technip SA | 185,380 | 19,977,467 | ||||||
Zodiac Aerospace | 56,130 | 4,522,768 | ||||||
212,001,288 | ||||||||
GERMANY — 7.3% | ||||||||
adidas AG | 107,430 | 8,092,943 | ||||||
Allianz SE | 126,610 | 17,506,987 | ||||||
BASF SE | 171,890 | 15,881,538 | ||||||
Bayerische Motoren Werke AG | 192,128 | 17,036,225 | ||||||
Fresenius Medical Care AG & Co. KGaA | 180,644 | 13,112,735 | ||||||
Kabel Deutschland Holding AG(1) | 271,135 | 18,520,868 | ||||||
SAP AG | 174,360 | 10,849,601 | ||||||
Siemens AG | 163,343 | 21,858,753 | ||||||
ThyssenKrupp AG | 214,280 | 10,205,885 | ||||||
133,065,535 | ||||||||
HONG KONG — 2.3% | ||||||||
AIA Group Ltd.(1) | 1,588,800 | 5,612,393 | ||||||
China Unicom Ltd. ADR | 760,720 | 16,796,698 | ||||||
CNOOC Ltd. | 2,157,000 | 5,456,405 | ||||||
Li & Fung Ltd. | 4,832,000 | 10,741,153 | ||||||
Sun Hung Kai Properties Ltd. | 174,000 | 2,709,269 | ||||||
41,315,918 | ||||||||
INDIA — 1.0% | ||||||||
Bharti Airtel Ltd. | 1,288,750 | 10,704,964 | ||||||
Housing Development Finance Corp. Ltd. | 249,670 | 3,791,739 | ||||||
Titan Industries Ltd. | 38,930 | 3,811,911 | ||||||
18,308,614 | ||||||||
INDONESIA — 0.9% | ||||||||
PT Bank Mandiri (Persero) Tbk | 20,391,952 | 17,245,842 | ||||||
IRELAND — 2.2% | ||||||||
Accenture plc, Class A | 308,665 | 17,714,284 | ||||||
CRH plc | 577,210 | 12,591,256 | ||||||
Shire plc | 287,420 | 9,092,620 | ||||||
39,398,160 | ||||||||
ISRAEL — 0.5% | ||||||||
Teva Pharmaceutical Industries Ltd. ADR | 180,697 | 9,197,477 | ||||||
ITALY — 3.4% | ||||||||
Pirelli & C SpA | 1,235,740 | 12,321,809 | ||||||
Saipem SpA | 505,508 | 26,705,296 | ||||||
UniCredit SpA | 9,993,350 | 22,797,772 | ||||||
61,824,877 |
8
Shares | Value | |||||||
JAPAN — 10.8% | ||||||||
FANUC CORP. | 95,900 | $14,741,823 | ||||||
JSR Corp. | 471,900 | 9,368,496 | ||||||
Komatsu Ltd. | 509,600 | 15,251,558 | ||||||
Mitsubishi Corp. | 833,600 | 21,097,497 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 2,644,500 | 12,241,215 | ||||||
Murata Manufacturing Co. Ltd. | 211,400 | 13,340,242 | ||||||
Nissan Motor Co. Ltd. | 2,663,900 | 26,698,102 | ||||||
Nitori Holdings Co. Ltd. | 113,100 | 9,868,444 | ||||||
ORIX Corp. | 191,410 | 18,343,085 | ||||||
Rakuten, Inc. | 17,660 | 17,944,669 | ||||||
SOFTBANK CORP. | 325,900 | 12,671,863 | ||||||
Sumitomo Realty & Development Co. Ltd. | 344,000 | 7,344,549 | ||||||
Unicharm Corp. | 246,500 | 9,974,041 | ||||||
Yahoo Japan Corp. | 25,528 | 8,464,456 | ||||||
197,350,040 | ||||||||
LUXEMBOURG — 1.1% | ||||||||
Millicom International Cellular SA | 172,523 | 19,702,127 | ||||||
MACAU — 0.6% | ||||||||
Wynn Macau Ltd. | 2,896,785 | 10,186,962 | ||||||
NETHERLANDS — 3.1% | ||||||||
ASML Holding NV | 159,604 | 6,228,812 | ||||||
CNH Global NV(1) | 219,415 | 9,285,643 | ||||||
European Aeronautic Defence and Space Co. NV | 547,600 | 18,101,308 | ||||||
Royal Dutch Shell plc B Shares | 612,364 | 22,255,048 | ||||||
55,870,811 | ||||||||
NORWAY — 1.0% | ||||||||
Petroleum Geo-Services ASA(1) | 477,950 | 7,771,532 | ||||||
Yara International ASA | 182,289 | 10,996,916 | ||||||
18,768,448 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 2.3% | ||||||||
Baidu, Inc. ADR(1) | 134,994 | 18,320,036 | ||||||
Ctrip.com International Ltd. ADR(1) | 101,918 | 4,586,310 | ||||||
Focus Media Holding Ltd. ADR(1) | 186,925 | 5,841,406 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares(1) | 16,410,435 | 13,770,212 | ||||||
42,517,964 | ||||||||
POLAND — 1.0% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 1,128,885 | 18,110,391 | ||||||
PORTUGAL — 1.2% | ||||||||
Jeronimo Martins SGPS SA | 1,212,060 | 22,695,242 | ||||||
RUSSIAN FEDERATION — 1.5% | ||||||||
Magnit OJSC GDR | 369,832 | 11,398,490 | ||||||
Sberbank of Russia | 4,257,850 | 15,061,250 | ||||||
26,459,740 | ||||||||
SINGAPORE — 0.5% | ||||||||
DBS Group Holdings Ltd. | 737,000 | 8,846,118 | ||||||
SOUTH KOREA — 2.0% | ||||||||
Hyundai Motor Co. | 99,103 | 23,272,755 | ||||||
Samsung Electronics Co. Ltd. | 14,603 | 12,240,578 | ||||||
35,513,333 | ||||||||
SPAIN — 1.8% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 1,573,494 | 18,433,430 | ||||||
Inditex SA | 159,068 | 14,471,217 | ||||||
32,904,647 | ||||||||
SWEDEN — 3.9% | ||||||||
Alfa Laval AB | 422,483 | 9,332,169 | ||||||
Atlas Copco AB A Shares | 512,444 | 13,553,227 | ||||||
Swedbank AB A Shares | 1,246,021 | 23,199,758 | ||||||
Telefonaktiebolaget LM Ericsson B Shares | 729,440 | 10,815,262 | ||||||
Volvo AB B Shares | 809,462 | 14,661,151 | ||||||
71,561,567 | ||||||||
SWITZERLAND — 12.2% | ||||||||
ABB Ltd.(1) | 479,250 | 12,871,569 | ||||||
Adecco SA(1) | 221,240 | 15,128,232 | ||||||
Kuehne + Nagel International AG | 69,571 | 10,962,321 | ||||||
Nestle SA | 518,193 | 33,285,126 | ||||||
Novartis AG | 597,643 | 38,648,905 | ||||||
SGS SA | 7,855 | 15,625,125 | ||||||
Swatch Group AG (The)(1) | 36,366 | 18,121,993 | ||||||
Syngenta AG(1) | 57,400 | 19,824,995 | ||||||
UBS AG(1) | 1,064,684 | 20,460,054 | ||||||
Wolseley plc | 266,697 | 9,044,704 | ||||||
Xstrata plc | 1,184,801 | 27,837,666 | ||||||
221,810,690 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 1.6% | ||||||||
HTC Corp. | 467,000 | 19,960,384 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 690,320 | 9,429,771 | ||||||
29,390,155 | ||||||||
TURKEY — 0.2% | ||||||||
Turkiye Garanti Bankasi AS | 993,872 | 4,442,405 |
9
Shares | Value |
UNITED KINGDOM — 17.0% | ||||||||
Admiral Group plc | 460,590 | $13,071,543 | ||||||
Aggreko plc | 437,950 | 13,503,421 | ||||||
Antofagasta plc | 628,857 | 13,770,952 | ||||||
ARM Holdings plc | 1,535,009 | 14,542,428 | ||||||
Barclays plc | 2,383,005 | 10,889,448 | ||||||
BG Group plc | 1,152,777 | 26,815,369 | ||||||
British American Tobacco plc | 461,377 | 20,736,544 | ||||||
Burberry Group plc | 550,018 | 11,960,059 | ||||||
Capita Group plc (The) | 990,192 | 12,007,262 | ||||||
Carnival plc | 336,909 | 13,573,567 | ||||||
Compass Group plc | 464,120 | 4,528,404 | ||||||
HSBC Holdings plc (Hong Kong) | 1,441,612 | 15,217,040 | ||||||
International Power plc | 1,513,825 | 7,967,049 | ||||||
Kingfisher plc | 1,589,120 | 7,529,915 | ||||||
National Grid plc | 1,049,150 | 10,825,828 | ||||||
Petrofac Ltd. | 419,148 | 11,098,551 | ||||||
Reckitt Benckiser Group plc | 402,532 | 22,850,606 | ||||||
Rio Tinto plc | 482,380 | 33,751,513 | ||||||
Schroders plc | 329,806 | 8,909,370 | ||||||
Standard Chartered plc | 478,550 | 12,835,259 | ||||||
Vodafone Group plc | 6,330,467 | 17,624,667 | ||||||
Whitbread plc | 200,210 | 5,378,537 | ||||||
309,387,332 | ||||||||
TOTAL COMMON STOCKS (Cost $1,342,058,411) | 1,811,475,677 | |||||||
Temporary Cash Investments — 0.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 6,459 | 6,459 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 4/15/12, valued at $5,813,024), in a joint trading account at 0.04%, dated 5/31/11, due 6/1/11 (Delivery value $5,700,006) | 5,700,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,706,459) | 5,706,459 | |||||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $1,347,764,870) | 1,817,182,136 | |||||||
OTHER ASSETS AND LIABILITIES — 0.1% | 1,736,248 | |||||||
TOTAL NET ASSETS — 100.0% | $1,818,918,384 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 17.5% |
Consumer Discretionary | 16.2% |
Industrials | 15.7% |
Materials | 12.3% |
Consumer Staples | 10.3% |
Information Technology | 8.3% |
Energy | 7.8% |
Health Care | 5.7% |
Telecommunication Services | 4.3% |
Utilities | 1.5% |
Cash and Equivalents* | 0.4% |
*Includes temporary cash investments and other assets and liabilities. |
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $1,347,764,870) | $1,817,182,136 | |||
Foreign currency holdings, at value (cost of $1,786,001) | 1,796,176 | |||
Receivable for investments sold | 6,335,306 | |||
Receivable for capital shares sold | 467,641 | |||
Dividends and interest receivable | 7,895,089 | |||
Other assets | 39,716 | |||
1,833,716,064 | ||||
Liabilities | ||||
Payable for investments purchased | 10,426,241 | |||
Payable for capital shares redeemed | 2,349,033 | |||
Accrued management fees | 1,953,907 | |||
Distribution and service fees payable | 48,837 | |||
Accrued foreign taxes | 19,662 | |||
14,797,680 | ||||
Net Assets | $1,818,918,384 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $1,575,159,161 | |||
Undistributed net investment income | 7,273,985 | |||
Accumulated net realized loss | (233,464,324 | ) | ||
Net unrealized appreciation | 469,949,562 | |||
$1,818,918,384 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $1,486,519,226 | 125,441,325 | $11.85 |
Institutional Class, $0.01 Par Value | $120,511,233 | 10,194,475 | $11.82 |
A Class, $0.01 Par Value | $202,202,563 | 17,008,813 | $11.89* |
B Class, $0.01 Par Value | $1,294,435 | 109,435 | $11.83 |
C Class, $0.01 Par Value | $3,412,616 | 290,300 | $11.76 |
R Class, $0.01 Par Value | $4,978,311 | 416,067 | $11.97 |
*Maximum offering price $12.62 (net asset value divided by 0.9425)
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $2,336,339) | $23,143,360 | |||
Interest | 32,387 | |||
23,175,747 | ||||
Expenses: | ||||
Management fees | 11,309,112 | |||
Distribution and service fees: | ||||
A Class | 251,215 | |||
B Class | 6,411 | |||
C Class | 15,454 | |||
R Class | 11,733 | |||
Directors’ fees and expenses | 47,381 | |||
Other expenses | 19,694 | |||
11,661,000 | ||||
Net investment income (loss) | 11,514,747 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $48,759) | 84,864,554 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $36,993) | 34,165,449 | |||
119,030,003 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(588,520)) | 64,688,608 | |||
Translation of assets and liabilities in foreign currencies | 70,697,792 | |||
135,386,400 | ||||
Net realized and unrealized gain (loss) | 254,416,403 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $265,931,150 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $11,514,747 | $12,895,767 | ||||||
Net realized gain (loss) | 119,030,003 | 133,596,891 | ||||||
Change in net unrealized appreciation (depreciation) | 135,386,400 | (48,350,927 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 265,931,150 | 98,141,731 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (19,326,415 | ) | (19,906,669 | ) | ||||
Institutional Class | (1,926,383 | ) | (1,322,640 | ) | ||||
A Class | (1,708,891 | ) | (1,881,933 | ) | ||||
R Class | (16,637 | ) | (29,305 | ) | ||||
Decrease in net assets from distributions | (22,978,326 | ) | (23,140,547 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (35,866,332 | ) | 2,472,875 | |||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 21,355 | 47,277 | ||||||
Net increase (decrease) in net assets | 207,107,847 | 77,521,336 | ||||||
Net Assets | ||||||||
Beginning of period | 1,611,810,537 | 1,534,289,201 | ||||||
End of period | $1,818,918,384 | $1,611,810,537 | ||||||
Undistributed net investment income | $7,273,985 | $18,737,564 |
See Notes to Financial Statements.
13
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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 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.
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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 change in 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.
15
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The strategy assets of the fund 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 six months ended May 31, 2011 was 1.30% for the Investor Class, A Class, B Class, C Class and R Class and 1.10% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, 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 six months ended May 31, 2011 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. Various funds in a series issued by
16
American Century Asset Allocation Portfolios, Inc. (ACAAP) own, in aggregate, 11% of the shares of the fund. 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 six months ended May 31, 2011 were $1,164,587,881 and $1,211,307,428, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 1,050,000,000 | 1,050,000,000 | ||||||||||||||
Sold | 4,854,383 | $54,410,519 | 8,998,458 | $87,341,556 | ||||||||||||
Issued in connection with reorganization (Note 9) | — | — | 6,962,925 | 74,712,185 | ||||||||||||
Issued in reinvestment of distributions | 1,682,295 | 18,745,429 | 1,715,678 | 16,876,319 | ||||||||||||
Redeemed | (9,353,987 | ) | (105,735,763 | ) | (20,641,413 | ) | (195,052,248 | ) | ||||||||
(2,817,309 | ) | (32,579,815 | ) | (2,964,352 | ) | (16,122,188 | ) | |||||||||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||||||||
Sold | 1,263,761 | 14,162,223 | 4,557,606 | 41,463,495 | ||||||||||||
Issued in reinvestment of distributions | 171,269 | 1,903,792 | 124,940 | 1,229,822 | ||||||||||||
Redeemed | (809,910 | ) | (9,141,572 | ) | (1,958,144 | ) | (18,855,853 | ) | ||||||||
625,120 | 6,924,443 | 2,724,402 | 23,837,464 | |||||||||||||
A Class/Shares Authorized | 125,000,000 | 125,000,000 | ||||||||||||||
Sold | 2,089,696 | 23,492,467 | 4,383,626 | 42,679,057 | ||||||||||||
Issued in reinvestment of distributions | 93,927 | 1,049,896 | 128,516 | 1,263,884 | ||||||||||||
Redeemed | (3,051,070 | ) | (34,820,732 | ) | (4,926,258 | ) | (47,071,221 | ) | ||||||||
(867,447 | ) | (10,278,369 | ) | (414,116 | ) | (3,128,280 | ) | |||||||||
B Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 415 | 4,914 | 530 | 5,119 | ||||||||||||
Redeemed | (11,943 | ) | (133,609 | ) | (31,944 | ) | (307,445 | ) | ||||||||
(11,528 | ) | (128,695 | ) | (31,414 | ) | (302,326 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 40,616 | 459,683 | 20,492 | 198,669 | ||||||||||||
Redeemed | (15,968 | ) | (176,253 | ) | (74,746 | ) | (691,551 | ) | ||||||||
24,648 | 283,430 | (54,254 | ) | (492,882 | ) | |||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 45,967 | 526,103 | 136,723 | 1,333,762 | ||||||||||||
Issued in reinvestment of distributions | 1,323 | 14,931 | 2,819 | 27,821 | ||||||||||||
Redeemed | (55,697 | ) | (628,360 | ) | (274,140 | ) | (2,680,496 | ) | ||||||||
(8,407 | ) | (87,326 | ) | (134,598 | ) | (1,318,913 | ) | |||||||||
Net increase (decrease) | (3,054,923 | ) | $(35,866,332 | ) | (874,332 | ) | $2,472,875 |
17
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 | $110,873,752 | $1,700,601,925 | — | |||||||||
Temporary Cash Investments | 6,459 | 5,700,000 | — | |||||||||
Total Value of Investment Securities | $110,880,211 | $1,706,301,925 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $1,375,918,583 | |||
Gross tax appreciation of investments | $450,883,541 | |||
Gross tax depreciation of investments | (9,619,988 | ) | ||
Net tax appreciation (depreciation) of investments | $441,263,553 |
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.
18
As of November 30, 2010, the fund had accumulated capital losses of $(317,829,746), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(8,397,447), $(36,440,654) and $(272,991,645) expire in 2015, 2016 and 2017, respectively.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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/unrealized gains (losses) | 92,089,745 | |||
Change 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.
19
Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.30 | $9.75 | $7.15 | $14.87 | $12.17 | $9.75 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.08 | 0.09 | 0.09 | 0.14 | 0.13 | 0.06 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.62 | 0.61 | 2.64 | (6.96 | ) | 2.66 | 2.54 | |||||||||||||||||
Total From Investment Operations | 1.70 | 0.70 | 2.73 | (6.82 | ) | 2.79 | 2.60 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.15 | ) | (0.15 | ) | (0.13 | ) | (0.11 | ) | (0.09 | ) | (0.18 | ) | ||||||||||||
From Net Realized Gains | — | — | — | (0.79 | ) | — | — | |||||||||||||||||
Total Distributions | (0.15 | ) | (0.15 | ) | (0.13 | ) | (0.90 | ) | (0.09 | ) | (0.18 | ) | ||||||||||||
Net Asset Value, End of Period | $11.85 | $10.30 | $9.75 | $7.15 | $14.87 | $12.17 | ||||||||||||||||||
Total Return(3) | 16.63 | % | 7.28 | % | 38.66 | % | (48.67 | )% | 23.09 | % | 27.03 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.31 | %(4) | 1.35 | % | 1.38 | % | 1.31 | % | 1.27 | % | 1.26 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.33 | %(4) | 0.87 | % | 1.18 | % | 1.18 | % | 0.94 | % | 0.52 | % | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $1,486,519 | $1,320,906 | $1,279,615 | $1,018,753 | $2,267,093 | $2,352,967 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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.
20
Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.30 | $9.78 | $7.17 | $14.91 | $12.20 | $9.78 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.09 | 0.10 | 0.11 | 0.15 | 0.17 | 0.07 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.63 | 0.61 | 2.64 | (6.96 | ) | 2.66 | 2.55 | |||||||||||||||||
Total From Investment Operations | 1.72 | 0.71 | 2.75 | (6.81 | ) | 2.83 | 2.62 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.20 | ) | (0.19 | ) | (0.14 | ) | (0.14 | ) | (0.12 | ) | (0.20 | ) | ||||||||||||
From Net Realized Gains | — | — | — | (0.79 | ) | — | — | |||||||||||||||||
Total Distributions | (0.20 | ) | (0.19 | ) | (0.14 | ) | (0.93 | ) | (0.12 | ) | (0.20 | ) | ||||||||||||
Net Asset Value, End of Period | $11.82 | $10.30 | $9.78 | $7.17 | $14.91 | $12.20 | ||||||||||||||||||
Total Return(3) | 16.80 | % | 7.38 | % | 38.96 | % | (48.55 | )% | 23.36 | % | 27.19 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.11 | %(4) | 1.15 | % | 1.18 | % | 1.11 | % | 1.07 | % | 1.06 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.53 | %(4) | 1.07 | % | 1.38 | % | 1.38 | % | 1.14 | % | 0.72 | % | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $120,511 | $98,610 | $66,920 | $37,160 | $80,452 | $125,814 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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.
21
A Class(1) | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(2) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.29 | $9.72 | $7.13 | $14.82 | $12.12 | $9.72 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.06 | 0.06 | 0.07 | 0.11 | 0.08 | 0.03 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.64 | 0.61 | 2.63 | (6.94 | ) | 2.68 | 2.52 | |||||||||||||||||
Total From Investment Operations | 1.70 | 0.67 | 2.70 | (6.83 | ) | 2.76 | 2.55 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.10 | ) | (0.10 | ) | (0.11 | ) | (0.07 | ) | (0.06 | ) | (0.15 | ) | ||||||||||||
From Net Realized Gains | — | — | — | (0.79 | ) | — | — | |||||||||||||||||
Total Distributions | (0.10 | ) | (0.10 | ) | (0.11 | ) | (0.86 | ) | (0.06 | ) | (0.15 | ) | ||||||||||||
Net Asset Value, End of Period | $11.89 | $10.29 | $9.72 | $7.13 | $14.82 | $12.12 | ||||||||||||||||||
Total Return(4) | 16.55 | % | 6.98 | % | 38.30 | % | (48.79 | )% | 22.87 | % | 26.57 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.56 | %(5) | 1.60 | % | 1.63 | % | 1.56 | % | 1.52 | % | 1.51 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.08 | %(5) | 0.62 | % | 0.93 | % | 0.93 | % | 0.69 | % | 0.27 | % | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $202,203 | $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) | Six months ended May 31, 2011 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(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. |
See Notes to Financial Statements.
22
B Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.19 | $9.60 | $7.04 | $14.68 | $12.04 | $9.65 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.02 | (0.01 | ) | 0.01 | 0.02 | — | (3) | (0.05 | ) | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.62 | 0.60 | 2.61 | (6.87 | ) | 2.64 | 2.52 | |||||||||||||||||
Total From Investment Operations | 1.64 | 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 | $11.83 | $10.19 | $9.60 | $7.04 | $14.68 | $12.04 | ||||||||||||||||||
Total Return(4) | 16.09 | % | 6.15 | % | 37.36 | % | (49.18 | )% | 21.93 | % | 25.71 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.31 | %(5) | 2.35 | % | 2.38 | % | 2.31 | % | 2.27 | % | 2.26 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.33 | %(5) | (0.13 | )% | 0.18 | % | 0.18 | % | (0.06 | )% | (0.48 | )% | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $1,294 | $1,233 | $1,463 | $1,211 | $3,320 | $2,699 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
23
C Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.13 | $9.54 | $7.00 | $14.60 | $11.97 | $9.60 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.02 | (0.01 | ) | 0.01 | 0.02 | — | (3) | (0.05 | ) | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.61 | 0.60 | 2.59 | (6.83 | ) | 2.63 | 2.50 | |||||||||||||||||
Total From Investment Operations | 1.63 | 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 | $11.76 | $10.13 | $9.54 | $7.00 | $14.60 | $11.97 | ||||||||||||||||||
Total Return(4) | 16.09 | % | 6.18 | % | 37.29 | % | (49.18 | )% | 21.97 | % | 25.64 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.31 | %(5) | 2.35 | % | 2.38 | % | 2.31 | % | 2.27 | % | 2.26 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.33 | %(5) | (0.13 | )% | 0.18 | % | 0.18 | % | (0.06 | )% | (0.48 | )% | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $3,413 | $2,691 | $3,051 | $3,210 | $7,318 | $6,250 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
24
R Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.32 | $9.72 | $7.13 | $14.81 | $12.12 | $9.71 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | 0.05 | 0.03 | 0.06 | 0.09 | 0.07 | 0.01 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.64 | 0.62 | 2.62 | (6.96 | ) | 2.65 | 2.53 | |||||||||||||||||
Total From Investment Operations | 1.69 | 0.65 | 2.68 | (6.87 | ) | 2.72 | 2.54 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.04 | ) | (0.05 | ) | (0.09 | ) | (0.02 | ) | (0.03 | ) | (0.13 | ) | ||||||||||||
From Net Realized Gains | — | — | — | (0.79 | ) | — | — | |||||||||||||||||
Total Distributions | (0.04 | ) | (0.05 | ) | (0.09 | ) | (0.81 | ) | (0.03 | ) | (0.13 | ) | ||||||||||||
Net Asset Value, End of Period | $11.97 | $10.32 | $9.72 | $7.13 | $14.81 | $12.12 | ||||||||||||||||||
Total Return(3) | 16.40 | % | 6.75 | % | 37.97 | % | (48.92 | )% | 22.48 | % | 26.39 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.81 | %(4) | 1.85 | % | 1.88 | % | 1.81 | % | 1.77 | % | 1.76 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.83 | %(4) | 0.37 | % | 0.68 | % | 0.68 | % | 0.44 | % | 0.02 | % | ||||||||||||
Portfolio Turnover Rate | 66 | % | 130 | % | 151 | % | 144 | % | 133 | % | 95 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $4,978 | $4,381 | $5,436 | $2,727 | $4,042 | $2,106 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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.
25
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.
26
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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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72023 1107
SEMIANNUAL REPORT | MAY 31, 2011
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International Opportunities Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 20 |
Additional Information | 25 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance,
portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2011 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | Since Inception | Inception Date | |
Investor Class | AIOIX | 16.17% | 41.62% | 4.04% | 14.46% | 6/1/01 |
MSCI All Country World ex-U.S. Small Cap Growth Index | — | 13.38% | 38.49% | 5.07% | 9.47%(3) | — |
Institutional Class | ACIOX | 16.12% | 41.85% | 4.24% | 18.22% | 1/9/03 |
A Class No sales charge* With sales charge* | AIVOX | 15.88% 9.28% | 40.99% 32.77% | — — | 25.73% 19.85% | 3/1/10 |
C Class No sales charge* With sales charge* | AIOCX | 15.40% 14.40% | 40.08% 40.08% | — — | 24.84% 24.84% | 3/1/10 |
R Class | AIORX | 15.71% | 40.73% | — | 25.50% | 3/1/10 |
*Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Since 5/31/01, the date nearest the Investor Class’s inception for which data are available. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.89% | 1.69% | 2.14% | 2.89% | 2.39% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not.
4
Fund Characteristics |
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Croda International plc | 2.4% |
Ashtead Group plc | 2.2% |
Pirelli & C SpA | 2.2% |
Spectris plc | 2.1% |
Campbell Brothers Ltd. | 2.1% |
Ingenico | 2.0% |
SXC Health Solutions Corp. | 1.9% |
Aberdeen Asset Management plc | 1.8% |
Haier Electronics Group Co. Ltd. | 1.7% |
Major Drilling Group International, Inc. | 1.6% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks & Rights | 99.0% |
Temporary Cash Investments | 1.3% |
Other Assets and Liabilities | (0.3)% |
Investments by Country | % of net assets |
United Kingdom | 18.2% |
Japan | 12.3% |
Canada | 9.6% |
People’s Republic of China | 8.5% |
Australia | 6.0% |
Italy | 5.0% |
Hong Kong | 4.9% |
France | 4.3% |
Taiwan (Republic of China) | 4.3% |
South Korea | 3.3% |
Germany | 3.3% |
India | 2.2% |
Brazil | 2.2% |
Other Countries | 14.9% |
Cash and Equivalents* | 1.0% |
*Includes temporary cash investments and other assets and liabilities.
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,161.70 | $9.81 | 1.82% |
Institutional Class | $1,000 | $1,161.20 | $8.73 | 1.62% |
A Class | $1,000 | $1,158.80 | $11.14 | 2.07% |
C Class | $1,000 | $1,154.00 | $15.14 | 2.82% |
R Class | $1,000 | $1,157.10 | $12.48 | 2.32% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.86 | $9.15 | 1.82% |
Institutional Class | $1,000 | $1,016.85 | $8.15 | 1.62% |
A Class | $1,000 | $1,014.61 | $10.40 | 2.07% |
C Class | $1,000 | $1,010.87 | $14.14 | 2.82% |
R Class | $1,000 | $1,013.36 | $11.65 | 2.32% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
Shares | Value | |||||||
Common Stocks & Rights — 99.0% | ||||||||
AUSTRALIA — 6.0% | ||||||||
Atlas Iron Ltd.(1) | 290,750 | $1,154,927 | ||||||
Bandanna Energy Ltd.(1) | 253,088 | 569,651 | ||||||
Campbell Brothers Ltd. | 49,679 | 2,433,210 | ||||||
Iluka Resources Ltd. | 61,508 | 1,032,348 | ||||||
Medusa Mining Ltd. | 67,991 | 634,579 | ||||||
Mesoblast Ltd.(1) | 58,856 | 511,404 | ||||||
PanAust Ltd.(1) | 157,074 | 682,724 | ||||||
7,018,843 | ||||||||
AUSTRIA — 1.0% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 6,640 | 640,658 | ||||||
Zumtobel AG | 17,099 | 536,086 | ||||||
1,176,744 | ||||||||
BERMUDA — 1.4% | ||||||||
Archer Ltd.(1) | 235,463 | 1,603,077 | ||||||
BRAZIL — 2.2% | ||||||||
CETIP SA – Balcao Organizado de Ativos e Derivativos | 87,800 | 1,335,573 | ||||||
CETIP SA – Balcao Organizado de Ativos e Derivativos Rights(1) | 646 | 696 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 90,600 | 1,219,102 | ||||||
2,555,371 | ||||||||
CANADA — 9.6% | ||||||||
Canadian Western Bank | 35,761 | 1,108,061 | ||||||
Copper Mountain Mining Corp.(1) | 70,157 | 588,715 | ||||||
Detour Gold Corp.(1) | 34,598 | 1,105,593 | ||||||
Dollarama, Inc.(1) | 17,281 | 560,070 | ||||||
Legacy Oil + Gas, Inc.(1) | 98,008 | 1,405,100 | ||||||
Major Drilling Group International, Inc. | 119,758 | 1,913,458 | ||||||
Quadra FNX Mining Ltd.(1) | 37,657 | 571,744 | ||||||
SXC Health Solutions Corp.(1) | 37,370 | 2,209,762 | ||||||
Trican Well Service Ltd. | 73,875 | 1,775,867 | ||||||
11,238,370 | ||||||||
DENMARK — 1.5% | ||||||||
Christian Hansen Holding A/S | 73,076 | 1,759,164 | ||||||
FINLAND — 1.5% | ||||||||
Konecranes Oyj | 12,084 | 500,368 | ||||||
Outotec Oyj | 21,817 | 1,271,518 | ||||||
1,771,886 | ||||||||
FRANCE — 4.3% | ||||||||
Alten Ltd. | 23,597 | 938,434 | ||||||
Eurofins Scientific | 12,279 | 1,186,566 | ||||||
Ingenico | 50,073 | 2,329,806 | ||||||
Teleperformance | 16,006 | 547,971 | ||||||
5,002,777 | ||||||||
GERMANY — 3.3% | ||||||||
Gerry Weber International AG | 22,082 | 1,449,620 | ||||||
Gildemeister AG(1) | 50,275 | 1,164,574 | ||||||
SAF-HOLLAND SA(1) | 46,169 | 629,334 | ||||||
XING AG(1) | 8,190 | 630,669 | ||||||
3,874,197 | ||||||||
HONG KONG — 4.9% | ||||||||
Galaxy Entertainment Group Ltd.(1) | 330,000 | 742,651 | ||||||
Giordano International Ltd. | 700,000 | 639,978 | ||||||
Haier Electronics Group Co. Ltd.(1) | 1,608,000 | 1,963,981 | ||||||
Singamas Container Holdings Ltd. | 3,062,000 | 1,355,212 | ||||||
Techtronic Industries Co. | 809,500 | 991,657 | ||||||
5,693,479 | ||||||||
INDIA — 2.2% | ||||||||
Indian Bank | 157,670 | 778,159 | ||||||
Jubilant Foodworks Ltd.(1) | 63,446 | 1,186,714 | ||||||
S. Kumars Nationwide Ltd.(1) | 426,287 | 648,528 | ||||||
2,613,401 | ||||||||
IRELAND — 1.3% | ||||||||
Kenmare Resources plc(1) | 1,839,528 | 1,483,789 | ||||||
ISRAEL — 1.0% | ||||||||
Mellanox Technologies Ltd.(1) | 36,815 | 1,136,847 | ||||||
ITALY — 5.0% | ||||||||
Banca Generali SpA | 74,866 | 1,141,478 | ||||||
Interpump Group SpA | 98,071 | 811,686 | ||||||
Pirelli & C SpA | 257,929 | 2,571,861 | ||||||
Safilo Group SpA(1) | 75,833 | 1,365,124 | ||||||
5,890,149 | ||||||||
JAPAN — 12.3% | ||||||||
Anritsu Corp. | 143,000 | 1,172,867 | ||||||
CyberAgent, Inc. | 476 | 1,627,227 | ||||||
Dr. Ci:Labo Co. Ltd. | 176 | 748,799 | ||||||
F.C.C. Co. Ltd. | 37,700 | 865,444 | ||||||
Horiba Ltd. | 36,600 | 1,118,893 | ||||||
Kakaku.com, Inc. | 99 | 622,497 | ||||||
M3, Inc. | 81 | 564,068 |
8
Shares | Value | |||||||
Makino Milling Machine Co. Ltd.(1) | 162,000 | $1,449,851 | ||||||
Nabtesco Corp. | 63,900 | 1,446,231 | ||||||
Nippon Shokubai Co. Ltd. | 110,000 | 1,386,548 | ||||||
Tamron Co. Ltd. | 39,100 | 871,550 | ||||||
THK Co. Ltd. | 31,600 | 779,642 | ||||||
Tsubakimoto Chain Co. | 92,000 | 520,301 | ||||||
Zeon Corp. | 140,000 | 1,226,947 | ||||||
14,400,865 | ||||||||
MEXICO — 1.3% | ||||||||
Genomma Lab Internacional SAB de CV, Class B(1) | 572,697 | 1,476,585 | ||||||
NETHERLANDS — 0.9% | ||||||||
Aalberts Industries NV | 46,932 | 1,115,670 | ||||||
NORWAY — 1.2% | ||||||||
Tomra Systems ASA | 159,432 | 1,460,027 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 8.5% | ||||||||
21Vianet Group, Inc. ADR(1) | 37,595 | 465,050 | ||||||
51job, Inc. ADR(1) | 9,805 | 559,964 | ||||||
AirTAC International Group(1) | 168,000 | 1,569,138 | ||||||
Biostime International Holdings Ltd.(1) | 448,500 | 923,707 | ||||||
China Liansu Group Holdings Ltd. | 633,000 | 533,776 | ||||||
China Shanshui Cement Group Ltd. | 1,604,000 | 1,734,349 | ||||||
Intime Department Store Group Co. Ltd. | 331,000 | 589,990 | ||||||
Kingdee International Software Group Co. Ltd. | 2,284,800 | 1,314,096 | ||||||
Shenguan Holdings Group Ltd. | 458,000 | 620,815 | ||||||
Spreadtrum Communication, Inc. ADR(1) | 82,360 | 1,588,724 | ||||||
9,899,609 | ||||||||
PHILIPPINES — 0.4% | ||||||||
International Container Terminal Services, Inc. | 410,100 | 476,366 | ||||||
SINGAPORE — 0.5% | ||||||||
Biosensors International Group Ltd.(1) | 548,000 | 568,788 | ||||||
SOUTH KOREA — 3.3% | ||||||||
CrucialTec Co. Ltd.(1) | 28,018 | 578,042 | ||||||
Dongyang Mechatronics Corp. | 35,250 | 593,333 | ||||||
Hyundai Marine & Fire Insurance Co. Ltd. | 47,780 | 1,197,951 | ||||||
Mando Corp. | 8,250 | 1,526,913 | ||||||
3,896,239 | ||||||||
SPAIN — 1.3% | ||||||||
NH Hoteles SA(1) | 182,881 | 1,493,046 | ||||||
SWITZERLAND — 0.9% | ||||||||
Burckhardt Compression Holding AG | 1,203 | 395,398 | ||||||
Nobel Biocare Holding AG(1) | 27,665 | 604,273 | ||||||
999,671 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 4.3% | ||||||||
Largan Precision Co. Ltd. | 27,000 | 891,516 | ||||||
St. Shine Optical Co. Ltd. | 47,000 | 688,453 | ||||||
Taiwan Hon Chuan Enterprise Co. Ltd. | 403,000 | 1,155,081 | ||||||
Wistron NeWeb Corp. | 338,000 | 1,318,950 | ||||||
Yungtay Engineering Co. Ltd. | 526,000 | 946,347 | ||||||
5,000,347 | ||||||||
TURKEY — 0.7% | ||||||||
Turkiye Sise ve Cam Fabrikalari AS | 286,556 | 766,404 | ||||||
UNITED KINGDOM — 18.2% | ||||||||
Aberdeen Asset Management plc | 549,239 | 2,119,055 | ||||||
Afren plc(1) | 424,301 | 1,161,453 | ||||||
Ashtead Group plc | 872,268 | 2,628,290 | ||||||
ASOS plc(1) | 44,531 | 1,740,203 | ||||||
Bellway plc | 98,715 | 1,207,047 | ||||||
Chariot Oil & Gas Ltd.(1) | 74,968 | 280,170 | ||||||
Croda International plc | 87,918 | 2,821,668 | ||||||
Imagination Technologies Group plc(1) | 88,534 | 721,285 | ||||||
IMI plc | 81,146 | 1,392,148 | ||||||
John Wood Group plc | 109,749 | 1,134,622 | ||||||
Premier Oil plc(1) | 88,312 | 695,419 | ||||||
Rightmove plc | 69,352 | 1,260,645 | ||||||
Shaftesbury plc | 75,192 | 666,841 | ||||||
Spectris plc | 95,328 | 2,471,995 | ||||||
Spirax-Sarco Engineering plc | 30,266 | 992,899 | ||||||
21,293,740 | ||||||||
TOTAL COMMON STOCKS & RIGHTS (Cost $93,272,595) | 115,665,451 | |||||||
Temporary Cash Investments — 1.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 76,308 | 76,308 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 4/15/12, valued at $1,529,743), in a joint trading account at 0.04%, dated 5/31/11, due 6/1/11 (Delivery value $1,500,002) | 1,500,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,576,308) | 1,576,308 |
9
Value | ||||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $94,848,903) | $117,241,759 | |||
OTHER ASSETS AND LIABILITIES — (0.3)% | (358,706 | ) | ||
TOTAL NET ASSETS — 100.0% | $116,883,053 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 22.3% |
Consumer Discretionary | 21.7% |
Materials | 16.5% |
Information Technology | 14.8% |
Energy | 7.9% |
Financials | 7.1% |
Health Care | 6.7% |
Consumer Staples | 2.0% |
Cash and Equivalents* | 1.0% |
*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.
10
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $94,848,903) | $117,241,759 | |||
Foreign currency holdings, at value (cost of $100,119) | 101,453 | |||
Receivable for investments sold | 824,261 | |||
Receivable for capital shares sold | 90,447 | |||
Dividends and interest receivable | 319,179 | |||
Other assets | 55,056 | |||
118,632,155 | ||||
Liabilities | ||||
Payable for investments purchased | 1,037,820 | |||
Payable for capital shares redeemed | 513,382 | |||
Accrued management fees | 177,158 | |||
Distribution and service fees payable | 256 | |||
Accrued foreign taxes | 20,486 | |||
1,749,102 | ||||
Net Assets | $116,883,053 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $118,420,785 | |||
Accumulated net investment loss | (1,231,781 | ) | ||
Accumulated net realized loss | (22,688,404 | ) | ||
Net unrealized appreciation | 22,382,453 | |||
$116,883,053 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $116,042,946 | 15,947,505 | $7.28 |
Institutional Class, $0.01 Par Value | $45,494 | 6,214 | $7.32 |
A Class, $0.01 Par Value | $550,097 | 75,532 | $7.28* |
C Class, $0.01 Par Value | $170,990 | 23,511 | $7.27 |
R Class, $0.01 Par Value | $73,526 | 10,083 | $7.29 |
*Maximum offering price $7.72 (net asset value divided by 0.9425)
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $61,188) | $780,241 | |||
Interest | 315 | |||
780,556 | ||||
Expenses: | ||||
Management fees | 1,015,811 | |||
Distribution and service fees: | ||||
A Class | 289 | |||
C Class | 504 | |||
R Class | 156 | |||
Directors’ fees and expenses | 2,696 | |||
Other expenses | 138 | |||
1,019,594 | ||||
Net investment income (loss) | (239,038 | ) | ||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $(24,144)) | 8,274,746 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $38,379) | 2,278,938 | |||
10,553,684 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $7,443) | 3,079,341 | |||
Translation of assets and liabilities in foreign currencies | 2,968,457 | |||
6,047,798 | ||||
Net realized and unrealized gain (loss) | 16,601,482 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $16,362,444 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $(239,038 | ) | $(513,047 | ) | ||||
Net realized gain (loss) | 10,553,684 | 17,551,821 | ||||||
Change in net unrealized appreciation (depreciation) | 6,047,798 | (2,531,247 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 16,362,444 | 14,507,527 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (419,854 | ) | (1,832,216 | ) | ||||
Institutional Class | (244 | ) | (787 | ) | ||||
A Class | (287 | ) | (169 | ) | ||||
R Class | — | (100 | ) | |||||
Decrease in net assets from distributions | (420,385 | ) | (1,833,272 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (2,036,778 | ) | (2,744,539 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 11,934 | 34,730 | ||||||
Net increase (decrease) in net assets | 13,917,215 | 9,964,446 | ||||||
Net Assets | ||||||||
Beginning of period | 102,965,838 | 93,001,392 | ||||||
End of period | $116,883,053 | $102,965,838 | ||||||
Accumulated net investment loss | $(1,231,781 | ) | $(572,358 | ) |
See Notes to Financial Statements.
13
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Opportunities Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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 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
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.
14
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 change in 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.
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Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.60% 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 six months ended May 31, 2011 was 1.81% for the Investor Class, A Class, C Class and R Class and 1.61% for the Institutional Class.
Distribution and Service Fees — The Board of Directors has adopted a separate Master Distribution and Individual Shareholder Services Plan for each of the A Class, C Class and R Class (collectively the plans), pursuant to Rule 12b-1 of the 1940 Act. The plans provide that the A Class will pay 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 six months ended May 31, 2011 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.
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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 six months ended May 31, 2011 were $100,794,773 and $104,252,869, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010(1) | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||||||||
Sold | 1,333,086 | $9,238,442 | 2,531,933 | $14,684,338 | ||||||||||||
Issued in reinvestment of distributions | 59,421 | 408,224 | 314,167 | 1,791,301 | ||||||||||||
Redeemed | (1,774,899 | ) | (12,240,153 | ) | (3,437,697 | ) | (19,387,146 | ) | ||||||||
(382,392 | ) | (2,593,487 | ) | (591,597 | ) | (2,911,507 | ) | |||||||||
Institutional Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Issued in reinvestment of distributions | 35 | 244 | 137 | 787 | ||||||||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 63,265 | 444,321 | 15,078 | 85,679 | ||||||||||||
Issued in reinvestment of distributions | 41 | 287 | 29 | 169 | ||||||||||||
Redeemed | (2,415 | ) | (16,259 | ) | (466 | ) | (2,608 | ) | ||||||||
60,891 | 428,349 | 14,641 | 83,240 | |||||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 16,520 | 114,835 | 6,991 | 38,671 | ||||||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 1,932 | 13,281 | 8,134 | 44,170 | ||||||||||||
Issued in reinvestment of distributions | — | — | 17 | 100 | ||||||||||||
1,932 | 13,281 | 8,151 | 44,270 | |||||||||||||
Net increase (decrease) | (303,014 | ) | $(2,036,778 | ) | (561,677 | ) | $(2,744,539 | ) |
(1) | March 1, 2010 (commencement of sale) through November 30, 2010 for the A Class, C Class and R Class. |
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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 | $3,750,585 | $111,914,866 | — | |||||||||
Temporary Cash Investments | 76,308 | 1,500,000 | — | |||||||||
Total Value of Investment Securities | $3,826,893 | $113,414,866 | — |
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, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
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8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $95,894,630 | |||
Gross tax appreciation of investments | $22,625,788 | |||
Gross tax depreciation of investments | (1,278,659 | ) | ||
Net tax appreciation (depreciation) of investments | $21,347,129 |
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.
As of November 30, 2010, the fund had accumulated capital losses of $(32,889,317), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(21,113,960) and $(11,775,357) expire in 2016 and 2017, respectively.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.29 | $5.49 | $3.70 | $11.37 | $11.79 | $12.27 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.01 | ) | (0.03 | ) | (0.02 | ) | 0.05 | 0.02 | (0.01 | ) | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.03 | 0.94 | 1.81 | (5.06 | ) | 2.94 | 2.53 | |||||||||||||||||
Total From Investment Operations | 1.02 | 0.91 | 1.79 | (5.01 | ) | 2.96 | 2.52 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.03 | ) | (0.11 | ) | — | (0.05 | ) | — | (3) | (0.01 | ) | |||||||||||||
From Net Realized Gains | — | — | — | (2.61 | ) | (3.38 | ) | (2.99 | ) | |||||||||||||||
Total Distributions | (0.03 | ) | (0.11 | ) | — | (2.66 | ) | (3.38 | ) | (3.00 | ) | |||||||||||||
Net Asset Value, End of Period | $7.28 | $6.29 | $5.49 | $3.70 | $11.37 | $11.79 | ||||||||||||||||||
Total Return(4) | 16.17 | % | 16.72 | % | 48.38 | % | (56.46 | )% | 33.73 | % | 25.37 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.82 | %(5) | 1.89 | % | 1.95 | % | 1.87 | % | 1.81 | % | 1.85 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.43 | )%(5) | (0.52 | )% | (0.52 | )% | 0.72 | % | 0.19 | % | (0.06 | )% | ||||||||||||
Portfolio Turnover Rate | 91 | % | 209 | % | 244 | % | 206 | % | 149 | % | 160 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $116,043 | $102,739 | $92,968 | $65,541 | $212,157 | $180,732 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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. |
See Notes to Financial Statements.
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Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.34 | $5.54 | $3.72 | $11.44 | $11.85 | $12.32 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(2) | (0.01 | ) | (0.02 | ) | (0.04 | ) | 0.07 | 0.06 | 0.02 | |||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.03 | 0.95 | 1.86 | (5.10 | ) | 2.94 | 2.54 | |||||||||||||||||
Total From Investment Operations | 1.02 | 0.93 | 1.82 | (5.03 | ) | 3.00 | 2.56 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.04 | ) | (0.13 | ) | — | (0.08 | ) | (0.03 | ) | (0.04 | ) | |||||||||||||
From Net Realized Gains | — | — | — | (2.61 | ) | (3.38 | ) | (2.99 | ) | |||||||||||||||
Total Distributions | (0.04 | ) | (0.13 | ) | — | (2.69 | ) | (3.41 | ) | (3.03 | ) | |||||||||||||
Net Asset Value, End of Period | $7.32 | $6.34 | $5.54 | $3.72 | $11.44 | $11.85 | ||||||||||||||||||
Total Return(3) | 16.12 | % | 17.04 | % | 48.92 | % | (56.44 | )% | 33.97 | % | 25.66 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.62 | %(4) | 1.69 | % | 1.75 | % | 1.67 | % | 1.61 | % | 1.65 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.23 | )%(4) | (0.32 | )% | (0.32 | )% | 0.92 | % | 0.39 | % | 0.14 | % | ||||||||||||
Portfolio Turnover Rate | 91 | % | 209 | % | 244 | % | 206 | % | 149 | % | 160 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $45 | $39 | $33 | $1,245 | $4,513 | $1,099 |
(1) | Six months ended May 31, 2011 (unaudited). |
(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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A Class | ||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||
2011(1) | 2010(2) | |||||||
Per-Share Data | ||||||||
Net Asset Value, Beginning of Period | $6.29 | $5.51 | ||||||
Income From Investment Operations | ||||||||
Net Investment Income (Loss)(3) | (0.01 | ) | (0.02 | ) | ||||
Net Realized and Unrealized Gain (Loss) | 1.01 | 0.84 | ||||||
Total From Investment Operations | 1.00 | 0.82 | ||||||
Distributions | ||||||||
From Net Investment Income | (0.01 | ) | (0.04 | ) | ||||
Net Asset Value, End of Period | $7.28 | $6.29 | ||||||
Total Return(4) | 15.88 | % | 14.87 | % | ||||
Ratios/Supplemental Data | ||||||||
Ratio of Operating Expenses to Average Net Assets | 2.07 | %(5) | 2.14 | %(5) | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.68 | )%(5) | (0.45 | )%(5) | ||||
Portfolio Turnover Rate | 91 | % | 209 | %(6) | ||||
Net Assets, End of Period (in thousands) | $550 | $92 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(3) | Computed using average shares outstanding throughout the period. |
(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, 2010. |
See Notes to Financial Statements.
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C Class | ||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||
2011(1) | 2010(2) | |||||||
Per-Share Data | ||||||||
Net Asset Value, Beginning of Period | $6.30 | $5.51 | ||||||
Income From Investment Operations | ||||||||
Net Investment Income (Loss)(3) | (0.04 | ) | (0.05 | ) | ||||
Net Realized and Unrealized Gain (Loss) | 1.01 | 0.84 | ||||||
Total From Investment Operations | 0.97 | 0.79 | ||||||
Net Asset Value, End of Period | $7.27 | $6.30 | ||||||
Total Return(4) | 15.40 | % | 14.34 | % | ||||
Ratios/Supplemental Data | ||||||||
Ratio of Operating Expenses to Average Net Assets | 2.82 | %(5) | 2.89 | %(5) | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (1.43 | )%(5) | (1.19 | )%(5) | ||||
Portfolio Turnover Rate | 91 | % | 209 | %(6) | ||||
Net Assets, End of Period (in thousands) | $171 | $44 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(3) | Computed using average shares outstanding throughout the period. |
(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, 2010. |
See Notes to Financial Statements.
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R Class | ||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||
�� | 2011(1) | 2010(2) | ||||||
Per-Share Data | ||||||||
Net Asset Value, Beginning of Period | $6.30 | $5.51 | ||||||
Income From Investment Operations | ||||||||
Net Investment Income (Loss)(3) | (0.03 | ) | (0.03 | ) | ||||
Net Realized and Unrealized Gain (Loss) | 1.02 | 0.84 | ||||||
Total From Investment Operations | 0.99 | 0.81 | ||||||
Distributions | ||||||||
From Net Investment Income | — | (0.02 | ) | |||||
Net Asset Value, End of Period | $7.29 | $6.30 | ||||||
Total Return(4) | 15.71 | % | 14.77 | % | ||||
Ratios/Supplemental Data | ||||||||
Ratio of Operating Expenses to Average Net Assets | 2.32 | %(5) | 2.39 | %(5) | ||||
Ratio of Net Investment Income (Loss) to Average Net Assets | (0.93 | )%(5) | (0.69 | )%(5) | ||||
Portfolio Turnover Rate | 91 | % | 209 | %(6) | ||||
Net Assets, End of Period (in thousands) | $74 | $51 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(3) | Computed using average shares outstanding throughout the period. |
(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, 2010. |
See Notes to Financial Statements.
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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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72028 1107
SEMIANNUAL REPORT | MAY 31, 2011
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International Value Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 10 |
Statement of Operations | 11 |
Statement of Changes in Net Assets | 12 |
Notes to Financial Statements | 13 |
Financial Highlights | 19 |
Additional Information | 25 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2011 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | 10 years | Since Inception | Inception Date | |
A Class No sales charge* With sales charge* | MEQAX | 18.15% 11.39% | 33.56% 25.96% | 2.64%(3) 1.43%(3) | 5.37%(3) 4.75%(3) | 4.38%(3) 3.94%(3) | 3/31/97 |
MSCI EAFE Index | — | 14.92% | 30.69% | 1.73% | 5.35% | 5.12% | — |
Investor Class | ACEVX | 18.21% | 33.91% | 2.86% | — | 2.81% | 4/3/06 |
Institutional Class | ACVUX | 18.33% | 34.07% | 3.03% | — | 2.99% | 4/3/06 |
B Class No sales charge* With sales charge* | MEQBX | 17.51% 12.51% | 32.59% 28.59% | 1.87%(3) 1.69%(3) | 4.60%(3) 4.60%(3) | 3.66%(3) 3.66%(3) | 3/31/97 |
C Class No sales charge* With sales charge* | ACCOX | 17.76% 16.76% | 32.77% 32.77% | 1.83% 1.83% | — — | 1.78% 1.78% | 4/3/06 |
R Class | ACVRX | 17.92% | 33.17% | 2.32% | — | 2.28% | 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 and may be subject to a maximum CDSC of 1.00%. B Class shares redeemed within six years of purchase are subject to a CDSC that declines from 5.00% during the first year after purchase to 0.00% the sixth year after purchase. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
International Value acquired all the net assets of the Mason Street International Equity Fund on March 31, 2006, pursuant to a plan of reorganization approved by the acquired fund’s shareholders on March 15, 2006. Performance information prior to April 1, 2006, is that of the Mason Street International Equity Fund.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Returns would have been lower if a portion of the fees had not been waived. |
Total Annual Fund Operating Expenses | |||||
Investor Class | Institutional Class | A Class | B Class | C Class | R Class |
1.32% | 1.12% | 1.57% | 2.32% | 2.32% | 1.82% |
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.
4
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Merck KGaA | 2.8% |
Royal Dutch Shell plc B Shares | 2.8% |
AIA Group Ltd. | 2.6% |
Cie Generale des Etablissements Michelin, Class B | 2.5% |
Vodafone Group plc | 2.4% |
China Telecom Corp. Ltd. H Shares | 2.4% |
Roche Holding AG | 2.3% |
ING Groep NV CVA | 2.3% |
Aviva plc | 2.3% |
Kingfisher plc | 2.3% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 96.3% |
Temporary Cash Investments | 3.7% |
Other Assets and Liabilities | —(1) |
(1)Category is less than 0.05% of total net assets. | |
Investments by Country | % of net assets |
United Kingdom | 18.9% |
France | 11.5% |
Germany | 8.9% |
Netherlands | 7.9% |
Switzerland | 6.6% |
Hong Kong | 6.3% |
South Korea | 5.9% |
Singapore | 5.0% |
Japan | 5.0% |
People’s Republic of China | 4.6% |
Brazil | 3.4% |
Italy | 2.6% |
Taiwan (Republic of China) | 2.5% |
Other Countries | 7.2% |
Cash and Equivalents(2) | 3.7% |
(2)Includes temporary cash investments and other assets and liabilities. |
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Investor Class | $1,000 | $1,182.10 | $7.13 | 1.31% |
Institutional Class | $1,000 | $1,183.30 | $6.04 | 1.11% |
A Class | $1,000 | $1,181.50 | $8.48 | 1.56% |
B Class | $1,000 | $1,175.10 | $12.53 | 2.31% |
C Class | $1,000 | $1,177.60 | $12.54 | 2.31% |
R Class | $1,000 | $1,179.20 | $9.83 | 1.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.40 | $6.59 | 1.31% |
Institutional Class | $1,000 | $1,019.40 | $5.59 | 1.11% |
A Class | $1,000 | $1,017.15 | $7.85 | 1.56% |
B Class | $1,000 | $1,013.41 | $11.60 | 2.31% |
C Class | $1,000 | $1,013.41 | $11.60 | 2.31% |
R Class | $1,000 | $1,015.91 | $9.10 | 1.81% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
Shares | Value | |||||||
Common Stocks — 96.3% | ||||||||
BRAZIL — 3.4% | ||||||||
Centrais Eletricas Brasileiras SA(1) | 10,380 | $146,777 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 11,580 | 401,016 | ||||||
Vale SA Preference Shares ADR | 16,930 | 496,049 | ||||||
1,043,842 | ||||||||
CANADA — 0.3% | ||||||||
Husky Energy, Inc. | 2,810 | 85,995 | ||||||
FRANCE — 11.5% | ||||||||
Alstom SA | 2,320 | 144,020 | ||||||
AXA SA | 26,237 | 561,903 | ||||||
Carrefour SA(1) | 1,670 | 74,099 | ||||||
Cie Generale des Etablissements Michelin, Class B | 7,988 | 749,961 | ||||||
Credit Agricole SA | 8,190 | 125,705 | ||||||
France Telecom SA | 22,060 | 505,592 | ||||||
Sanofi | 5,813 | 461,198 | ||||||
Thales SA | 2,020 | 84,842 | ||||||
Total SA | 9,030 | 522,681 | ||||||
Vivendi SA | 10,030 | 281,249 | ||||||
3,511,250 | ||||||||
GERMANY — 8.9% | ||||||||
Celesio AG | 5,670 | 136,445 | ||||||
Deutsche Lufthansa AG | 5,350 | 116,373 | ||||||
Deutsche Post AG | 11,140 | 209,957 | ||||||
Merck KGaA | 7,660 | 841,959 | ||||||
Muenchener Rueckversicherungs AG | 1,880 | 289,132 | ||||||
RHOEN-KLINIKUM AG | 6,020 | 151,723 | ||||||
SAP AG | 9,280 | 577,451 | ||||||
Siemens AG ADR | 3,040 | 406,904 | ||||||
2,729,944 | ||||||||
HONG KONG — 6.3% | ||||||||
AIA Group Ltd.(1) | 224,400 | 792,687 | ||||||
Cheung Kong Holdings Ltd. | 23,300 | 365,061 | ||||||
China Mobile Ltd. | 53,500 | 488,496 | ||||||
Hutchison Whampoa Ltd. | 23,900 | 276,848 | ||||||
1,923,092 | ||||||||
ITALY — 2.6% | ||||||||
ENI SpA | 19,180 | 459,330 | ||||||
Intesa Sanpaolo SpA | 88,780 | 231,289 | ||||||
UniCredit SpA | 48,220 | 110,004 | ||||||
800,623 | ||||||||
JAPAN — 5.0% | ||||||||
ITOCHU Corp. | 31,100 | 321,832 | ||||||
Nintendo Co. Ltd. | 1,330 | 310,197 | ||||||
Nissan Motor Co. Ltd. | 15,660 | 156,947 | ||||||
Sony Corp. | 5,100 | 136,438 | ||||||
Toyota Motor Corp. | 5,800 | 241,481 | ||||||
Trend Micro, Inc. | 11,600 | 352,920 | ||||||
1,519,815 | ||||||||
NETHERLANDS — 7.9% | ||||||||
Aegon NV(1) | 19,030 | 133,692 | ||||||
Akzo Nobel NV | 4,950 | 357,998 | ||||||
ING Groep NV CVA(1) | 56,972 | 690,405 | ||||||
Koninklijke Philips Electronics NV | 4,579 | 127,152 | ||||||
Royal Dutch Shell plc B Shares | 23,125 | 840,428 | ||||||
SBM Offshore NV | 9,788 | 259,001 | ||||||
2,408,676 | ||||||||
NORWAY — 1.5% | ||||||||
Telenor ASA | 27,590 | 468,443 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 4.6% | ||||||||
China Coal Energy Co. Ltd. H Shares | 46,000 | 62,300 | ||||||
China Shenhua Energy Co. Ltd. H Shares | 26,000 | 129,379 | ||||||
China Telecom Corp. Ltd. H Shares | 1,214,000 | 728,287 | ||||||
Shanghai Electric Group Co. Ltd. H Shares | 916,000 | 480,293 | ||||||
1,400,259 | ||||||||
RUSSIAN FEDERATION — 1.1% | ||||||||
OAO Gazprom ADR | 22,580 | 334,101 | ||||||
SINGAPORE — 5.0% | ||||||||
DBS Group Holdings Ltd. | 56,250 | 675,162 | ||||||
Flextronics International Ltd.(1) | 20,340 | 147,261 | ||||||
Singapore Telecommunications Ltd. | 161,000 | 419,055 | ||||||
United Overseas Bank Ltd. | 19,000 | 299,393 | ||||||
1,540,871 | ||||||||
SOUTH KOREA — 5.9% | ||||||||
Hana Financial Group, Inc. | 15,320 | 548,705 | ||||||
KB Financial Group, Inc. | 7,050 | 337,306 | ||||||
Samsung Electronics Co. Ltd. | 790 | 662,197 | ||||||
Shinhan Financial Group Co. Ltd. | 5,350 | 241,243 | ||||||
1,789,451 |
8
Shares | Value | |||||||
SPAIN — 1.9% | ||||||||
Telefonica SA ADR | 23,580 | $573,701 | ||||||
SWEDEN — 0.7% | ||||||||
Telefonaktiebolaget LM Ericsson B Shares | 14,000 | 207,575 | ||||||
SWITZERLAND — 6.6% | ||||||||
ACE Ltd. | 6,380 | 439,071 | ||||||
Basilea Pharmaceutica(1) | 1,960 | 162,511 | ||||||
Lonza Group AG(1) | 2,680 | 231,793 | ||||||
Novartis AG | 1,200 | 77,603 | ||||||
Roche Holding AG | 4,010 | 705,826 | ||||||
Swiss Reinsurance Co. Ltd.(1) | 6,757 | 401,269 | ||||||
2,018,073 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.5% | ||||||||
Compal Electronics, Inc. | 127,684 | 155,071 | ||||||
Siliconware Precision Industries Co. | 143,000 | 191,540 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 150,749 | 403,006 | ||||||
749,617 | ||||||||
THAILAND — 1.2% | ||||||||
Bangkok Bank PCL | 68,000 | 366,950 | ||||||
TURKEY — 0.5% | ||||||||
Turkcell Iletisim Hizmetleri AS ADR(1) | 11,530 | 162,227 | ||||||
UNITED KINGDOM — 18.9% | ||||||||
Aviva plc | 95,440 | 687,522 | ||||||
BAE Systems plc | 37,660 | 205,427 | ||||||
BP plc | 53,240 | 410,731 | ||||||
G4S plc | 17,910 | 84,481 | ||||||
GlaxoSmithKline plc | 25,720 | 558,562 | ||||||
HSBC Holdings plc | 36,400 | 384,223 | ||||||
International Consolidated Airlines Group SA(1) | 35,440 | 138,261 | ||||||
Kingfisher plc | 145,040 | 687,260 | ||||||
Marks & Spencer Group plc | 56,340 | 370,659 | ||||||
National Grid plc | 20,232 | 208,767 | ||||||
Pearson plc | 16,290 | 306,371 | ||||||
Rentokil Initial plc(1) | 46,140 | 75,152 | ||||||
Rexam plc | 54,590 | 360,668 | ||||||
Tesco plc | 45,490 | 314,262 | ||||||
Unilever plc | 7,335 | 238,268 | ||||||
Vodafone Group plc | 264,953 | 737,656 | ||||||
5,768,270 | ||||||||
TOTAL COMMON STOCKS (Cost $23,576,006) | 29,402,775 | |||||||
Temporary Cash Investments — 3.7% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 16,499 | $16,499 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 4/15/12, valued at $1,121,812), in a joint trading account at 0.04%, dated 5/31/11, due 6/1/11 (Delivery value $1,100,001) | 1,100,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,116,499) | 1,116,499 | |||||||
TOTAL INVESTMENT SECURITIES — 100.0% (Cost $24,692,505) | 30,519,274 | |||||||
OTHER ASSETS AND LIABILITIES(2) | 3,863 | |||||||
TOTAL NET ASSETS — 100.0% | $30,523,137 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 25.2% |
Telecommunication Services | 13.4% |
Energy | 11.5% |
Health Care | 10.9% |
Information Technology | 9.8% |
Consumer Discretionary | 9.6% |
Industrials | 8.7% |
Materials | 4.0% |
Consumer Staples | 2.0% |
Utilities | 1.2% |
Cash and Equivalents* | 3.7% |
*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. |
(2) | Category is less than 0.05% of total net assets. |
See Notes to Financial Statements.
9
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $24,692,505) | $30,519,274 | |||
Foreign currency holdings, at value (cost of $187,811) | 191,080 | |||
Receivable for capital shares sold | 60,929 | |||
Dividends and interest receivable | 293,875 | |||
31,065,158 | ||||
Liabilities | ||||
Payable for investments purchased | 458,118 | |||
Payable for capital shares redeemed | 45,800 | |||
Accrued management fees | 32,864 | |||
Distribution and service fees payable | 5,239 | |||
542,021 | ||||
Net Assets | $30,523,137 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $31,519,515 | |||
Undistributed net investment income | 283,499 | |||
Accumulated net realized loss | (7,128,565 | ) | ||
Net unrealized appreciation | 5,848,688 | |||
$30,523,137 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $10,576,409 | 1,316,078 | $8.04 |
Institutional Class, $0.01 Par Value | $1,455,598 | 181,446 | $8.02 |
A Class, $0.01 Par Value | $16,094,054 | 1,992,435 | $8.08* |
B Class, $0.01 Par Value | $858,738 | 108,502 | $7.91 |
C Class, $0.01 Par Value | $1,216,200 | 150,607 | $8.08 |
R Class, $0.01 Par Value | $322,138 | 40,009 | $8.05 |
*Maximum offering price $8.57 (net asset value divided by 0.9425)
See Notes to Financial Statements.
10
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $40,636) | $497,977 | |||
Interest | 395 | |||
498,372 | ||||
Expenses: | ||||
Management fees | 182,834 | |||
Distribution and service fees: | ||||
A Class | 19,488 | |||
B Class | 4,524 | |||
C Class | 5,794 | |||
R Class | 772 | |||
Directors’ fees and expenses | 1,153 | |||
Other expenses | 13 | |||
214,578 | ||||
Net investment income (loss) | 283,794 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 1,114,671 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $2,867) | 140,742 | |||
1,255,413 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | 1,767,512 | |||
Translation of assets and liabilities in foreign currencies | 1,321,186 | |||
3,088,698 | ||||
Net realized and unrealized gain (loss) | 4,344,111 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $4,627,905 |
See Notes to Financial Statements.
11
SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $283,794 | $398,260 | ||||||
Net realized gain (loss) | 1,255,413 | 421,106 | ||||||
Change in net unrealized appreciation (depreciation) | 3,088,698 | (1,828,731 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 4,627,905 | (1,009,365 | ) | |||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (140,867 | ) | (281,159 | ) | ||||
Institutional Class | (26,763 | ) | (73,160 | ) | ||||
A Class | (203,043 | ) | (645,217 | ) | ||||
B Class | (5,247 | ) | (28,789 | ) | ||||
C Class | (6,656 | ) | (19,261 | ) | ||||
R Class | (3,336 | ) | (4,722 | ) | ||||
Decrease in net assets from distributions | (385,912 | ) | (1,052,308 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (479,000 | ) | (1,004,655 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 2,437 | 3,710 | ||||||
Net increase (decrease) in net assets | 3,765,430 | (3,062,618 | ) | |||||
Net Assets | ||||||||
Beginning of period | 26,757,707 | 29,820,325 | ||||||
End of period | $30,523,137 | $26,757,707 | ||||||
Undistributed net investment income | $283,499 | $385,617 |
See Notes to Financial Statements.
12
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. International Value Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek long-term capital growth. The fund 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 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.
13
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 change in 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. 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.
14
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee) per class. The agreement provides that all expenses of managing and operating the fund, except distribution and service fees, brokerage expenses, taxes, interest, fees and expenses of the independent directors (including legal counsel fees), and extraordinary expenses, will be paid by ACIM. The fee is computed and accrued daily based on each class’s daily net assets and paid monthly in arrears. The rate of the fee is determined by applying a fee rate calculation formula. This formula takes into account the fund’s assets as well as certain assets, if any, of other clients of the investment advisor outside the American Century Investments family of funds (such as subadvised funds and separate accounts) that have very similar investment teams and investment strategies (strategy assets). The annual management fee schedule ranges from 1.10% 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 six months ended May 31, 2011 was 1.30% for the Investor Class, A Class, B Class, C Class and R Class and 1.10% for the Institutional Class.
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.
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 six months ended May 31, 2011 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.
15
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 six months ended May 31, 2011 were $3,735,960 and $4,109,355, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2011 | Year ended November 30, 2010 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 454,433 | $3,523,784 | 543,874 | $3,779,102 | ||||||||||||
Issued in reinvestment of distributions | 17,606 | 134,337 | 38,587 | 273,798 | ||||||||||||
Redeemed | (208,901 | ) | (1,597,471 | ) | (493,578 | ) | (3,480,623 | ) | ||||||||
263,138 | 2,060,650 | 88,883 | 572,277 | |||||||||||||
Institutional Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 20,657 | 159,219 | 68,030 | 462,329 | ||||||||||||
Issued in reinvestment of distributions | 3,517 | 26,763 | 10,333 | 73,160 | ||||||||||||
Redeemed | (53,635 | ) | (411,867 | ) | (89,177 | ) | (600,913 | ) | ||||||||
(29,461 | ) | (225,885 | ) | (10,814 | ) | (65,424 | ) | |||||||||
A Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||||||||
Sold | 201,526 | 1,560,598 | 899,755 | 6,485,839 | ||||||||||||
Issued in reinvestment of distributions | 26,048 | 199,787 | 89,337 | 636,290 | ||||||||||||
Redeemed | (511,727 | ) | (3,857,874 | ) | (1,254,749 | ) | (8,540,309 | ) | ||||||||
(284,153 | ) | (2,097,489 | ) | (265,657 | ) | (1,418,180 | ) | |||||||||
B Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 2,376 | 17,559 | 2,489 | 16,165 | ||||||||||||
Issued in reinvestment of distributions | 696 | 5,240 | 4,077 | 28,443 | ||||||||||||
Redeemed | (32,643 | ) | (244,689 | ) | (78,840 | ) | (534,140 | ) | ||||||||
(29,571 | ) | (221,890 | ) | (72,274 | ) | (489,532 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 21,726 | 168,338 | 68,338 | 488,852 | ||||||||||||
Issued in reinvestment of distributions | 864 | 6,646 | 2,661 | 18,909 | ||||||||||||
Redeemed | (22,535 | ) | (172,478 | ) | (40,306 | ) | (275,068 | ) | ||||||||
55 | 2,506 | 30,693 | 232,693 | |||||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 4,522 | 34,800 | 32,079 | 225,622 | ||||||||||||
Issued in reinvestment of distributions | 436 | 3,336 | 667 | 4,722 | ||||||||||||
Redeemed | (4,541 | ) | (35,028 | ) | (10,043 | ) | (66,833 | ) | ||||||||
417 | 3,108 | 22,703 | 163,511 | |||||||||||||
Net increase (decrease) | (79,575 | ) | $(479,000 | ) | (206,466 | ) | $(1,004,655 | ) |
16
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 | $2,626,229 | $26,776,546 | — | |||||||||
Temporary Cash Investments | 16,499 | 1,100,000 | — | |||||||||
Total Value of Investment Securities | $2,642,728 | $27,876,546 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social, and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $24,820,439 | |||
Gross tax appreciation of investments | $6,575,188 | |||
Gross tax depreciation of investments | (876,353 | ) | ||
Net tax appreciation (depreciation) of investments | $5,698,835 |
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.
17
As of November 30, 2010, the fund had accumulated capital losses of $(8,116,714), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers of $(932,933) and $(7,183,781) expire in 2016 and 2017, respectively.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
18
Investor Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.91 | $7.33 | $5.47 | $11.48 | $14.36 | $12.85 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.09 | 0.11 | 0.11 | 0.19 | 0.22 | 0.15 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.16 | (0.24 | ) | 1.88 | (5.18 | ) | 2.09 | 1.36 | ||||||||||||||||
Total From Investment Operations | 1.25 | (0.13 | ) | 1.99 | (4.99 | ) | 2.31 | 1.51 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.12 | ) | (0.29 | ) | (0.13 | ) | (0.24 | ) | (0.47 | ) | — | |||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | ||||||||||||||||
Total Distributions | (0.12 | ) | (0.29 | ) | (0.13 | ) | (1.02 | ) | (5.19 | ) | — | |||||||||||||
Net Asset Value, End of Period | $8.04 | $6.91 | $7.33 | $5.47 | �� | $11.48 | $14.36 | |||||||||||||||||
Total Return(4) | 18.21 | % | (1.82 | )% | 36.98 | % | (47.43 | )% | 23.55 | % | 11.75 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.31 | %(5) | 1.32 | % | 1.31 | % | 1.31 | % | 1.30 | % | 1.30 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 2.20 | %(5) | 1.66 | % | 2.34 | % | 2.20 | % | 1.96 | % | 2.77 | %(5)(6) | ||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $10,576 | $7,272 | $7,062 | $2,512 | $3,044 | $437 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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.
19
Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.90 | $7.34 | $5.48 | $11.50 | $14.38 | $12.85 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.09 | 0.13 | 0.18 | 0.21 | 0.23 | 0.25 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.17 | (0.25 | ) | 1.82 | (5.19 | ) | 2.10 | 1.28 | ||||||||||||||||
Total From Investment Operations | 1.26 | (0.12 | ) | 2.00 | (4.98 | ) | 2.33 | 1.53 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.14 | ) | (0.32 | ) | (0.14 | ) | (0.26 | ) | (0.49 | ) | — | |||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | ||||||||||||||||
Total Distributions | (0.14 | ) | (0.32 | ) | (0.14 | ) | (1.04 | ) | (5.21 | ) | — | |||||||||||||
Net Asset Value, End of Period | $8.02 | $6.90 | $7.34 | $5.48 | $11.50 | $14.38 | ||||||||||||||||||
Total Return(4) | 18.33 | % | (1.69 | )% | 37.18 | % | (47.32 | )% | 23.77 | % | 11.91 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.11 | %(5) | 1.12 | % | 1.11 | % | 1.11 | % | 1.10 | % | 1.10 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 2.40 | %(5) | 1.86 | % | 2.54 | % | 2.40 | % | 2.16 | % | 2.97 | %(5)(6) | ||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $1,456 | $1,456 | $1,627 | $23,847 | $45,262 | $35,574 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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.
20
A Class | ||||||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | 2006 | ||||||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.93 | $7.33 | $5.48 | $11.49 | $14.35 | $12.70 | $10.91 | |||||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.07 | 0.10 | 0.10 | 0.18 | 0.20 | 0.25 | 0.18 | |||||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | (0.24 | ) | 1.86 | (5.20 | ) | 2.11 | 1.40 | 1.97 | |||||||||||||||||||
Total From Investment Operations | 1.25 | (0.14 | ) | 1.96 | (5.02 | ) | 2.31 | 1.65 | 2.15 | |||||||||||||||||||
Distributions | ||||||||||||||||||||||||||||
From Net Investment Income | (0.10 | ) | (0.26 | ) | (0.11 | ) | (0.21 | ) | (0.45 | ) | — | (0.15 | ) | |||||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | (0.21 | ) | ||||||||||||||||||
Total Distributions | (0.10 | ) | (0.26 | ) | (0.11 | ) | (0.99 | ) | (5.17 | ) | — | (0.36 | ) | |||||||||||||||
Net Asset Value, End of Period | $8.08 | $6.93 | $7.33 | $5.48 | $11.49 | $14.35 | $12.70 | |||||||||||||||||||||
Total Return(4) | 18.15 | % | (2.04 | )% | 36.40 | % | (47.53 | )% | 23.44 | % | 12.99 | % | 19.95 | % | ||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.56 | %(5) | 1.57 | % | 1.56 | % | 1.51 | % | 1.40 | % | 1.40 | %(5) | 1.35 | % | ||||||||||||||
Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) | 1.56 | %(5) | 1.57 | % | 1.56 | % | 1.56 | % | 1.55 | % | 1.55 | %(5) | 1.35 | % | ||||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.95 | %(5) | 1.41 | % | 2.09 | % | 2.00 | % | 1.86 | % | 2.67 | %(5)(6) | 1.52 | % | ||||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) | 1.95 | %(5) | 1.41 | % | 2.09 | % | 1.95 | % | 1.71 | % | 2.52 | %(5)(6) | 1.52 | % | ||||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | 7 | % | ||||||||||||||
Net Assets, End of Period (in thousands) | $16,094 | $15,783 | $18,644 | $15,015 | $24,558 | $19,890 | $54,617 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 1, 2006 through November 30, 2006. The fund’s fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund’s fiscal year end was March 31. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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.
21
B Class | ||||||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | 2006 | ||||||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.77 | $7.11 | $5.32 | $11.16 | $14.08 | $12.51 | $10.75 | |||||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.04 | 0.05 | 0.05 | 0.11 | 0.12 | 0.17 | 0.10 | |||||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.14 | (0.24 | ) | 1.81 | (5.05 | ) | 2.05 | 1.40 | 1.93 | |||||||||||||||||||
Total From Investment Operations | 1.18 | (0.19 | ) | 1.86 | (4.94 | ) | 2.17 | 1.57 | 2.03 | |||||||||||||||||||
Distributions | ||||||||||||||||||||||||||||
From Net Investment Income | (0.04 | ) | (0.15 | ) | (0.07 | ) | (0.12 | ) | (0.37 | ) | — | (0.06 | ) | |||||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | (0.21 | ) | ||||||||||||||||||
Total Distributions | (0.04 | ) | (0.15 | ) | (0.07 | ) | (0.90 | ) | (5.09 | ) | — | (0.27 | ) | |||||||||||||||
Net Asset Value, End of Period | $7.91 | $6.77 | $7.11 | $5.32 | $11.16 | $14.08 | $12.51 | |||||||||||||||||||||
Total Return(4) | 17.51 | % | (2.76 | )% | 35.36 | % | (47.84 | )% | 22.51 | % | 12.55 | % | 19.07 | % | ||||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.31 | %(5) | 2.32 | % | 2.31 | % | 2.22 | % | 2.09 | % | 2.09 | %(5) | 2.08 | % | ||||||||||||||
Ratio of Operating Expenses to Average Net Assets (Before Expense Waiver) | 2.31 | %(5) | 2.32 | % | 2.31 | % | 2.31 | % | 2.30 | % | 2.30 | %(5) | 2.08 | % | ||||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.20 | %(5) | 0.66 | % | 1.34 | % | 1.29 | % | 1.17 | % | 1.98 | %(5)(6) | 0.90 | % | ||||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets (Before Expense Waiver) | 1.20 | %(5) | 0.66 | % | 1.34 | % | 1.20 | % | 0.96 | % | 1.77 | %(5)(6) | 0.90 | % | ||||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | 7 | % | ||||||||||||||
Net Assets, End of Period (in thousands) | $859 | $934 | $1,495 | $1,526 | $4,059 | $4,313 | $4,917 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 1, 2006 through November 30, 2006. The fund’s fiscal year end was changed from March 31 to November 30, resulting in an eight-month annual reporting period. For the years before November 30, 2006, the fund’s fiscal year end was March 31. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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.
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C Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.90 | $7.25 | $5.42 | $11.37 | $14.27 | $12.85 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.04 | 0.05 | 0.05 | 0.12 | 0.12 | 0.14 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.18 | (0.25 | ) | 1.85 | (5.17 | ) | 2.07 | 1.28 | ||||||||||||||||
Total From Investment Operations | 1.22 | (0.20 | ) | 1.90 | (5.05 | ) | 2.19 | 1.42 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.04 | ) | (0.15 | ) | (0.07 | ) | (0.12 | ) | (0.37 | ) | — | |||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | ||||||||||||||||
Total Distributions | (0.04 | ) | (0.15 | ) | (0.07 | ) | (0.90 | ) | (5.09 | ) | — | |||||||||||||
Net Asset Value, End of Period | $8.08 | $6.90 | $7.25 | $5.42 | $11.37 | $14.27 | ||||||||||||||||||
Total Return(4) | 17.76 | % | (2.85 | )% | 35.44 | % | (47.93 | )% | 22.28 | % | 11.05 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 2.31 | %(5) | 2.32 | % | 2.31 | % | 2.31 | % | 2.30 | % | 2.30 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.20 | %(5) | 0.66 | % | 1.34 | % | 1.20 | % | 0.96 | % | 1.77 | %(5)(6) | ||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $1,216 | $1,039 | $869 | $337 | $222 | $41 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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.
23
R Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $6.90 | $7.28 | $5.45 | $11.42 | $14.31 | $12.85 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss)(3) | 0.06 | 0.09 | 0.09 | 0.13 | 0.11 | 0.19 | ||||||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.17 | (0.25 | ) | 1.84 | (5.14 | ) | 2.14 | 1.27 | ||||||||||||||||
Total From Investment Operations | 1.23 | (0.16 | ) | 1.93 | (5.01 | ) | 2.25 | 1.46 | ||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.08 | ) | (0.22 | ) | (0.10 | ) | (0.18 | ) | (0.42 | ) | — | |||||||||||||
From Net Realized Gains | — | — | — | (0.78 | ) | (4.72 | ) | — | ||||||||||||||||
Total Distributions | (0.08 | ) | (0.22 | ) | (0.10 | ) | (0.96 | ) | (5.14 | ) | — | |||||||||||||
Net Asset Value, End of Period | $8.05 | $6.90 | $7.28 | $5.45 | $11.42 | $14.31 | ||||||||||||||||||
Total Return(4) | 17.92 | % | (2.27 | )% | 35.90 | % | (47.61 | )% | 22.91 | % | 11.36 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.81 | %(5) | 1.82 | % | 1.81 | % | 1.81 | % | 1.80 | % | 1.80 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.70 | %(5) | 1.16 | % | 1.84 | % | 1.70 | % | 1.46 | % | 2.27 | %(5)(6) | ||||||||||||
Portfolio Turnover Rate | 14 | % | 26 | % | 16 | % | 4 | % | 11 | % | 17 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $322 | $273 | $123 | $78 | $202 | $28 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | April 3, 2006 (commencement of sale) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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) | 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
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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72025 1107
SEMIANNUAL REPORT | MAY 31, 2011
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NT Emerging Markets Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 10 |
Statement of Operations | 11 |
Statement of Changes in Net Assets | 12 |
Notes to Financial Statements | 13 |
Financial Highlights | 18 |
Additional Information | 19 |
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.
Dear Investor:
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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Dear Fellow Shareholders,
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12–18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
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Don Pratt
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Total Returns as of May 31, 2011 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLKX | 9.47% | 32.35%(2) | 8.48% | 6.50% | 5/12/06 |
MSCI Emerging Markets Growth Index | — | 9.37% | 29.74% | 10.17% | 7.54%(3) | — |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Since 4/30/06, the date nearest the Institutional Class’s inception for which data are available. |
Total Annual Fund Operating Expenses |
Institutional Class 1.52% |
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.
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MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
Vale SA Preference Shares | 4.2% |
Samsung Electronics Co. Ltd. | 4.0% |
HTC Corp. | 3.5% |
LG Chem Ltd. | 2.7% |
Sberbank of Russia | 2.6% |
iShares MSCI Emerging Markets Index Fund | 2.5% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 2.3% |
CNOOC Ltd. | 2.2% |
Hon Hai Precision Industry Co. Ltd. | 2.2% |
MTN Group Ltd. | 1.9% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 96.9% |
Temporary Cash Investments | 4.3% |
Other Assets and Liabilities | (1.2)% |
Investments by Country | % of net assets |
South Korea | 15.5% |
People’s Republic of China | 14.3% |
Brazil | 12.4% |
Taiwan (Republic of China) | 10.4% |
Hong Kong | 7.9% |
South Africa | 6.6% |
Russian Federation | 5.7% |
Mexico | 4.2% |
India | 3.9% |
Thailand | 3.6% |
Indonesia | 3.4% |
Multi-National | 2.5% |
Other Countries | 6.5% |
Cash and Equivalents* | 3.1% |
*Includes temporary cash investments and other assets and liabilities. |
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Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Institutional Class | $1,000 | $1,094.70 | $7.83 | 1.50% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,017.45 | $7.54 | 1.50% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
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MAY 31, 2011 (UNAUDITED)
Shares | Value | |||||||
Common Stocks — 96.9% | ||||||||
BRAZIL — 12.4% | ||||||||
BR Malls Participacoes SA | 148,400 | $1,741,954 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 57,912 | 1,826,544 | ||||||
Itau Unibanco Holding SA Preference Shares | 99,859 | 2,257,627 | ||||||
Natura Cosmeticos SA | 29,800 | 793,659 | ||||||
PDG Realty SA Empreendimentos e Participacoes | 261,200 | 1,619,101 | ||||||
Petroleo Brasileiro SA-Petrobras ADR | 53,010 | 1,657,092 | ||||||
Vale SA Preference Shares | 181,000 | 5,133,735 | ||||||
15,029,712 | ||||||||
HONG KONG — 7.9% | ||||||||
Brilliance China Automotive Holdings Ltd.(1) | 890,000 | 815,637 | ||||||
China Lumena New Materials Corp. | 1,536,000 | 682,026 | ||||||
China Merchants Holdings International Co. Ltd. | 268,349 | 1,169,240 | ||||||
China Overseas Land & Investment Ltd. | 366,000 | 768,371 | ||||||
China Unicom Ltd. | 716,000 | 1,581,530 | ||||||
CNOOC Ltd. | 1,041,000 | 2,633,342 | ||||||
Comba Telecom Systems Holdings Ltd. | 537,300 | 595,813 | ||||||
Xinyi Glass Holdings Ltd. | 1,248,000 | 1,274,049 | ||||||
9,520,008 | ||||||||
HUNGARY — 0.8% | ||||||||
OTP Bank plc(1) | 28,910 | 957,267 | ||||||
INDIA — 3.9% | ||||||||
HDFC Bank Ltd. | 25,757 | 1,372,401 | ||||||
ICICI Bank Ltd. | 53,783 | 1,291,148 | ||||||
Infosys Technologies Ltd. | 15,580 | 962,532 | ||||||
Sesa Goa Ltd. | 47,662 | 306,765 | ||||||
Tata Motors Ltd. | 32,641 | 793,762 | ||||||
4,726,608 | ||||||||
INDONESIA — 3.4% | ||||||||
PT Astra International Tbk | 155,500 | 1,070,568 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1,768,000 | 1,319,049 | ||||||
PT Indofood CBP Sukses Makmur Tbk(1) | 1,483,500 | 877,742 | ||||||
PT Semen Gresik (Persero) Tbk | 715,000 | 812,722 | ||||||
4,080,081 | ||||||||
MALAYSIA — 0.7% | ||||||||
CIMB Group Holdings Bhd | 312,900 | 870,081 | ||||||
MEXICO — 4.2% | ||||||||
Alfa SAB de CV, Series A | 85,969 | 1,242,898 | ||||||
America Movil SAB de CV, Series L ADR | 21,221 | 1,118,347 | ||||||
Fomento Economico Mexicano SAB de CV ADR | 13,925 | 862,375 | ||||||
Wal-Mart de Mexico SAB de CV | 621,280 | 1,886,739 | ||||||
5,110,359 | ||||||||
MULTI-NATIONAL — 2.5% | ||||||||
iShares MSCI Emerging Markets Index Fund | 62,292 | 3,024,277 | ||||||
PEOPLE’S REPUBLIC OF CHINA — 14.3% | ||||||||
51job, Inc. ADR(1) | 8,936 | 510,335 | ||||||
Agricultural Bank of China Ltd. H Shares(1) | 1,956,000 | 1,198,221 | ||||||
Baidu, Inc. ADR(1) | 9,242 | 1,254,232 | ||||||
China BlueChemical Ltd. H Shares | 1,018,000 | 812,448 | ||||||
China Liansu Group Holdings Ltd. | 879,000 | 741,216 | ||||||
China National Building Material Co. Ltd. H Shares | 800,000 | 1,627,577 | ||||||
China Oilfield Services Ltd. H Shares(1) | 436,000 | 870,690 | ||||||
Evergrande Real Estate Group Ltd. | 1,421,000 | 1,002,361 | ||||||
Focus Media Holding Ltd. ADR(1) | 53,033 | 1,657,281 | ||||||
Golden Eagle Retail Group Ltd. | 108,000 | 282,688 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares(1) | 1,604,095 | 1,346,017 | ||||||
Ping An Insurance Group Co. H Shares | 201,500 | 2,167,014 | ||||||
Sany Heavy Equipment International Holdings Co. Ltd. | 840,500 | 1,001,270 | ||||||
Tencent Holdings Ltd. | 58,800 | 1,694,974 | ||||||
Xingda International Holdings Ltd. | 471,000 | 504,040 | ||||||
ZTE Corp. H Shares | 170,960 | 609,870 | ||||||
17,280,234 | ||||||||
POLAND — 0.5% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 36,128 | 579,592 | ||||||
RUSSIAN FEDERATION — 5.7% | ||||||||
Magnit OJSC GDR | 36,552 | 1,126,559 | ||||||
NovaTek OAO GDR | 13,162 | 1,795,929 | ||||||
Rosneft Oil Co. OJSC GDR | 96,353 | 837,340 | ||||||
Sberbank of Russia | 874,204 | 3,092,313 | ||||||
6,852,141 |
8
Shares | Value | |||||||
SOUTH AFRICA — 6.6% | ||||||||
Barloworld Ltd. | 119,453 | $1,276,467 | ||||||
Exxaro Resources Ltd. | 67,739 | 1,615,469 | ||||||
MTN Group Ltd. | 106,570 | 2,275,092 | ||||||
Naspers Ltd. N Shares | 10,958 | 654,110 | ||||||
Sasol Ltd. | 39,650 | 2,110,680 | ||||||
7,931,818 | ||||||||
SOUTH KOREA — 15.5% | ||||||||
Celltrion, Inc. | 33,440 | 1,141,109 | ||||||
CrucialTec Co. Ltd.(1) | 32,648 | 673,564 | ||||||
Doosan Infracore Co. Ltd.(1) | 20,150 | 459,037 | ||||||
Hyundai Heavy Industries Co. Ltd. | 3,283 | 1,540,402 | ||||||
Hyundai Motor Co. | 8,593 | 2,017,929 | ||||||
Hyundai Steel Co. | 6,966 | 770,391 | ||||||
LG Chem Ltd. | 6,591 | 3,276,723 | ||||||
LG Household & Health Care Ltd. | 3,210 | 1,313,770 | ||||||
NCSoft Corp. | 3,686 | 966,740 | ||||||
Samsung Electronics Co. Ltd. | 5,819 | 4,877,623 | ||||||
Samsung Heavy Industries Co. Ltd. | 41,060 | 1,753,346 | ||||||
18,790,634 | ||||||||
SWITZERLAND — 1.0% | ||||||||
Ferrexpo plc | 161,694 | 1,219,723 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 10.4% | ||||||||
Catcher Technology Co. Ltd. | 261,000 | 1,707,697 | ||||||
Hon Hai Precision Industry Co. Ltd. | 742,503 | 2,612,892 | ||||||
HTC Corp. | 98,700 | 4,218,608 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 1,053,774 | 2,817,118 | ||||||
TPK Holding Co. Ltd.(1) | 36,000 | 1,175,544 | ||||||
12,531,859 | ||||||||
THAILAND — 3.6% | ||||||||
Banpu PCL | 68,150 | 1,657,985 | ||||||
CP ALL PCL | 823,100 | 1,210,947 | ||||||
Kasikornbank PCL NVDR | 365,500 | 1,501,918 | ||||||
4,370,850 | ||||||||
TURKEY — 1.9% | ||||||||
Tofas Turk Otomobil Fabrikasi AS | 124,402 | 602,047 | ||||||
Turkiye Garanti Bankasi AS | 190,829 | 852,967 | ||||||
Turkiye Sise ve Cam Fabrikalari AS | 338,777 | 906,071 | ||||||
2,361,085 | ||||||||
UNITED KINGDOM — 1.6% | ||||||||
Antofagasta plc | 33,529 | $734,231 | ||||||
International Personal Finance plc | 201,127 | 1,230,881 | ||||||
1,965,112 | ||||||||
TOTAL COMMON STOCKS (Cost $87,627,333) | 117,201,441 | |||||||
Temporary Cash Investments — 4.3% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 97,868 | 97,868 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 4/15/12, valued at $5,201,127), in a joint trading account at 0.04%, dated 5/31/11, due 6/1/11 (Delivery value $5,100,006) | 5,100,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $5,197,868) | 5,197,868 | |||||||
TOTAL INVESTMENT SECURITIES — 101.2% (Cost $92,825,201) | 122,399,309 | |||||||
OTHER ASSETS AND LIABILITIES — (1.2)% | (1,472,695 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $120,926,614 |
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 20.0% |
Financials | 19.5% |
Materials | 14.5% |
Energy | 9.5% |
Consumer Discretionary | 9.0% |
Industrials | 8.7% |
Consumer Staples | 8.2% |
Telecommunication Services | 4.1% |
Diversified | 2.5% |
Health Care | 0.9% |
Cash and Equivalents* | 3.1% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
MSCI = Morgan Stanley Capital International
NVDR = Non-Voting Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
9
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $92,825,201) | $122,399,309 | |||
Foreign currency holdings, at value (cost of $104,648) | 104,874 | |||
Dividends and interest receivable | 372,287 | |||
Other assets | 17,268 | |||
122,893,738 | ||||
Liabilities | ||||
Payable for investments purchased | 1,579,734 | |||
Payable for capital shares redeemed | 237,854 | |||
Accrued management fees | 149,536 | |||
1,967,124 | ||||
Net Assets | $120,926,614 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 10,787,037 | |||
Net Asset Value Per Share | $11.21 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $90,263,454 | |||
Undistributed net investment income | 166,737 | |||
Undistributed net realized gain | 921,450 | |||
Net unrealized appreciation | 29,574,973 | |||
$120,926,614 |
See Notes to Financial Statements.
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FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $49,114) | $991,127 | |||
Interest | 536 | |||
991,663 | ||||
Expenses: | ||||
Management fees | 802,974 | |||
Directors’ fees and expenses | 2,537 | |||
Other expenses | 196 | |||
805,707 | ||||
Net investment income (loss) | 185,956 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $(14,380)) | 3,269,861 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $83,493) | 973,625 | |||
4,243,486 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(152,342)) | 3,597,717 | |||
Translation of assets and liabilities in foreign currencies | 1,632,765 | |||
5,230,482 | ||||
Net realized and unrealized gain (loss) | 9,473,968 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $9,659,924 |
See Notes to Financial Statements.
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SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $185,956 | $140,792 | ||||||
Net realized gain (loss) | 4,243,486 | 5,992,671 | ||||||
Change in net unrealized appreciation (depreciation) | 5,230,482 | 6,356,851 | ||||||
Net increase (decrease) in net assets resulting from operations | 9,659,924 | 12,490,314 | ||||||
Distributions to Shareholders | ||||||||
From net investment income | — | (94,843 | ) | |||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 22,550,789 | 26,050,487 | ||||||
Payments for shares redeemed | (2,393,664 | ) | (7,646,938 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 20,157,125 | 18,403,549 | ||||||
Net increase (decrease) in net assets | 29,817,049 | 30,799,020 | ||||||
Net Assets | ||||||||
Beginning of period | 91,109,565 | 60,310,545 | ||||||
End of period | $120,926,614 | $91,109,565 | ||||||
Accumulated undistributed net investment income (loss) | $166,737 | $(19,219 | ) | |||||
Transactions in Shares of the Fund | ||||||||
Sold | 2,114,055 | 2,902,783 | ||||||
Redeemed | (223,077 | ) | (810,053 | ) | ||||
Net increase (decrease) in shares of the fund | 1,890,978 | 2,092,730 |
See Notes to Financial Statements.
12
MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT Emerging Markets Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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.
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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.
Exchange-Traded Funds — The fund may invest in exchange-traded funds (ETFs). ETFs are a type of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. A fund may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market while awaiting purchase of underlying securities. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although a lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.
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 change in 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.
14
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Indemnifications — Under the corporation’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business, the fund enters into contracts that provide general indemnifications. The maximum exposure under these arrangements is unknown as this would involve future claims that may be made against a fund. The risk of material loss from such claims is considered by management to be remote.
3. Fees and Transactions with Related Parties
Management Fees — The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). 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 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 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 six months ended May 31, 2011 was 1.49%.
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 six months ended May 31, 2011 were $69,056,425 and $51,356,920, respectively.
15
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 | $11,910,483 | $105,290,958 | — | |||||||||
Temporary Cash Investments | 97,868 | 5,100,000 | — | |||||||||
Total Value of Investment Securities | $12,008,351 | $110,390,958 | — |
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 book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $93,635,662 | |||
Gross tax appreciation of investments | $29,322,091 | |||
Gross tax depreciation of investments | (558,444 | ) | ||
Net tax appreciation (depreciation) of investments | $28,763,647 |
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.
16
As of November 30, 2010, the fund had accumulated capital losses of $(2,576,198), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
The fund has elected to treat $(18,521) of net foreign currency losses incurred in the one-month period ended November 30, 2010, as having been incurred in the following fiscal year for federal income tax purposes.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
17
Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $10.24 | $8.86 | $5.12 | $16.19 | $11.01 | $10.00 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss) | 0.02 | (3) | 0.02 | (3) | 0.02 | (3) | 0.11 | (3) | 0.15 | 0.07 | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 0.95 | 1.37 | 3.74 | (8.52 | ) | 5.12 | 0.94 | |||||||||||||||||
Total From Investment Operations | 0.97 | 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 | $11.21 | $10.24 | $8.86 | $5.12 | $16.19 | $11.01 | ||||||||||||||||||
Total Return(4) | 9.47 | % | 15.73 | % | 73.87 | % | (61.75 | )% | 48.22 | % | 10.10 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.50 | %(5) | 1.52 | % | 1.57 | % | 1.52 | % | 1.46 | % | 1.60 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 0.35 | %(5) | 0.19 | % | 0.36 | % | 1.17 | % | 1.12 | % | 1.68 | %(5) | ||||||||||||
Portfolio Turnover Rate | 48 | % | 94 | % | 158 | % | 157 | % | 113 | % | 59 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $120,927 | $91,110 | $60,311 | $20,715 | $28,378 | $19,844 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | May 12, 2006 (fund inception) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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. |
See Notes to Financial Statements.
18
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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72021 1107
SEMIANNUAL REPORT | MAY 31, 2011
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NT International Growth Fund |
President’s Letter | 2 |
Independent Chairman’s Letter | 3 |
Performance | 4 |
Fund Characteristics | 5 |
Shareholder Fee Example | 6 |
Schedule of Investments | 8 |
Statement of Assets and Liabilities | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 18 |
Additional Information | 19 |
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.
Thank you for reviewing our semiannual report for the six months ended May 31, 2011. This report offers a macroeconomic and financial market overview of the period (below), followed by fund performance, a schedule of fund investments, and other financial information.
For additional, updated information on fund performance, portfolio strategy, and the investment markets, we encourage you to visit our website, americancentury.com. Click on the “Fund Performance” and “Insights & News” headings at the top of our Individual Investors site. Also, the fund’s annual report, dated November 30, 2011, will provide additional market perspective and portfolio commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
Despite headline-making economic headwinds (high fuel prices) and disruptions (sovereign debt problems in Europe, and earthquake-related disasters in Japan) that erupted during the period, U.S. investors experienced mostly positive overall financial market performance, in dollar terms, for the six months ended May 31, 2011. Stocks and corporate bonds generally outperformed government bonds as investors demonstrated increased risk appetites, triggered by favorable economic and corporate earnings projections for 2011 and 2012 at the start of the six-month period.
A declining dollar—compared with the currency values of major U.S. trading partners—and global economic expansion helped boost the returns of international investments, when converted back to dollars. U.S. market performance was generally positive too, with the notable exception of the benchmark 10-year U.S. Treasury note, which had a slightly negative total return.
As the period came to a close, we saw increasing signs that—while still sustainable—the global economic expansion had lost momentum, particularly in developed countries, due to factors including the headwinds and disruptions mentioned above. As a result, economic growth forecasts were reduced, and broad global stock indices declined for much of May and June. We appreciate your continued trust in us during these uncertain times. The experts who manage our portfolios will continue to diligently apply their knowledge and skills as they make daily investment decisions for you.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
With an existing vacancy and several directors approaching retirement age over the next few years, your American Century Investments Kansas City-based mutual fund board of directors recently addressed board succession planning. The board developed a succession plan and conducted an extensive search that yielded two new members who joined the board in 2011.
As part of the planning process, the board referred to the criteria for potential new directors set forth in its director nomination policy adopted in 2009. A nomination process generated more than 20 candidates whose credentials were reviewed by the board’s Governance Committee. Six candidates were selected by the committee for telephone interviews. Three were then chosen for in person interviews.
The committee recommended, and the full board approved, the addition of Jan Lewis, currently the President and Chief Executive Officer of Catholic Charities of Northeast Kansas, to fill the vacant board seat and the addition as an advisory director of Stephen E. Yates, who recently retired as Executive Vice President, Technology and Operations at Keycorp of Cleveland, Ohio. Mr. Yates will serve in an advisory capacity for 12-18 months before becoming an active director. Both of these additions bring operating management experience and unique perspectives to our various tasks.
We look forward to the contributions of our new directors to our efforts as shareholder representatives and thank the Governance Committee for their thorough search process.
If you have comments, suggestions or questions send them to me at dhpratt@fundboardchair.com.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/prattsignature.jpg)
Don Pratt
3
Performance |
Total Returns as of May 31, 2011 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year(2) | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLNX | 15.93% | 35.40% | 3.88% | 2.44% | 5/12/06 |
MSCI EAFE Index | — | 14.92% | 30.69% | 1.73% | 0.91%(3) | — |
MSCI EAFE Growth Index | — | 14.36% | 33.31% | 2.86% | 1.94%(3) | — |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Extraordinary performance is attributable in part to unusually favorable market conditions and may not be repeated or consistently achieved in the future. |
(3) | Since 4/30/06, the date nearest the Institutional Class’s inception for which data are available. |
Total Annual Fund Operating Expenses |
Institutional Class 1.14% |
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.
4
Fund Characteristics |
MAY 31, 2011 | |
Top Ten Holdings | % of net assets |
BHP Billiton Ltd. | 1.8% |
Nissan Motor Co. Ltd. | 1.5% |
Nestle SA | 1.5% |
Reckitt Benckiser Group plc | 1.5% |
Rio Tinto plc | 1.4% |
BNP Paribas | 1.4% |
UBS AG | 1.4% |
Saipem SpA | 1.3% |
HTC Corp. | 1.3% |
Danone SA | 1.3% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.4% |
Temporary Cash Investments | 0.9% |
Other Assets and Liabilities | (0.3)% |
Investments by Country | % of net assets |
United Kingdom | 15.0% |
France | 12.5% |
Japan | 12.1% |
Switzerland | 9.8% |
Germany | 7.3% |
Sweden | 3.9% |
People’s Republic of China | 3.2% |
Netherlands | 3.0% |
Italy | 2.9% |
Australia | 2.9% |
Hong Kong | 2.8% |
Denmark | 2.6% |
Ireland | 2.4% |
Other Countries | 19.0% |
Cash and Equivalents* | 0.6% |
*Includes temporary cash investments and other assets and liabilities. |
5
Fund shareholders may incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemption/exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in your fund and to compare these costs with the ongoing cost of investing in other mutual funds.
The example is based on an investment of $1,000 made at the beginning of the period and held for the entire period from December 1, 2010 to May 31, 2011.
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.
6
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 12/1/10 | Ending Account Value 5/31/11 | Expenses Paid During Period* 12/1/10 – 5/31/11 | Annualized Expense Ratio* | |
Actual | ||||
Institutional Class | $1,000 | $1,159.30 | $5.98 | 1.11% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,019.40 | $5.59 | 1.11% |
*Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 182, the number of days in the most recent fiscal half-year, divided by 365, to reflect the one-half year period.
7
Shares | Value | |||||||
Common Stocks — 99.4% | ||||||||
AUSTRALIA — 2.9% | ||||||||
BHP Billiton Ltd. | 127,331 | $6,072,371 | ||||||
Iluka Resources Ltd. | 115,100 | 1,931,834 | ||||||
Wesfarmers Ltd. | 44,931 | 1,598,879 | ||||||
9,603,084 | ||||||||
AUSTRIA — 0.5% | ||||||||
Erste Group Bank AG | 31,376 | 1,566,742 | ||||||
BELGIUM — 1.6% | ||||||||
Anheuser-Busch InBev NV | 51,608 | 3,117,827 | ||||||
Telenet Group Holding NV(1) | 18,583 | 846,565 | ||||||
Umicore SA | 25,100 | 1,385,155 | ||||||
5,349,547 | ||||||||
BERMUDA — 0.6% | ||||||||
Seadrill Ltd. | 59,800 | 2,170,504 | ||||||
BRAZIL — 0.3% | ||||||||
Vale SA Preference Shares | 36,800 | 1,043,765 | ||||||
CANADA — 0.5% | ||||||||
Canadian National Railway Co. | 15,400 | 1,204,374 | ||||||
Suncor Energy, Inc. | 14,000 | 584,508 | ||||||
1,788,882 | ||||||||
DENMARK — 2.6% | ||||||||
Carlsberg A/S B Shares | 25,300 | 2,927,438 | ||||||
Christian Hansen Holding A/S | 63,000 | 1,516,604 | ||||||
Novo Nordisk A/S B Shares | 30,400 | 3,816,445 | ||||||
Pandora A/S | 19,000 | 648,778 | ||||||
8,909,265 | ||||||||
FINLAND — 0.6% | ||||||||
Fortum Oyj | 56,800 | 1,904,109 | ||||||
FRANCE — 12.5% | ||||||||
Accor SA | 63,442 | 2,914,701 | ||||||
Air Liquide SA | 20,620 | 2,868,857 | ||||||
Alcatel-Lucent(1) | 382,500 | 2,165,139 | ||||||
BNP Paribas | 59,270 | 4,637,109 | ||||||
Cie Generale d’Optique Essilor International SA | 17,000 | 1,381,470 | ||||||
Danone SA | 60,422 | 4,433,748 | ||||||
Eutelsat Communications SA | 37,200 | 1,653,982 | ||||||
JCDecaux SA(1) | 58,200 | 1,873,490 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 20,400 | 3,569,581 | ||||||
Pernod-Ricard SA | 26,358 | 2,671,836 | ||||||
Publicis Groupe SA | 48,700 | 2,687,317 | ||||||
Safran SA | 98,300 | 4,017,845 | ||||||
Schneider Electric SA | 19,800 | 3,268,875 | ||||||
Technip SA | 26,200 | 2,823,442 | ||||||
Zodiac Aerospace | 14,700 | 1,184,477 | ||||||
42,151,869 | ||||||||
GERMANY — 7.3% | ||||||||
adidas AG | 16,600 | 1,250,515 | ||||||
Allianz SE | 15,700 | 2,170,916 | ||||||
BASF SE | 13,200 | 1,219,596 | ||||||
Bayerische Motoren Werke AG | 43,200 | 3,830,597 | ||||||
Fresenius Medical Care AG & Co. KGaA | 36,570 | 2,654,573 | ||||||
Hugo Boss AG Preference Shares | 19,200 | 1,731,040 | ||||||
Kabel Deutschland Holding AG(1) | 34,257 | 2,340,050 | ||||||
SAP AG | 47,400 | 2,949,479 | ||||||
Siemens AG | 26,600 | 3,559,643 | ||||||
ThyssenKrupp AG | 63,100 | 3,005,373 | ||||||
24,711,782 | ||||||||
HONG KONG — 2.8% | ||||||||
AIA Group Ltd.(1) | 375,900 | 1,327,857 | ||||||
China Unicom Ltd. ADR | 155,700 | 3,437,856 | ||||||
CNOOC Ltd. | 878,000 | 2,221,012 | ||||||
Li & Fung Ltd. | 1,076,000 | 2,391,863 | ||||||
9,378,588 | ||||||||
INDIA — 1.1% | ||||||||
Bharti Airtel Ltd. | 159,500 | 1,324,882 | ||||||
HDFC Bank Ltd. | 22,900 | 1,220,172 | ||||||
Titan Industries Ltd. | 13,000 | 1,272,922 | ||||||
3,817,976 | ||||||||
INDONESIA — 1.0% | ||||||||
PT Bank Mandiri (Persero) Tbk | 3,857,750 | 3,262,569 | ||||||
IRELAND — 2.4% | ||||||||
Accenture plc, Class A | 75,800 | 4,350,162 | ||||||
CRH plc | 102,300 | 2,231,572 | ||||||
Shire plc | 52,100 | 1,648,199 | ||||||
8,229,933 | ||||||||
ISRAEL — 0.3% | ||||||||
Teva Pharmaceutical Industries Ltd. ADR | 16,800 | 855,120 | ||||||
ITALY — 2.9% | ||||||||
Pirelli & C SpA | 268,400 | 2,676,270 | ||||||
Saipem SpA | 85,162 | 4,498,992 | ||||||
UniCredit SpA | 1,180,400 | 2,692,839 | ||||||
9,868,101 |
8
Shares | Value | |||||||
JAPAN — 12.1% | ||||||||
FANUC CORP. | 20,200 | $3,105,160 | ||||||
JSR Corp. | 81,200 | 1,612,040 | ||||||
Komatsu Ltd. | 99,600 | 2,980,877 | ||||||
Mitsubishi Corp. | 112,800 | 2,854,844 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 478,300 | 2,214,019 | ||||||
Murata Manufacturing Co. Ltd. | 46,800 | 2,953,280 | ||||||
Nissan Motor Co. Ltd. | 515,100 | �� | 5,162,428 | |||||
Nitori Holdings Co. Ltd. | 26,300 | 2,294,784 | ||||||
ORIX Corp. | 43,000 | 4,120,749 | ||||||
Rakuten, Inc. | 3,500 | 3,556,418 | ||||||
SOFTBANK CORP. | 61,800 | 2,402,949 | ||||||
Sumitomo Realty & Development Co. Ltd. | 101,000 | 2,156,394 | ||||||
Unicharm Corp. | 65,800 | 2,662,442 | ||||||
Yahoo Japan Corp. | 7,500 | 2,486,815 | ||||||
40,563,199 | ||||||||
LUXEMBOURG — 0.9% | ||||||||
Millicom International Cellular SA(1) | 27,806 | 3,175,445 | ||||||
MACAU — 0.5% | ||||||||
Wynn Macau Ltd. | 520,400 | 1,830,062 | ||||||
MEXICO — 0.5% | ||||||||
Grupo Financiero Banorte SAB de CV, Series O | 338,200 | 1,572,785 | ||||||
NETHERLANDS — 3.0% | ||||||||
ASML Holding NV | 28,700 | 1,120,065 | ||||||
CNH Global NV(1) | 46,300 | 1,959,416 | ||||||
European Aeronautic Defence and Space Co. NV | 110,400 | 3,649,351 | ||||||
Royal Dutch Shell plc, Class A | 95,464 | 3,402,958 | ||||||
10,131,790 | ||||||||
NORWAY — 1.0% | ||||||||
Petroleum Geo-Services ASA(1) | 74,500 | 1,211,380 | ||||||
Yara International ASA | 33,300 | 2,008,883 | ||||||
3,220,263 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 3.2% | ||||||||
Baidu, Inc. ADR(1) | 21,100 | 2,863,481 | ||||||
Ctrip.com International Ltd. ADR(1) | 39,464 | 1,775,880 | ||||||
Focus Media Holding Ltd. ADR(1) | 69,485 | 2,171,406 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares(1) | 3,348,715 | 2,809,951 | ||||||
ZTE Corp. H Shares | 324,440 | 1,157,383 | ||||||
10,778,101 | ||||||||
POLAND — 0.8% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 157,376 | 2,524,740 | ||||||
PORTUGAL — 0.8% | ||||||||
Jeronimo Martins SGPS SA | 152,000 | 2,846,127 | ||||||
RUSSIAN FEDERATION — 1.7% | ||||||||
Magnit OJSC GDR | 89,100 | 2,746,127 | ||||||
Sberbank of Russia | 874,700 | 3,094,067 | ||||||
5,840,194 | ||||||||
SINGAPORE — 0.5% | ||||||||
DBS Group Holdings Ltd. | 68,000 | 816,196 | ||||||
Genting Singapore plc(1) | 549,000 | 886,162 | ||||||
1,702,358 | ||||||||
SOUTH KOREA — 1.7% | ||||||||
Hyundai Motor Co. | 14,395 | 3,380,435 | ||||||
Samsung Electronics Co. Ltd. | 2,800 | 2,347,026 | ||||||
5,727,461 | ||||||||
SPAIN — 1.9% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 372,927 | 4,368,828 | ||||||
Inditex SA | 20,500 | 1,864,988 | ||||||
6,233,816 | ||||||||
SWEDEN — 3.9% | ||||||||
Alfa Laval AB | 134,600 | 2,973,161 | ||||||
Atlas Copco AB A Shares | 128,200 | 3,390,661 | ||||||
Atlas Copco AB Redemption Shares(1) | 128,200 | 103,450 | ||||||
Swedbank AB A Shares | 159,400 | 2,967,880 | ||||||
Telefonaktiebolaget LM Ericsson B Shares | 65,700 | 974,121 | ||||||
Volvo AB B Shares | 145,600 | 2,637,139 | ||||||
13,046,412 | ||||||||
SWITZERLAND — 9.8% | ||||||||
ABB Ltd.(1) | 107,500 | 2,887,206 | ||||||
Adecco SA(1) | 27,700 | 1,894,106 | ||||||
Kuehne + Nagel International AG | 7,800 | 1,229,048 | ||||||
Nestle SA | 79,500 | 5,106,529 | ||||||
Novartis AG | 65,065 | 4,207,681 | ||||||
Roche Holding AG | 14,966 | 2,634,263 | ||||||
Swatch Group AG (The)(1) | 5,600 | 2,790,606 | ||||||
Syngenta AG(1) | 7,300 | 2,521,297 | ||||||
UBS AG(1) | 236,700 | 4,548,669 | ||||||
Wolseley plc | 50,000 | 1,695,689 | ||||||
Xstrata plc | 152,800 | 3,590,135 | ||||||
33,105,229 |
9
Shares | Value |
TAIWAN (REPUBLIC OF CHINA) — 1.8% | ||||||||
HTC Corp. | 104,550 | $4,468,647 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 594,000 | 1,587,976 | ||||||
6,056,623 | ||||||||
TURKEY — 0.4% | ||||||||
Turkiye Garanti Bankasi AS | 293,300 | 1,310,991 | ||||||
UNITED KINGDOM — 15.0% | ||||||||
Admiral Group plc | 74,241 | 2,106,959 | ||||||
Aggreko plc | 82,000 | 2,528,326 | ||||||
Antofagasta plc | 78,713 | 1,723,687 | ||||||
ARM Holdings plc | 306,200 | 2,900,889 | ||||||
Barclays plc | 293,078 | 1,339,257 | ||||||
BG Group plc | 185,431 | 4,313,411 | ||||||
Burberry Group plc | 97,598 | 2,122,254 | ||||||
Capita Group plc (The) | 163,405 | 1,981,481 | ||||||
Carnival plc | 62,067 | 2,500,588 | ||||||
Compass Group plc | 103,000 | 1,004,968 | ||||||
HSBC Holdings plc (Hong Kong) | 324,578 | 3,426,107 | ||||||
Intertek Group plc | 72,000 | 2,429,864 | ||||||
National Grid plc | 229,700 | 2,370,198 | ||||||
Reckitt Benckiser Group plc | 89,177 | 5,062,327 | ||||||
Rio Tinto plc | 67,500 | 4,722,889 | ||||||
Schroders plc | 57,993 | 1,566,621 | ||||||
Standard Chartered plc | 90,064 | 2,415,620 | ||||||
Tullow Oil plc | 61,100 | 1,361,477 | ||||||
Vodafone Group plc | 1,052,800 | 2,931,103 | ||||||
Whitbread plc | 55,600 | 1,493,665 | ||||||
50,301,691 | ||||||||
TOTAL COMMON STOCKS (Cost $265,278,627) | 334,579,123 | |||||||
Temporary Cash Investments — 0.9% | ||||||||
JPMorgan U.S. Treasury Plus Money Market Fund Agency Shares | 65,966 | 65,966 | ||||||
Repurchase Agreement, Goldman Sachs Group, Inc., (collateralized by various U.S. Treasury obligations, 1.375%, 4/15/12, valued at $2,957,503), in a joint trading account at 0.04%, dated 5/31/11, due 6/1/11 (Delivery value $2,900,003) | 2,900,000 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,965,966) | 2,965,966 | |||||||
TOTAL INVESTMENT SECURITIES — 100.3% (Cost $268,244,593) | 337,545,089 | |||||||
OTHER ASSETS AND LIABILITIES — (0.3)% | (1,161,721 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $336,383,368 |
Market Sector Diversification | |
(as a % of net assets) | |
Consumer Discretionary | 18.3% |
Financials | 17.9% |
Industrials | 15.3% |
Materials | 11.1% |
Consumer Staples | 9.9% |
Information Technology | 9.6% |
Energy | 6.7% |
Health Care | 5.1% |
Telecommunication Services | 4.2% |
Utilities | 1.3% |
Cash and Equivalents* | 0.6% |
*Includes temporary cash investments and other assets and liabilities. |
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2011 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $268,244,593) | $337,545,089 | |||
Foreign currency holdings, at value (cost $343,489) | 348,680 | |||
Receivable for investments sold | 1,621,873 | |||
Dividends and interest receivable | 1,047,389 | |||
Other assets | 4,254 | |||
340,567,285 | ||||
Liabilities | ||||
Payable for investments purchased | 3,665,936 | |||
Payable for capital shares redeemed | 199,975 | |||
Accrued management fees | 304,060 | |||
Accrued foreign taxes | 13,946 | |||
4,183,917 | ||||
Net Assets | $336,383,368 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 32,172,146 | |||
Net Asset Value Per Share | $10.46 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $270,351,974 | |||
Undistributed net investment income | 1,295,741 | |||
Accumulated net realized loss | (4,631,536 | ) | ||
Net unrealized appreciation | 69,367,189 | |||
$336,383,368 |
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $413,423) | $3,637,302 | |||
Interest | 1,278 | |||
3,638,580 | ||||
Expenses: | ||||
Management fees | 1,637,420 | |||
Directors’ fees and expenses | 6,978 | |||
Other expenses | 2,452 | |||
1,646,850 | ||||
Net investment income (loss) | 1,991,730 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions (net of foreign tax expenses paid (refunded) of $5,449) | 3,295,069 | |||
Foreign currency transactions (net of foreign tax expenses paid (refunded) of $22,027) | 3,870,400 | |||
7,165,469 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (net of deferred foreign taxes of $(58,301)) | 18,866,860 | |||
Translation of assets and liabilities in foreign currencies | 14,313,208 | |||
33,180,068 | ||||
Net realized and unrealized gain (loss) | 40,345,537 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $42,337,267 |
See Notes to Financial Statements.
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SIX MONTHS ENDED MAY 31, 2011 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2010 | ||||||||
Increase (Decrease) in Net Assets | 2011 | 2010 | ||||||
Operations | ||||||||
Net investment income (loss) | $1,991,730 | $1,978,829 | ||||||
Net realized gain (loss) | 7,165,469 | 11,374,128 | ||||||
Change in net unrealized appreciation (depreciation) | 33,180,068 | 3,791,324 | ||||||
Net increase (decrease) in net assets resulting from operations | 42,337,267 | 17,144,281 | ||||||
Distributions to Shareholders | ||||||||
From net investment income | (2,574,499 | ) | (2,270,324 | ) | ||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 51,261,072 | 87,778,606 | ||||||
Proceeds from reinvestment of distributions | 2,574,499 | — | ||||||
Payments for shares redeemed | (7,432,512 | ) | (15,911,311 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 46,403,059 | 71,867,295 | ||||||
Net increase (decrease) in net assets | 86,165,827 | 86,741,252 | ||||||
Net Assets | ||||||||
Beginning of period | 250,217,541 | 163,476,289 | ||||||
End of period | $336,383,368 | $250,217,541 | ||||||
Undistributed net investment income | $1,295,741 | $1,878,510 | ||||||
Transactions in Shares of the Fund | ||||||||
Sold | 5,179,931 | 10,301,837 | ||||||
Issued in reinvestment of distributions | 266,500 | — | ||||||
Redeemed | (753,907 | ) | (1,809,370 | ) | ||||
Net increase (decrease) in shares of the fund | 4,692,524 | 8,492,467 |
See Notes to Financial Statements.
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MAY 31, 2011 (UNAUDITED)
1. Organization
American Century World Mutual Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company and is organized as a Maryland corporation. NT International Growth Fund (the fund) is one fund in a series issued by the corporation. The fund is diversified as defined under the 1940 Act. The fund’s investment objective is to seek capital growth. The fund 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.
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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 change in 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 from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
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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 —The corporation has entered into a management agreement with ACIM, under which ACIM provides the fund with investment advisory and management services in exchange for a single, unified management fee (the fee). 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 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 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 six months ended May 31, 2011 was 1.10%.
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 six months ended May 31, 2011 were $152,676,728 and $102,134,753, respectively.
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). |
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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 | $20,588,766 | $313,990,357 | — | |||||||||
Temporary Cash Investments | 65,966 | 2,900,000 | — | |||||||||
Total Value of Investment Securities | $20,654,732 | $316,890,357 | — |
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 book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2011, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $270,601,053 | |||
Gross tax appreciation of investments | $69,739,986 | |||
Gross tax depreciation of investments | (2,795,950 | ) | ||
Net tax appreciation (depreciation) of investments | $66,944,036 |
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.
As of November 30, 2010, the fund had accumulated capital losses of $(9,914,815), which represent net capital loss carryovers that may be used to offset future realized capital gains for federal income tax purposes. Future capital loss carryover utilization in any given year may be subject to Internal Revenue Code limitations. Capital loss carryovers expire in 2017.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. Under the Act, the fund will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years, which carry an expiration date. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused.
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Institutional Class | ||||||||||||||||||||||||
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||
2011(1) | 2010 | 2009 | 2008 | 2007 | 2006(2) | |||||||||||||||||||
Per-Share Data | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $9.11 | $8.61 | $6.29 | $12.72 | $10.34 | $10.00 | ||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||
Net Investment Income (Loss) | 0.07 | (3) | 0.08 | (3) | 0.10 | (3) | 0.16 | (3) | 0.12 | 0.03 | ||||||||||||||
Net Realized and Unrealized Gain (Loss) | 1.37 | 0.54 | 2.33 | (6.18 | ) | 2.29 | 0.31 | |||||||||||||||||
Total From Investment Operations | 1.44 | 0.62 | 2.43 | (6.02 | ) | 2.41 | 0.34 | |||||||||||||||||
Distributions | ||||||||||||||||||||||||
From Net Investment Income | (0.09 | ) | (0.12 | ) | (0.11 | ) | (0.12 | ) | (0.03 | ) | — | |||||||||||||
From Net Realized Gains | — | — | — | (0.29 | ) | — | — | |||||||||||||||||
Total Distributions | (0.09 | ) | (0.12 | ) | (0.11 | ) | (0.41 | ) | (0.03 | ) | — | |||||||||||||
Net Asset Value, End of Period | $10.46 | $9.11 | $8.61 | $6.29 | $12.72 | $10.34 | ||||||||||||||||||
Total Return(4) | 15.93 | % | 7.28 | % | 39.09 | % | (48.82 | )% | 23.40 | % | 3.40 | % | ||||||||||||
Ratios/Supplemental Data | ||||||||||||||||||||||||
Ratio of Operating Expenses to Average Net Assets | 1.11 | %(5) | 1.14 | % | 1.18 | % | 1.12 | % | 1.07 | % | 1.07 | %(5) | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets | 1.34 | %(5) | 0.95 | % | 1.41 | % | 1.62 | % | 1.15 | % | 0.59 | %(5) | ||||||||||||
Portfolio Turnover Rate | 35 | % | 85 | % | 132 | % | 119 | % | 104 | % | 65 | % | ||||||||||||
Net Assets, End of Period (in thousands) | $336,383 | $250,218 | $163,476 | $55,860 | $67,703 | $46,380 |
(1) | Six months ended May 31, 2011 (unaudited). |
(2) | May 12, 2006 (fund inception) through November 30, 2006. |
(3) | Computed using average shares outstanding throughout the period. |
(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. |
See Notes to Financial Statements.
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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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![](https://capedge.com/proxy/N-CSRS/0001437749-11-005446/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.
©2011 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-72022 1107
ITEM 2. CODE OF ETHICS.
Not applicable for semiannual report filings.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable for semiannual report filings.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable for semiannual report filings.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. INVESTMENTS.
(a) | The schedule of investments is included as part of the report to stockholders filed under Item 1 of this Form. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During the reporting period, there were no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board.
ITEM 11. CONTROLS AND PROCEDURES.
(a) | The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant's second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) | Not applicable for semiannual report filings. |
(a)(2) | Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are filed and attached hereto as EX-99.CERT. |
(a)(3) | Not applicable. |
(b) | A certification by the registrant’s chief executive officer and chief financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, is furnished and attached hereto as EX- 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: | AMERICAN CENTURY WORLD MUTUAL FUNDS, INC. | |||
By: | /s/ Jonathan S. Thomas | |||
Name: | Jonathan S. Thomas | |||
Title: | President | |||
Date: | July 29, 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: | July 29, 2011 |
By: | /s/ Robert J. Leach | ||
Name: | Robert J. Leach | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | July 29, 2011 |