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: | 5-31-2012 |
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMIANNUAL REPORT | MAY 31, 2012
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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 | 23 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/prattsignature.jpg)
Don Pratt
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Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWMIX | -1.22% | -21.36% | -4.32% | 9.88% | 6.36% | 9/30/97 |
MSCI Emerging Markets Growth Index | — | -0.27% | -20.31% | -1.38% | 11.14% | N/A(2) | — |
Institutional Class | AMKIX | -1.14% | -21.16% | -4.15% | 10.09% | 10.38% | 1/28/99 |
A Class(3) No sales charge* With sales charge* | AEMMX | -1.26% -6.97% | -21.44% -25.97% | -4.54% -5.66% | 9.63% 8.99% | 7.89% 7.41% | 5/12/99 |
C Class No sales charge* With sales charge* | ACECX | -1.61% -2.59% | -22.11% -22.11% | -5.26% -5.26% | 8.83% 8.83% | 9.33% 9.33% | 12/18/01 |
R Class | AEMRX | -1.37% | -21.65% | N/A | N/A | -8.22% | 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%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Benchmark data first available 1/1/01. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.72% | 1.52% | 1.97% | 2.72% | 2.22% |
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, 2012 | |
Top Ten Holdings | % of net assets |
Samsung Electronics Co. Ltd. | 8.1% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 5.5% |
Tencent Holdings Ltd. | 2.2% |
Cia de Bebidas das Americas Preference Shares ADR | 2.2% |
Hon Hai Precision Industry Co. Ltd. | 2.2% |
Vale SA Preference Shares | 2.0% |
CNOOC Ltd. | 1.8% |
Ping An Insurance Group Co. H Shares | 1.7% |
BR Malls Participacoes SA | 1.6% |
Hotel Shilla Co. Ltd. | 1.4% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 98.6% |
Exchange-Traded Funds | 0.5% |
Total Equity Exposure | 99.1% |
Temporary Cash Investments | 0.8% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
South Korea | 17.9% |
Brazil | 14.1% |
People’s Republic of China | 11.6% |
Taiwan (Republic of China) | 9.2% |
South Africa | 6.9% |
Hong Kong | 6.2% |
Mexico | 5.3% |
Thailand | 5.2% |
India | 4.2% |
Turkey | 3.6% |
Russian Federation | 3.4% |
Indonesia | 3.4% |
United Kingdom | 2.8% |
Other Countries | 5.3% |
Cash and Equivalents* | 0.9% |
*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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $987.80 | $8.65 | 1.74% |
Institutional Class | $1,000 | $988.60 | $7.66 | 1.54% |
A Class | $1,000 | $987.40 | $9.89 | 1.99% |
C Class | $1,000 | $983.90 | $13.59 | 2.74% |
R Class | $1,000 | $986.30 | $11.12 | 2.24% |
Hypothetical | ||||
Investor Class | $1,000 | $1,016.30 | $8.77 | 1.74% |
Institutional Class | $1,000 | $1,017.30 | $7.77 | 1.54% |
A Class | $1,000 | $1,015.05 | $10.02 | 1.99% |
C Class | $1,000 | $1,011.30 | $13.78 | 2.74% |
R Class | $1,000 | $1,013.80 | $11.28 | 2.24% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 98.6% | ||||||||
BRAZIL — 14.1% | ||||||||
BR Malls Participacoes SA | 647,400 | $7,142,153 | ||||||
BR Properties SA | 457,000 | 5,211,592 | ||||||
BRF – Brasil Foods SA | 292,600 | 4,524,974 | ||||||
CCR SA | 546,800 | 4,183,318 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 256,477 | 9,835,893 | ||||||
Cia de Saneamento de Minas Gerais-COPASA | 66,417 | 1,418,999 | ||||||
Cia Hering | 183,600 | 3,741,458 | ||||||
Cielo SA | 150,807 | 4,004,871 | ||||||
Itau Unibanco Holding SA Preference Shares | 186,900 | 2,697,602 | ||||||
Marcopolo SA Preference Shares | 708,200 | 3,272,640 | ||||||
Tim Participacoes SA ADR | 115,413 | 2,821,848 | ||||||
Ultrapar Participacoes SA | 296,600 | 6,000,089 | ||||||
Vale SA Preference Shares | 512,100 | 9,242,353 | ||||||
64,097,790 | ||||||||
CHILE — 0.8% | ||||||||
SACI Falabella | 396,411 | 3,566,012 | ||||||
HONG KONG — 6.2% | ||||||||
Belle International Holdings Ltd. | 2,726,000 | 4,376,183 | ||||||
Brilliance China Automotive Holdings Ltd.(1) | 3,674,000 | 3,602,262 | ||||||
China Overseas Land & Investment Ltd. | 2,466,000 | 5,153,419 | ||||||
China Unicom Ltd. | 776,000 | 1,065,787 | ||||||
CNOOC Ltd. | 4,451,000 | 8,051,490 | ||||||
Kunlun Energy Co. Ltd. | 3,294,000 | 5,627,541 | ||||||
27,876,682 | ||||||||
INDIA — 4.2% | ||||||||
HDFC Bank Ltd. | 515,619 | 4,647,755 | ||||||
ICICI Bank Ltd. ADR | 81,191 | 2,285,527 | ||||||
ITC Ltd. | 1,360,818 | 5,557,648 | ||||||
Jubilant Foodworks Ltd.(1) | 111,995 | 2,548,019 | ||||||
Tata Motors Ltd. | 934,762 | 3,878,370 | ||||||
18,917,319 | ||||||||
INDONESIA — 3.4% | ||||||||
PT AKR Corporindo Tbk | 9,856,000 | 3,538,723 | ||||||
PT Astra International Tbk | 330,500 | 2,260,761 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 3,535,000 | 2,124,761 | ||||||
PT Charoen Pokphand Indonesia Tbk | 13,203,500 | 3,687,147 | ||||||
PT Semen Gresik (Persero) Tbk | 3,323,500 | 3,871,524 | ||||||
15,482,916 | ||||||||
MALAYSIA — 1.1% | ||||||||
Axiata Group Bhd | 1,325,700 | 2,244,505 | ||||||
Genting Malaysia Bhd | 2,419,100 | 2,814,370 | ||||||
5,058,875 | ||||||||
MEXICO — 5.3% | ||||||||
Alfa SAB de CV, Series A | 401,509 | 5,029,565 | ||||||
Cemex SAB de CV ADR(1) | 173,484 | 961,101 | ||||||
Fomento Economico Mexicano SAB de CV ADR | 71,984 | 5,674,499 | ||||||
Grupo Financiero Banorte SAB de CV | 918,204 | 4,103,387 | ||||||
Mexichem SAB de CV | 1,039,598 | 3,611,375 | ||||||
Wal-Mart de Mexico SAB de CV | 1,836,297 | 4,436,483 | ||||||
23,816,410 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 11.6% | ||||||||
AAC Technologies Holdings, Inc. | 1,904,000 | 6,010,140 | ||||||
China BlueChemical Ltd. H Shares(1) | 5,554,000 | 3,835,502 | ||||||
China Minsheng Banking Corp. Ltd. H Shares | 6,235,500 | 5,953,071 | ||||||
Focus Media Holding Ltd. ADR | 200,465 | 4,169,672 | ||||||
Hengan International Group Co. Ltd. | 366,500 | 3,506,081 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 7,841,645 | 4,768,708 | ||||||
Lenovo Group Ltd. | 2,626,000 | 2,233,007 | ||||||
Ping An Insurance Group Co. H Shares | 1,021,500 | 7,521,529 | ||||||
Qihoo 360 Technology Co. Ltd. ADR(1) | 111,370 | 2,227,400 | ||||||
Tencent Holdings Ltd. | 369,300 | 10,153,722 | ||||||
ZTE Corp. H Shares | 1,225,920 | 2,429,238 | ||||||
52,808,070 | ||||||||
PERU — 1.1% | ||||||||
Credicorp Ltd. | 39,544 | 4,933,905 | ||||||
POLAND — 0.6% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 312,173 | 2,817,049 | ||||||
RUSSIAN FEDERATION — 3.4% | ||||||||
Magnit OJSC GDR(1) | 110,247 | 2,712,076 | ||||||
Mail.ru Group Ltd. GDR(1) | 54,500 | 1,709,665 | ||||||
Mobile Telesystems OJSC ADR(1) | 294,559 | 4,901,462 | ||||||
Sberbank of Russia | 2,524,898 | 6,254,172 | ||||||
15,577,375 |
8
Shares | Value | |||||||
SOUTH AFRICA — 6.9% | ||||||||
Aspen Pharmacare Holdings Ltd.(1) | 237,593 | $3,290,163 | ||||||
Barloworld Ltd. | 373,055 | 3,716,885 | ||||||
Clicks Group Ltd. | 617,578 | 3,403,549 | ||||||
Discovery Holdings Ltd. | 654,890 | 3,835,188 | ||||||
Exxaro Resources Ltd. | 243,095 | 5,416,459 | ||||||
Mr Price Group Ltd. | 482,278 | 5,919,055 | ||||||
Naspers Ltd. N Shares | 63,332 | 3,348,500 | ||||||
Sasol Ltd. | 54,594 | 2,322,308 | ||||||
31,252,107 | ||||||||
SOUTH KOREA — 17.9% | ||||||||
Cheil Worldwide, Inc. | 121,180 | 1,853,250 | ||||||
Grand Korea Leisure Co. Ltd. | 228,790 | 4,419,752 | ||||||
Hotel Shilla Co. Ltd. | 142,990 | 6,517,994 | ||||||
Hyundai Glovis Co. Ltd. | 30,792 | 5,439,637 | ||||||
Hyundai Motor Co. | 22,535 | 4,658,793 | ||||||
Kia Motors Corp. | 89,993 | 6,115,178 | ||||||
LG Chem Ltd. | 7,934 | 1,956,191 | ||||||
LG Household & Health Care Ltd. | 11,512 | 5,696,257 | ||||||
NCSoft Corp. | 20,913 | 4,252,590 | ||||||
Orion Corp. | 4,536 | 3,697,210 | ||||||
Samsung Electronics Co. Ltd. | 35,610 | 36,537,776 | ||||||
81,144,628 | ||||||||
SWITZERLAND — 0.3% | ||||||||
Ferrexpo plc | 442,616 | 1,345,219 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 9.2% | ||||||||
Catcher Technology Co. Ltd. | 622,000 | 3,948,975 | ||||||
Hon Hai Precision Industry Co. Ltd. | 3,342,666 | 9,799,091 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 8,771,939 | 25,009,783 | ||||||
United Microelectronics Corp. | 7,128,000 | 3,128,411 | ||||||
41,886,260 | ||||||||
THAILAND — 5.2% | ||||||||
Advanced Info Service PCL | 747,000 | 4,202,829 | ||||||
Banpu PCL | 276,950 | 3,917,256 | ||||||
CP ALL PCL | 4,943,600 | 5,321,965 | ||||||
Kasikornbank PCL NVDR | 914,100 | 4,453,418 | ||||||
Siam Cement PCL NVDR | 505,700 | 5,436,096 | ||||||
23,331,564 | ||||||||
TURKEY — 3.6% | ||||||||
BIM Birlesik Magazalar AS | 101,963 | 4,128,278 | ||||||
Koza Altin Isletmeleri AS | 163,210 | 2,757,000 | ||||||
TAV Havalimanlari Holding AS | 626,015 | 3,028,103 | ||||||
Tofas Turk Otomobil Fabrikasi | 916,362 | 3,115,557 | ||||||
Turkiye Garanti Bankasi AS | 1,081,938 | 3,469,628 | ||||||
16,498,566 | ||||||||
UNITED ARAB EMIRATES — 0.9% | ||||||||
Dragon Oil plc | 530,162 | 4,075,215 | ||||||
UNITED KINGDOM — 2.8% | ||||||||
Antofagasta plc | 179,190 | 2,767,200 | ||||||
Petrofac Ltd. | 237,329 | 5,658,485 | ||||||
Tullow Oil plc | 199,849 | 4,379,864 | ||||||
12,805,549 | ||||||||
TOTAL COMMON STOCKS (Cost $388,726,863) | 447,291,511 | |||||||
Exchange-Traded Funds — 0.5% | ||||||||
Global X FTSE Colombia 20 ETF (Cost $2,265,528) | 108,340 | 2,251,305 | ||||||
Temporary Cash Investments — 0.8% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% – 2.625%, 9/15/14 – 12/31/14, valued at $1,320,194), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $1,293,632) | 1,293,626 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $1,326,392), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $1,293,631) | 1,293,626 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $909,973), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $890,653) | 890,651 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,477,903) | 3,477,903 | |||||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $394,470,294) | 453,020,719 | |||||||
OTHER ASSETS AND LIABILITIES — 0.1% | 582,669 | |||||||
TOTAL NET ASSETS — 100.0% | $453,603,388 |
9
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 24.4% |
Financials | 17.2% |
Consumer Discretionary | 15.6% |
Consumer Staples | 13.1% |
Materials | 8.9% |
Energy | 8.9% |
Industrials | 6.2% |
Telecommunication Services | 3.3% |
Health Care | 0.7% |
Diversified | 0.5% |
Utilities | 0.3% |
Cash and Equivalents* | 0.9% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
ETF = Exchange-Traded Fund
FTSE = Financial Times Stock Exchange
GDR = Global Depositary Receipt
NVDR = Non-Voting Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $394,470,294) | $453,020,719 | |||
Foreign currency holdings, at value (cost of $326,797) | 321,319 | |||
Receivable for investments sold | 2,053,327 | |||
Receivable for capital shares sold | 67,176 | |||
Dividends and interest receivable | 1,067,572 | |||
456,530,113 | ||||
Liabilities | ||||
Payable for investments purchased | 1,984,482 | |||
Payable for capital shares redeemed | 234,334 | |||
Accrued management fees | 701,525 | |||
Distribution and service fees payable | 6,384 | |||
2,926,725 | ||||
Net Assets | $453,603,388 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $522,674,561 | |||
Undistributed net investment income | 372,655 | |||
Accumulated net realized loss | (127,950,729 | ) | ||
Net unrealized appreciation | 58,506,901 | |||
$453,603,388 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $410,973,514 | 56,369,537 | $7.29 |
Institutional Class, $0.01 Par Value | $25,195,599 | 3,377,179 | $7.46 |
A Class, $0.01 Par Value | $13,327,775 | 1,885,980 | $7.07* |
C Class, $0.01 Par Value | $3,414,201 | 507,594 | $6.73 |
R Class, $0.01 Par Value | $692,299 | 96,200 | $7.20 |
*Maximum offering price $7.50 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $456,195) | $4,658,252 | |||
Interest (net of foreign taxes withheld of $5,414) | 31,233 | |||
4,689,485 | ||||
Expenses: | ||||
Management fees | 4,294,881 | |||
Distribution and service fees: | ||||
A Class | 18,530 | |||
C Class | 19,545 | |||
R Class | 1,823 | |||
Directors’ fees and expenses | 8,800 | |||
Other expenses | 8,829 | |||
4,352,408 | ||||
Net investment income (loss) | 337,077 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 19,781,028 | |||
Foreign currency transactions | (471,342 | ) | ||
19,309,686 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | (23,539,627 | ) | ||
Translation of assets and liabilities in foreign currencies | (20,720 | ) | ||
(23,560,347 | ) | |||
Net realized and unrealized gain (loss) | (4,250,661 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(3,913,584 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $337,077 | $938,130 | ||||||
Net realized gain (loss) | 19,309,686 | 49,355,393 | ||||||
Change in net unrealized appreciation (depreciation) | (23,560,347 | ) | (120,227,565 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (3,913,584 | ) | (69,934,042 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Institutional Class | (51,371 | ) | — | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (27,079,227 | ) | (106,484,925 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 7,889 | 144,876 | ||||||
Net increase (decrease) in net assets | (31,036,293 | ) | (176,274,091 | ) | ||||
Net Assets | ||||||||
Beginning of period | 484,639,681 | 660,913,772 | ||||||
End of period | $453,603,388 | $484,639,681 | ||||||
Undistributed net investment income | $372,655 | $86,949 |
See Notes to Financial Statements.
13
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 offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee. On October 21, 2011, all outstanding B Class shares were converted to A Class shares and the fund discontinued offering the B Class.
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.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Interest income less foreign taxes withheld, if any, is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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. Prior to November 14, 2011, the redemption fee applied to shares held less than 180 days.
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, 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, 2012 was 1.74% for the Investor Class, A Class, C Class and R Class and 1.54% 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 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, 2012 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., 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, 17% of the shares of the fund. ACAAP does not invest in the fund for the purpose of exercising management or control.
16
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $232,229,735 and $261,384,101, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 235,000,000 | 235,000,000 | ||||||||||||||
Sold | 3,855,112 | $29,191,964 | 6,538,088 | $55,636,956 | ||||||||||||
Redeemed | (6,442,170 | ) | (49,537,324 | ) | (16,579,314 | ) | (141,943,249 | ) | ||||||||
(2,587,058 | ) | (20,345,360 | ) | (10,041,226 | ) | (86,306,293 | ) | |||||||||
Institutional Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 419,452 | 3,290,776 | 814,282 | 7,001,115 | ||||||||||||
Issued in reinvestment of distributions | 6,334 | 51,366 | — | — | ||||||||||||
Redeemed | (977,403 | ) | (7,796,132 | ) | (1,621,034 | ) | (14,518,773 | ) | ||||||||
(551,617 | ) | (4,453,990 | ) | (806,752 | ) | (7,517,658 | ) | |||||||||
A Class/Shares Authorized | 40,000,000 | 40,000,000 | ||||||||||||||
Sold | 157,725 | 1,193,594 | 2,314,402 | 20,284,532 | ||||||||||||
Redeemed | (413,415 | ) | (3,111,019 | ) | (3,764,042 | ) | (31,735,094 | ) | ||||||||
(255,690 | ) | (1,917,425 | ) | (1,449,640 | ) | (11,450,562 | ) | |||||||||
B Class/Shares Authorized | N/A | 10,000,000 | ||||||||||||||
Sold | 2,549 | 21,664 | ||||||||||||||
Redeemed | (39,638 | ) | (294,160 | ) | ||||||||||||
(37,089 | ) | (272,496 | ) | |||||||||||||
C Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 30,048 | 215,930 | 99,057 | 738,536 | ||||||||||||
Redeemed | (91,717 | ) | (650,725 | ) | (193,003 | ) | (1,533,169 | ) | ||||||||
(61,669 | ) | (434,795 | ) | (93,946 | ) | (794,633 | ) | |||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 24,307 | 186,091 | 42,747 | 331,354 | ||||||||||||
Redeemed | (14,574 | ) | (113,748 | ) | (54,656 | ) | (474,637 | ) | ||||||||
9,733 | 72,343 | (11,909 | ) | (143,283 | ) | |||||||||||
Net increase (decrease) | (3,446,301 | ) | $(27,079,227 | ) | (12,440,562 | ) | $(106,484,925 | ) |
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 | $37,811,307 | $409,480,204 | — | |||||||||
Exchange-Traded Funds | 2,251,305 | — | — | |||||||||
Temporary Cash Investments | — | 3,477,903 | — | |||||||||
Total Value of Investment Securities | $40,062,612 | $412,958,107 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
18
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $396,964,123 | |||
Gross tax appreciation of investments | $74,862,178 | |||
Gross tax depreciation of investments | (18,805,582 | ) | ||
Net tax appreciation (depreciation) of investments | $56,056,596 |
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, 2011, the fund had accumulated capital losses of $(131,458,384), 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 $(14,251,983) and $(117,206,401) expire in 2016 and 2017, respectively. The Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(13,010,792) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
19
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Redemption Fees(1) | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||||||||||
Investor Class | |||||||||||||||||||||||||||||||||||||||||
2012(3) | $7.38 | 0.01 | (0.10 | ) | (0.09 | ) | — | — | — | — | (4) | $7.29 | (1.22 | )% | 1.74 | %(5) | 0.14 | %(5) | 47 | % | $410,974 | ||||||||||||||||||||
2011 | $8.46 | 0.01 | (1.09 | ) | (1.08 | ) | — | — | — | — | (4) | $7.38 | (12.77 | )% | 1.71 | % | 0.17 | % | 71 | % | $435,079 | ||||||||||||||||||||
2010 | $7.28 | — | (4) | 1.18 | 1.18 | — | — | — | — | (4) | $8.46 | 16.21 | % | 1.72 | % | (0.02 | )% | 87 | % | $583,978 | |||||||||||||||||||||
2009 | $4.17 | 0.01 | 3.13 | 3.14 | (0.03 | ) | — | (0.03 | ) | — | (4) | $7.28 | 75.36 | % | 1.78 | % | 0.11 | % | 126 | % | $567,248 | ||||||||||||||||||||
2008 | $12.69 | 0.09 | (7.21 | ) | (7.12 | ) | (0.10 | ) | (1.31 | ) | (1.41 | ) | 0.01 | $4.17 | (62.66 | )% | 1.66 | % | 1.06 | % | 121 | % | $316,695 | ||||||||||||||||||
2007 | $10.06 | 0.10 | 4.06 | 4.16 | (0.13 | ) | (1.42 | ) | (1.55 | ) | 0.02 | $12.69 | 48.81 | % | 1.66 | % | 0.96 | % | 85 | % | $1,070,138 | ||||||||||||||||||||
Institutional Class | |||||||||||||||||||||||||||||||||||||||||
2012(3) | $7.56 | 0.01 | (0.10 | ) | (0.09 | ) | (0.01 | ) | — | (0.01 | ) | — | (4) | $7.46 | (1.14 | )% | 1.54 | %(5) | 0.34 | %(5) | 47 | % | $25,196 | ||||||||||||||||||
2011 | $8.65 | 0.03 | (1.12 | ) | (1.09 | ) | — | — | — | — | (4) | $7.56 | (12.60 | )% | 1.51 | % | 0.37 | % | 71 | % | $29,695 | ||||||||||||||||||||
2010 | $7.43 | 0.02 | 1.20 | 1.22 | — | — | — | — | (4) | $8.65 | 16.42 | % | 1.52 | % | 0.18 | % | 87 | % | $40,969 | ||||||||||||||||||||||
2009 | $4.26 | 0.02 | 3.18 | 3.20 | (0.03 | ) | — | (0.03 | ) | — | (4) | $7.43 | 75.92 | % | 1.58 | % | 0.31 | % | 126 | % | $27,787 | ||||||||||||||||||||
2008 | $12.92 | 0.12 | (7.35 | ) | (7.23 | ) | (0.13 | ) | (1.31 | ) | (1.44 | ) | 0.01 | $4.26 | (62.63 | )% | 1.46 | % | 1.26 | % | 121 | % | $27,235 | ||||||||||||||||||
2007 | $10.21 | 0.12 | 4.14 | 4.26 | (0.15 | ) | (1.42 | ) | (1.57 | ) | 0.02 | $12.92 | 49.21 | % | 1.46 | % | 1.16 | % | 85 | % | $74,897 |
20
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Redemption Fees(1) | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||||||||||
A Class(6) | |||||||||||||||||||||||||||||||||||||||||
2012(3) | $7.16 | — | (4) | (0.09 | ) | (0.09 | ) | — | — | — | — | (4) | $7.07 | (1.26 | )% | 1.99 | %(5) | (0.11 | )%(5) | 47 | % | $13,328 | |||||||||||||||||||
2011 | $8.23 | (0.01 | ) | (1.06 | ) | (1.07 | ) | — | — | — | — | (4) | $7.16 | (13.00 | )% | 1.96 | % | (0.08 | )% | 71 | % | $15,339 | |||||||||||||||||||
2010 | $7.10 | (0.02 | ) | 1.15 | 1.13 | — | — | — | — | (4) | $8.23 | 15.92 | % | 1.97 | % | (0.27 | )% | 87 | % | $29,572 | |||||||||||||||||||||
2009 | $4.07 | (0.01 | ) | 3.06 | 3.05 | (0.02 | ) | — | (0.02 | ) | — | (4) | $7.10 | 75.24 | % | 2.03 | % | (0.14 | )% | 126 | % | $23,260 | |||||||||||||||||||
2008 | $12.40 | 0.07 | (7.03 | ) | (6.96 | ) | (0.07 | ) | (1.31 | ) | (1.38 | ) | 0.01 | $4.07 | (62.78 | )% | 1.91 | % | 0.81 | % | 121 | % | $17,105 | ||||||||||||||||||
2007 | $9.85 | 0.07 | 3.99 | 4.06 | (0.11 | ) | (1.42 | ) | (1.53 | ) | 0.02 | $12.40 | 48.61 | % | 1.91 | % | 0.71 | % | 85 | % | $36,795 | ||||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.84 | (0.03 | ) | (0.08 | ) | (0.11 | ) | — | — | — | — | (4) | $6.73 | (1.61 | )% | 2.74 | %(5) | (0.86 | )%(5) | 47 | % | $3,414 | |||||||||||||||||||
2011 | $7.93 | (0.07 | ) | (1.02 | ) | (1.09 | ) | — | — | — | — | (4) | $6.84 | (13.75 | )% | 2.71 | % | (0.83 | )% | 71 | % | $3,896 | |||||||||||||||||||
2010 | $6.89 | (0.07 | ) | 1.11 | 1.04 | — | — | — | — | (4) | $7.93 | 15.09 | % | 2.72 | % | (1.02 | )% | 87 | % | $5,257 | |||||||||||||||||||||
2009 | $3.96 | (0.05 | ) | 2.98 | 2.93 | — | — | — | — | (4) | $6.89 | 73.99 | % | 2.78 | % | (0.89 | )% | 126 | % | $5,372 | |||||||||||||||||||||
2008 | $12.10 | 0.01 | (6.87 | ) | (6.86 | ) | — | (1.29 | ) | (1.29 | ) | 0.01 | $3.96 | (63.09 | )% | 2.66 | % | 0.06 | % | 121 | % | $3,217 | |||||||||||||||||||
2007 | $9.64 | (0.01 | ) | 3.90 | 3.89 | (0.03 | ) | (1.42 | ) | (1.45 | ) | 0.02 | $12.10 | 47.39 | % | 2.66 | % | (0.04 | )% | 85 | % | $9,098 | |||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||
2012(3) | $7.30 | (0.01 | ) | (0.09 | ) | (0.10 | ) | — | — | — | — | (4) | $7.20 | (1.37 | )% | 2.24 | %(5) | (0.36 | )%(5) | 47 | % | $692 | |||||||||||||||||||
2011 | $8.42 | (0.03 | ) | (1.09 | ) | (1.12 | ) | — | — | — | — | (4) | $7.30 | (13.30 | )% | 2.21 | % | (0.33 | )% | 71 | % | $631 | |||||||||||||||||||
2010 | $7.28 | (0.04 | ) | 1.18 | 1.14 | — | — | — | — | (4) | $8.42 | 15.66 | % | 2.22 | % | (0.52 | )% | 87 | % | $828 | |||||||||||||||||||||
2009 | $4.17 | (0.02 | ) | 3.14 | 3.12 | (0.01 | ) | — | (0.01 | ) | — | (4) | $7.28 | 74.94 | % | 2.28 | % | (0.39 | )% | 126 | % | $516 | |||||||||||||||||||
2008 | $12.68 | 0.05 | (7.22 | ) | (7.17 | ) | (0.04 | ) | (1.31 | ) | (1.35 | ) | 0.01 | $4.17 | (62.92 | )% | 2.19 | % | 0.53 | % | 121 | % | $144 | ||||||||||||||||||
2007(7) | $12.15 | (0.01 | ) | 0.52 | 0.51 | — | — | — | 0.02 | $12.68 | 4.36 | % | 2.08 | %(5) | (0.68 | )%(5) | 85 | %(8) | $27 |
21
Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
(6) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class. |
(7) | September 28, 2007 (commencement of sale) through November 30, 2007. |
(8) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2007. |
See Notes to Financial Statements.
22
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.
23
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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75489 1207
SEMIANNUAL REPORT | MAY 31, 2012
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![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/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 | 19 |
Additional Information | 22 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWGGX | 4.31% | -7.24% | -1.64% | 5.85% | 7.06% | 12/1/98 |
MSCI World Index | — | 0.72% | -11.02% | -4.07% | 4.00% | 2.31%(2) | — |
Institutional Class | AGGIX | 4.48% | -7.08% | -1.43% | 6.07% | 2.08% | 8/1/00 |
A Class(3) No sales charge* With sales charge* | AGGRX | 4.22% -1.75% | -7.47% -12.82% | -1.90% -3.05% | 5.60% 4.97% | 6.02% 5.55% | 2/5/99 |
C Class No sales charge* With sales charge* | AGLCX | 3.81% 2.81% | -8.20% -8.20% | -2.62% -2.62% | 4.83% 4.83% | 5.02% 5.02% | 3/1/02 |
R Class | AGORX | 4.17% | -7.71% | -2.14% | — | 3.82% | 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%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since 11/30/98, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class 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 |
1.11% | 0.91% | 1.36% | 2.11% | 1.61% |
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, 2012 | |
Top Ten Holdings | % of net assets |
Apple, Inc. | 4.8% |
Google, Inc., Class A | 2.7% |
Union Pacific Corp. | 2.1% |
Danone SA | 2.0% |
Danaher Corp. | 2.0% |
Precision Castparts Corp. | 1.9% |
Nestle SA | 1.8% |
American Express Co. | 1.8% |
American Tower Corp. | 1.8% |
priceline.com, Inc. | 1.7% |
Types of Investments in Portfolio | % of net assets |
Domestic Common Stocks | 58.8% |
Foreign Common Stocks | 40.1% |
Total Common Stocks | 98.9% |
Temporary Cash Investments | 0.8% |
Other Assets and Liabilities | 0.3% |
Investments by Country | % of net assets |
United States | 58.8% |
United Kingdom | 7.4% |
Japan | 6.8% |
Switzerland | 4.8% |
France | 4.3% |
People’s Republic of China | 2.2% |
Other Countries | 14.6% |
Cash and Equivalents* | 1.1% |
* 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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,043.10 | $5.62 | 1.10% |
Institutional Class | $1,000 | $1,044.80 | $4.60 | 0.90% |
A Class | $1,000 | $1,042.20 | $6.89 | 1.35% |
C Class | $1,000 | $1,038.10 | $10.70 | 2.10% |
R Class | $1,000 | $1,041.70 | $8.17 | 1.60% |
Hypothetical | ||||
Investor Class | $1,000 | $1,019.50 | $5.55 | 1.10% |
Institutional Class | $1,000 | $1,020.50 | $4.55 | 0.90% |
A Class | $1,000 | $1,018.25 | $6.81 | 1.35% |
C Class | $1,000 | $1,014.50 | $10.58 | 2.10% |
R Class | $1,000 | $1,017.00 | $8.07 | 1.60% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 98.9% | ||||||||
AUSTRALIA — 1.3% | ||||||||
BHP Billiton Ltd. | 174,035 | $5,419,792 | ||||||
BRAZIL — 0.9% | ||||||||
BR Malls Participacoes SA | 175,500 | 1,936,125 | ||||||
Itau Unibanco Holding SA ADR | 122,370 | 1,770,694 | ||||||
3,706,819 | ||||||||
CANADA — 0.5% | ||||||||
Bank of Nova Scotia | 43,380 | 2,224,755 | ||||||
DENMARK — 1.1% | ||||||||
Novo Nordisk A/S B Shares | 33,995 | 4,522,598 | ||||||
FRANCE — 4.3% | ||||||||
Danone SA | 129,302 | 8,296,276 | ||||||
L’Oreal SA | 18,075 | 2,032,039 | ||||||
Pernod-Ricard SA | 30,154 | 2,945,549 | ||||||
Safran SA | 64,475 | 2,214,317 | ||||||
Sanofi | 30,110 | 2,047,707 | ||||||
17,535,888 | ||||||||
GERMANY — 1.6% | ||||||||
Fresenius Medical Care AG & Co. KGaA | 51,940 | 3,448,178 | ||||||
Kabel Deutschland Holding AG(1) | 19,275 | 1,093,483 | ||||||
SAP AG ADR | 34,241 | 1,962,694 | ||||||
6,504,355 | ||||||||
HONG KONG — 0.6% | ||||||||
China Unicom Ltd. | 1,716,000 | 2,356,818 | ||||||
INDONESIA — 0.4% | ||||||||
PT Bank Mandiri (Persero) Tbk | 1,997,631 | 1,466,346 | ||||||
IRELAND — 0.5% | ||||||||
Shire plc | 69,335 | 1,953,385 | ||||||
ISRAEL — 0.4% | ||||||||
Check Point Software Technologies Ltd.(1) | 29,670 | 1,520,291 | ||||||
ITALY — 1.9% | ||||||||
Pirelli & C SpA | 178,525 | 1,769,281 | ||||||
Saipem SpA | 148,275 | 5,756,942 | ||||||
7,526,223 | ||||||||
JAPAN — 6.8% | ||||||||
Daihatsu Motor Co. Ltd. | 120,000 | 2,064,319 | ||||||
FANUC Corp. | 14,300 | 2,467,279 | ||||||
Komatsu Ltd. | 138,200 | 3,312,144 | ||||||
ORIX Corp. | 43,060 | 3,725,712 | ||||||
Rakuten, Inc. | 5,753 | 6,152,391 | ||||||
Toyota Motor Corp. | 133,800 | 5,190,812 | ||||||
Unicharm Corp. | 86,800 | 4,691,143 | ||||||
27,603,800 | ||||||||
NETHERLANDS — 1.0% | ||||||||
ASML Holding NV New York Shares | 49,285 | 2,257,746 | ||||||
European Aeronautic Defence and Space Co. NV | 57,070 | 1,910,251 | ||||||
4,167,997 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 2.2% | ||||||||
Baidu, Inc. ADR(1) | 49,790 | 5,863,768 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 4,743,000 | 2,884,342 | ||||||
8,748,110 | ||||||||
PERU — 0.3% | ||||||||
Credicorp Ltd. | 11,225 | 1,400,543 | ||||||
PORTUGAL — 0.7% | ||||||||
Jeronimo Martins SGPS SA | 148,135 | 2,631,223 | ||||||
RUSSIAN FEDERATION — 0.6% | ||||||||
Sberbank of Russia ADR | 252,965 | 2,487,911 | ||||||
SOUTH KOREA — 1.0% | ||||||||
Hyundai Motor Co. | 20,110 | 4,157,458 | ||||||
SPAIN — 0.7% | ||||||||
Grifols SA(1) | 130,240 | 2,954,312 | ||||||
SWEDEN — 0.5% | ||||||||
Atlas Copco AB A Shares | 105,750 | 2,129,703 | ||||||
SWITZERLAND — 4.8% | ||||||||
Nestle SA | 130,190 | 7,378,349 | ||||||
Novartis AG | 40,235 | 2,089,726 | ||||||
Swatch Group AG (The) | 9,500 | 3,652,906 | ||||||
Syngenta AG | 12,590 | 4,030,978 | ||||||
Xstrata plc | 161,500 | 2,296,138 | ||||||
19,448,097 | ||||||||
TURKEY — 0.6% | ||||||||
Turkiye Garanti Bankasi AS | 709,330 | 2,274,725 | ||||||
UNITED KINGDOM — 7.4% | ||||||||
Admiral Group plc | 110,358 | 1,767,170 | ||||||
Aggreko plc | 12,400 | 420,057 | ||||||
BG Group plc | 303,365 | 5,809,261 | ||||||
Burberry Group plc | 125,675 | 2,647,747 | ||||||
Capita Group plc (The) | 361,880 | 3,446,768 | ||||||
Compass Group plc | 383,235 | 3,756,482 | ||||||
GlaxoSmithKline plc | 84,030 | 1,862,311 | ||||||
Kingfisher plc | 694,390 | 3,017,947 | ||||||
Petrofac Ltd. | 50,995 | 1,215,842 | ||||||
Reckitt Benckiser Group plc | 62,250 | 3,304,164 | ||||||
Rio Tinto plc | 60,015 | 2,571,365 | ||||||
29,819,114 | ||||||||
UNITED STATES — 58.8% | ||||||||
Aflac, Inc. | 88,409 | 3,543,433 | ||||||
Air Products & Chemicals, Inc. | 20,584 | 1,626,959 |
8
Shares | Value | |||||||
Alexion Pharmaceuticals, Inc.(1) | 26,715 | $2,419,578 | ||||||
Alliance Data Systems Corp.(1) | 30,479 | 3,840,354 | ||||||
Altera Corp. | 1,257 | 41,996 | ||||||
Amazon.com, Inc.(1) | 12,590 | 2,680,537 | ||||||
American Express Co. | 130,240 | 7,271,299 | ||||||
American Tower Corp. | 111,285 | 7,220,171 | ||||||
Apple, Inc.(1) | 33,541 | 19,377,642 | ||||||
BE Aerospace, Inc.(1) | 67,475 | 2,923,017 | ||||||
BorgWarner, Inc.(1) | 45,671 | 3,276,894 | ||||||
Celgene Corp.(1) | 30,757 | 2,099,165 | ||||||
Cerner Corp.(1) | 48,775 | 3,802,499 | ||||||
Charles Schwab Corp. (The) | 505,850 | 6,302,891 | ||||||
CIT Group, Inc.(1) | 88,919 | 3,040,141 | ||||||
Colgate-Palmolive Co. | 55,864 | 5,491,431 | ||||||
Continental Resources, Inc.(1) | 24,184 | 1,762,046 | ||||||
Costco Wholesale Corp. | 28,810 | 2,488,896 | ||||||
Danaher Corp. | 157,266 | 8,173,114 | ||||||
eBay, Inc.(1) | 31,053 | 1,216,967 | ||||||
EMC Corp.(1) | 193,842 | 4,623,132 | ||||||
Equinix, Inc.(1) | 32,625 | 5,321,464 | ||||||
Estee Lauder Cos., Inc. (The), Class A | 24,871 | 1,346,765 | ||||||
Express Scripts Holding Co.(1) | 85,766 | 4,476,128 | ||||||
FactSet Research Systems, Inc. | 25,121 | 2,648,507 | ||||||
Google, Inc., Class A(1) | 18,695 | 10,859,178 | ||||||
Harley-Davidson, Inc. | 93,968 | 4,527,378 | ||||||
Home Depot, Inc. (The) | 75,110 | 3,705,927 | ||||||
IntercontinentalExchange, Inc.(1) | 35,098 | 4,297,750 | ||||||
Intuitive Surgical, Inc.(1) | 7,768 | 4,063,441 | ||||||
Kraft Foods, Inc., Class A | 155,365 | 5,945,819 | ||||||
Las Vegas Sands Corp. | 72,855 | 3,364,444 | ||||||
Liberty Global, Inc. Class A(1) | 122,857 | 5,675,993 | ||||||
MasterCard, Inc., Class A | 12,445 | 5,059,017 | ||||||
Mead Johnson Nutrition Co. | 59,784 | 4,826,960 | ||||||
Monsanto Co. | 55,412 | 4,277,806 | ||||||
National Oilwell Varco, Inc. | 46,423 | 3,098,735 | ||||||
O’Reilly Automotive, Inc.(1) | 32,255 | 3,089,706 | ||||||
Occidental Petroleum Corp. | 86,035 | 6,819,994 | ||||||
Oceaneering International, Inc. | 30,866 | 1,426,627 | ||||||
Pall Corp. | 41,625 | 2,316,847 | ||||||
Polypore International, Inc.(1) | 46,195 | 1,708,753 | ||||||
Precision Castparts Corp. | 45,975 | 7,641,505 | ||||||
priceline.com, Inc.(1) | 11,203 | 7,007,364 | ||||||
QUALCOMM, Inc. | 102,262 | 5,860,635 | ||||||
Schlumberger Ltd. | 97,275 | 6,152,644 | ||||||
Tractor Supply Co. | 17,674 | 1,614,520 | ||||||
Union Pacific Corp. | 75,425 | 8,402,345 | ||||||
VeriFone Systems, Inc.(1) | 61,470 | 2,219,682 | ||||||
Verisk Analytics, Inc. Class A(1) | 52,970 | 2,537,263 | ||||||
Visa, Inc., Class A | 26,960 | 3,105,792 | ||||||
Waters Corp.(1) | 31,160 | 2,485,945 | ||||||
Wells Fargo & Co. | 192,120 | 6,157,446 | ||||||
Whole Foods Market, Inc. | 32,831 | 2,909,155 | ||||||
238,173,697 | ||||||||
TOTAL COMMON STOCKS (Cost $327,854,823) | 400,733,960 | |||||||
Temporary Cash Investments — 0.8% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $1,189,263), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $1,165,335) | 1,165,330 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $1,194,846), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $1,165,334) | 1,165,330 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $819,726), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $802,320) | 802,318 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,132,978) | 3,132,978 | |||||||
TOTAL INVESTMENT SECURITIES — 99.7% (Cost $330,987,801) | 403,866,938 | |||||||
OTHER ASSETS AND LIABILITIES — 0.3% | 1,408,450 | |||||||
TOTAL NET ASSETS — 100.0% | $405,275,388 |
9
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 19.5% |
Consumer Discretionary | 17.0% |
Financials | 14.8% |
Consumer Staples | 13.5% |
Industrials | 12.2% |
Health Care | 8.4% |
Energy | 7.9% |
Materials | 5.0% |
Telecommunication Services | 0.6% |
Cash and Equivalents* | 1.1% |
*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, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $330,987,801) | $403,866,938 | |||
Foreign currency holdings, at value (cost of $224,187) | 220,675 | |||
Receivable for investments sold | 1,790,715 | |||
Receivable for capital shares sold | 154,162 | |||
Dividends and interest receivable | 1,146,967 | |||
Other assets | 48,097 | |||
407,227,554 | ||||
Liabilities | ||||
Disbursements in excess of demand deposit cash | 25,817 | |||
Payable for investments purchased | 1,097,412 | |||
Payable for capital shares redeemed | 441,712 | |||
Accrued management fees | 377,364 | |||
Distribution and service fees payable | 9,861 | |||
1,952,166 | ||||
Net Assets | $405,275,388 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $383,898,057 | |||
Undistributed net investment income | 162,680 | |||
Accumulated net realized loss | (51,675,031 | ) | ||
Net unrealized appreciation | 72,889,682 | |||
$405,275,388 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $336,061,961 | 37,915,681 | $8.86 |
Institutional Class, $0.01 Par Value | $36,256,074 | 4,053,755 | $8.94 |
A Class, $0.01 Par Value | $28,453,465 | 3,254,368 | $8.74* |
C Class, $0.01 Par Value | $3,597,745 | 440,254 | $8.17 |
R Class, $0.01 Par Value | $906,143 | 103,688 | $8.74 |
*Maximum offering price $9.27 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $272,297) | $3,463,116 | |||
Interest | 1,391 | |||
3,464,507 | ||||
Expenses: | ||||
Management fees | 2,212,414 | |||
Distribution and service fees: | ||||
A Class | 35,947 | |||
C Class | 18,384 | |||
R Class | 2,146 | |||
Directors’ fees and expenses | 7,533 | |||
Other expenses | 402 | |||
2,276,826 | ||||
Net investment income (loss) | 1,187,681 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 11,692,672 | |||
Foreign currency transactions | 4,676 | |||
11,697,348 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | 4,309,111 | |||
Translation of assets and liabilities in foreign currencies | (25,639 | ) | ||
4,283,472 | ||||
Net realized and unrealized gain (loss) | 15,980,820 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $17,168,501 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $1,187,681 | $1,153,182 | ||||||
Net realized gain (loss) | 11,697,348 | 28,046,131 | ||||||
Change in net unrealized appreciation (depreciation) | 4,283,472 | (18,766,487 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 17,168,501 | 10,432,826 | ||||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (1,027,964 | ) | (1,819,577 | ) | ||||
Institutional Class | (195,280 | ) | (300,047 | ) | ||||
A Class | (13,556 | ) | (82,583 | ) | ||||
Decrease in net assets from distributions | (1,236,800 | ) | (2,202,207 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (422,148 | ) | (48,395,004 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 1,438 | 13,588 | ||||||
Net increase (decrease) in net assets | 15,510,991 | (40,150,797 | ) | |||||
Net Assets | ||||||||
Beginning of period | 389,764,397 | 429,915,194 | ||||||
End of period | $405,275,388 | $389,764,397 | ||||||
Undistributed net investment income | $162,680 | $211,799 |
See Notes to Financial Statements.
13
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 located in developed countries world-wide (inluding the United States).
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee. On October 21, 2011, all outstanding B Class shares were converted to A Class shares and the fund discontinued offering the B Class.
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
14
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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, 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, 2012 was 1.10% for the Investor Class, A Class, C Class and R Class and 0.90% 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, 2012 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., 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.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $103,461,191 and $104,945,543, respectively.
During the six months ended May 31, 2012, the fund incurred purchases in kind of equity securities valued at $11,264,910. A purchase in kind occurs when a fund receives securities into its portfolio in lieu of cash as payment from a purchasing shareholder.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 200,000,000 | 200,000,000 | ||||||||||||||
Sold | 2,710,886 | $24,384,182 | 2,343,841 | $20,895,594 | ||||||||||||
Issued in reinvestment of distributions | 109,431 | 1,003,479 | 162,223 | 1,481,093 | ||||||||||||
Redeemed | (2,787,542 | ) | (25,332,292 | ) | (5,653,429 | ) | (50,792,438 | ) | ||||||||
32,775 | 55,369 | (3,147,365 | ) | (28,415,751 | ) | |||||||||||
Institutional Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 541,184 | 4,925,673 | 423,252 | 3,859,467 | ||||||||||||
Issued in reinvestment of distributions | 21,111 | 195,280 | 32,478 | 299,125 | ||||||||||||
Redeemed | (691,702 | ) | (6,276,875 | ) | (1,625,818 | ) | (14,879,113 | ) | ||||||||
(129,407 | ) | (1,155,922 | ) | (1,170,088 | ) | (10,720,521 | ) | |||||||||
A Class/Shares Authorized | 35,000,000 | 35,000,000 | ||||||||||||||
Sold | 490,174 | 4,480,950 | 1,000,371 | 8,676,341 | ||||||||||||
Issued in reinvestment of distributions | 1,453 | 13,148 | 8,817 | 79,446 | ||||||||||||
Redeemed | (443,730 | ) | (3,974,612 | ) | (1,864,354 | ) | (16,217,606 | ) | ||||||||
47,897 | 519,486 | (855,166 | ) | (7,461,819 | ) | |||||||||||
B Class/Shares Authorized | N/A | 10,000,000 | ||||||||||||||
Sold | 3,403 | 30,316 | ||||||||||||||
Redeemed | (101,931 | ) | (836,156 | ) | ||||||||||||
(98,528 | ) | (805,840 | ) | |||||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 48,582 | 416,840 | 195,017 | 1,642,864 | ||||||||||||
Redeemed | (60,360 | ) | (509,608 | ) | (329,591 | ) | (2,780,205 | ) | ||||||||
(11,778 | ) | (92,768 | ) | (134,574 | ) | (1,137,341 | ) | |||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 61,813 | 552,710 | 50,734 | 453,279 | ||||||||||||
Redeemed | (33,925 | ) | (301,023 | ) | (34,078 | ) | (307,011 | ) | ||||||||
27,888 | 251,687 | 16,656 | 146,268 | |||||||||||||
Net increase (decrease) | (32,625 | ) | $(422,148 | ) | (5,389,065 | ) | $(48,395,004 | ) |
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.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||||||
Investment Securities | ||||||||||||
Domestic Common Stocks | $238,173,697 | — | — | |||||||||
Foreign Common Stocks | 14,775,736 | $147,784,527 | — | |||||||||
Temporary Cash Investments | — | 3,132,978 | — | |||||||||
Total Value of Investment Securities | $252,949,433 | $150,917,505 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $332,632,315 | |||
Gross tax appreciation of investments | $86,420,497 | |||
Gross tax depreciation of investments | (15,185,874 | ) | ||
Net tax appreciation (depreciation) of investments | $71,234,623 |
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, 2011, the fund had accumulated capital losses of $(60,962,868), 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 Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(211,649) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
18
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||||||
2012(3) | $8.52 | 0.03 | 0.34 | 0.37 | (0.03 | ) | — | (0.03 | ) | $8.86 | 4.31 | % | 1.10 | %(4) | 0.59 | %(4) | 26 | % | $336,062 | |||||||||||||||||
2011 | $8.41 | 0.03 | 0.13 | 0.16 | (0.05 | ) | — | (0.05 | ) | $8.52 | 1.82 | % | 1.11 | % | 0.28 | % | 53 | % | $322,672 | |||||||||||||||||
2010 | $7.80 | 0.03 | 0.64 | 0.67 | (0.06 | ) | — | (0.06 | ) | $8.41 | 8.61 | % | 1.16 | % | 0.33 | % | 100 | % | $344,950 | |||||||||||||||||
2009 | $5.90 | 0.04 | 1.86 | 1.90 | — | (5) | — | — | (5) | $7.80 | 32.24 | % | 1.22 | % | 0.62 | % | 103 | % | $346,590 | |||||||||||||||||
2008 | $12.69 | 0.04 | (4.75 | ) | (4.71 | ) | — | (2.08 | ) | (2.08 | ) | $5.90 | (44.01 | )% | 1.26 | % | 0.40 | % | 121 | % | $274,599 | |||||||||||||||
2007 | $10.52 | 0.03 | 2.41 | 2.44 | (0.05 | ) | (0.22 | ) | (0.27 | ) | $12.69 | 23.73 | % | 1.30 | % | 0.29 | % | 108 | % | $481,553 | ||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||||||
2012(3) | $8.60 | 0.04 | 0.35 | 0.39 | (0.05 | ) | — | (0.05 | ) | $8.94 | 4.48 | % | 0.90 | %(4) | 0.79 | %(4) | 26 | % | $36,256 | |||||||||||||||||
2011 | $8.49 | 0.04 | 0.13 | 0.17 | (0.06 | ) | — | (0.06 | ) | $8.60 | 2.00 | % | 0.91 | % | 0.48 | % | 53 | % | $35,991 | |||||||||||||||||
2010 | $7.90 | 0.04 | 0.64 | 0.68 | (0.09 | ) | — | (0.09 | ) | $8.49 | 8.68 | % | 0.96 | % | 0.53 | % | 100 | % | $45,459 | |||||||||||||||||
2009 | $5.97 | 0.05 | 1.89 | 1.94 | (0.01 | ) | — | (0.01 | ) | $7.90 | 32.61 | % | 1.02 | % | 0.82 | % | 103 | % | $44,752 | |||||||||||||||||
2008 | $12.79 | 0.07 | (4.81 | ) | (4.74 | ) | — | (2.08 | ) | (2.08 | ) | $5.97 | (43.88 | )% | 1.05 | % | 0.61 | % | 121 | % | $28,477 | |||||||||||||||
2007 | $10.60 | 0.06 | 2.42 | 2.48 | (0.07 | ) | (0.22 | ) | (0.29 | ) | $12.79 | 23.99 | % | 1.10 | % | 0.49 | % | 108 | % | $16,298 |
19
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||||||
A Class(6) | ||||||||||||||||||||||||||||||||||||
2012(3) | $8.39 | 0.02 | 0.33 | 0.35 | — | (5) | ��� | — | (5) | $8.74 | 4.22 | % | 1.35 | %(4) | 0.34 | %(4) | 26 | % | $28,453 | |||||||||||||||||
2011 | $8.28 | — | (5) | 0.13 | 0.13 | (0.02 | ) | — | (0.02 | ) | $8.39 | 1.58 | % | 1.36 | % | 0.03 | % | 53 | % | $26,908 | ||||||||||||||||
2010 | $7.67 | 0.01 | 0.62 | 0.63 | (0.02 | ) | — | (0.02 | ) | $8.28 | 8.20 | % | 1.41 | % | 0.08 | % | 100 | % | $33,641 | |||||||||||||||||
2009 | $5.81 | 0.02 | 1.84 | 1.86 | — | — | — | $7.67 | 32.01 | % | 1.47 | % | 0.37 | % | 103 | % | $34,744 | |||||||||||||||||||
2008 | $12.56 | 0.01 | (4.68 | ) | (4.67 | ) | — | (2.08 | ) | (2.08 | ) | $5.81 | (44.17 | )% | 1.51 | % | 0.15 | % | 121 | % | $22,447 | |||||||||||||||
2007 | $10.41 | 0.01 | 2.38 | 2.39 | (0.02 | ) | (0.22 | ) | (0.24 | ) | $12.56 | 23.74 | % | 1.55 | % | 0.04 | % | 108 | % | $18,402 | ||||||||||||||||
C Class | ||||||||||||||||||||||||||||||||||||
2012(3) | $7.87 | (0.02 | ) | 0.32 | 0.30 | — | — | — | $8.17 | 3.81 | % | 2.10 | %(4) | (0.41 | )%(4) | 26 | % | $3,598 | ||||||||||||||||||
2011 | $7.81 | (0.06 | ) | 0.12 | 0.06 | — | — | — | $7.87 | 0.77 | % | 2.11 | % | (0.72 | )% | 53 | % | $3,557 | ||||||||||||||||||
2010 | $7.27 | (0.05 | ) | 0.59 | 0.54 | — | — | — | $7.81 | 7.43 | % | 2.16 | % | (0.67 | )% | 100 | % | $4,579 | ||||||||||||||||||
2009 | $5.54 | (0.02 | ) | 1.75 | 1.73 | — | — | — | $7.27 | 31.23 | % | 2.22 | % | (0.38 | )% | 103 | % | $3,535 | ||||||||||||||||||
2008 | $12.16 | (0.05 | ) | (4.49 | ) | (4.54 | ) | — | (2.08 | ) | (2.08 | ) | $5.54 | (44.64 | )% | 2.26 | % | (0.60 | )% | 121 | % | $2,382 | ||||||||||||||
2007 | $10.14 | (0.07 | ) | 2.31 | 2.24 | — | (0.22 | ) | (0.22 | ) | $12.16 | 22.54 | % | 2.30 | % | (0.71 | )% | 108 | % | $2,625 | ||||||||||||||||
R Class | ||||||||||||||||||||||||||||||||||||
2012(3) | $8.39 | 0.01 | 0.34 | 0.35 | — | — | — | $8.74 | 4.17 | % | 1.60 | %(4) | 0.09 | %(4) | 26 | % | $906 | |||||||||||||||||||
2011 | $8.29 | (0.02 | ) | 0.12 | 0.10 | — | — | — | $8.39 | 1.21 | % | 1.61 | % | (0.22 | )% | 53 | % | $636 | ||||||||||||||||||
2010 | $7.67 | (0.01 | ) | 0.63 | 0.62 | — | — | — | $8.29 | 8.08 | % | 1.66 | % | (0.17 | )% | 100 | % | $490 | ||||||||||||||||||
2009 | $5.82 | — | (5) | 1.85 | 1.85 | — | — | — | $7.67 | 31.79 | % | 1.72 | % | 0.12 | % | 103 | % | $442 | ||||||||||||||||||
2008 | $12.62 | (0.01 | ) | (4.71 | ) | (4.72 | ) | — | (2.08 | ) | (2.08 | ) | $5.82 | (44.40 | )% | 1.76 | % | (0.10 | )% | 121 | % | $253 | ||||||||||||||
2007 | $10.47 | 0.02 | 2.35 | 2.37 | — | (0.22 | ) | (0.22 | ) | $12.62 | 23.08 | % | 1.80 | % | (0.21 | )% | 108 | % | $202 |
20
Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | Prior to September 4, 2007, the A Class was referred to as the Advisor Class. |
See Notes to Financial Statements.
21
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.
22
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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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75487 1207
SEMIANNUAL REPORT | MAY 31, 2012
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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 | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 19 |
Additional Information | 22 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
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Don Pratt
3
Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWEGX | -4.86% | -22.63% | -7.32% | 7.05% | 10.06% | 4/1/94 |
MSCI All Country World ex-U.S. Mid Cap Growth Index | — | -2.94% | -21.01% | -6.61% | 6.18% | N/A(2) | — |
Institutional Class | TIDIX | -4.81% | -22.47% | -7.13% | 7.26% | 8.42% | 1/2/98 |
A Class(3) No sales charge* With sales charge* | ACIDX | -4.99% -10.46% | -22.81% -27.27% | -7.54% -8.62% | 6.80% 6.16% | 6.53% 6.09% | 4/28/98 |
C Class No sales charge* With sales charge* | TWECX | -5.39% -6.34% | -23.35% -23.35% | — — | — — | 0.52% 0.52% | 3/1/10 |
R Class | TWERX | -5.02% | -22.94% | — | — | 1.04% | 3/1/10 |
*Sales charges include initial sales charges and contingent deferred sales charges (CDSCs), as applicable. A Class shares have a 5.75% maximum initial sales charge and may be subject to a maximum CDSC of 1.00%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Benchmark data first available June 1994. |
(3) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class and did not have a front-end sales charge. Performance prior to that date has been adjusted to reflect this charge. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.42% | 1.22% | 1.67% | 2.42% | 1.92% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. Historically, small company stocks have been more volatile than the stocks of larger, more established companies. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the index are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the index do not.
4
Fund Characteristics |
MAY 31, 2012 | |
Top Ten Holdings | % of net assets |
Gemalto NV | 2.7% |
Technip SA | 2.5% |
Subsea 7 SA | 2.5% |
Aggreko plc | 2.0% |
Babcock International Group plc | 2.0% |
Intercontinental Hotels Group plc | 1.8% |
Mellanox Technologies Ltd. | 1.8% |
AAC Technologies Holdings, Inc. | 1.8% |
Swedish Match AB | 1.8% |
Zodiac Aerospace | 1.7% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.6% |
Temporary Cash Investments | 0.2% |
Other Assets and Liabilities | 0.2% |
Investments by Country | % of net assets |
United Kingdom | 17.1% |
Japan | 9.8% |
France | 7.8% |
Canada | 7.3% |
Switzerland | 5.9% |
Sweden | 5.2% |
People’s Republic of China | 5.1% |
Netherlands | 4.9% |
Germany | 3.9% |
Taiwan (Republic of China) | 3.7% |
South Korea | 3.4% |
Hong Kong | 3.4% |
Ireland | 3.2% |
Israel | 2.7% |
Italy | 2.4% |
Norway | 2.3% |
Australia | 2.2% |
Other Countries | 9.3% |
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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 - 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $951.40 | $7.22 | 1.48% |
Institutional Class | $1,000 | $951.90 | $6.25 | 1.28% |
A Class | $1,000 | $950.10 | $8.43 | 1.73% |
C Class | $1,000 | $946.10 | $12.07 | 2.48% |
R Class | $1,000 | $949.80 | $9.65 | 1.98% |
Hypothetical | ||||
Investor Class | $1,000 | $1,017.60 | $7.47 | 1.48% |
Institutional Class | $1,000 | $1,018.60 | $6.46 | 1.28% |
A Class | $1,000 | $1,016.35 | $8.72 | 1.73% |
C Class | $1,000 | $1,012.60 | $12.48 | 2.48% |
R Class | $1,000 | $1,015.10 | $9.97 | 1.98% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 99.6% | ||||||||
AUSTRALIA — 2.2% | ||||||||
Campbell Brothers Ltd. | 55,200 | $3,126,743 | ||||||
Iluka Resources Ltd. | 293,200 | 3,827,121 | ||||||
Mesoblast Ltd.(1) | 497,100 | 3,229,780 | ||||||
Oil Search Ltd. | 481,219 | 3,192,223 | ||||||
13,375,867 | ||||||||
BELGIUM — 1.3% | ||||||||
Umicore SA | 164,185 | 7,791,709 | ||||||
BERMUDA — 1.0% | ||||||||
Golar LNG Ltd. | 184,898 | 6,476,977 | ||||||
BRAZIL — 0.8% | ||||||||
BR Properties SA | 454,000 | 5,177,381 | ||||||
CANADA — 7.3% | ||||||||
Alimentation Couche Tard, Inc. B Shares | 137,477 | 5,437,319 | ||||||
Franco-Nevada Corp. | 215,000 | 9,040,470 | ||||||
Imax Corp.(1) | 173,600 | 3,687,264 | ||||||
Intact Financial Corp. | 115,930 | 7,075,788 | ||||||
Methanex Corp. | 175,200 | 4,898,849 | ||||||
SXC Health Solutions Corp.(1) | 86,500 | 7,947,766 | ||||||
Tim Hortons, Inc. | 128,200 | 6,832,948 | ||||||
44,920,404 | ||||||||
FINLAND — 0.7% | ||||||||
Nokian Renkaat Oyj | 123,200 | 4,615,807 | ||||||
FRANCE — 7.8% | ||||||||
Edenred | 93,306 | 2,461,481 | ||||||
Iliad SA | 82,196 | 10,595,490 | ||||||
Ingenico | 101,755 | 4,301,790 | ||||||
Sodexo | 57,000 | 4,137,207 | ||||||
Technip SA | 170,800 | 15,567,131 | ||||||
Zodiac Aerospace | 110,700 | 10,790,298 | ||||||
47,853,397 | ||||||||
GERMANY — 3.9% | ||||||||
GEA Group AG | 289,896 | 7,377,036 | ||||||
Hugo Boss AG Preference Shares | 95,635 | 9,288,752 | ||||||
Lanxess AG | 108,831 | 7,211,584 | ||||||
23,877,372 | ||||||||
HONG KONG — 3.4% | ||||||||
China Resources Cement Holdings Ltd. | 4,132,000 | 3,023,850 | ||||||
Link Real Estate Investment Trust (The) | 1,215,500 | 4,666,838 | ||||||
Melco Crown Entertainment Ltd. ADR(1) | 860,441 | 10,110,182 | ||||||
Nine Dragons Paper Holdings Ltd. | 5,164,000 | 3,240,162 | ||||||
21,041,032 | ||||||||
INDIA — 1.1% | ||||||||
IRB Infrastructure Developers Ltd. | 561,508 | 1,126,365 | ||||||
LIC Housing Finance Ltd. | 395,900 | 1,671,159 | ||||||
Yes Bank Ltd. | 628,500 | 3,691,595 | ||||||
6,489,119 | ||||||||
INDONESIA — 0.6% | ||||||||
PT Semen Gresik (Persero) Tbk | 2,967,500 | 3,456,822 | ||||||
IRELAND — 3.2% | ||||||||
Elan Corp. plc ADR(1) | 420,100 | 5,864,596 | ||||||
Experian plc | 505,300 | 7,047,854 | ||||||
James Hardie Industries SE | 271,147 | 1,959,802 | ||||||
UBM plc | 613,703 | 5,060,239 | ||||||
19,932,491 | ||||||||
ISRAEL — 2.7% | ||||||||
Allot Communications Ltd.(1) | 211,800 | 5,511,036 | ||||||
Mellanox Technologies Ltd.(1) | 185,609 | 11,220,064 | ||||||
16,731,100 | ||||||||
ITALY — 2.4% | ||||||||
Fiat SpA(1) | 579,600 | 2,723,368 | ||||||
Pirelli & C SpA | 937,741 | 9,293,530 | ||||||
Prysmian SpA | 201,800 | 2,849,585 | ||||||
14,866,483 | ||||||||
JAPAN — 9.8% | ||||||||
Aisin Seiki Co. Ltd. | 142,000 | 4,448,826 | ||||||
Anritsu Corp. | 126,000 | 1,355,513 | ||||||
Chiyoda Corp. | 802,000 | 9,508,142 | ||||||
Daihatsu Motor Co. Ltd. | 185,000 | 3,182,491 | ||||||
McDonald’s Holdings Co. Japan Ltd. | 106,900 | 3,119,963 | ||||||
Nikon Corp. | 276,100 | 7,695,283 | ||||||
Nippon Television Network Corp. | 49,600 | 7,171,618 | ||||||
Nippon Yusen KK | 933,000 | 2,500,383 | ||||||
Nisshinbo Holdings, Inc. | 450,000 | 3,594,946 | ||||||
NSK Ltd. | 523,000 | 3,223,698 | ||||||
OKUMA Corp. | 578,000 | 3,806,126 | ||||||
Park24 Co. Ltd. | 566,300 | 7,508,751 | ||||||
Shimano, Inc. | 53,300 | 3,241,124 | ||||||
60,356,864 |
8
Shares | Value | |||||||
LUXEMBOURG — 0.4% | ||||||||
Pacific Drilling SA(1) | 259,265 | $2,203,752 | ||||||
NETHERLANDS — 4.9% | ||||||||
ASM International | 64,400 | 2,189,842 | ||||||
Fugro NV CVA | 53,996 | 3,104,623 | ||||||
Gemalto NV | 262,800 | 16,738,295 | ||||||
Koninklijke Vopak NV | 136,400 | 8,039,959 | ||||||
30,072,719 | ||||||||
NORWAY — 2.3% | ||||||||
Aker Solutions ASA | 569,461 | 7,487,394 | ||||||
Schibsted ASA | 217,589 | 6,746,615 | ||||||
14,234,009 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 5.1% | ||||||||
AAC Technologies Holdings, Inc. | 3,546,000 | 11,193,254 | ||||||
Evergrande Real Estate Group Ltd.(1) | 5,724,000 | 3,141,671 | ||||||
Focus Media Holding Ltd. ADR | 148,200 | 3,082,560 | ||||||
Great Wall Motor Co. Ltd. H Shares | 3,093,500 | 6,353,163 | ||||||
Lenovo Group Ltd. | 5,576,000 | 4,741,527 | ||||||
Longfor Properties Co. Ltd. | 1,779,000 | 2,759,650 | ||||||
31,271,825 | ||||||||
SINGAPORE — 1.0% | ||||||||
Golden Agri-Resources Ltd. | 5,637,000 | 2,843,435 | ||||||
Neptune Orient Lines Ltd.(1) | 4,314,000 | 3,565,427 | ||||||
6,408,862 | ||||||||
SOUTH AFRICA — 1.0% | ||||||||
Discovery Holdings Ltd. | 544,630 | 3,189,480 | ||||||
Mr Price Group Ltd. | 242,266 | 2,973,359 | ||||||
6,162,839 | ||||||||
SOUTH KOREA — 3.4% | ||||||||
Celltrion, Inc. | 194,116 | 5,517,976 | ||||||
Hotel Shilla Co. Ltd. | 35,955 | 1,638,957 | ||||||
NCSoft Corp. | 41,200 | 8,377,886 | ||||||
Nexen Tire Corp. | 321,820 | 5,698,825 | ||||||
21,233,644 | ||||||||
SPAIN — 1.4% | ||||||||
Grifols SA(1) | 381,100 | 8,644,721 | ||||||
SWEDEN — 5.2% | ||||||||
Autoliv, Inc. | 55,901 | 3,231,637 | ||||||
Elekta AB B Shares | 93,000 | 4,458,930 | ||||||
Hexagon AB B Shares | 504,200 | 8,918,673 | ||||||
Lundin Petroleum AB(1) | 254,658 | 4,487,057 | ||||||
Swedish Match AB | 293,589 | 11,113,907 | ||||||
32,210,204 | ||||||||
SWITZERLAND — 5.9% | ||||||||
Aryzta AG(1) | 134,061 | 6,045,063 | ||||||
Clariant AG(1) | 949,100 | 9,668,342 | ||||||
DKSH Holding AG(1) | 48,927 | 2,442,950 | ||||||
GAM Holding AG(1) | 662,586 | 6,957,716 | ||||||
Sika AG | 2,000 | 3,613,527 | ||||||
Wolseley plc | 223,300 | 7,598,832 | ||||||
36,326,430 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 3.7% | ||||||||
Catcher Technology Co. Ltd. | 1,405,085 | 8,920,651 | ||||||
Hiwin Technologies Corp. | 388,000 | 3,886,760 | ||||||
Radiant Opto-Electronics Corp. | 1,137,000 | 5,123,509 | ||||||
Simplo Technology Co. Ltd. | 712,000 | 5,104,798 | ||||||
23,035,718 | ||||||||
UNITED KINGDOM — 17.1% | ||||||||
Aggreko plc | 364,301 | 12,340,907 | ||||||
Ashmore Group plc | 894,983 | 4,680,127 | ||||||
Ashtead Group plc | 1,909,515 | 6,777,602 | ||||||
Babcock International Group plc | 935,457 | 12,254,675 | ||||||
BTG plc(1) | 408,100 | 2,427,800 | ||||||
Bunzl plc | 203,845 | 3,213,918 | ||||||
Burberry Group plc | 202,500 | 4,266,312 | ||||||
Croda International plc | 307,100 | 10,583,045 | ||||||
Intercontinental Hotels Group plc | 479,050 | 11,266,640 | ||||||
Intertek Group plc | 145,167 | 5,917,695 | ||||||
Johnson Matthey plc | 248,900 | 8,331,894 | ||||||
Ophir Energy plc(1) | 415,136 | 3,723,681 | ||||||
Persimmon plc | 242,111 | 2,119,444 | ||||||
Subsea 7 SA(1) | 770,518 | 15,158,599 | ||||||
Telecity Group plc(1) | 216,000 | 2,723,117 | ||||||
105,785,456 | ||||||||
TOTAL COMMON STOCKS (Cost $590,350,521) | 614,553,004 |
9
Value | ||||
Temporary Cash Investments — 0.2% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $569,229), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $557,776) | $557,774 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $571,901), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $557,775) | 557,773 | |||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $392,353), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $384,023) | 384,022 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $1,499,569) | 1,499,569 | |||
TOTAL INVESTMENT SECURITIES — 99.8% (Cost $591,850,090) | 616,052,573 | |||
OTHER ASSETS AND LIABILITIES — 0.2% | 996,933 | |||
TOTAL NET ASSETS — 100.0% | $617,049,506 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 22.8% |
Consumer Discretionary | 21.2% |
Information Technology | 14.1% |
Materials | 12.5% |
Energy | 9.9% |
Financials | 7.0% |
Health Care | 6.3% |
Consumer Staples | 4.1% |
Telecommunication Services | 1.7% |
Cash and Equivalents* | 0.4% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
CVA = Certificaten Van Aandelen
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $591,850,090) | $616,052,573 | |||
Foreign currency holdings, at value (cost of $471,764) | 467,741 | |||
Receivable for investments sold | 1,959,173 | |||
Receivable for capital shares sold | 20,904 | |||
Dividends and interest receivable | 1,730,358 | |||
Other assets | 177,774 | |||
620,408,523 | ||||
Liabilities | ||||
Payable for investments purchased | 1,815,512 | |||
Payable for capital shares redeemed | 731,048 | |||
Accrued management fees | 811,692 | |||
Distribution and service fees payable | 765 | |||
3,359,017 | ||||
Net Assets | $617,049,506 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $934,223,140 | |||
Undistributed net investment income | 2,026,812 | |||
Accumulated net realized loss | (343,400,463 | ) | ||
Net unrealized appreciation | 24,200,017 | |||
$617,049,506 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $559,030,797 | 63,670,578 | $8.78 |
Institutional Class, $0.01 Par Value | $55,158,415 | 6,210,007 | $8.88 |
A Class, $0.01 Par Value | $2,525,313 | 294,994 | $8.56* |
C Class, $0.01 Par Value | $91,406 | 10,624 | $8.60 |
R Class, $0.01 Par Value | $243,575 | 28,006 | $8.70 |
*Maximum offering price $9.08 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $836,561) | $7,329,625 | |||
Interest | 3,138 | |||
7,332,763 | ||||
Expenses: | ||||
Management fees | 5,160,405 | |||
Distribution and service fees: | ||||
A Class | 3,654 | |||
C Class | 517 | |||
R Class | 680 | |||
Directors’ fees and expenses | 12,349 | |||
Other expenses | 33,661 | |||
5,211,266 | ||||
Net investment income (loss) | 2,121,497 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 1,163,257 | |||
Foreign currency transactions | (367,119 | ) | ||
796,138 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | (32,049,679 | ) | ||
Translation of assets and liabilities in foreign currencies | 66,418 | |||
(31,983,261 | ) | |||
Net realized and unrealized gain (loss) | (31,187,123 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(29,065,626 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $2,121,497 | $1,621,324 | ||||||
Net realized gain (loss) | 796,138 | 47,818,057 | ||||||
Change in net unrealized appreciation (depreciation) | (31,983,261 | ) | (110,079,679 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (29,065,626 | ) | (60,640,298 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (127,731 | ) | — | |||||
Institutional Class | (157,604 | ) | — | |||||
Decrease in net assets from distributions | (285,335 | ) | — | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (114,941,420 | ) | (158,780,647 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 11,752 | 135,065 | ||||||
Net increase (decrease) in net assets | (144,280,629 | ) | (219,285,880 | ) | ||||
Net Assets | ||||||||
Beginning of period | 761,330,135 | 980,616,015 | ||||||
End of period | $617,049,506 | $761,330,135 | ||||||
Undistributed net investment income | $2,026,812 | $190,650 |
See Notes to Financial Statements.
13
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 offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share 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.
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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. Prior to November 14, 2011, the redemption fee applied to shares held less than 180 days.
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, 2012 was 1.46% for the Investor Class, A Class, C Class and R Class and 1.26% 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, 2012 are detailed in the Statement of Operations.
Other Expenses — The fund’s total other expenses include the fees and expenses of the fund’s independent directors and their legal counsel, interest, and other miscellaneous expenses. A portion of these expenses was due to nonrecurring expenses paid by the fund. The impact of total other expenses to the annualized ratio of operating expenses to average net assets was 0.02% for the six months ended May 31, 2012.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc., 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
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $585,316,108 and $687,199,441, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 400,000,000 | 400,000,000 | ||||||||||||||
Sold | 934,362 | $8,668,554 | 7,072,349 | $75,279,226 | ||||||||||||
Issued in reinvestment of distributions | 13,080 | 121,513 | — | — | ||||||||||||
Redeemed | (8,958,583 | ) | (83,427,447 | ) | (24,303,658 | ) | (240,508,259 | ) | ||||||||
(8,011,141 | ) | (74,637,380 | ) | (17,231,309 | ) | (165,229,033 | ) | |||||||||
Institutional Class/Shares Authorized | 70,000,000 | 70,000,000 | ||||||||||||||
Sold | 353,260 | 3,308,785 | 3,483,268 | 35,787,791 | ||||||||||||
Issued in reinvestment of distributions | 16,519 | 155,111 | — | — | ||||||||||||
Redeemed | (4,553,814 | ) | (43,459,203 | ) | (2,818,293 | ) | (27,863,390 | ) | ||||||||
(4,184,035 | ) | (39,995,307 | ) | 664,975 | 7,924,401 | |||||||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 34,669 | 315,877 | 91,116 | 944,432 | ||||||||||||
Redeemed | (93,240 | ) | (856,227 | ) | (235,457 | ) | (2,458,608 | ) | ||||||||
(58,571 | ) | (540,350 | ) | (144,341 | ) | (1,514,176 | ) | |||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 3,289 | 29,904 | 11,986 | 130,918 | ||||||||||||
Redeemed | (2,301 | ) | (21,462 | ) | (10,143 | ) | (92,757 | ) | ||||||||
988 | 8,442 | 1,843 | 38,161 | |||||||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 32,641 | 290,343 | — | — | ||||||||||||
Redeemed | (7,576 | ) | (67,168 | ) | — | — | ||||||||||
25,065 | 223,175 | — | — | |||||||||||||
Net increase (decrease) | (12,227,694 | ) | $(114,941,420 | ) | (16,708,832 | ) | $(158,780,647 | ) |
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.
17
The following is a summary of the level classifications as of period end. The Schedule of Investments provides additional information on the fund’s portfolio holdings.
Level 1 | Level 2 | Level 3 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks | $51,388,068 | $563,164,936 | — | |||||||||
Temporary Cash Investments | — | 1,499,569 | — | |||||||||
Total Value of Investment Securities | $51,388,068 | $564,664,505 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
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.
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, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $595,285,654 | |||
Gross tax appreciation of investments | $57,673,115 | |||
Gross tax depreciation of investments | (36,906,196 | ) | ||
Net tax appreciation (depreciation) of investments | $20,766,919 |
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, 2011, the fund had accumulated capital losses of $(325,858,641), 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 $(84,373,986) and $(241,484,655) expire in 2016 and 2017 respectively. The Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(8,497,210) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
18
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||
Investor Class | |||||||||||||||||||||||||||||||||||||
2012(3) | $9.22 | 0.03 | (0.47 | ) | (0.44 | ) | — | (4) | — | — | (4) | $8.78 | (4.86 | )% | 1.48 | %(5) | 0.57 | %(5) | 83 | % | $559,031 | ||||||||||||||||
2011 | $9.88 | 0.02 | (0.68 | ) | (0.66 | ) | — | — | — | $9.22 | (6.58 | )% | 1.42 | % | 0.14 | % | 167 | % | $660,971 | ||||||||||||||||||
2010 | $8.55 | — | (4) | 1.35 | 1.35 | (0.02 | ) | — | (0.02 | ) | $9.88 | 15.80 | % | 1.43 | % | 0.00 | %(6) | 199 | % | $878,530 | |||||||||||||||||
2009 | $6.26 | 0.01 | 2.34 | 2.35 | (0.06 | ) | — | (0.06 | ) | $8.55 | 38.06 | % | 1.48 | % | 0.13 | % | 207 | % | $872,865 | ||||||||||||||||||
2008 | $18.40 | 0.06 | (8.09 | ) | (8.03 | ) | (0.06 | ) | (4.05 | ) | (4.11 | ) | $6.26 | (55.48 | )% | 1.37 | % | 0.51 | % | 175 | % | $713,764 | |||||||||||||||
2007 | $18.01 | 0.05 | 4.60 | 4.65 | — | (4.26 | ) | (4.26 | ) | $18.40 | 32.18 | % | 1.36 | % | 0.30 | % | 162 | % | $1,758,335 | ||||||||||||||||||
Institutional Class | |||||||||||||||||||||||||||||||||||||
2012(3) | $9.34 | 0.03 | (0.47 | ) | (0.44 | ) | (0.02 | ) | — | (0.02 | ) | $8.88 | (4.81 | )% | 1.28 | %(5) | 0.77 | %(5) | 83 | % | $55,158 | ||||||||||||||||
2011 | $9.99 | 0.03 | (0.68 | ) | (0.65 | ) | — | — | — | $9.34 | (6.41 | )% | 1.22 | % | 0.34 | % | 167 | % | $97,063 | ||||||||||||||||||
2010 | $8.66 | 0.02 | 1.36 | 1.38 | (0.05 | ) | — | (0.05 | ) | $9.99 | 16.06 | % | 1.23 | % | 0.20 | % | 199 | % | $97,167 | ||||||||||||||||||
2009 | $6.34 | 0.02 | 2.37 | 2.39 | (0.07 | ) | — | (0.07 | ) | $8.66 | 38.32 | % | 1.28 | % | 0.33 | % | 207 | % | $79,830 | ||||||||||||||||||
2008 | $18.59 | 0.08 | (8.18 | ) | (8.10 | ) | (0.10 | ) | (4.05 | ) | (4.15 | ) | $6.34 | (55.37 | )% | 1.17 | % | 0.71 | % | 175 | % | $55,091 | |||||||||||||||
2007 | $18.16 | 0.09 | 4.64 | 4.73 | — | (4.30 | ) | (4.30 | ) | $18.59 | 32.45 | % | 1.16 | % | 0.50 | % | 162 | % | $145,723 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||
A Class(7) | |||||||||||||||||||||||||||||||||||||
2012(3) | $9.00 | 0.01 | (0.45 | ) | (0.44 | ) | — | — | — | $8.56 | (4.99 | )% | 1.73 | %(5) | 0.32 | %(5) | 83 | % | $2,525 | ||||||||||||||||||
2011 | $9.67 | (0.02 | ) | (0.65 | ) | (0.67 | ) | — | — | — | $9.00 | (6.83 | )% | 1.67 | % | (0.11 | )% | 167 | % | $3,182 | |||||||||||||||||
2010 | $8.37 | (0.02 | ) | 1.32 | 1.30 | — | — | — | $9.67 | 15.53 | % | 1.68 | % | (0.25 | )% | 199 | % | $4,814 | |||||||||||||||||||
2009 | $6.13 | — | (4) | 2.29 | 2.29 | (0.05 | ) | — | (0.05 | ) | $8.37 | 37.71 | % | 1.73 | % | (0.12 | )% | 207 | % | $6,342 | |||||||||||||||||
2008 | $18.08 | 0.06 | (7.95 | ) | (7.89 | ) | (0.01 | ) | (4.05 | ) | (4.06 | ) | $6.13 | (55.56 | )% | 1.63 | % | 0.25 | % | 175 | % | $10,622 | |||||||||||||||
2007 | $17.76 | 0.07 | 4.46 | 4.53 | — | (4.21 | ) | (4.21 | ) | $18.08 | 31.83 | % | 1.61 | % | 0.05 | % | 162 | % | $2,494 | ||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||
2012(3) | $9.08 | (0.02 | ) | (0.46 | ) | (0.48 | ) | — | — | — | $8.60 | (5.39 | )% | 2.48 | %(5) | (0.43 | )%(5) | 83 | % | $91 | |||||||||||||||||
2011 | $9.82 | (0.07 | ) | (0.67 | ) | (0.74 | ) | — | — | — | $9.08 | (7.43 | )% | 2.42 | % | (0.86 | )% | 167 | % | $87 | |||||||||||||||||
2010(8) | $8.50 | (0.05 | ) | 1.37 | 1.32 | — | — | — | $9.82 | 15.53 | % | 2.43 | %(5) | (0.77 | )%(5) | 199 | %(9) | $77 | |||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||
2012(3) | $9.15 | 0.02 | (0.47 | ) | (0.45 | ) | — | — | — | $8.70 | (5.02 | )% | 1.98 | %(5) | 0.07 | %(5) | 83 | % | $244 | ||||||||||||||||||
2011 | $9.86 | (0.04 | ) | (0.67 | ) | (0.71 | ) | — | — | — | $9.15 | (7.10 | )% | 1.92 | % | (0.36 | )% | 167 | % | $27 | |||||||||||||||||
2010(8) | $8.50 | (0.01 | ) | 1.37 | 1.36 | — | — | — | $9.86 | 16.00 | % | 1.93 | %(5) | (0.16 | )%(5) | 199 | %(9) | $29 |
20
Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Per-share amount was less than $0.005. |
(5) | Annualized. |
(6) | Ratio was less than 0.005%. |
(7) | Prior to March 1, 2010, the A Class was referred to as the Advisor Class. |
(8) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(9) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements.
21
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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75490 1207
SEMIANNUAL REPORT | MAY 31, 2012
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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 | 19 |
Additional Information | 21 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
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Don Pratt
3
Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | AIOIX | 1.84% | -16.35% | -5.24% | 10.87% | 11.24% | 6/1/01 |
MSCI All Country World ex-U.S. Small Cap Growth Index | — | -1.23% | -19.89% | -4.53% | 7.96% | 6.41%(2) | — |
Institutional Class | ACIOX | 1.82% | -16.12% | -5.06% | — | 13.98% | 1/9/03 |
A Class No sales charge* With sales charge* | AIVOX | 1.67% -4.10% | -16.48% -21.24% | — — | — — | 4.82% 2.07% | 3/1/10 |
C Class No sales charge* With sales charge* | AIOCX | 1.34% 0.34% | -17.06% -17.06% | — — | — — | 4.09% 4.09% | 3/1/10 |
R Class | AIORX | 1.67% | -16.60% | — | — | 4.64% | 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) | 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 |
1.83% | 1.63% | 2.08% | 2.83% | 2.33% |
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, 2012 | |
Top Ten Holdings | % of net assets |
Ingenico | 2.7% |
Christian Hansen Holding A/S | 2.4% |
Aberdeen Asset Management plc | 2.3% |
Mellanox Technologies Ltd. | 2.0% |
Dollarama, Inc. | 2.0% |
Telecity Group plc | 2.0% |
Ashtead Group plc | 1.9% |
Spectris plc | 1.8% |
SXC Health Solutions Corp. | 1.8% |
Hotel Shilla Co. Ltd. | 1.8% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.6% |
Rights | —* |
Total Equity Exposure | 99.6% |
Temporary Cash Investments | 0.3% |
Other Assets and Liabilities | 0.1% |
*Category is less than 0.05% of total net assets. | |
Investments by Country | % of net assets |
United Kingdom | 20.2% |
Japan | 12.5% |
Canada | 6.9% |
Germany | 6.5% |
France | 5.6% |
South Korea | 5.5% |
Australia | 4.0% |
Norway | 3.1% |
People’s Republic of China | 2.9% |
Hong Kong | 2.9% |
Brazil | 2.7% |
Taiwan (Republic of China) | 2.6% |
India | 2.5% |
Israel | 2.4% |
Denmark | 2.4% |
Italy | 2.3% |
Indonesia | 2.2% |
Other Countries | 12.4% |
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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $1,018.40 | $9.44 | 1.87% |
Institutional Class | $1,000 | $1,018.20 | $8.43 | 1.67% |
A Class | $1,000 | $1,016.70 | $10.69 | 2.12% |
C Class | $1,000 | $1,013.40 | $14.45 | 2.87% |
R Class | $1,000 | $1,016.70 | $11.95 | 2.37% |
Hypothetical | ||||
Investor Class | $1,000 | $1,015.65 | $9.42 | 1.87% |
Institutional Class | $1,000 | $1,016.65 | $8.42 | 1.67% |
A Class | $1,000 | $1,014.40 | $10.68 | 2.12% |
C Class | $1,000 | $1,010.65 | $14.43 | 2.87% |
R Class | $1,000 | $1,013.15 | $11.93 | 2.37% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 99.6% | ||||||||
AUSTRALIA — 4.0% | ||||||||
Aristocrat Leisure Ltd. | 301,503 | $860,523 | ||||||
Atlas Iron Ltd. | 168,293 | 355,737 | ||||||
Campbell Brothers Ltd. | 10,220 | 578,901 | ||||||
Flight Centre Ltd. | 44,437 | 787,806 | ||||||
NRW Holdings Ltd. | 188,901 | 614,588 | ||||||
SAI Global Ltd. | 43,900 | 199,276 | ||||||
3,396,831 | ||||||||
BERMUDA — 1.8% | ||||||||
Golar LNG Ltd. | 20,044 | 702,141 | ||||||
Lancashire Holdings Ltd. | 71,405 | 828,672 | ||||||
1,530,813 | ||||||||
BRAZIL — 2.7% | ||||||||
CETIP SA – Balcao Organizado de Ativos e Derivativos | 14,946 | 213,720 | ||||||
Marcopolo SA Preference Shares | 229,300 | 1,059,611 | ||||||
Mills Estruturas e Servicos de Engenharia SA | 81,000 | 991,591 | ||||||
2,264,922 | ||||||||
CANADA — 6.9% | ||||||||
Africa Oil Corp.(1) | 78,569 | 803,300 | ||||||
AuRico Gold, Inc.(1) | 88,831 | 662,244 | ||||||
Canadian Western Bank | 30,982 | 798,210 | ||||||
Detour Gold Corp.(1) | 19,280 | 395,550 | ||||||
Dollarama, Inc. | 30,154 | 1,669,659 | ||||||
SXC Health Solutions Corp.(1) | 16,361 | 1,503,276 | ||||||
5,832,239 | ||||||||
DENMARK — 2.4% | ||||||||
Christian Hansen Holding A/S | 72,348 | 2,015,285 | ||||||
FINLAND — 1.4% | ||||||||
Huhtamaki Oyj | 52,328 | 723,386 | ||||||
Outotec Oyj | 10,544 | 414,337 | ||||||
1,137,723 | ||||||||
FRANCE — 5.6% | ||||||||
CFAO SA | 13,157 | 558,665 | ||||||
Eurofins Scientific | 11,022 | 1,240,213 | ||||||
Ingenico | 54,230 | 2,292,625 | ||||||
Zodiac Aerospace | 5,990 | 583,865 | ||||||
4,675,368 | ||||||||
GERMANY — 6.5% | ||||||||
Delticom AG | 5,577 | 433,756 | ||||||
Gerry Weber International AG(1) | 33,616 | 1,287,721 | ||||||
Gildemeister AG | 80,914 | 1,337,171 | ||||||
KUKA AG(1) | 30,984 | 678,118 | ||||||
TAG Immobilien AG(1) | 47,569 | 470,553 | ||||||
Wirecard AG | 49,957 | 903,104 | ||||||
XING AG(1) | 6,574 | 362,542 | ||||||
5,472,965 | ||||||||
HONG KONG — 2.9% | ||||||||
China Overseas Grand Oceans Group Ltd.(1) | 814,500 | 1,078,787 | ||||||
Giordano International Ltd. | 536,000 | 392,252 | ||||||
Vinda International Holdings Ltd. | 594,000 | 970,414 | ||||||
2,441,453 | ||||||||
INDIA — 2.5% | ||||||||
Exide Industries Ltd. | 156,664 | 330,025 | ||||||
Hathway Cable & Datacom Ltd.(1) | 123,575 | 361,763 | ||||||
Havells India Ltd. | 44,401 | 442,014 | ||||||
Mahindra & Mahindra Financial Services Ltd. | 36,698 | 414,995 | ||||||
McLeod Russel India Ltd. | 106,216 | 528,550 | ||||||
2,077,347 | ||||||||
INDONESIA — 2.2% | ||||||||
PT Jasa Marga | 1,099,500 | 602,386 | ||||||
PT Mitra Adiperkasa Tbk | 820,500 | 611,010 | ||||||
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk | 2,367,500 | 604,468 | ||||||
1,817,864 | ||||||||
IRELAND — 0.6% | ||||||||
Grafton Group plc | 71,116 | 242,876 | ||||||
Kentz Corp. Ltd. | 48,588 | 297,364 | ||||||
540,240 | ||||||||
ISRAEL — 2.4% | ||||||||
Avner Oil Exploration LLP(1) | 587,619 | 328,299 | ||||||
Mellanox Technologies Ltd.(1) | 28,561 | 1,726,512 | ||||||
2,054,811 | ||||||||
ITALY — 2.3% | ||||||||
Banca Generali SpA | 111,774 | 1,050,385 | ||||||
Salvatore Ferragamo Italia SpA | 44,509 | 910,836 | ||||||
1,961,221 | ||||||||
JAPAN — 12.5% | ||||||||
Anritsu Corp. | 76,000 | 817,611 | ||||||
Dainippon Screen Manufacturing Co. Ltd. | 83,000 | 599,515 | ||||||
Disco Corp. | 16,300 | 870,540 | ||||||
Horiba Ltd. | 27,900 | 929,644 |
8
Shares | Value | |||||||
M3, Inc. | 195 | $867,247 | ||||||
MonotaRO Co. Ltd. | 12,108 | 243,674 | ||||||
Nachi-Fujikoshi Corp. | 138,000 | 614,625 | ||||||
NET One Systems Co. Ltd. | 63,300 | 875,666 | ||||||
Nihon Kohden Corp. | 31,500 | 901,263 | ||||||
Seria Co. Ltd. | 12,800 | 221,991 | ||||||
Ship Healthcare Holdings, Inc. | 36,300 | 855,616 | ||||||
Tamron Co. Ltd. | 37,800 | 1,121,072 | ||||||
Tsubakimoto Chain Co. | 231,000 | 1,288,247 | ||||||
Zeon Corp. | 44,000 | 338,030 | ||||||
10,544,741 | ||||||||
MEXICO — 0.8% | ||||||||
Genomma Lab Internacional SAB de CV Class B(1) | 359,352 | 629,796 | ||||||
NETHERLANDS — 1.3% | ||||||||
Aalberts Industries NV | 31,267 | 503,375 | ||||||
InterXion Holding NV(1) | 36,589 | 605,914 | ||||||
1,109,289 | ||||||||
NORWAY — 3.1% | ||||||||
Algeta ASA(1) | 19,215 | 458,780 | ||||||
Det Norske Oljeselskap ASA(1) | 35,302 | 461,849 | ||||||
Petroleum Geo-Services ASA | 77,688 | 900,128 | ||||||
Tomra Systems ASA | 118,359 | 818,752 | ||||||
2,639,509 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 2.9% | ||||||||
AirTAC International Group | 151,000 | 839,788 | ||||||
Biostime International Holdings Ltd. | 248,000 | 622,433 | ||||||
China Shanshui Cement Group Ltd. | 837,000 | 667,525 | ||||||
Goodbaby International Holdings Ltd. | 1,197,000 | 331,577 | ||||||
2,461,323 | ||||||||
PHILIPPINES — 1.1% | ||||||||
International Container Terminal Services, Inc. | 297,000 | 525,664 | ||||||
Universal Robina Corp. | 293,100 | 437,915 | ||||||
963,579 | ||||||||
SINGAPORE — 1.2% | ||||||||
Biosensors International Group Ltd.(1) | 623,000 | 592,251 | ||||||
Ezion Holdings Ltd. | 678,000 | 397,245 | ||||||
989,496 | ||||||||
SOUTH KOREA — 5.5% | ||||||||
Cheil Worldwide, Inc. | 53,630 | 820,184 | ||||||
Eugene Technology Co. Ltd. | 27,832 | 541,194 | ||||||
Handsome Co. Ltd. | 22,670 | 586,798 | ||||||
Hotel Shilla Co. Ltd. | 32,540 | 1,483,289 | ||||||
Jinsung T.E.C. | 43,075 | 392,337 | ||||||
Mando Corp. | 5,830 | 795,281 | ||||||
4,619,083 | ||||||||
SWEDEN — 1.0% | ||||||||
Trelleborg AB B Shares | 90,098 | 878,097 | ||||||
SWITZERLAND — 0.8% | ||||||||
Micronas Semiconductor Holding AG(1) | 39,916 | 361,621 | ||||||
Temenos Group AG(1) | 20,406 | 327,723 | ||||||
689,344 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 2.6% | ||||||||
Ginko International Co. Ltd.(1) | 62,425 | 614,880 | ||||||
Johnson Health Tech Co. Ltd. | 113,000 | 230,180 | ||||||
Radiant Opto-Electronics Corp. | 205,000 | 923,764 | ||||||
Standard Foods Corp. | 137,000 | 417,224 | ||||||
2,186,048 | ||||||||
THAILAND — 1.4% | ||||||||
Home Product Center PCL | 1,190,700 | 456,594 | ||||||
Thai Union Frozen Products PCL | 337,200 | 712,768 | ||||||
1,169,362 | ||||||||
TURKEY — 1.0% | ||||||||
Bizim Toptan Satis Magazalari AS | 63,682 | 816,195 | ||||||
UNITED KINGDOM — 20.2% | ||||||||
Aberdeen Asset Management plc | 512,868 | 1,920,750 | ||||||
Ashtead Group plc | 454,195 | 1,612,112 | ||||||
AZ Electronic Materials SA | 90,021 | 415,250 | ||||||
Bellway plc | 95,990 | 1,024,483 | ||||||
Bodycote plc | 125,980 | 736,062 | ||||||
Croda International plc | 41,541 | 1,431,554 | ||||||
Great Portland Estates plc | 68,455 | 398,379 | ||||||
Hays plc | 328,851 | 367,955 | ||||||
Imagination Technologies Group plc(1) | 110,098 | 836,368 | ||||||
John Wood Group plc | 113,758 | 1,227,267 | ||||||
Millennium & Copthorne Hotels plc | 94,926 | 681,612 | ||||||
Pennon Group plc | 57,360 | 647,554 | ||||||
Rightmove plc | 40,580 | 916,864 | ||||||
Rotork plc | 14,374 | 449,710 | ||||||
Shaftesbury plc | 69,518 | 541,063 | ||||||
Spectris plc | 61,672 | 1,526,485 | ||||||
Spirax-Sarco Engineering plc | 13,998 | 445,713 |
9
Shares | Value |
Telecity Group plc(1) | 131,393 | $1,656,474 | ||||||
Victrex plc | 10,454 | 224,436 | ||||||
17,060,091 | ||||||||
TOTAL COMMON STOCKS (Cost $75,979,874) | 83,975,035 | |||||||
Rights† | ||||||||
BRAZIL† | ||||||||
CETIP SA – Balcao Organizado de Ativos e Derivativos(1) | 8 | 10 | ||||||
SOUTH KOREA† | ||||||||
Jinsung T.E.C.(1) | 5,550 | 13,449 | ||||||
TOTAL RIGHTS (Cost $—) | 13,459 | |||||||
Temporary Cash Investments — 0.3% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% – 2.625%, 9/15/14 – 12/31/14, valued at $98,309), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $96,330) | 96,330 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $98,770), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $96,330) | 96,330 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $67,761), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $66,323) | 66,323 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $258,983) | 258,983 | |||||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $76,238,857) | 84,247,477 | |||||||
OTHER ASSETS AND LIABILITIES — 0.1% | 48,581 | |||||||
TOTAL NET ASSETS — 100.0% | $84,296,058 |
Market Sector Diversification | |
(as a % of net assets) | |
Industrials | 21.0% |
Consumer Discretionary | 20.2% |
Information Technology | 19.1% |
Financials | 9.1% |
Health Care | 9.1% |
Materials | 8.7% |
Consumer Staples | 6.0% |
Energy | 5.6% |
Utilities | 0.8% |
Cash and Equivalents* | 0.4% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
† Category is less than 0.05% of total net assets.
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $76,238,857) | $84,247,477 | |||
Foreign currency holdings, at value (cost of $279,550) | 278,771 | |||
Receivable for investments sold | 1,046,377 | |||
Receivable for capital shares sold | 60,211 | |||
Dividends and interest receivable | 279,707 | |||
Other assets | 55,056 | |||
85,967,599 | ||||
Liabilities | ||||
Payable for investments purchased | 1,181,055 | |||
Payable for capital shares redeemed | 349,589 | |||
Accrued management fees | 140,398 | |||
Distribution and service fees payable | 499 | |||
1,671,541 | ||||
Net Assets | $84,296,058 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $103,931,966 | |||
Accumulated net investment loss | (285,146 | ) | ||
Accumulated net realized loss | (27,359,790 | ) | ||
Net unrealized appreciation | 8,009,028 | |||
$84,296,058 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $82,499,907 | 13,539,683 | $6.09 |
Institutional Class, $0.01 Par Value | $38,181 | 6,214 | $6.14 |
A Class, $0.01 Par Value | $1,501,252 | 246,731 | $6.08* |
C Class, $0.01 Par Value | $129,897 | 21,536 | $6.03 |
R Class, $0.01 Par Value | $126,821 | 20,871 | $6.08 |
*Maximum offering price $6.45 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $82,311) | $941,150 | |||
Interest | 283 | |||
941,433 | ||||
Expenses: | ||||
Management fees | 876,565 | |||
Distribution and service fees: | ||||
A Class | 6,750 | |||
C Class | 570 | |||
R Class | 244 | |||
Directors’ fees and expenses | 1,684 | |||
Other expenses | 3,272 | |||
889,085 | ||||
Net investment income (loss) | 52,348 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (1,420,626 | ) | ||
Foreign currency transactions | (56,555 | ) | ||
(1,477,181 | ) | |||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | 3,689,680 | |||
Translation of assets and liabilities in foreign currencies | (430 | ) | ||
3,689,250 | ||||
Net realized and unrealized gain (loss) | 2,212,069 | |||
Net Increase (Decrease) in Net Assets Resulting from Operations | $2,264,417 |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $52,348 | $(181,257 | ) | |||||
Net realized gain (loss) | (1,477,181 | ) | 7,817,186 | |||||
Change in net unrealized appreciation (depreciation) | 3,689,250 | (12,014,877 | ) | |||||
Net increase (decrease) in net assets resulting from operations | 2,264,417 | (4,378,948 | ) | |||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | — | (419,841 | ) | |||||
Institutional Class | — | (244 | ) | |||||
A Class | — | (287 | ) | |||||
Decrease in net assets from distributions | — | (420,372 | ) | |||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (13,026,006 | ) | (3,147,447 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 1,222 | 37,354 | ||||||
Net increase (decrease) in net assets | (10,760,367 | ) | (7,909,413 | ) | ||||
Net Assets | ||||||||
Beginning of period | 95,056,425 | 102,965,838 | ||||||
End of period | $84,296,058 | $95,056,425 | ||||||
Accumulated net investment loss | $(285,146 | ) | $(337,494 | ) |
See Notes to Financial Statements.
13
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 companies that are small-sized at the time of purchase and are located in foreign developed countries or emerging market countries.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the fund in preparation of its financial statements. The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from these estimates.
Investment Valuations — The fund determines the fair value of its investments and computes its net asset value per share 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.
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. 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. Prior to November 14, 2011, the redemption fee applied to shares held less than 180 days.
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 1.40% 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, 2012 was 1.86% for the Investor Class, A Class, C Class and R Class and 1.66% 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, 2012 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., 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
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $53,508,107 and $65,945,000, respectively.
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 100,000,000 | 100,000,000 | ||||||||||||||
Sold | 681,623 | $4,330,731 | 2,482,073 | $16,630,637 | ||||||||||||
Issued in reinvestment of distributions | — | — | 59,420 | 408,211 | ||||||||||||
Redeemed | (2,137,160 | ) | (13,238,753 | ) | (3,876,170 | ) | (25,431,961 | ) | ||||||||
(1,455,537 | ) | (8,908,022 | ) | (1,334,677 | ) | (8,393,113 | ) | |||||||||
Institutional Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Issued in reinvestment of distributions | — | — | 35 | 244 | ||||||||||||
A Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 962,543 | 5,994,226 | 966,727 | 5,889,154 | ||||||||||||
Issued in reinvestment of distributions | — | — | 41 | 283 | ||||||||||||
Redeemed | (1,576,327 | ) | (10,209,190 | ) | (120,894 | ) | (739,192 | ) | ||||||||
(613,784 | ) | (4,214,964 | ) | 845,874 | 5,150,245 | |||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 7,145 | 44,738 | 22,245 | 150,515 | ||||||||||||
Redeemed | (2,955 | ) | (17,732 | ) | (11,890 | ) | (69,692 | ) | ||||||||
4,190 | 27,006 | 10,355 | 80,823 | |||||||||||||
R Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 10,645 | 69,974 | 7,603 | 54,226 | ||||||||||||
Redeemed | — | — | (5,528 | ) | (39,872 | ) | ||||||||||
10,645 | 69,974 | 2,075 | 14,354 | |||||||||||||
Net increase (decrease) | (2,054,486 | ) | $(13,026,006 | ) | (476,338 | ) | $(3,147,447 | ) |
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.
17
Level 1 | Level 2 | Level 3 | ||||||||||
Investment Securities | ||||||||||||
Foreign Common Stocks | $3,034,567 | $80,940,468 | — | |||||||||
Rights | — | 13,459 | — | |||||||||
Temporary Cash Investments | — | 258,983 | — | |||||||||
Total Value of Investment Securities | $3,034,567 | $81,212,910 | — |
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.
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, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $76,697,336 | |||
Gross tax appreciation of investments | $12,437,929 | |||
Gross tax depreciation of investments | (4,887,788 | ) | ||
Net tax appreciation (depreciation) of investments | $7,550,141 |
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, 2011, the fund had accumulated capital losses of $(25,272,830), 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 $(13,497,473) and $(11,775,357) expire in 2016 and 2017, respectively. The Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(337,681) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||
2012(3) | $5.98 | 0.01 | 0.10 | 0.11 | — | — | — | $6.09 | 1.84 | % | 1.87 | %(4) | 0.13 | %(4) | 57 | % | $82,500 | |||||||||||||||
2011 | $6.29 | (0.01 | ) | (0.27 | ) | (0.28 | ) | (0.03 | ) | — | (0.03 | ) | $5.98 | (4.57 | )% | 1.83 | % | (0.17 | )% | 146 | % | $89,708 | ||||||||||
2010 | $5.49 | (0.03 | ) | 0.94 | 0.91 | (0.11 | ) | — | (0.11 | ) | $6.29 | 16.72 | % | 1.89 | % | (0.52 | )% | 209 | % | $102,739 | ||||||||||||
2009 | $3.70 | (0.02 | ) | 1.81 | 1.79 | — | — | — | $5.49 | 48.38 | % | 1.95 | % | (0.52 | )% | 244 | % | $92,968 | ||||||||||||||
2008 | $11.37 | 0.05 | (5.06 | ) | (5.01 | ) | (0.05 | ) | (2.61 | ) | (2.66 | ) | $3.70 | (56.46 | )% | 1.87 | % | 0.72 | % | 206 | % | $65,541 | ||||||||||
2007 | $11.79 | 0.02 | 2.94 | 2.96 | — | (5) | (3.38 | ) | (3.38 | ) | $11.37 | 33.73 | % | 1.81 | % | 0.19 | % | 149 | % | $212,157 | ||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
2012(3) | $6.03 | 0.01 | 0.10 | 0.11 | — | — | — | $6.14 | 1.82 | % | 1.67 | %(4) | 0.33 | %(4) | 57 | % | $38 | |||||||||||||||
2011 | $6.34 | — | (5) | (0.27 | ) | (0.27 | ) | (0.04 | ) | — | (0.04 | ) | $6.03 | (4.35 | )% | 1.63 | % | 0.03 | % | 146 | % | $37 | ||||||||||
2010 | $5.54 | (0.02 | ) | 0.95 | 0.93 | (0.13 | ) | — | (0.13 | ) | $6.34 | 17.04 | % | 1.69 | % | (0.32 | )% | 209 | % | $39 | ||||||||||||
2009 | $3.72 | (0.04 | ) | 1.86 | 1.82 | — | — | — | $5.54 | 48.92 | % | 1.75 | % | (0.32 | )% | 244 | % | $33 | ||||||||||||||
2008 | $11.44 | 0.07 | (5.10 | ) | (5.03 | ) | (0.08 | ) | (2.61 | ) | (2.69 | ) | $3.72 | (56.44 | )% | 1.67 | % | 0.92 | % | 206 | % | $1,245 | ||||||||||
2007 | $11.85 | 0.06 | 2.94 | 3.00 | (0.03 | ) | (3.38 | ) | (3.41 | ) | $11.44 | 33.97 | % | 1.61 | % | 0.39 | % | 149 | % | $4,513 | ||||||||||||
A Class | ||||||||||||||||||||||||||||||||
2012(3) | $5.98 | (0.02 | ) | 0.12 | 0.10 | — | — | — | $6.08 | 1.67 | % | 2.12 | %(4) | (0.12 | )%(4) | 57 | % | $1,501 | ||||||||||||||
2011 | $6.29 | (0.04 | ) | (0.26 | ) | (0.30 | ) | (0.01 | ) | — | (0.01 | ) | $5.98 | (4.81 | )% | 2.10 | % | (0.44 | )% | 146 | % | $5,147 | ||||||||||
2010(6) | $5.51 | (0.02 | ) | 0.84 | 0.82 | (0.04 | ) | — | (0.04 | ) | $6.29 | 14.87 | % | 2.14 | %(4) | (0.45 | )%(4) | 209 | %(7) | $92 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||
C Class | ||||||||||||||||||||||||||||||||
2012(3) | $5.95 | (0.02 | ) | 0.10 | 0.08 | — | — | — | $6.03 | 1.34 | % | 2.87 | %(4) | (0.87 | )%(4) | 57 | % | $130 | ||||||||||||||
2011 | $6.30 | (0.06 | ) | (0.29 | ) | (0.35 | ) | — | — | — | $5.95 | (5.56 | )% | 2.83 | % | (1.17 | )% | 146 | % | $103 | ||||||||||||
2010(6) | $5.51 | (0.05 | ) | 0.84 | 0.79 | — | — | — | $6.30 | 14.34 | % | 2.89 | %(4) | (1.19 | )%(4) | 209 | %(7) | $44 | ||||||||||||||
R Class | ||||||||||||||||||||||||||||||||
2012(3) | $5.98 | — | (5) | 0.10 | 0.10 | — | — | — | $6.08 | 1.67 | % | 2.37 | %(4) | (0.37 | )%(4) | 57 | % | $127 | ||||||||||||||
2011 | $6.30 | (0.04 | ) | (0.28 | ) | (0.32 | ) | — | — | — | $5.98 | (5.08 | )% | 2.33 | % | (0.67 | )% | 146 | % | $61 | ||||||||||||
2010(6) | $5.51 | (0.03 | ) | 0.84 | 0.81 | (0.02 | ) | — | (0.02 | ) | $6.30 | 14.77 | % | 2.39 | %(4) | (0.69 | )%(4) | 209 | %(7) | $51 |
Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Annualized. |
(5) | Per-share amount was less than $0.005. |
(6) | March 1, 2010 (commencement of sale) through November 30, 2010. |
(7) | Portfolio turnover is calculated at the fund level. Percentage indicated was calculated for the year ended November 30, 2010. |
See Notes to Financial Statements.
20
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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75491 1207
SEMIANNUAL REPORT | MAY 31, 2012
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![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/frontpagebanner.jpg)
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 | 19 |
Additional Information | 22 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
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Don Pratt
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Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
Investor Class | TWIEX | -2.67% | -18.68% | -4.78% | 3.70% | 7.00% | 5/9/91 |
MSCI EAFE Index | — | -4.70% | -20.48% | -7.34% | 4.01% | 4.30%(2) | — |
MSCI EAFE Growth Index | — | -2.78% | -18.36% | -5.56% | 4.08% | 3.08%(2) | — |
Institutional Class | TGRIX | -2.59% | -18.49% | -4.58% | 3.92% | 4.28% | 11/20/97 |
A Class(3) No sales charge* With sales charge* | TWGAX | -2.85% -8.48% | -18.94% -23.63% | -5.03% -6.15% | 3.44% 2.83% | 4.89% 4.49% | 10/2/96 |
C Class No sales charge* With sales charge* | AIWCX | -3.17% -4.14% | -19.56% -19.56% | -5.73% -5.73% | 2.66% 2.66% | 0.97% 0.97% | 6/4/01 |
R Class | ATGRX | -2.91% | -19.13% | -5.25% | — | 5.00% | 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%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since 4/30/91, the date nearest the Investor Class’s inception for which data are available. |
(3) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class 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 |
1.32% | 1.12% | 1.57% | 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. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
Unless otherwise indicated, performance reflects Investor Class shares; performance for other share classes will vary due to differences in fee structure. For information about other share classes available, please consult the prospectus. Data assumes reinvestment of dividends and capital gains, and none of the charts reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Returns for the indices are provided for comparison. The fund’s total returns include operating expenses (such as transaction costs and management fees) that reduce returns, while the total returns of the indices do not.
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Fund Characteristics |
MAY 31, 2012 | |
Top Ten Holdings | % of net assets |
Nestle SA | 2.6% |
Toyota Motor Corp. | 1.7% |
BHP Billiton Ltd. | 1.7% |
Syngenta AG | 1.7% |
Samsung Electronics Co. Ltd. | 1.5% |
Pernod-Ricard SA | 1.5% |
Statoil ASA | 1.5% |
Novo Nordisk A/S B Shares | 1.4% |
Grifols SA | 1.4% |
Saipem SpA | 1.4% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.3% |
Temporary Cash Investments | 0.1% |
Other Assets and Liabilities | 0.6% |
Investments by Country | % of net assets |
United Kingdom | 16.8% |
Japan | 14.3% |
France | 10.2% |
Switzerland | 9.7% |
Germany | 8.2% |
Italy | 3.4% |
Netherlands | 3.1% |
Sweden | 2.9% |
South Korea | 2.8% |
Spain | 2.7% |
Australia | 2.6% |
Denmark | 2.2% |
Belgium | 2.1% |
Other Countries | 18.3% |
Cash and Equivalents* | 0.7% |
*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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $973.30 | $6.46 | 1.31% |
Institutional Class | $1,000 | $974.10 | $5.48 | 1.11% |
A Class | $1,000 | $971.50 | $7.69 | 1.56% |
C Class | $1,000 | $968.30 | $11.37 | 2.31% |
R Class | $1,000 | $970.90 | $8.92 | 1.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.45 | $6.61 | 1.31% |
Institutional Class | $1,000 | $1,019.45 | $5.60 | 1.11% |
A Class | $1,000 | $1,017.20 | $7.87 | 1.56% |
C Class | $1,000 | $1,013.45 | $11.63 | 2.31% |
R Class | $1,000 | $1,015.95 | $9.12 | 1.81% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
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Shares | Value | |||||||
Common Stocks — 99.3% | ||||||||
AUSTRALIA — 2.6% | ||||||||
BHP Billiton Ltd. | 751,562 | $23,405,118 | ||||||
Commonwealth Bank of Australia | 261,850 | 12,600,359 | ||||||
36,005,477 | ||||||||
BELGIUM — 2.1% | ||||||||
Anheuser-Busch InBev NV | 268,189 | 18,155,967 | ||||||
Umicore SA | 223,571 | 10,609,984 | ||||||
28,765,951 | ||||||||
BRAZIL — 0.8% | ||||||||
BR Malls Participacoes SA | 455,800 | 5,028,411 | ||||||
Itau Unibanco Holding SA Preference Shares | 407,900 | 5,887,383 | ||||||
10,915,794 | ||||||||
CANADA — 1.1% | ||||||||
Bank of Nova Scotia | 169,888 | 8,712,754 | ||||||
Potash Corp. of Saskatchewan, Inc. | 158,570 | 6,280,775 | ||||||
14,993,529 | ||||||||
DENMARK — 2.2% | ||||||||
Christian Hansen Holding A/S | 384,384 | 10,707,182 | ||||||
Novo Nordisk A/S B Shares | 152,595 | 20,300,803 | ||||||
31,007,985 | ||||||||
FINLAND — 0.4% | ||||||||
Kone Oyj | 96,940 | 5,409,569 | ||||||
FRANCE — 10.2% | ||||||||
BNP Paribas SA | 296,324 | 9,425,763 | ||||||
Cie Generale d’Optique Essilor International SA | 125,552 | 10,724,332 | ||||||
Danone SA | 296,267 | 19,009,087 | ||||||
L’Oreal SA | 134,647 | 15,137,369 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 66,923 | 9,880,389 | ||||||
Pernod-Ricard SA | 215,360 | 21,037,127 | ||||||
Sanofi | 292,527 | 19,894,038 | ||||||
Schneider Electric SA | 170,267 | 9,067,752 | ||||||
Technip SA | 158,152 | 14,414,361 | ||||||
Zodiac Aerospace | 143,908 | 14,027,193 | ||||||
142,617,411 | ||||||||
GERMANY — 8.2% | ||||||||
adidas AG | 115,202 | 8,573,905 | ||||||
BASF SE | 231,086 | 16,109,906 | ||||||
Bayerische Motoren Werke AG | 176,801 | 13,357,347 | ||||||
E.ON AG | 186,618 | 3,410,533 | ||||||
Fresenius Medical Care AG & Co. KGaA | 112,444 | 7,464,900 | ||||||
HeidelbergCement AG | 170,912 | 7,413,554 | ||||||
Hugo Boss AG Preference Shares | 112,929 | 10,968,468 | ||||||
Infineon Technologies AG | 179,338 | 1,416,549 | ||||||
Kabel Deutschland Holding AG(1) | 248,560 | 14,100,969 | ||||||
Muenchener Rueckversicherungs AG | 151,762 | 18,812,292 | ||||||
SAP AG | 221,674 | 12,718,240 | ||||||
114,346,663 | ||||||||
HONG KONG — 1.9% | ||||||||
AIA Group Ltd. | 2,450,600 | 7,988,118 | ||||||
China Unicom Ltd. ADR | 700,139 | 9,619,910 | ||||||
Li & Fung Ltd. | 2,264,000 | 4,153,727 | ||||||
Link Real Estate Investment Trust (The) | 1,438,000 | 5,521,114 | ||||||
27,282,869 | ||||||||
INDIA — 0.3% | ||||||||
HDFC Bank Ltd. ADR(1) | 170,839 | 4,776,658 | ||||||
INDONESIA — 0.7% | ||||||||
PT Bank Mandiri (Persero) Tbk | 14,088,452 | 10,341,523 | ||||||
IRELAND — 1.2% | ||||||||
Experian plc | 512,537 | 7,148,795 | ||||||
Shire plc | 358,756 | 10,107,282 | ||||||
17,256,077 | ||||||||
ISRAEL — 0.1% | ||||||||
Check Point Software Technologies Ltd.(1) | 26,648 | 1,365,444 | ||||||
ITALY — 3.4% | ||||||||
ENI SpA | 619,628 | 11,952,257 | ||||||
Pirelli & C SpA | 924,113 | 9,158,470 | ||||||
Prada SpA | 1,127,700 | 6,945,012 | ||||||
Saipem SpA | 514,836 | 19,989,082 | ||||||
48,044,821 | ||||||||
JAPAN — 14.3% | ||||||||
Daito Trust Construction Co. Ltd. | 90,600 | 7,977,795 | ||||||
FANUC Corp. | 64,600 | 11,145,891 | ||||||
Fast Retailing Co. Ltd. | 47,200 | 10,535,069 | ||||||
Hitachi Ltd. | 599,000 | 3,432,248 | ||||||
Japan Tobacco, Inc. | 3,029 | 16,892,203 | ||||||
Komatsu Ltd. | 392,000 | 9,394,793 | ||||||
Konami Corp. | 154,000 | 3,256,483 | ||||||
Lawson, Inc. | 227,800 | 15,959,954 | ||||||
Mitsubishi Corp. | 732,600 | 14,350,957 | ||||||
Mitsubishi Heavy Industries Ltd. | 2,895,000 | 11,711,524 |
8
Shares | Value | |||||||
Mitsubishi UFJ Financial Group, Inc. | 2,251,900 | $9,770,878 | ||||||
Murata Manufacturing Co. Ltd. | 236,300 | 12,273,366 | ||||||
Nitori Holdings Co. Ltd. | 58,450 | 5,281,087 | ||||||
ORIX Corp. | 193,520 | 16,744,073 | ||||||
Rakuten, Inc. | 13,398 | 14,328,132 | ||||||
Toyota Motor Corp. | 608,000 | 23,587,545 | ||||||
Unicharm Corp. | 254,600 | 13,759,967 | ||||||
200,401,965 | ||||||||
MACAU — 0.5% | ||||||||
Sands China Ltd. | 2,215,600 | 7,564,649 | ||||||
NETHERLANDS — 3.1% | ||||||||
ASML Holding NV | 298,165 | 13,678,071 | ||||||
European Aeronautic Defence and Space Co. NV | 403,981 | 13,522,080 | ||||||
Gemalto NV | 110,752 | 7,054,032 | ||||||
Koninklijke Vopak NV | 149,551 | 8,815,131 | ||||||
43,069,314 | ||||||||
NORWAY — 1.9% | ||||||||
Statoil ASA | 915,666 | 20,649,617 | ||||||
Telenor ASA | 457,109 | 6,679,208 | ||||||
27,328,825 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 1.7% | ||||||||
Baidu, Inc. ADR(1) | 85,787 | 10,103,135 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 7,123,435 | 4,331,946 | ||||||
Lenovo Group Ltd. | 6,648,000 | 5,653,097 | ||||||
Tencent Holdings Ltd. | 127,300 | 3,500,051 | ||||||
23,588,229 | ||||||||
PERU — 0.8% | ||||||||
Credicorp Ltd. | 92,449 | 11,534,862 | ||||||
PORTUGAL — 1.0% | ||||||||
Jeronimo Martins SGPS SA | 790,094 | 14,033,910 | ||||||
RUSSIAN FEDERATION — 1.2% | ||||||||
Magnit OJSC GDR(1) | 340,877 | 8,385,574 | ||||||
Sberbank of Russia | 3,373,708 | 8,356,675 | ||||||
16,742,249 | ||||||||
SINGAPORE — 1.2% | ||||||||
DBS Group Holdings Ltd. | 913,000 | 9,366,646 | ||||||
Keppel Corp. Ltd. | 935,000 | 7,241,425 | ||||||
16,608,071 | ||||||||
SOUTH KOREA — 2.8% | ||||||||
Hyundai Motor Co. | 87,263 | 18,040,391 | ||||||
Samsung Electronics Co. Ltd. | 20,586 | 21,122,344 | ||||||
39,162,735 | ||||||||
SPAIN — 2.7% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 1,007,721 | 5,734,311 | ||||||
Grifols SA(1) | 885,354 | 20,083,017 | ||||||
Inditex SA | 150,848 | 12,463,509 | ||||||
38,280,837 | ||||||||
SWEDEN — 2.9% | ||||||||
Atlas Copco AB A Shares | 420,423 | 8,466,912 | ||||||
Electrolux AB | 354,951 | 6,728,165 | ||||||
Elekta AB B Shares | 143,547 | 6,882,431 | ||||||
Getinge AB B Shares | 188,436 | 4,682,043 | ||||||
Swedbank AB A Shares | 633,601 | 9,000,981 | ||||||
Volvo AB B Shares | 382,941 | 4,298,828 | ||||||
40,059,360 | ||||||||
SWITZERLAND — 9.7% | ||||||||
Adecco SA(1) | 190,189 | 7,381,608 | ||||||
Kuehne + Nagel International AG | 33,197 | 3,526,978 | ||||||
Nestle SA | 637,904 | 36,152,381 | ||||||
Roche Holding AG | 84,725 | 13,223,153 | ||||||
SGS SA | 5,405 | 9,743,301 | ||||||
Syngenta AG | 73,087 | 23,400,481 | ||||||
UBS AG(1) | 1,101,895 | 12,421,630 | ||||||
Wolseley plc | 385,195 | 13,108,070 | ||||||
Xstrata plc | 551,213 | 7,836,910 | ||||||
Zurich Financial Services AG(1) | 46,037 | 9,412,620 | ||||||
136,207,132 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 1.8% | ||||||||
Hon Hai Precision Industry Co. Ltd. | 4,450,000 | 13,045,263 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 900,182 | 12,359,499 | ||||||
25,404,762 | ||||||||
THAILAND — 1.1% | ||||||||
Kasikornbank PCL NVDR | 3,067,000 | 14,942,166 | ||||||
TURKEY — 0.6% | ||||||||
Turkiye Garanti Bankasi AS | 2,842,732 | 9,116,255 | ||||||
UNITED KINGDOM — 16.8% | ||||||||
Admiral Group plc | 277,824 | 4,448,815 | ||||||
Aegis Group plc | 3,029,220 | 7,581,862 | ||||||
Aggreko plc | 348,631 | 11,810,077 | ||||||
Antofagasta plc | 447,593 | 6,912,101 | ||||||
ARM Holdings plc | 488,725 | 3,815,075 | ||||||
BG Group plc | 987,827 | 18,916,306 | ||||||
British American Tobacco plc | 371,717 | 17,521,849 |
9
Shares | Value |
Burberry Group plc | 488,488 | $10,291,566 | ||||||
Capita Group plc (The) | 867,797 | 8,265,434 | ||||||
Compass Group plc | 620,380 | 6,080,985 | ||||||
GlaxoSmithKline plc | 546,844 | 12,119,407 | ||||||
HSBC Holdings plc (Hong Kong) | 1,863,382 | 14,704,814 | ||||||
Intercontinental Hotels Group plc | 623,460 | 14,662,977 | ||||||
Kingfisher plc | 2,770,012 | 12,038,983 | ||||||
Lloyds Banking Group plc(1) | 25,004,662 | 9,780,738 | ||||||
Petrofac Ltd. | 646,699 | 15,418,834 | ||||||
Reckitt Benckiser Group plc | 172,776 | 9,170,766 | ||||||
Rio Tinto plc | 382,649 | 16,394,736 | ||||||
Standard Chartered plc | 470,192 | 9,485,799 | ||||||
Vodafone Group plc | 5,648,677 | 15,060,933 | ||||||
Whitbread plc | 389,898 | 11,194,969 | ||||||
235,677,026 | ||||||||
TOTAL COMMON STOCKS (Cost $1,255,039,502) | 1,392,852,118 | |||||||
Temporary Cash Investments — 0.1% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $862,568), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $845,214) | 845,210 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $866,617), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $845,213) | 845,210 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $594,544), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $581,920) | 581,918 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $2,272,338) | 2,272,338 | |||||||
TOTAL INVESTMENT SECURITIES — 99.4% (Cost $1,257,311,840) | 1,395,124,456 | |||||||
OTHER ASSETS AND LIABILITIES — 0.6% | 7,908,272 | |||||||
TOTAL NET ASSETS — 100.0% | $1,403,032,728 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 18.2% |
Consumer Discretionary | 17.0% |
Consumer Staples | 14.8% |
Industrials | 12.5% |
Materials | 9.5% |
Information Technology | 8.9% |
Health Care | 8.8% |
Energy | 7.0% |
Telecommunication Services | 2.3% |
Utilities | 0.3% |
Cash and Equivalents* | 0.7% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
GDR = Global Depositary Receipt
NVDR = Non-Voting Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $1,257,311,840) | $1,395,124,456 | |||
Foreign currency holdings, at value (cost of $1,897,112) | 1,886,972 | |||
Receivable for investments sold | 10,594,912 | |||
Receivable for capital shares sold | 727,500 | |||
Dividends and interest receivable | 7,975,027 | |||
Other assets | 1,092,732 | |||
1,417,401,599 | ||||
Liabilities | ||||
Payable for investments purchased | 10,670,679 | |||
Payable for capital shares redeemed | 2,053,335 | |||
Accrued management fees | 1,603,624 | |||
Distribution and service fees payable | 41,233 | |||
14,368,871 | ||||
Net Assets | $1,403,032,728 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $1,507,515,088 | |||
Undistributed net investment income | 13,630,323 | |||
Accumulated net realized loss | (256,055,008 | ) | ||
Net unrealized appreciation | 137,942,325 | |||
$1,403,032,728 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $1,108,261,514 | 116,305,471 | $9.53 |
Institutional Class, $0.01 Par Value | $118,567,795 | 12,499,154 | $9.49 |
A Class, $0.01 Par Value | $171,685,813 | 17,914,384 | $9.58* |
C Class, $0.01 Par Value | $2,353,403 | 248,712 | $9.46 |
R Class, $0.01 Par Value | $2,164,203 | 223,824 | $9.67 |
*Maximum offering price $10.16 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $3,204,894) | $27,127,675 | |||
Interest | 1,230 | |||
27,128,905 | ||||
Expenses: | ||||
Management fees | 9,807,271 | |||
Distribution and service fees: | ||||
A Class | 225,767 | |||
C Class | 13,262 | |||
R Class | 7,266 | |||
Directors’ fees and expenses | 29,009 | |||
Other expenses | 60,065 | |||
10,142,640 | ||||
Net investment income (loss) | 16,986,265 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 32,599,958 | |||
Foreign currency transactions | (572,662 | ) | ||
32,027,296 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | (85,696,080 | ) | ||
Translation of assets and liabilities in foreign currencies | (133,204 | ) | ||
(85,829,284 | ) | |||
Net realized and unrealized gain (loss) | (53,801,988 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(36,815,723 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $16,986,265 | $15,531,786 | ||||||
Net realized gain (loss) | 32,027,296 | 63,882,952 | ||||||
Change in net unrealized appreciation (depreciation) | (85,829,284 | ) | (110,791,553 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (36,815,723 | ) | (31,376,815 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (13,149,175 | ) | (19,326,387 | ) | ||||
Institutional Class | (1,737,113 | ) | (1,926,383 | ) | ||||
A Class | (1,045,144 | ) | (1,708,891 | ) | ||||
R Class | (2,865 | ) | (16,637 | ) | ||||
Decrease in net assets from distributions | (15,934,297 | ) | (22,978,298 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | (26,056,552 | ) | (75,665,759 | ) | ||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 5,228 | 44,407 | ||||||
Net increase (decrease) in net assets | (78,801,344 | ) | (129,976,465 | ) | ||||
Net Assets | ||||||||
Beginning of period | 1,481,834,072 | 1,611,810,537 | ||||||
End of period | $1,403,032,728 | $1,481,834,072 | ||||||
Undistributed net investment income | $13,630,323 | $12,578,355 |
See Notes to Financial Statements.
13
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 offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee. On October 21, 2011, all outstanding B Class shares were converted to A Class shares and the fund discontinued offering the B Class.
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.
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. Additionally, non-U.S. tax returns filed by the fund due to investments in certain foreign securities remain subject to examination by the relevant taxing authority for seven years from the date of filing. At this time, management believes there are no uncertain tax positions which, based on their technical merit, would not be sustained upon examination and for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. Accordingly, no provision has been made for federal or state income taxes.
Multiple Class — All shares of the fund represent an equal pro rata interest in the net assets of the class to which such shares belong, and have identical voting, dividend, liquidation and other rights and the same terms and conditions, except for class specific expenses and exclusive rights to vote on matters affecting only individual classes. Income, non-class specific expenses, and realized and unrealized capital gains and losses of the fund are allocated to each class of shares based on their relative net assets.
15
Distributions to Shareholders — Distributions from net investment income and net realized gains, if any, are generally declared and paid annually. The fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code, in all events in a manner consistent with provisions of the 1940 Act.
Redemption — 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, 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, 2012 was 1.30% for the Investor Class, A 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, 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, 2012 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., 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, 15% of the shares of the fund. ACAAP does not invest in the fund for the purpose of exercising management or control.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $882,196,258 and $908,407,126, respectively.
16
5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 1,050,000,000 | 1,050,000,000 | ||||||||||||||
Sold | 5,216,178 | $51,924,912 | 10,121,066 | $109,941,099 | ||||||||||||
Issued in reinvestment of distributions | 1,289,908 | 12,769,602 | 1,682,293 | 18,745,403 | ||||||||||||
Redeemed | (10,334,628 | ) | (104,559,189 | ) | (19,927,980 | ) | (217,005,403 | ) | ||||||||
(3,828,542 | ) | (39,864,675 | ) | (8,124,621 | ) | (88,318,901 | ) | |||||||||
Institutional Class/Shares Authorized | 150,000,000 | 150,000,000 | ||||||||||||||
Sold | 1,701,673 | 17,279,843 | 3,306,762 | 34,650,632 | ||||||||||||
Issued in reinvestment of distributions | 174,599 | 1,721,641 | 171,269 | 1,903,792 | ||||||||||||
Redeemed | (883,475 | ) | (8,901,151 | ) | (1,541,029 | ) | (16,717,393 | ) | ||||||||
992,797 | 10,100,333 | 1,937,002 | 19,837,031 | |||||||||||||
A Class/Shares Authorized | 125,000,000 | 125,000,000 | ||||||||||||||
Sold | 2,150,417 | 21,818,926 | 7,748,808 | 81,672,620 | ||||||||||||
Issued in reinvestment of distributions | 102,434 | 1,020,551 | 93,927 | 1,049,896 | ||||||||||||
Redeemed | (1,769,772 | ) | (17,825,687 | ) | (8,287,690 | ) | (87,839,910 | ) | ||||||||
483,079 | 5,013,790 | (444,955 | ) | (5,117,394 | ) | |||||||||||
B Class/Shares Authorized | N/A | 10,000,000 | ||||||||||||||
Sold | 415 | 4,343 | ||||||||||||||
Redeemed | (121,378 | ) | (1,230,969 | ) | ||||||||||||
(120,963 | ) | (1,226,626 | ) | |||||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 10,661 | 109,351 | 57,636 | 635,001 | ||||||||||||
Redeemed | (40,792 | ) | (406,963 | ) | (44,445 | ) | (469,982 | ) | ||||||||
(30,131 | ) | (297,612 | ) | 13,191 | 165,019 | |||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 27,289 | 285,353 | 64,918 | 725,158 | ||||||||||||
Issued in reinvestment of distributions | 250 | 2,536 | 1,323 | 14,931 | ||||||||||||
Redeemed | (126,897 | ) | (1,296,277 | ) | (167,533 | ) | (1,744,977 | ) | ||||||||
(99,358 | ) | (1,008,388 | ) | (101,292 | ) | (1,004,888 | ) | |||||||||
Net increase (decrease) | (2,482,155 | ) | $(26,056,552 | ) | (6,841,638 | ) | $(75,665,759 | ) |
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). |
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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 | $49,759,508 | $1,343,092,610 | — | |||||||||
Temporary Cash Investments | — | 2,272,338 | — | |||||||||
Total Value of Investment Securities | $49,759,508 | $1,345,364,948 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $1,285,852,415 | |||
Gross tax appreciation of investments | $185,176,916 | |||
Gross tax depreciation of investments | (75,904,875 | ) | ||
Net tax appreciation (depreciation) of investments | $109,272,041 |
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, 2011, the fund had accumulated capital losses of $(223,323,814), 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 $(12,343,552) and $(210,980,262) expire in 2016 and 2017, respectively. The Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(24,767,362) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||
Investor Class | ||||||||||||||||||||||||||||||||
2012(3) | $9.90 | 0.11 | (0.37 | ) | (0.26 | ) | (0.11 | ) | — | (0.11 | ) | $9.53 | (2.67 | )% | 1.31 | %(4) | 2.25 | %(4) | 59 | % | $1,108,262 | |||||||||||
2011 | $10.30 | 0.10 | (0.35 | ) | (0.25 | ) | (0.15 | ) | — | (0.15 | ) | $9.90 | (2.57 | )% | 1.32 | % | 0.95 | % | 125 | % | $1,189,245 | |||||||||||
2010 | $9.75 | 0.09 | 0.61 | 0.70 | (0.15 | ) | — | (0.15 | ) | $10.30 | 7.28 | % | 1.35 | % | 0.87 | % | 130 | % | $1,320,906 | |||||||||||||
2009 | $7.15 | 0.09 | 2.64 | 2.73 | (0.13 | ) | — | (0.13 | ) | $9.75 | 38.66 | % | 1.38 | % | 1.18 | % | 151 | % | $1,279,615 | |||||||||||||
2008 | $14.87 | 0.14 | (6.96 | ) | (6.82 | ) | (0.11 | ) | (0.79 | ) | (0.90 | ) | $7.15 | (48.67 | )% | 1.31 | % | 1.18 | % | 144 | % | $1,018,753 | ||||||||||
2007 | $12.17 | 0.13 | 2.66 | 2.79 | (0.09 | ) | — | (0.09 | ) | $14.87 | 23.09 | % | 1.27 | % | 0.94 | % | 133 | % | $2,267,093 | |||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
2012(3) | $9.89 | 0.13 | (0.38 | ) | (0.25 | ) | (0.15 | ) | — | (0.15 | ) | $9.49 | (2.59 | )% | 1.11 | %(4) | 2.45 | %(4) | 59 | % | $118,568 | |||||||||||
2011 | $10.30 | 0.12 | (0.33 | ) | (0.21 | ) | (0.20 | ) | — | (0.20 | ) | $9.89 | (2.27 | )% | 1.12 | % | 1.15 | % | 125 | % | $113,741 | |||||||||||
2010 | $9.78 | 0.10 | 0.61 | 0.71 | (0.19 | ) | — | (0.19 | ) | $10.30 | 7.38 | % | 1.15 | % | 1.07 | % | 130 | % | $98,610 | |||||||||||||
2009 | $7.17 | 0.11 | 2.64 | 2.75 | (0.14 | ) | — | (0.14 | ) | $9.78 | 38.96 | % | 1.18 | % | 1.38 | % | 151 | % | $66,920 | |||||||||||||
2008 | $14.91 | 0.15 | (6.96 | ) | (6.81 | ) | (0.14 | ) | (0.79 | ) | (0.93 | ) | $7.17 | (48.55 | )% | 1.11 | % | 1.38 | % | 144 | % | $37,160 | ||||||||||
2007 | $12.20 | 0.17 | 2.66 | 2.83 | (0.12 | ) | — | (0.12 | ) | $14.91 | 23.36 | % | 1.07 | % | 1.14 | % | 133 | % | $80,452 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||
A Class(5) | ||||||||||||||||||||||||||||||||
2012(3) | $9.92 | 0.10 | (0.38 | ) | (0.28 | ) | (0.06 | ) | — | (0.06 | ) | $9.58 | (2.85 | )% | 1.56 | %(4) | 2.00 | %(4) | 59 | % | $171,686 | |||||||||||
2011 | $10.29 | 0.08 | (0.35 | ) | (0.27 | ) | (0.10 | ) | — | (0.10 | ) | $9.92 | (2.76 | )% | 1.57 | % | 0.70 | % | 125 | % | $172,901 | |||||||||||
2010 | $9.72 | 0.06 | 0.61 | 0.67 | (0.10 | ) | — | (0.10 | ) | $10.29 | 6.98 | % | 1.60 | % | 0.62 | % | 130 | % | $183,990 | |||||||||||||
2009 | $7.13 | 0.07 | 2.63 | 2.70 | (0.11 | ) | — | (0.11 | ) | $9.72 | 38.30 | % | 1.63 | % | 0.93 | % | 151 | % | $177,804 | |||||||||||||
2008 | $14.82 | 0.11 | (6.94 | ) | (6.83 | ) | (0.07 | ) | (0.79 | ) | (0.86 | ) | $7.13 | (48.79 | )% | 1.56 | % | 0.93 | % | 144 | % | $140,798 | ||||||||||
2007 | $12.12 | 0.08 | 2.68 | 2.76 | (0.06 | ) | — | (0.06 | ) | $14.82 | 22.87 | % | 1.52 | % | 0.69 | % | 133 | % | $241,579 | |||||||||||||
C Class | ||||||||||||||||||||||||||||||||
2012(3) | $9.77 | 0.06 | (0.37 | ) | (0.31 | ) | — | — | — | $9.46 | (3.17 | )% | 2.31 | %(4) | 1.25 | %(4) | 59 | % | $2,353 | |||||||||||||
2011 | $10.13 | — | (6) | (0.36 | ) | (0.36 | ) | — | — | — | $9.77 | (3.55 | )% | 2.32 | % | (0.05 | )% | 125 | % | $2,725 | ||||||||||||
2010 | $9.54 | (0.01 | ) | 0.60 | 0.59 | — | — | — | $10.13 | 6.18 | % | 2.35 | % | (0.13 | )% | 130 | % | $2,691 | ||||||||||||||
2009 | $7.00 | 0.01 | 2.59 | 2.60 | (0.06 | ) | — | (0.06 | ) | $9.54 | 37.29 | % | 2.38 | % | 0.18 | % | 151 | % | $3,051 | |||||||||||||
2008 | $14.60 | 0.02 | (6.83 | ) | (6.81 | ) | — | (0.79 | ) | (0.79 | ) | $7.00 | (49.18 | )% | 2.31 | % | 0.18 | % | 144 | % | $3,210 | |||||||||||
2007 | $11.97 | — | (6) | 2.63 | 2.63 | — | — | — | $14.60 | 21.97 | % | 2.27 | % | (0.06 | )% | 133 | % | $7,318 | ||||||||||||||
R Class | ||||||||||||||||||||||||||||||||
2012(3) | $9.97 | 0.08 | (0.37 | ) | (0.29 | ) | (0.01 | ) | — | (0.01 | ) | $9.67 | (2.91 | )% | 1.81 | %(4) | 1.75 | %(4) | 59 | % | $2,164 | |||||||||||
2011 | $10.32 | 0.05 | (0.36 | ) | (0.31 | ) | (0.04 | ) | — | (0.04 | ) | $9.97 | (3.05 | )% | 1.82 | % | 0.45 | % | 125 | % | $3,222 | |||||||||||
2010 | $9.72 | 0.03 | 0.62 | 0.65 | (0.05 | ) | — | (0.05 | ) | $10.32 | 6.75 | % | 1.85 | % | 0.37 | % | 130 | % | $4,381 | |||||||||||||
2009 | $7.13 | 0.06 | 2.62 | 2.68 | (0.09 | ) | — | (0.09 | ) | $9.72 | 37.97 | % | 1.88 | % | 0.68 | % | 151 | % | $5,436 | |||||||||||||
2008 | $14.81 | 0.09 | (6.96 | ) | (6.87 | ) | (0.02 | ) | (0.79 | ) | (0.81 | ) | $7.13 | (48.92 | )% | 1.81 | % | 0.68 | % | 144 | % | $2,727 | ||||||||||
2007 | $12.12 | 0.07 | 2.65 | 2.72 | (0.03 | ) | — | (0.03 | ) | $14.81 | 22.48 | % | 1.77 | % | 0.44 | % | 133 | % | $4,042 |
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Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Annualized. |
(5) | Prior to December 3, 2007, the A Class was referred to as the Advisor Class. |
(6) | Per-share amount was less than $0.005. |
See Notes to Financial Statements.
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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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75486 1207
SEMIANNUAL REPORT | MAY 31, 2012
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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 | 11 |
Statement of Operations | 12 |
Statement of Changes in Net Assets | 13 |
Notes to Financial Statements | 14 |
Financial Highlights | 19 |
Additional Information | 22 |
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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
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The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
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Don Pratt
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Total Returns as of May 31, 2012 | |||||||
Average Annual Returns | |||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | 10 years | Since Inception | Inception Date | |
A Class No sales charge* With sales charge* | MEQAX | -8.43% -13.70% | -22.14% -26.59% | -7.50%(2) -8.59%(2) | 3.28%(2) 2.67%(2) | 2.38% 1.98% | 3/31/97 |
MSCI EAFE Value Index | — | -6.65% | -22.62% | -9.17% | 3.85% | 3.96% | — |
Investor Class | ACEVX | -8.23% | -21.92% | -7.27% | — | -1.68% | 4/3/06 |
Institutional Class | ACVUX | -8.18% | -21.69% | -7.09% | — | -1.49% | 4/3/06 |
C Class No sales charge* With sales charge* | ACCOX | -8.74% -9.64% | -22.74% -22.74% | -8.21% -8.21% | — — | -2.67% -2.67% | 4/3/06 |
R Class | ACVRX | -8.56% | -22.30% | -7.76% | — | -2.19% | 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%. C Class shares redeemed within 12 months of purchase are subject to a maximum CDSC of 1.00%. The SEC requires that mutual funds provide performance information net of maximum sales charges in all cases where charges could be applied.
International Value acquired all the net assets of the Mason Street International Equity Fund on March 31, 2006, pursuant to a plan of reorganization approved by the acquired fund’s shareholders on March 15, 2006. Performance information prior to April 1, 2006, is that of the Mason Street International Equity Fund.
(1) | Total returns for periods less than one year are not annualized. |
(2) | Returns would have been lower if a portion of the fees had not been waived. |
Total Annual Fund Operating Expenses | ||||
Investor Class | Institutional Class | A Class | C Class | R Class |
1.31% | 1.11% | 1.56% | 2.31% | 1.81% |
The total annual fund operating expenses shown is as stated in the fund’s prospectus current as of the date of this report. The prospectus may vary from the expense ratio shown elsewhere in this report because it is based on a different time period, includes acquired fund fees and expenses, and, if applicable, does not include fee waivers or expense reimbursements.
Data presented reflect past performance. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, and redemption value may be more or less than original cost. To obtain performance data current to the most recent month end, please call 1-800-345-2021 or visit americancentury.com. International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks. The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
Unless otherwise indicated, performance reflects 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 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, 2012 | |
Top Ten Holdings | % of net assets |
HSBC Holdings plc(1) | 4.7% |
Royal Dutch Shell plc B Shares | 3.5% |
Commonwealth Bank of Australia | 2.9% |
Total S.A. | 2.9% |
Westpac Banking Corp. | 2.5% |
Australia & New Zealand Banking Group Ltd. | 2.3% |
Vodafone Group plc | 2.3% |
Sanofi | 2.3% |
GlaxoSmithKline plc | 2.1% |
ENI SpA | 2.1% |
(1)Includes shares traded on all exchanges. | |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 99.0% |
Temporary Cash Investments | 0.5% |
Other Assets and Liabilities | 0.5% |
Investments by Country | % of net assets |
Japan | 21.8% |
United Kingdom | 18.4% |
France | 10.6% |
Australia | 9.3% |
Germany | 7.3% |
Switzerland | 6.9% |
Netherlands | 5.3% |
Spain | 4.3% |
Hong Kong | 3.8% |
Italy | 3.7% |
Other Countries | 7.6% |
Cash and Equivalents(2) | 1.0% |
(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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Investor Class | $1,000 | $917.70 | $6.28 | 1.31% |
Institutional Class | $1,000 | $918.20 | $5.32 | 1.11% |
A Class | $1,000 | $915.70 | $7.47 | 1.56% |
C Class | $1,000 | $912.60 | $11.05 | 2.31% |
R Class | $1,000 | $914.40 | $8.66 | 1.81% |
Hypothetical | ||||
Investor Class | $1,000 | $1,018.45 | $6.61 | 1.31% |
Institutional Class | $1,000 | $1,019.45 | $5.60 | 1.11% |
A Class | $1,000 | $1,017.20 | $7.87 | 1.56% |
C Class | $1,000 | $1,013.45 | $11.63 | 2.31% |
R Class | $1,000 | $1,015.95 | $9.12 | 1.81% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 99.0% | ||||||||
AUSTRALIA — 9.3% | ||||||||
Australia & New Zealand Banking Group Ltd. | 26,300 | $535,434 | ||||||
Commonwealth Bank of Australia | 14,000 | 673,687 | ||||||
National Australia Bank Ltd. | 3,208 | 70,248 | ||||||
OZ Minerals Ltd. | 12,910 | 109,660 | ||||||
Spark Infrastructure Group | 19,500 | 29,157 | ||||||
Telstra Corp. Ltd. | 34,047 | 117,736 | ||||||
Western Areas NL | 5,500 | 23,841 | ||||||
Westpac Banking Corp. | 29,300 | 579,099 | ||||||
2,138,862 | ||||||||
BELGIUM — 0.4% | ||||||||
KBC Groep NV | 6,000 | 91,922 | ||||||
DENMARK — 0.2% | ||||||||
Novo Nordisk A/S B Shares | 400 | 53,215 | ||||||
FINLAND — 0.9% | ||||||||
Metso Oyj | 4,500 | 146,785 | ||||||
Nokia Oyj | 20,900 | 54,890 | ||||||
201,675 | ||||||||
FRANCE — 10.6% | ||||||||
AXA SA | 21,687 | 243,516 | ||||||
CNP Assurances(1) | 14,670 | 158,720 | ||||||
Euler Hermes SA(1) | 4,000 | 261,792 | ||||||
France Telecom SA | 13,067 | 164,159 | ||||||
GDF Suez | 1,000 | 19,753 | ||||||
Plastic Omnium SA | 1,900 | 44,085 | ||||||
Sanofi | 7,613 | 517,741 | ||||||
Total S.A. | 15,330 | 658,990 | ||||||
Valeo SA | 5,800 | 245,165 | ||||||
Vivendi SA | 7,264 | 117,304 | ||||||
�� | 2,431,225 | |||||||
GERMANY — 7.3% | ||||||||
Allianz SE | 3,000 | 271,202 | ||||||
Aurubis AG | 1,100 | 50,176 | ||||||
BASF SE | 2,019 | 140,752 | ||||||
Bayer AG | 4,500 | 284,556 | ||||||
Bayerische Motoren Werke AG | 1,000 | 75,550 | ||||||
Deutsche Post AG | 11,140 | 183,478 | ||||||
E.ON AG | 14,320 | 261,705 | ||||||
Gildemeister AG | 4,000 | 66,103 | ||||||
Merck KGaA | 946 | 87,508 | ||||||
ProSiebenSat.1 Media AG Preference Shares | 9,360 | 196,289 | ||||||
Siemens AG | 630 | 51,811 | ||||||
1,669,130 | ||||||||
HONG KONG — 3.8% | ||||||||
BOC Hong Kong Holdings Ltd. | 100,000 | 275,074 | ||||||
Cheung Kong Holdings Ltd. | 10,300 | 118,771 | ||||||
Link Real Estate Investment Trust (The) | 65,500 | 251,483 | ||||||
SJM Holdings Ltd. | 37,000 | 65,691 | ||||||
Wharf Holdings Ltd. | 32,000 | 167,183 | ||||||
878,202 | ||||||||
IRELAND — 0.1% | ||||||||
CRH plc | 610 | 10,258 | ||||||
ISRAEL — 0.8% | ||||||||
Bank Hapoalim BM | 49,500 | 157,994 | ||||||
Delek Group Ltd. | 200 | 32,789 | ||||||
190,783 | ||||||||
ITALY — 3.7% | ||||||||
Assicurazioni Generali SpA | 2,300 | 23,363 | ||||||
Enel SpA | 75,500 | 214,905 | ||||||
ENI SpA | 24,680 | 476,063 | ||||||
Mediaset SpA | 37,800 | 58,705 | ||||||
Societa Iniziative Autostradali e Servizi SpA | 12,800 | 78,250 | ||||||
851,286 | ||||||||
JAPAN — 21.8% | ||||||||
Asahi Kasei Corp. | 43,000 | 232,670 | ||||||
Central Japan Railway Co. | 21 | 170,980 | ||||||
Chiba Bank Ltd. (The) | 9,000 | 50,766 | ||||||
Daicel Chemical Industries, Ltd. | 20,000 | 113,834 | ||||||
Daihatsu Motor Co. Ltd. | 14,000 | 240,837 | ||||||
Daito Trust Construction Co. Ltd. | 2,700 | 237,749 | ||||||
FamilyMart Co. Ltd. | 1,200 | 54,518 | ||||||
Fujitsu Ltd. | 37,000 | 161,958 | ||||||
Haseko Corp.(1) | 124,500 | 81,030 | ||||||
INPEX Corp. | 44 | 254,364 | ||||||
ITOCHU Corp. | 6,800 | 74,543 | ||||||
JGC Corp. | 9,000 | 247,167 | ||||||
Kao Corp. | 1,400 | 36,215 | ||||||
KDDI Corp. | 46 | 284,418 | ||||||
Konica Minolta Holdings, Inc. | 25,500 | 182,887 | ||||||
Lawson, Inc. | 4,300 | 301,263 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 14,000 | 60,745 | ||||||
Namco Bandai Holdings, Inc. | 9,000 | 109,571 | ||||||
Nippon Telegraph & Telephone Corp. | 8,400 | 362,328 | ||||||
Nissan Motor Co. Ltd. | 8,760 | 84,738 | ||||||
Nitto Denko Corp. | 2,300 | 93,338 |
8
Shares | Value | |||||||
NTT Data Corp. | 81 | $232,890 | ||||||
Park24 Co. Ltd. | 4,500 | 59,667 | ||||||
Resona Holdings, Inc. | 66,700 | 251,104 | ||||||
Seven & I Holdings Co. Ltd. | 9,700 | 292,015 | ||||||
SOFTBANK CORP. | 9,300 | 290,773 | ||||||
T&D Holdings, Inc. | 7,000 | 66,382 | ||||||
Tokyo Ohka Kogyo Co. Ltd. | 5,300 | 109,571 | ||||||
TS Tech Co. Ltd. | 8,500 | 150,562 | ||||||
UNY Co. Ltd. | 11,300 | 117,672 | ||||||
5,006,555 | ||||||||
NETHERLANDS — 5.3% | ||||||||
Aegon NV | 19,030 | 80,145 | ||||||
European Aeronautic Defence and Space Co. NV | 1,110 | 37,154 | ||||||
ING Groep NV CVA(1) | 35,686 | 206,112 | ||||||
PostNL NV | 30,300 | 101,982 | ||||||
Royal Dutch Shell plc B Shares | 24,725 | 792,037 | ||||||
1,217,430 | ||||||||
NEW ZEALAND — 0.7% | ||||||||
Vector Ltd. | 82,400 | 167,040 | ||||||
NORWAY — 1.9% | ||||||||
Statoil ASA | 2,878 | 64,903 | ||||||
STX OSV Holdings Ltd. | 71,000 | 79,893 | ||||||
Telenor ASA | 14,990 | 219,032 | ||||||
TGS Nopec Geophysical Co. ASA | 3,200 | 79,543 | ||||||
443,371 | ||||||||
PORTUGAL — 0.2% | ||||||||
EDP - Energias de Portugal SA | 17,800 | 36,976 | ||||||
SINGAPORE — 0.7% | ||||||||
DBS Group Holdings Ltd. | 9,700 | 99,514 | ||||||
Sakari Resources Ltd. | 53,000 | 59,433 | ||||||
158,947 | ||||||||
SPAIN — 4.3% | ||||||||
Banco Santander SA | 84,706 | 449,854 | ||||||
Endesa SA | 11,600 | 173,770 | ||||||
Grupo Catalana Occidente SA | 8,200 | 96,121 | ||||||
Mapfre SA | 107,168 | 207,516 | ||||||
Telefonica SA | 4,500 | 49,728 | ||||||
976,989 | ||||||||
SWEDEN — 1.7% | ||||||||
Intrum Justitia AB | 9,900 | 137,982 | ||||||
Saab AB B Shares | 13,400 | 207,516 | ||||||
Svenska Cellulosa AB B Shares | 3,475 | 49,462 | ||||||
394,960 | ||||||||
SWITZERLAND — 6.9% | ||||||||
Credit Suisse Group AG | 7,871 | 149,179 | ||||||
Helvetia Holding AG | 650 | 181,178 | ||||||
Nestle SA | 1,500 | 85,011 | ||||||
Novartis AG | 7,400 | 384,341 | ||||||
OC Oerlikon Corp. AG(1) | 26,950 | 225,011 | ||||||
Roche Holding AG | 1,610 | 251,275 | ||||||
Swiss Life Holding AG(1) | 2,700 | 216,395 | ||||||
Swiss Re AG(1) | 1,557 | 89,764 | ||||||
1,582,154 | ||||||||
UNITED KINGDOM — 18.4% | ||||||||
AstraZeneca plc | 3,000 | 121,046 | ||||||
Berendsen plc | 5,800 | 42,308 | ||||||
BHP Billiton plc | 8,200 | 214,148 | ||||||
BP plc | 61,640 | 375,153 | ||||||
BT Group plc | 35,446 | 112,700 | ||||||
Centrica plc | 21,400 | 102,045 | ||||||
Drax Group plc | 30,150 | 254,408 | ||||||
Firstgroup plc | 11,800 | 38,227 | ||||||
GlaxoSmithKline plc | 21,575 | 478,155 | ||||||
HSBC Holdings plc | 107,400 | 843,349 | ||||||
HSBC Holdings plc (Hong Kong) | 28,400 | 224,118 | ||||||
Man Group plc | 23,000 | 25,841 | ||||||
Marks & Spencer Group plc | 38,440 | 196,334 | ||||||
Mondi plc | 29,854 | 233,276 | ||||||
Sports Direct International plc(1) | 6,200 | 28,294 | ||||||
Standard Chartered plc | 10,700 | 215,865 | ||||||
Tullett Prebon plc | 28,100 | 118,577 | ||||||
Vodafone Group plc | 198,379 | 528,933 | ||||||
WH Smith plc | 8,695 | 64,498 | ||||||
4,217,275 | ||||||||
TOTAL COMMON STOCKS (Cost $24,122,557) | 22,718,255 |
9
Value | ||||
Temporary Cash Investments — 0.5% | ||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $39,328), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $38,537) | $38,537 | |||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $39,513), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $38,537) | 38,537 | |||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $27,108), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $26,532) | 26,532 | |||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $103,606) | 103,606 | |||
TOTAL INVESTMENT SECURITIES — 99.5% (Cost $24,226,163) | 22,821,861 | |||
OTHER ASSETS AND LIABILITIES — 0.5% | 118,681 | |||
TOTAL NET ASSETS — 100.0% | $22,940,542 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 33.6% |
Energy | 12.1% |
Health Care | 9.4% |
Telecommunication Services | 9.3% |
Industrials | 8.6% |
Consumer Discretionary | 7.8% |
Materials | 6.0% |
Utilities | 5.6% |
Consumer Staples | 3.9% |
Information Technology | 2.7% |
Cash and Equivalents* | 1.0% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
CVA = Certificaten Van Aandelen
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $24,226,163) | $22,821,861 | |||
Foreign currency holdings, at value (cost of $22,671) | 22,609 | |||
Receivable for investments sold | 1,837,286 | |||
Receivable for capital shares sold | 2,830 | |||
Dividends and interest receivable | 275,711 | |||
24,960,297 | ||||
Liabilities | ||||
Payable for investments purchased | 835,068 | |||
Payable for capital shares redeemed | 1,152,482 | |||
Accrued management fees | 28,048 | |||
Distribution and service fees payable | 4,157 | |||
2,019,755 | ||||
Net Assets | $22,940,542 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $31,389,356 | |||
Undistributed net investment income | 432,836 | |||
Accumulated net realized loss | (7,484,355 | ) | ||
Net unrealized depreciation | (1,397,295 | ) | ||
$22,940,542 |
Net assets | Shares outstanding | Net asset value per share | |
Investor Class, $0.01 Par Value | $8,785,156 | 1,426,734 | $6.16 |
Institutional Class, $0.01 Par Value | $272,661 | 44,367 | $6.15 |
A Class, $0.01 Par Value | $12,532,230 | 2,024,857 | $6.19* |
C Class, $0.01 Par Value | $1,115,343 | 180,193 | $6.19 |
R Class, $0.01 Par Value | $235,152 | 38,108 | $6.17 |
*Maximum offering price $6.57 (net asset value divided by 0.9425).
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $52,995) | $627,830 | |||
Interest | 53 | |||
627,883 | ||||
Expenses: | ||||
Management fees | 168,916 | |||
Distribution and service fees: | ||||
A Class | 18,296 | |||
C Class | 5,865 | |||
R Class | 601 | |||
Directors’ fees and expenses | 727 | |||
Other expenses | 290 | |||
194,695 | ||||
Net investment income (loss) | 433,188 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (1,005,024 | ) | ||
Foreign currency transactions | (11,870 | ) | ||
(1,016,894 | ) | |||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | (1,696,353 | ) | ||
Translation of assets and liabilities in foreign currencies | (3,536 | ) | ||
(1,699,889 | ) | |||
Net realized and unrealized gain (loss) | (2,716,783 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(2,283,595 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $433,188 | $457,476 | ||||||
Net realized gain (loss) | (1,016,894 | ) | 1,899,009 | |||||
Change in net unrealized appreciation (depreciation) | (1,699,889 | ) | (2,457,396 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (2,283,595 | ) | (100,911 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income: | ||||||||
Investor Class | (189,634 | ) | (140,866 | ) | ||||
Institutional Class | (5,151 | ) | (26,763 | ) | ||||
A Class | (231,826 | ) | (203,043 | ) | ||||
B Class | — | (5,247 | ) | |||||
C Class | (10,018 | ) | (6,656 | ) | ||||
R Class | (3,397 | ) | (3,336 | ) | ||||
Decrease in net assets from distributions | (440,026 | ) | (385,911 | ) | ||||
Capital Share Transactions | ||||||||
Net increase (decrease) in net assets from capital share transactions | 677,222 | (1,290,177 | ) | |||||
Redemption Fees | ||||||||
Increase in net assets from redemption fees | 1,291 | 4,942 | ||||||
Net increase (decrease) in net assets | (2,045,108 | ) | (1,772,057 | ) | ||||
Net Assets | ||||||||
Beginning of period | 24,985,650 | 26,757,707 | ||||||
End of period | $22,940,542 | $24,985,650 | ||||||
Undistributed net investment income | $432,836 | $439,674 |
See Notes to Financial Statements.
13
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 that have characteristics similar to those of the companies that comprise the MSCI EAFE Value Index. Additionally, the fund invests primarily in securities issued by companies located in developed countries.
The fund offers the Investor Class, the Institutional Class, the A Class, the C Class and the R Class. The A Class may incur an initial sales charge. The A Class and C Class may be subject to a contingent deferred sales charge. The share classes differ principally in their respective sales charges and distribution and shareholder servicing expenses and arrangements. The Institutional Class is made available to institutional shareholders or through financial intermediaries whose clients do not require the same level of shareholder and administrative services as shareholders of other classes. As a result, the Institutional Class is charged a lower unified management fee. On October 21, 2011, all outstanding B Class shares were converted to A Class shares and the fund discontinued offering the B Class.
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.
14
The value of investments initially expressed in foreign currencies is translated into U.S. dollars at prevailing exchange rates.
If the fund determines that the market price for a portfolio security is not readily available or the valuation methods mentioned above do not reflect a security’s fair value, such security is valued as determined in good faith by the Board of Directors or its designee, in accordance with procedures adopted by the Board of Directors. Circumstances that may cause the fund to use these procedures to value a security include, but are not limited to: a security has been declared in default; trading in a security has been halted during the trading day; there is a foreign market holiday and no trading occurred; or an event occurred between the close of a foreign exchange and the NYSE that may affect the value of a security.
Security Transactions — Security transactions are accounted for as of the trade date. Net realized gains and losses are determined on the identified cost basis, which is also used for federal income tax purposes.
Investment Income — Dividend income less foreign taxes withheld, if any, is recorded as of the ex-dividend date. Interest income is recorded on the accrual basis and includes accretion of discounts and amortization of premiums.
Foreign Currency Translations — All assets and liabilities initially expressed in foreign currencies are translated into U.S. dollars at prevailing exchange rates at period end. The fund may enter into spot foreign currency exchange contracts to facilitate transactions denominated in a foreign currency. Purchases and sales of investment securities, dividend and interest income, spot foreign currency exchange contracts, and expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. Net realized and unrealized foreign currency exchange gains or losses related to investment securities are a component of net realized gain (loss) on investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. 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.
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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, 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, 2012 was 1.30% for the Investor Class, A 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, 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, 2012 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., 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.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $23,443,899 and $22,662,959, respectively.
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5. Capital Share Transactions
Transactions in shares of the fund were as follows:
Six months ended May 31, 2012 | Year ended November 30, 2011 | |||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Investor Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 287,021 | $1,992,641 | 791,977 | $5,985,711 | ||||||||||||
Issued in reinvestment of distributions | 26,559 | 184,322 | 17,606 | 134,337 | ||||||||||||
Redeemed | (259,091 | ) | (1,764,139 | ) | (490,278 | ) | (3,574,371 | ) | ||||||||
54,489 | 412,824 | 319,305 | 2,545,677 | |||||||||||||
Institutional Class/Shares Authorized | 55,000,000 | 55,000,000 | ||||||||||||||
Sold | 11,659 | 79,821 | 43,605 | 319,246 | ||||||||||||
Issued in reinvestment of distributions | 744 | 5,151 | 3,517 | 26,763 | ||||||||||||
Redeemed | (3,685 | ) | (26,035 | ) | (222,380 | ) | (1,539,176 | ) | ||||||||
8,718 | 58,937 | (175,258 | ) | (1,193,167 | ) | |||||||||||
A Class/Shares Authorized | 45,000,000 | 45,000,000 | ||||||||||||||
Sold | 332,433 | 2,346,731 | 491,689 | 3,631,313 | ||||||||||||
Issued in reinvestment of distributions | 32,778 | 228,789 | 26,048 | 199,787 | ||||||||||||
Redeemed | (375,369 | ) | (2,499,232 | ) | (759,310 | ) | (5,588,230 | ) | ||||||||
(10,158 | ) | 76,288 | (241,573 | ) | (1,757,130 | ) | ||||||||||
B Class/Shares Authorized | N/A | 5,000,000 | ||||||||||||||
Sold | 2,377 | 17,568 | ||||||||||||||
Issued in reinvestment of distributions | 696 | 5,240 | ||||||||||||||
Redeemed | (141,146 | ) | (980,262 | ) | ||||||||||||
(138,073 | ) | (957,454 | ) | |||||||||||||
C Class/Shares Authorized | 10,000,000 | 10,000,000 | ||||||||||||||
Sold | 29,208 | 202,009 | 50,831 | 372,349 | ||||||||||||
Issued in reinvestment of distributions | 1,418 | 9,913 | 864 | 6,647 | ||||||||||||
Redeemed | (16,553 | ) | (113,362 | ) | (36,127 | ) | (274,435 | ) | ||||||||
14,073 | 98,560 | 15,568 | 104,561 | |||||||||||||
R Class/Shares Authorized | 5,000,000 | 5,000,000 | ||||||||||||||
Sold | 11,381 | 80,656 | 10,643 | 78,636 | ||||||||||||
Issued in reinvestment of distributions | 488 | 3,397 | 436 | 3,336 | ||||||||||||
Redeemed | (7,931 | ) | (53,440 | ) | (16,501 | ) | (114,636 | ) | ||||||||
3,938 | 30,613 | (5,422 | ) | (32,664 | ) | |||||||||||
Net increase (decrease) | 71,060 | $677,222 | (225,453 | ) | $(1,290,177 | ) |
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). |
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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 | — | $22,718,255 | — | |||||||||
Temporary Cash Investments | — | 103,606 | — | |||||||||
Total Value of Investment Securities | — | $22,821,861 | — |
7. Risk Factors
There are certain risks involved in investing in foreign securities. These risks include those resulting from future adverse political, social and economic developments, fluctuations in currency exchange rates, the possible imposition of exchange controls, and other foreign laws or restrictions. Investing in emerging markets may accentuate these risks.
The fund’s investment process may result in high portfolio turnover, which could mean high transaction costs, affecting both performance and capital gains tax liabilities to investors.
8. Federal Tax Information
The book-basis character of distributions made during the year from net investment income or net realized gains may differ from their ultimate characterization for federal income tax purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements.
As of May 31, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $24,263,946 | |||
Gross tax appreciation of investments | $1,061,826 | |||
Gross tax depreciation of investments | (2,503,911 | ) | ||
Net tax appreciation (depreciation) of investments | $(1,442,085 | ) |
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, 2011, the fund had accumulated capital losses of $(6,210,901), 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 Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||
Investor Class | |||||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.84 | 0.12 | (0.67 | ) | (0.55 | ) | (0.13 | ) | — | (0.13 | ) | $6.16 | (8.23 | )% | 1.31 | %(4) | 1.31 | %(4) | 3.52 | %(4) | 3.52 | %(4) | 89 | % | $8,785 | ||||||||||||||||||
2011 | $6.91 | 0.14 | (0.09 | ) | 0.05 | (0.12 | ) | — | (0.12 | ) | $6.84 | 0.57 | % | 1.31 | % | 1.31 | % | 1.85 | % | 1.85 | % | 30 | % | $9,391 | |||||||||||||||||||
2010 | $7.33 | 0.11 | (0.24 | ) | (0.13 | ) | (0.29 | ) | — | (0.29 | ) | $6.91 | (1.82 | )% | 1.32 | % | 1.32 | % | 1.66 | % | 1.66 | % | 26 | % | $7,272 | ||||||||||||||||||
2009 | $5.47 | 0.11 | 1.88 | 1.99 | (0.13 | ) | — | (0.13 | ) | $7.33 | 36.98 | % | 1.31 | % | 1.31 | % | 2.34 | % | 2.34 | % | 16 | % | $7,062 | ||||||||||||||||||||
2008 | $11.48 | 0.19 | (5.18 | ) | (4.99 | ) | (0.24 | ) | (0.78 | ) | (1.02 | ) | $5.47 | (47.43 | )% | 1.31 | % | 1.31 | % | 2.20 | % | 2.20 | % | 4 | % | $2,512 | |||||||||||||||||
2007 | $14.36 | 0.22 | 2.09 | 2.31 | (0.47 | ) | (4.72 | ) | (5.19 | ) | $11.48 | 23.55 | % | 1.30 | % | 1.30 | % | 1.96 | % | 1.96 | % | 11 | % | $3,044 | |||||||||||||||||||
Institutional Class | |||||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.84 | 0.13 | (0.67 | ) | (0.54 | ) | (0.15 | ) | — | (0.15 | ) | $6.15 | (8.18 | )% | 1.11 | %(4) | 1.11 | %(4) | 3.72 | %(4) | 3.72 | %(4) | 89 | % | $273 | ||||||||||||||||||
2011 | $6.90 | 0.15 | (0.07 | ) | 0.08 | (0.14 | ) | — | (0.14 | ) | $6.84 | 0.92 | % | 1.11 | % | 1.11 | % | 2.05 | % | 2.05 | % | 30 | % | $244 | |||||||||||||||||||
2010 | $7.34 | 0.13 | (0.25 | ) | (0.12 | ) | (0.32 | ) | — | (0.32 | ) | $6.90 | (1.69 | )% | 1.12 | % | 1.12 | % | 1.86 | % | 1.86 | % | 26 | % | $1,456 | ||||||||||||||||||
2009 | $5.48 | 0.18 | 1.82 | 2.00 | (0.14 | ) | — | (0.14 | ) | $7.34 | 37.18 | % | 1.11 | % | 1.11 | % | 2.54 | % | 2.54 | % | 16 | % | $1,627 | ||||||||||||||||||||
2008 | $11.50 | 0.21 | (5.19 | ) | (4.98 | ) | (0.26 | ) | (0.78 | ) | (1.04 | ) | $5.48 | (47.32 | )% | 1.11 | % | 1.11 | % | 2.40 | % | 2.40 | % | 4 | % | $23,847 | |||||||||||||||||
2007 | $14.38 | 0.23 | 2.10 | 2.33 | (0.49 | ) | (4.72 | ) | (5.21 | ) | $11.50 | 23.77 | % | 1.10 | % | 1.10 | % | 2.16 | % | 2.16 | % | 11 | % | $45,262 |
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | |||||||||||||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss)(1) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(2) | Operating Expenses | Operating Expenses (before expense waiver) | Net Investment Income (Loss) | Net Investment Income (Loss) (before expense waiver) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||||||||||
A Class | |||||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.87 | 0.11 | (0.68 | ) | (0.57 | ) | (0.11 | ) | — | (0.11 | ) | $6.19 | (8.43 | )% | 1.56 | %(4) | 1.56 | %(4) | 3.27 | %(4) | 3.27 | %(4) | 89 | % | $12,532 | ||||||||||||||||||
2011 | $6.93 | 0.12 | (0.08 | ) | 0.04 | (0.10 | ) | — | (0.10 | ) | $6.87 | 0.45 | % | 1.56 | % | 1.56 | % | 1.60 | % | 1.60 | % | 30 | % | $13,981 | |||||||||||||||||||
2010 | $7.33 | 0.10 | (0.24 | ) | (0.14 | ) | (0.26 | ) | — | (0.26 | ) | $6.93 | (2.04 | )% | 1.57 | % | 1.57 | % | 1.41 | % | 1.41 | % | 26 | % | $15,783 | ||||||||||||||||||
2009 | $5.48 | 0.10 | 1.86 | 1.96 | (0.11 | ) | — | (0.11 | ) | $7.33 | 36.40 | % | 1.56 | % | 1.56 | % | 2.09 | % | 2.09 | % | 16 | % | $18,644 | ||||||||||||||||||||
2008 | $11.49 | 0.18 | (5.20 | ) | (5.02 | ) | (0.21 | ) | (0.78 | ) | (0.99 | ) | $5.48 | (47.53 | )% | 1.51 | % | 1.56 | % | 2.00 | % | 1.95 | % | 4 | % | $15,015 | |||||||||||||||||
2007 | $14.35 | 0.20 | 2.11 | 2.31 | (0.45 | ) | (4.72 | ) | (5.17 | ) | $11.49 | 23.44 | % | 1.40 | % | 1.55 | % | 1.86 | % | 1.71 | % | 11 | % | $24,558 | |||||||||||||||||||
C Class | |||||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.84 | 0.09 | (0.68 | ) | (0.59 | ) | (0.06 | ) | — | (0.06 | ) | $6.19 | (8.74 | )% | 2.31 | %(4) | 2.31 | %(4) | 2.52 | %(4) | 2.52 | %(4) | 89 | % | $1,115 | ||||||||||||||||||
2011 | $6.90 | 0.06 | (0.08 | ) | (0.02 | ) | (0.04 | ) | — | (0.04 | ) | $6.84 | (0.31 | )% | 2.31 | % | 2.31 | % | 0.85 | % | 0.85 | % | 30 | % | $1,137 | ||||||||||||||||||
2010 | $7.25 | 0.05 | (0.25 | ) | (0.20 | ) | (0.15 | ) | — | (0.15 | ) | $6.90 | (2.85 | )% | 2.32 | % | 2.32 | % | 0.66 | % | 0.66 | % | 26 | % | $1,039 | ||||||||||||||||||
2009 | $5.42 | 0.05 | 1.85 | 1.90 | (0.07 | ) | — | (0.07 | ) | $7.25 | 35.44 | % | 2.31 | % | 2.31 | % | 1.34 | % | 1.34 | % | 16 | % | $869 | ||||||||||||||||||||
2008 | $11.37 | 0.12 | (5.17 | ) | (5.05 | ) | (0.12 | ) | (0.78 | ) | (0.90 | ) | $5.42 | (47.93 | )% | 2.31 | % | 2.31 | % | 1.20 | % | 1.20 | % | 4 | % | $337 | |||||||||||||||||
2007 | $14.27 | 0.12 | 2.07 | 2.19 | (0.37 | ) | (4.72 | ) | (5.09 | ) | $11.37 | 22.28 | % | 2.30 | % | 2.30 | % | 0.96 | % | 0.96 | % | 11 | % | $222 | |||||||||||||||||||
R Class | |||||||||||||||||||||||||||||||||||||||||||
2012(3) | $6.84 | 0.11 | (0.68 | ) | (0.57 | ) | (0.10 | ) | — | (0.10 | ) | $6.17 | (8.56 | )% | 1.81 | %(4) | 1.81 | %(4) | 3.02 | %(4) | 3.02 | %(4) | 89 | % | $235 | ||||||||||||||||||
2011 | $6.90 | 0.10 | (0.08 | ) | 0.02 | (0.08 | ) | — | (0.08 | ) | $6.84 | 0.20 | % | 1.81 | % | 1.81 | % | 1.35 | % | 1.35 | % | 30 | % | $234 | |||||||||||||||||||
2010 | $7.28 | 0.09 | (0.25 | ) | (0.16 | ) | (0.22 | ) | — | (0.22 | ) | $6.90 | (2.27 | )% | 1.82 | % | 1.82 | % | 1.16 | % | 1.16 | % | 26 | % | $273 | ||||||||||||||||||
2009 | $5.45 | 0.09 | 1.84 | 1.93 | (0.10 | ) | — | (0.10 | ) | $7.28 | 35.90 | % | 1.81 | % | 1.81 | % | 1.84 | % | 1.84 | % | 16 | % | $123 | ||||||||||||||||||||
2008 | $11.42 | 0.13 | (5.14 | ) | (5.01 | ) | (0.18 | ) | (0.78 | ) | (0.96 | ) | $5.45 | (47.61 | )% | 1.81 | % | 1.81 | % | 1.70 | % | 1.70 | % | 4 | % | $78 | |||||||||||||||||
2007 | $14.31 | 0.11 | 2.14 | 2.25 | (0.42 | ) | (4.72 | ) | (5.14 | ) | $11.42 | 22.91 | % | 1.80 | % | 1.80 | % | 1.46 | % | 1.46 | % | 11 | % | $202 |
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Notes to Financial Highlights
(1) | Computed using average shares outstanding throughout the period. |
(2) | Total returns are calculated based on the net asset value of the last business day and do not reflect applicable sales charges, if any. Total returns for periods less than one year are not annualized. |
(3) | Six months ended May 31, 2012 (unaudited). |
(4) | Annualized. |
See Notes to Financial Statements.
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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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75488 1207
SEMIANNUAL REPORT | MAY 31, 2012
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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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/thomassignature.jpg)
Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
![](https://capedge.com/proxy/N-CSRS/0001437749-12-007815/prattsignature.jpg)
Don Pratt
3
Total Returns as of May 31, 2012 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLNX | -2.36% | -18.69% | -4.81% | -1.39% | 5/12/06 |
MSCI EAFE Index | — | -4.70% | -20.48% | -7.34% | -2.96%(2) | — |
MSCI EAFE Growth Index | — | -2.78% | -18.36% | -5.56% | -1.71%(2) | — |
(1) | Total returns for periods less than one year are not annualized. |
(2) | Since 4/30/06, the date nearest the Institutional Class’s inception for which data are available. |
Total Annual Fund Operating Expenses |
Institutional Class 1.12% |
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
MAY 31, 2012 | |
Top Ten Holdings | % of net assets |
Nestle SA | 2.3% |
Syngenta AG | 1.7% |
Pernod-Ricard SA | 1.6% |
Toyota Motor Corp. | 1.6% |
BHP Billiton Ltd. | 1.5% |
Danone SA | 1.5% |
Samsung Electronics Co. Ltd. | 1.5% |
Statoil ASA | 1.4% |
Novo Nordisk A/S B Shares | 1.4% |
Saipem SpA | 1.4% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 98.1% |
Temporary Cash Investments | 2.3% |
Other Assets and Liabilities | (0.4)% |
Investments by Country | % of net assets |
United Kingdom | 15.6% |
Japan | 12.9% |
France | 10.5% |
Switzerland | 8.5% |
Germany | 8.1% |
Italy | 4.0% |
Netherlands | 4.0% |
Sweden | 3.0% |
South Korea | 2.7% |
Spain | 2.6% |
Australia | 2.3% |
Denmark | 2.2% |
People’s Republic of China | 2.1% |
Belgium | 2.0% |
Norway | 2.0% |
Other Countries | 15.6% |
Cash and Equivalents* | 1.9% |
*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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 – 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $976.40 | $5.48 | 1.11% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,019.45 | $5.60 | 1.11% |
(1) Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 98.1% | ||||||||
AUSTRALIA — 2.3% | ||||||||
BHP Billiton Ltd. | 203,627 | $6,341,345 | ||||||
Commonwealth Bank of Australia | 73,585 | 3,540,949 | ||||||
9,882,294 | ||||||||
BELGIUM — 2.0% | ||||||||
Anheuser-Busch InBev NV | 70,951 | 4,803,270 | ||||||
Umicore SA | 80,103 | 3,801,439 | ||||||
8,604,709 | ||||||||
BRAZIL — 0.8% | ||||||||
BR Malls Participacoes SA | 132,300 | 1,459,541 | ||||||
Itau Unibanco Holding SA Preference Shares | 120,000 | 1,732,008 | ||||||
3,191,549 | ||||||||
CANADA — 1.5% | ||||||||
Bank of Nova Scotia | 50,304 | 2,579,855 | ||||||
Canadian National Railway Co. | 20,666 | 1,689,936 | ||||||
Potash Corp. of Saskatchewan, Inc. | 52,081 | 2,062,868 | ||||||
6,332,659 | ||||||||
DENMARK — 2.2% | ||||||||
Christian Hansen Holding A/S | 114,668 | 3,194,127 | ||||||
Novo Nordisk A/S B Shares | 45,135 | 6,004,631 | ||||||
9,198,758 | ||||||||
FINLAND — 0.8% | ||||||||
Fortum Oyj | 53,002 | 962,083 | ||||||
Kone Oyj | 44,199 | 2,466,449 | ||||||
3,428,532 | ||||||||
FRANCE — 10.5% | ||||||||
BNP Paribas SA | 95,963 | 3,052,485 | ||||||
Cie Generale d’Optique Essilor International SA | 35,913 | 3,067,597 | ||||||
Danone SA | 97,607 | 6,262,661 | ||||||
L’Oreal SA | 44,168 | 4,965,482 | ||||||
LVMH Moet Hennessy Louis Vuitton SA | 21,192 | 3,128,748 | ||||||
Pernod-Ricard SA | 70,522 | 6,888,838 | ||||||
Sanofi | 73,941 | 5,028,545 | ||||||
Schneider Electric SA | 54,975 | 2,927,753 | ||||||
Technip SA | 45,306 | 4,129,300 | ||||||
Zodiac Aerospace | 47,093 | 4,590,312 | ||||||
44,041,721 | ||||||||
GERMANY — 8.1% | ||||||||
adidas AG | 37,863 | 2,817,952 | ||||||
BASF SE | 65,971 | 4,599,096 | ||||||
Bayerische Motoren Werke AG | 50,878 | 3,843,842 | ||||||
Fresenius Medical Care AG & Co. KGaA | 29,479 | 1,957,043 | ||||||
HeidelbergCement AG | 69,952 | 3,034,269 | ||||||
Hugo Boss AG Preference Shares | 35,198 | 3,418,680 | ||||||
Infineon Technologies AG | 104,792 | 827,727 | ||||||
Kabel Deutschland Holding AG(1) | 73,497 | 4,169,532 | ||||||
Muenchener Rueckversicherungs AG | 44,706 | 5,541,719 | ||||||
SAP AG | 69,189 | 3,969,624 | ||||||
34,179,484 | ||||||||
HONG KONG — 1.7% | ||||||||
AIA Group Ltd. | 768,900 | 2,506,351 | ||||||
China Unicom Ltd. ADR | 211,815 | 2,910,338 | ||||||
Link Real Estate Investment Trust (The) | 497,500 | 1,910,121 | ||||||
7,326,810 | ||||||||
INDIA — 0.7% | ||||||||
HDFC Bank Ltd. | 162,097 | 1,461,132 | ||||||
HDFC Bank Ltd. ADR(1) | 51,063 | 1,427,721 | ||||||
2,888,853 | ||||||||
INDONESIA — 0.7% | ||||||||
PT Bank Mandiri (Persero) Tbk | 3,944,250 | 2,895,247 | ||||||
IRELAND — 1.2% | ||||||||
Experian plc | 143,719 | 2,004,573 | ||||||
Shire plc | 114,524 | 3,226,500 | ||||||
5,231,073 | ||||||||
ISRAEL — 0.2% | ||||||||
Check Point Software Technologies Ltd.(1) | 19,963 | 1,022,904 | ||||||
ITALY — 4.0% | ||||||||
ENI SpA | 206,495 | 3,983,166 | ||||||
Pirelli & C SpA | 369,973 | 3,666,637 | ||||||
Prada SpA | 504,800 | 3,108,843 | ||||||
Saipem SpA | 151,545 | 5,883,904 | ||||||
16,642,550 | ||||||||
JAPAN — 12.9% | ||||||||
Daihatsu Motor Co. Ltd. | 104,000 | 1,789,076 | ||||||
Daito Trust Construction Co. Ltd. | 26,700 | 2,351,072 | ||||||
FANUC Corp. | 19,500 | 3,364,472 | ||||||
Fast Retailing Co. Ltd. | 14,100 | 3,147,129 | ||||||
Hitachi Ltd. | 219,000 | 1,254,862 | ||||||
Komatsu Ltd. | 112,200 | 2,689,020 | ||||||
Konami Corp. | 45,400 | 960,028 |
8
Shares | Value |
Lawson, Inc. | 67,600 | $4,736,141 | ||||||
Mitsubishi Corp. | 169,600 | 3,322,307 | ||||||
Mitsubishi Heavy Industries Ltd. | 952,000 | 3,851,251 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 573,700 | 2,489,255 | ||||||
Murata Manufacturing Co. Ltd. | 66,100 | 3,433,218 | ||||||
Nitori Holdings Co. Ltd. | 15,500 | 1,400,459 | ||||||
ORIX Corp. | 55,360 | 4,789,954 | ||||||
Rakuten, Inc. | 3,833 | 4,099,099 | ||||||
Toyota Motor Corp. | 170,900 | 6,630,117 | ||||||
Unicharm Corp. | 74,900 | 4,048,003 | ||||||
54,355,463 | ||||||||
MACAU — 0.5% | ||||||||
Sands China Ltd. | 624,800 | 2,133,234 | ||||||
NETHERLANDS — 4.0% | ||||||||
ASML Holding NV | 88,652 | 4,066,837 | ||||||
European Aeronautic Defence and Space Co. NV | 143,099 | 4,789,819 | ||||||
Gemalto NV | 36,260 | 2,309,477 | ||||||
Koninklijke Vopak NV | 50,511 | 2,977,319 | ||||||
Unilever NV CVA | 79,229 | 2,492,763 | ||||||
16,636,215 | ||||||||
NORWAY — 2.0% | ||||||||
Statoil ASA | 269,754 | 6,083,350 | ||||||
Telenor ASA | 148,120 | 2,164,307 | ||||||
8,247,657 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 2.1% | ||||||||
Baidu, Inc. ADR(1) | 25,937 | 3,054,601 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 2,363,715 | 1,437,436 | ||||||
Lenovo Group Ltd. | 1,956,000 | 1,663,276 | ||||||
Tencent Holdings Ltd. | 98,700 | 2,713,708 | ||||||
8,869,021 | ||||||||
PERU — 0.8% | ||||||||
Credicorp Ltd. | 27,626 | 3,446,896 | ||||||
PORTUGAL — 1.0% | ||||||||
Jeronimo Martins SGPS SA | 243,654 | 4,327,863 | ||||||
RUSSIAN FEDERATION — 1.3% | ||||||||
Magnit OJSC GDR(1) | 110,265 | 2,712,519 | ||||||
Sberbank of Russia | 1,166,558 | 2,889,564 | ||||||
5,602,083 | ||||||||
SINGAPORE — 1.1% | ||||||||
DBS Group Holdings Ltd. | 255,000 | 2,616,095 | ||||||
Keppel Corp. Ltd. | 263,000 | 2,036,893 | ||||||
4,652,988 | ||||||||
SOUTH KOREA — 2.7% | ||||||||
Hyundai Motor Co. | 23,910 | 4,943,055 | ||||||
Samsung Electronics Co. Ltd. | 6,059 | 6,216,860 | ||||||
11,159,915 | ||||||||
SPAIN — 2.6% | ||||||||
Banco Bilbao Vizcaya Argentaria SA | 387,145 | 2,203,000 | ||||||
Grifols SA(1) | 252,002 | 5,716,313 | ||||||
Inditex SA | 34,865 | 2,880,650 | ||||||
10,799,963 | ||||||||
SWEDEN — 3.0% | ||||||||
Atlas Copco AB A Shares | 126,269 | 2,542,935 | ||||||
Electrolux AB | 99,068 | 1,877,853 | ||||||
Elekta AB B Shares | 37,401 | 1,793,209 | ||||||
Getinge AB B Shares | 73,998 | 1,838,618 | ||||||
Swedbank AB A Shares | 204,122 | 2,899,772 | ||||||
Volvo AB B Shares | 150,653 | 1,691,204 | ||||||
12,643,591 | ||||||||
SWITZERLAND — 8.5% | ||||||||
Adecco SA(1) | 54,407 | 2,111,642 | ||||||
Nestle SA | 170,485 | 9,662,016 | ||||||
Roche Holding AG | 28,847 | 4,502,193 | ||||||
Syngenta AG | 21,808 | 6,982,332 | ||||||
UBS AG(1) | 304,653 | 3,434,344 | ||||||
Wolseley plc | 117,732 | 4,006,385 | ||||||
Xstrata plc | 170,990 | 2,431,062 | ||||||
Zurich Financial Services AG(1) | 13,499 | 2,759,975 | ||||||
35,889,949 | ||||||||
TAIWAN (REPUBLIC OF CHINA) — 1.8% | ||||||||
Hon Hai Precision Industry Co. Ltd. | 1,469,000 | 4,306,402 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. ADR | 251,427 | 3,452,093 | ||||||
7,758,495 | ||||||||
THAILAND — 0.9% | ||||||||
Kasikornbank PCL NVDR | 761,500 | 3,709,964 | ||||||
TURKEY — 0.6% | ||||||||
Turkiye Garanti Bankasi AS | 751,871 | 2,411,148 | ||||||
UNITED KINGDOM — 15.6% | ||||||||
Admiral Group plc | 88,164 | 1,411,776 | ||||||
Aegis Group plc | 573,703 | 1,435,926 | ||||||
Aggreko plc | 97,616 | 3,306,799 | ||||||
Antofagasta plc | 147,889 | 2,283,824 | ||||||
ARM Holdings plc | 144,614 | 1,128,883 | ||||||
BG Group plc | 288,429 | 5,523,246 |
9
Shares | Value | |||||||
Burberry Group plc | 111,129 | $2,341,289 | ||||||
Capita Group plc (The) | 240,437 | 2,290,070 | ||||||
Compass Group plc | 165,735 | 1,624,540 | ||||||
GlaxoSmithKline plc | 170,742 | 3,784,062 | ||||||
HSBC Holdings plc (Hong Kong) | 525,076 | 4,143,619 | ||||||
Intercontinental Hotels Group plc | 153,810 | 3,617,413 | ||||||
Intertek Group plc | 101,521 | 4,138,478 | ||||||
Kingfisher plc | 722,606 | 3,140,579 | ||||||
Lloyds Banking Group plc(1) | 7,472,126 | 2,922,771 | ||||||
Petrofac Ltd. | 192,741 | 4,595,401 | ||||||
Reckitt Benckiser Group plc | 51,089 | 2,711,750 | ||||||
Rio Tinto plc | 109,143 | 4,676,272 | ||||||
Standard Chartered plc | 142,293 | 2,870,663 | ||||||
Vodafone Group plc | 1,662,336 | 4,432,247 | ||||||
Whitbread plc | 116,538 | 3,346,104 | ||||||
65,725,712 | ||||||||
TOTAL COMMON STOCKS (Cost $406,708,338) | 413,237,300 | |||||||
Temporary Cash Investments — 2.3% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $3,688,757), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $3,614,540) | 3,614,524 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $3,706,075), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $3,614,537) | 3,614,529 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $2,542,558), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $2,488,571) | 2,488,564 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $9,717,617) | 9,717,617 | |||||||
TOTAL INVESTMENT SECURITIES — 100.4% (Cost $416,425,955) | 422,954,917 | |||||||
OTHER ASSETS AND LIABILITIES — (0.4)% | (1,674,238 | ) | ||||||
TOTAL NET ASSETS — 100.0% | $421,280,679 |
Market Sector Diversification | |
(as a % of net assets) | |
Financials | 18.1% |
Consumer Discretionary | 16.5% |
Industrials | 13.4% |
Consumer Staples | 12.6% |
Information Technology | 9.6% |
Materials | 9.4% |
Health Care | 8.7% |
Energy | 7.3% |
Telecommunication Services | 2.3% |
Utilities | 0.2% |
Cash and Equivalents* | 1.9% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
CVA = Certificaten Van Aandelen
GDR = Global Depositary Receipt
NVDR = Non-Voting Depositary Receipt
OJSC = Open Joint Stock Company
(1) | Non-income producing. |
See Notes to Financial Statements.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $416,425,955) | $422,954,917 | |||
Foreign currency holdings, at value (cost of $538,334) | 535,232 | |||
Receivable for investments sold | 2,377,445 | |||
Receivable for capital shares sold | 339,925 | |||
Dividends and interest receivable | 1,818,791 | |||
Other assets | 4,254 | |||
428,030,564 | ||||
Liabilities | ||||
Payable for investments purchased | 6,352,058 | |||
Accrued management fees | 397,827 | |||
6,749,885 | ||||
Net Assets | $421,280,679 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 49,992,893 | |||
Net Asset Value Per Share | $8.43 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $428,324,599 | |||
Undistributed net investment income | 4,358,339 | |||
Accumulated net realized loss | (17,941,365 | ) | ||
Net unrealized appreciation | 6,539,106 | |||
$421,280,679 |
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $895,775) | $7,106,538 | |||
Interest | 2,320 | |||
7,108,858 | ||||
Expenses: | ||||
Management fees | 2,190,522 | |||
Directors’ fees and expenses | 6,627 | |||
Other expenses | 1,370 | |||
2,198,519 | ||||
Net investment income (loss) | 4,910,339 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | 1,411,314 | |||
Foreign currency transactions | (212,837 | ) | ||
1,198,477 | ||||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments | (19,047,452 | ) | ||
Translation of assets and liabilities in foreign currencies | (14,407 | ) | ||
(19,061,859 | ) | |||
Net realized and unrealized gain (loss) | (17,863,382 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(12,953,043 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $4,910,339 | $3,240,776 | ||||||
Net realized gain (loss) | 1,198,477 | (7,431,146 | ) | |||||
Change in net unrealized appreciation (depreciation) | (19,061,859 | ) | (10,586,156 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (12,953,043 | ) | (14,776,526 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income | (3,008,478 | ) | (2,574,499 | ) | ||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 95,957,119 | 125,698,997 | ||||||
Proceeds from reinvestment of distributions | 3,008,478 | 2,574,499 | ||||||
Payments for shares redeemed | (6,957,794 | ) | (15,905,615 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 92,007,803 | 112,367,881 | ||||||
Net increase (decrease) in net assets | 76,046,282 | 95,016,856 | ||||||
Net Assets | ||||||||
Beginning of period | 345,234,397 | 250,217,541 | ||||||
End of period | $421,280,679 | $345,234,397 | ||||||
Undistributed net investment income | $4,358,339 | $2,456,478 | ||||||
Transactions in Shares of the Fund | ||||||||
Sold | 10,781,978 | 13,582,598 | ||||||
Issued in reinvestment of distributions | 361,162 | 266,500 | ||||||
Redeemed | (789,159 | ) | (1,689,808 | ) | ||||
Net increase (decrease) in shares of the fund | 10,353,981 | 12,159,290 |
See Notes to Financial Statements.
13
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.
14
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. 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.
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.
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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, 2012 was 1.10%.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc., 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.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $260,243,265 and $171,183,324, 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). |
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 | $15,314,553 | $397,922,747 | — | |||||||||
Temporary Cash Investments | — | 9,717,617 | — | |||||||||
Total Value of Investment Securities | $15,314,553 | $407,640,364 | — |
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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, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $422,066,524 | |||
Gross tax appreciation of investments | $26,900,883 | |||
Gross tax depreciation of investments | (26,012,490 | ) | ||
Net tax appreciation (depreciation) of investments | $888,393 |
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, 2011, the fund had accumulated capital losses of $(8,278,098), 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 Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(5,863,340) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
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For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | |||||||||||||||||||||||||||||
Net Investment Income (Loss) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(1) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | |||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
2012(2) | $8.71 | 0.11 | (3) | (0.32 | ) | (0.21 | ) | (0.07 | ) | — | (0.07 | ) | $8.43 | (2.36 | )% | 1.11 | %(4) | 2.47 | %(4) | 44 | % | $421,281 | ||||||||||
2011 | $9.11 | 0.10 | (3) | (0.41 | ) | (0.31 | ) | (0.09 | ) | — | (0.09 | ) | $8.71 | (3.47 | )% | 1.12 | % | 1.04 | % | 77 | % | $345,234 | ||||||||||
2010 | $8.61 | 0.08 | (3) | 0.54 | 0.62 | (0.12 | ) | — | (0.12 | ) | $9.11 | 7.28 | % | 1.14 | % | 0.95 | % | 85 | % | $250,218 | ||||||||||||
2009 | $6.29 | 0.10 | (3) | 2.33 | 2.43 | (0.11 | ) | — | (0.11 | ) | $8.61 | 39.09 | % | 1.18 | % | 1.41 | % | 132 | % | $163,476 | ||||||||||||
2008 | $12.72 | 0.16 | (3) | (6.18 | ) | (6.02 | ) | (0.12 | ) | (0.29 | ) | (0.41 | ) | $6.29 | (48.82 | )% | 1.12 | % | 1.62 | % | 119 | % | $55,860 | |||||||||
2007 | $10.34 | 0.12 | 2.29 | 2.41 | (0.03 | ) | — | (0.03 | ) | $12.72 | 23.40 | % | 1.07 | % | 1.15 | % | 104 | % | $67,703 |
Notes to Financial Highlights
(1) | 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. |
(2) | Six months ended May 31, 2012 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Annualized. |
See Notes to Financial Statements.
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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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75485 1207
SEMIANNUAL REPORT | MAY 31, 2012
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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 | 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, 2012. 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 next annual report, dated November 30, 2012, will provide additional market perspective and commentary from our portfolio management team.
Macroeconomic and Financial Market Overview
The six-month period covered by this report began in late 2011 on a relatively strong note, with market values, yields, and investor activity reflecting optimism for 2012. Concerns about the European sovereign debt crisis had eased somewhat. Renewed optimism (similar to early in the first quarter of 2011) inspired investors to generally favor stocks over bonds, and higher-yielding investments over lower-yielding.
This risk-tolerant attitude prevailed through March 2012, but broke down in April and May. During the first four months, investor optimism helped push equities—both domestic and foreign—to double-digit returns. In contrast, the U.S. Treasury market suffered negative returns.
But trends reversed during the final two months of the reporting period. Several U.S. growth indicators slowed, and Europe’s sovereign debt crisis turned for the worse. Spain’s banking sector deteriorated, and Greece’s failure to form a coalition government after elections in May led to concerns that the country might leave the eurozone. Investor preferences generally shifted from stocks to safe-haven assets, particularly U.S. Treasuries.
As a result, investment returns for the six months were mixed. The biggest gainers included long-maturity U.S. government and municipal bonds, and high-yield bonds. The biggest decliners included commodities and international stocks, particularly European stocks. Between those extremes were middling returns for broad U.S. indices—the S&P 500 Index advanced 6.23%, while its bond counterpart, the Barclays U.S. Aggregate Bond Index, advanced 3.46%.
In this uncertain, unstable environment, we continue to believe in a disciplined, diversified, long-term investment approach. We appreciate your continued trust in us during these unsettled times.
Sincerely,
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Jonathan Thomas
President and Chief Executive Officer
American Century Investments
2
Dear Fellow Shareholders,
The assets under management in American Century Investments’ funds grow through investors placing new assets in the funds and through market appreciation. Asset growth has been at near record levels over the past two calendar years as market movements were upward, the funds’ relative returns were generally favorable, and the distribution strategies implemented by fund management have been successful.
The board reviews fund performance and distribution strategies on a regular basis. Several years ago, the fund’s management team discussed with the board its plans to grow fund assets in the intermediary, institutional and international distribution channels. These distribution strategies have produced strong positive growth. The growth in the intermediary channel recognizes the funds’ strong relative investment performance and the desire of many shareholders to seek financial guidance. Investors in both the institutional and international channels appear to find the funds’ risk-based investment strategies attractive. The board continues to support fund management’s strategies to increase fund assets and will continue to work to provide the benefits of these gains to fund shareholders.
We continue to receive a steady flow of very thoughtful questions from shareholders. If there are issues that you would like the board to address please email me at dhpratt@fundboardchair.com. Thank you for your continued investment in American Century Investments funds.
Best regards,
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Don Pratt
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Total Returns as of May 31, 2012 | ||||||
Average Annual Returns | ||||||
Ticker Symbol | 6 months(1) | 1 year | 5 years | Since Inception | Inception Date | |
Institutional Class | ACLKX | -1.15% | -21.17% | -4.18% | 1.34% | 5/12/06 |
MSCI Emerging Markets Growth Index | — | -0.27% | -20.31% | -1.38% | 2.37%(2) | — |
(1) | Total returns for periods less than one year are not annualized. |
(2) | 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. 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.
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, 2012 | |
Top Ten Holdings | % of net assets |
Samsung Electronics Co. Ltd. | 7.9% |
Taiwan Semiconductor Manufacturing Co. Ltd. | 5.4% |
Tencent Holdings Ltd. | 2.2% |
Cia de Bebidas das Americas Preference Shares ADR | 2.1% |
Hon Hai Precision Industry Co. Ltd. | 2.0% |
Vale SA Preference Shares | 2.0% |
CNOOC Ltd. | 1.8% |
Ping An Insurance Group Co. H Shares | 1.6% |
BR Malls Participacoes SA | 1.5% |
Hotel Shilla Co. Ltd. | 1.4% |
Types of Investments in Portfolio | % of net assets |
Foreign Common Stocks | 95.7% |
Exchange-Traded Funds | 1.7% |
Total Equity Exposure | 97.4% |
Temporary Cash Investments | 2.5% |
Other Assets and Liabilities | 0.1% |
Investments by Country | % of net assets |
South Korea | 17.6% |
Brazil | 13.9% |
People’s Republic of China | 11.3% |
Taiwan (Republic of China) | 9.0% |
South Africa | 6.8% |
Hong Kong | 6.1% |
Mexico | 5.1% |
Thailand | 5.0% |
Turkey | 3.6% |
Russian Federation | 3.4% |
Indonesia | 3.4% |
India | 2.9% |
United Kingdom | 2.8% |
Other Countries | 6.5% |
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, 2011 to May 31, 2012.
Actual Expenses
The table provides information about actual account values and actual expenses for each class. You may use the information, together with the amount you invested, to estimate the expenses that you paid over the period. First, identify the share class you own. Then simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
If you hold Investor Class shares of any American Century Investments fund, or Institutional Class shares of the American Century Diversified Bond Fund, in an American Century Investments account (i.e., not a financial intermediary or retirement plan account), American Century Investments may charge you a $12.50 semiannual account maintenance fee if the value of those shares is less than $10,000. We will redeem shares automatically in one of your accounts to pay the $12.50 fee. In determining your total eligible investment amount, we will include your investments in all personal accounts (including American Century Investments Brokerage accounts) registered under your Social Security number. Personal accounts include individual accounts, joint accounts, UGMA/UTMA accounts, personal trusts, Coverdell Education Savings Accounts and IRAs (including traditional, Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement accounts. If you have only business, business retirement, employer-sponsored or American Century Investments Brokerage accounts, you are currently not subject to this fee. If you are subject to the Account Maintenance Fee, your account value could be reduced by the fee amount.
Hypothetical Example for Comparison Purposes
The table also provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each class of your fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of a fund’s share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in your fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
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 12/1/11 | Ending Account Value 5/31/12 | Expenses Paid During Period(1) 12/1/11 - 5/31/12 | Annualized Expense Ratio(1) | |
Actual | ||||
Institutional Class | $1,000 | $988.50 | $7.66 | 1.54% |
Hypothetical | ||||
Institutional Class | $1,000 | $1,017.30 | $7.77 | 1.54% |
(1) | Expenses are equal to the class’s annualized expense ratio listed in the table above, multiplied by the average account value over the period, multiplied by 183, the number of days in the most recent fiscal half-year, divided by 366, to reflect the one-half year period. |
7
Shares | Value | |||||||
Common Stocks — 95.7% | ||||||||
BRAZIL — 13.9% | ||||||||
BR Malls Participacoes SA | 199,000 | $2,195,379 | ||||||
BR Properties SA | 149,300 | 1,702,606 | ||||||
BRF - Brasil Foods SA | 89,400 | 1,382,545 | ||||||
CCR SA | 175,300 | 1,341,140 | ||||||
Cia de Bebidas das Americas Preference Shares ADR | 80,975 | 3,105,391 | ||||||
Cia de Saneamento de Minas Gerais-COPASA | 21,298 | 455,032 | ||||||
Cia Hering | 56,700 | 1,155,450 | ||||||
Cielo SA | 49,205 | 1,306,701 | ||||||
Itau Unibanco Holding SA Preference Shares | 58,200 | 840,024 | ||||||
Marcopolo SA Preference Shares | 226,800 | 1,048,058 | ||||||
Tim Participacoes SA ADR | 36,517 | 892,841 | ||||||
Ultrapar Participacoes SA | 91,900 | 1,859,097 | ||||||
Vale SA Preference Shares | 162,000 | 2,923,767 | ||||||
20,208,031 | ||||||||
CHILE — 0.8% | ||||||||
SACI Falabella | 123,788 | 1,113,565 | ||||||
HONG KONG — 6.1% | ||||||||
Belle International Holdings Ltd. | 873,000 | 1,401,470 | ||||||
Brilliance China Automotive Holdings Ltd.(1) | 1,164,000 | 1,141,272 | ||||||
China Overseas Land & Investment Ltd. | 774,000 | 1,617,496 | ||||||
China Unicom Ltd. | 244,000 | 335,119 | ||||||
CNOOC Ltd. | 1,455,000 | 2,631,974 | ||||||
Kunlun Energy Co. Ltd. | 1,052,000 | 1,797,260 | ||||||
8,924,591 | ||||||||
INDIA — 2.9% | ||||||||
HDFC Bank Ltd. | 162,589 | 1,465,567 | ||||||
ICICI Bank Ltd. ADR | 25,295 | 712,054 | ||||||
Jubilant Foodworks Ltd.(1) | 34,898 | 793,971 | ||||||
Tata Motors Ltd. | 294,746 | 1,222,914 | ||||||
4,194,506 | ||||||||
INDONESIA — 3.4% | ||||||||
PT AKR Corporindo Tbk | 3,117,000 | 1,119,136 | ||||||
PT Astra International Tbk | 106,000 | 725,085 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1,109,000 | 666,580 | ||||||
PT Charoen Pokphand Indonesia Tbk | 4,074,500 | 1,137,826 | ||||||
PT Semen Gresik (Persero) Tbk | 1,062,500 | 1,237,699 | ||||||
4,886,326 | ||||||||
MALAYSIA — 1.1% | ||||||||
Axiata Group Bhd | 425,000 | 719,556 | ||||||
Genting Malaysia Bhd | 759,000 | 883,017 | ||||||
1,602,573 | ||||||||
MEXICO — 5.1% | ||||||||
Alfa SAB de CV, Series A | 124,068 | 1,554,157 | ||||||
Cemex SAB de CV ADR(1) | 58,767 | 325,569 | ||||||
Fomento Economico Mexicano SAB de CV ADR | 22,295 | 1,757,515 | ||||||
Grupo Financiero Banorte SAB de CV | 286,586 | 1,280,732 | ||||||
Mexichem SAB de CV | 324,638 | 1,127,734 | ||||||
Wal-Mart de Mexico SAB de CV | 579,861 | 1,400,941 | ||||||
7,446,648 | ||||||||
PEOPLE’S REPUBLIC OF CHINA — 11.3% | ||||||||
AAC Technologies Holdings, Inc. | 590,000 | 1,862,386 | ||||||
China BlueChemical Ltd. H Shares(1) | 1,732,000 | 1,196,091 | ||||||
China Minsheng Banking Corp. Ltd. H Shares | 1,977,500 | 1,887,931 | ||||||
Focus Media Holding Ltd. ADR | 61,844 | 1,286,355 | ||||||
Hengan International Group Co. Ltd. | 117,000 | 1,119,267 | ||||||
Industrial & Commercial Bank of China Ltd. H Shares | 2,456,095 | 1,493,615 | ||||||
Lenovo Group Ltd. | 842,000 | 715,991 | ||||||
Ping An Insurance Group Co. H Shares | 313,000 | 2,304,688 | ||||||
Qihoo 360 Technology Co. Ltd. ADR(1) | 36,199 | 723,980 | ||||||
Tencent Holdings Ltd. | 115,100 | 3,164,618 | ||||||
ZTE Corp. H Shares | 372,960 | 739,044 | ||||||
16,493,966 | ||||||||
PERU — 1.1% | ||||||||
Credicorp Ltd. | 12,487 | 1,558,003 | ||||||
POLAND — 0.6% | ||||||||
Powszechna Kasa Oszczednosci Bank Polski SA | 99,544 | 898,285 | ||||||
RUSSIAN FEDERATION — 3.4% | ||||||||
Magnit OJSC GDR(1) | 34,375 | 845,625 | ||||||
Mail.ru Group Ltd. GDR(1) | 17,265 | 541,603 | ||||||
Mobile Telesystems OJSC ADR(1) | 93,946 | 1,563,262 | ||||||
Sberbank of Russia | 807,114 | 1,999,221 | ||||||
4,949,711 |
8
Shares | Value | |||||||
SOUTH AFRICA — 6.8% | ||||||||
Aspen Pharmacare Holdings Ltd.(1) | 77,728 | $1,076,369 | ||||||
Barloworld Ltd. | 114,692 | 1,142,719 | ||||||
Clicks Group Ltd. | 196,210 | 1,081,338 | ||||||
Discovery Holdings Ltd. | 208,064 | 1,218,471 | ||||||
Exxaro Resources Ltd. | 76,145 | 1,696,605 | ||||||
Mr Price Group Ltd. | 149,883 | 1,839,532 | ||||||
Naspers Ltd. N Shares | 19,900 | 1,052,156 | ||||||
Sasol Ltd. | 17,023 | 724,121 | ||||||
9,831,311 | ||||||||
SOUTH KOREA — 17.6% | ||||||||
Cheil Worldwide, Inc. | 38,280 | 585,430 | ||||||
Grand Korea Leisure Co. Ltd. | 72,470 | 1,399,971 | ||||||
Hotel Shilla Co. Ltd. | 45,462 | 2,072,320 | ||||||
Hyundai Glovis Co. Ltd. | 9,278 | 1,639,028 | ||||||
Hyundai Motor Co. | 7,144 | 1,476,921 | ||||||
Kia Motors Corp. | 27,772 | 1,887,155 | ||||||
LG Chem Ltd. | 2,527 | 623,052 | ||||||
LG Household & Health Care Ltd. | 3,691 | 1,826,346 | ||||||
NCSoft Corp. | 6,671 | 1,356,526 | ||||||
Orion Corp. | 1,450 | 1,181,868 | ||||||
Samsung Electronics Co. Ltd. | 11,242 | 11,534,897 | ||||||
25,583,514 | ||||||||
SWITZERLAND — 0.3% | ||||||||
Ferrexpo plc | 141,520 | 430,114 | ||||||
TAIWAN (REPUBLIC OF CHINA) — 9.0% | ||||||||
Catcher Technology Co. Ltd. | 196,000 | 1,244,371 | ||||||
Hon Hai Precision Industry Co. Ltd. | 1,004,553 | 2,944,867 | ||||||
Taiwan Semiconductor Manufacturing Co. Ltd. | 2,777,774 | 7,919,746 | ||||||
United Microelectronics Corp. | 2,330,000 | 1,022,615 | ||||||
13,131,599 | ||||||||
THAILAND — 5.0% | ||||||||
Advanced Info Service PCL | 238,200 | 1,340,179 | ||||||
Banpu PCL | 84,650 | 1,197,313 | ||||||
CP ALL PCL | 1,571,600 | 1,691,884 | ||||||
Kasikornbank PCL NVDR | 285,000 | 1,388,496 | ||||||
Siam Cement PCL NVDR | 161,100 | 1,731,768 | ||||||
7,349,640 | ||||||||
TURKEY — 3.6% | ||||||||
BIM Birlesik Magazalar AS | 32,151 | 1,301,730 | ||||||
Koza Altin Isletmeleri AS | 51,463 | 869,331 | ||||||
TAV Havalimanlari Holding AS | 204,799 | 990,635 | ||||||
Tofas Turk Otomobil Fabrikasi | 297,212 | 1,010,497 | ||||||
Turkiye Garanti Bankasi AS | 341,652 | 1,095,631 | ||||||
5,267,824 | ||||||||
UNITED ARAB EMIRATES — 0.9% | ||||||||
Dragon Oil plc | 169,973 | 1,306,537 | ||||||
UNITED KINGDOM — 2.8% | ||||||||
Antofagasta plc | 57,356 | 885,739 | ||||||
Petrofac Ltd. | 75,728 | 1,805,535 | ||||||
Tullow Oil plc | 63,477 | 1,391,153 | ||||||
4,082,427 | ||||||||
TOTAL COMMON STOCKS (Cost $127,665,383) | 139,259,171 | |||||||
Exchange-Traded Funds — 1.7% | ||||||||
Global X FTSE Colombia 20 ETF | 34,741 | 721,918 | ||||||
iShares MSCI Emerging Markets Index Fund | 47,299 | 1,783,172 | ||||||
TOTAL EXCHANGE-TRADED FUNDS (Cost $2,622,572) | 2,505,090 | |||||||
Temporary Cash Investments — 2.5% | ||||||||
Repurchase Agreement, Bank of America Merrill Lynch, (collateralized by various U.S. Treasury obligations, 0.25% - 2.625%, 9/15/14 - 12/31/14, valued at $1,381,349), in a joint trading account at 0.16%, dated 5/31/12, due 6/1/12 (Delivery value $1,353,556) | 1,353,550 | |||||||
Repurchase Agreement, Credit Suisse First Boston, Inc., (collateralized by various U.S. Treasury obligations, 4.50%, 2/15/36, valued at $1,387,834), in a joint trading account at 0.13%, dated 5/31/12, due 6/1/12 (Delivery value $1,353,556) | 1,353,551 | |||||||
Repurchase Agreement, Goldman Sachs & Co., (collateralized by various U.S. Treasury obligations, 3.625%, 8/15/19, valued at $952,125), in a joint trading account at 0.10%, dated 5/31/12, due 6/1/12 (Delivery value $931,911) | 931,908 | |||||||
TOTAL TEMPORARY CASH INVESTMENTS (Cost $3,639,009) | 3,639,009 | |||||||
TOTAL INVESTMENT SECURITIES — 99.9% (Cost $133,926,964) | 145,403,270 | |||||||
OTHER ASSETS AND LIABILITIES — 0.1% | 188,986 | |||||||
TOTAL NET ASSETS — 100.0% | $145,592,256 |
9
Market Sector Diversification | |
(as a % of net assets) | |
Information Technology | 24.1% |
Financials | 16.7% |
Consumer Discretionary | 15.4% |
Consumer Staples | 11.5% |
Materials | 8.9% |
Energy | 8.7% |
Industrials | 6.1% |
Telecommunication Services | 3.3% |
Diversified | 1.7% |
Health Care | 0.7% |
Utilities | 0.3% |
Cash and Equivalents* | 2.6% |
*Includes temporary cash investments and other assets and liabilities.
Notes to Schedule of Investments
ADR = American Depositary Receipt
ETF = Exchange-Traded Fund
FTSE = Financial Times Stock Exchange
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.
10
MAY 31, 2012 (UNAUDITED) | ||||
Assets | ||||
Investment securities, at value (cost of $133,926,964) | $145,403,270 | |||
Foreign currency holdings, at value (cost of $70,763) | 69,979 | |||
Receivable for investments sold | 514,907 | |||
Receivable for capital shares sold | 109,423 | |||
Dividends and interest receivable | 310,638 | |||
Other assets | 17,268 | |||
146,425,485 | ||||
Liabilities | ||||
Payable for investments purchased | 636,579 | |||
Accrued management fees | 193,189 | |||
Accrued foreign taxes | 3,461 | |||
833,229 | ||||
Net Assets | $145,592,256 | |||
Institutional Class Capital Shares, $0.01 Par Value | ||||
Shares authorized | 100,000,000 | |||
Shares outstanding | 16,494,051 | |||
Net Asset Value Per Share | $8.83 | |||
Net Assets Consist of: | ||||
Capital (par value and paid-in surplus) | $142,056,244 | |||
Undistributed net investment income | 283,967 | |||
Accumulated net realized loss | (8,209,691 | ) | ||
Net unrealized appreciation | 11,461,736 | |||
$145,592,256 |
See Notes to Financial Statements.
11
FOR THE SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) | ||||
Investment Income (Loss) | ||||
Income: | ||||
Dividends (net of foreign taxes withheld of $129,268) | $1,344,888 | |||
Interest | 700 | |||
1,345,588 | ||||
Expenses: | ||||
Management fees | 1,066,709 | |||
Directors’ fees and expenses | 2,311 | |||
Other expenses | 1,145 | |||
1,070,165 | ||||
Net investment income (loss) | 275,423 | |||
Realized and Unrealized Gain (Loss) | ||||
Net realized gain (loss) on: | ||||
Investment transactions | (2,192,931 | ) | ||
Foreign currency transactions | (126,431 | ) | ||
(2,319,362 | ) | |||
Change in net unrealized appreciation (depreciation) on: | ||||
Investments (includes (increase) decrease in accrued foreign taxes of $(3,461)) | (399,892 | ) | ||
Translation of assets and liabilities in foreign currencies | (7,244 | ) | ||
(407,136 | ) | |||
Net realized and unrealized gain (loss) | (2,726,498 | ) | ||
Net Increase (Decrease) in Net Assets Resulting from Operations | $(2,451,075 | ) |
See Notes to Financial Statements.
12
SIX MONTHS ENDED MAY 31, 2012 (UNAUDITED) AND YEAR ENDED NOVEMBER 30, 2011 | ||||||||
Increase (Decrease) in Net Assets | May 31, 2012 | November 30, 2011 | ||||||
Operations | ||||||||
Net investment income (loss) | $275,423 | $414,293 | ||||||
Net realized gain (loss) | (2,319,362 | ) | (2,837,788 | ) | ||||
Change in net unrealized appreciation (depreciation) | (407,136 | ) | (12,475,619 | ) | ||||
Net increase (decrease) in net assets resulting from operations | (2,451,075 | ) | (14,899,114 | ) | ||||
Distributions to Shareholders | ||||||||
From net investment income | (117,035 | ) | — | |||||
Capital Share Transactions | ||||||||
Proceeds from shares sold | 30,534,984 | 47,150,673 | ||||||
Proceeds from reinvestment of distributions | 117,035 | — | ||||||
Payments for shares redeemed | (2,173,177 | ) | (3,679,600 | ) | ||||
Net increase (decrease) in net assets from capital share transactions | 28,478,842 | 43,471,073 | ||||||
Net increase (decrease) in net assets | 25,910,732 | 28,571,959 | ||||||
Net Assets | ||||||||
Beginning of period | 119,681,524 | 91,109,565 | ||||||
End of period | $145,592,256 | $119,681,524 | ||||||
Undistributed net investment income | $283,967 | $125,579 | ||||||
Transactions in Shares of the Fund | ||||||||
Sold | 3,335,324 | 4,848,404 | ||||||
Issued in reinvestment of distributions | 12,216 | — | ||||||
Redeemed | (237,601 | ) | (360,351 | ) | ||||
Net increase (decrease) in shares of the fund | 3,109,939 | 4,488,053 |
See Notes to Financial Statements.
13
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.
14
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 investment transactions and change in net unrealized appreciation (depreciation) on investments, respectively.
Repurchase Agreements — The fund may enter into repurchase agreements with institutions that American Century Investment Management, Inc. (ACIM) (the investment advisor) has determined are creditworthy pursuant to criteria adopted by the Board of Directors. The fund requires that the collateral, represented by securities, received in a repurchase transaction be transferred to the custodian in a manner sufficient to enable the fund to obtain those securities in the event of a default under the repurchase agreement. ACIM monitors, on a daily basis, the securities transferred to ensure the value, including accrued interest, of the securities under each repurchase agreement is equal to or greater than amounts owed to the fund under each repurchase agreement.
Joint Trading Account — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with certain other funds in the American Century Investments family of funds, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Agency obligations.
Income Tax Status — It is the fund’s policy to distribute substantially all net investment income and net realized gains to shareholders and to otherwise qualify as a regulated investment company under provisions of the Internal Revenue Code. The fund is no longer subject to examination by tax authorities for years prior to 2008. 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.
15
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, 2012 was 1.54%.
Related Parties — Certain officers and directors of the corporation are also officers and/or directors of American Century Companies, Inc., 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.
4. Investment Transactions
Purchases and sales of investment securities, excluding short-term investments, for the six months ended May 31, 2012 were $99,243,189 and $72,902,831, 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). |
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.
16
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 | $11,924,970 | $127,334,201 | — | |||||||||
Exchange-Traded Funds | 2,505,090 | — | — | |||||||||
Temporary Cash Investments | — | 3,639,009 | — | |||||||||
Total Value of Investment Securities | $14,430,060 | $130,973,210 | — |
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.
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.
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, 2012, the components of investments for federal income tax purposes were as follows:
Federal tax cost of investments | $135,553,069 | |||
Gross tax appreciation of investments | $15,491,854 | |||
Gross tax depreciation of investments | (5,641,653 | ) | ||
Net tax appreciation (depreciation) of investments | $9,850,201 |
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, 2011, the fund had accumulated capital losses of $(1,146,451), 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 Regulated Investment Company Modernization Act of 2010 allows the fund to carry forward capital losses incurred in future taxable years for an unlimited period. Any losses incurred during future taxable years will be required to be utilized prior to the losses which carry an expiration date. As a result, capital loss carryforwards may be more likely to expire unused.
The fund has elected to treat $(3,187,944) of net capital losses incurred in the one-month period ended November 30, 2011, as having been incurred in the following fiscal year for federal income tax purposes.
17
For a Share Outstanding Throughout the Years Ended November 30 (except as noted) | ||||||||||||||||||||||||||||||||
Per-Share Data | Ratios and Supplemental Data | |||||||||||||||||||||||||||||||
Income From Investment Operations: | Distributions From: | Ratio to Average Net Assets of: | ||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gain (Loss) | Total From Investment Operations | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return(1) | Operating Expenses | Net Investment Income (Loss) | Portfolio Turnover Rate | Net Assets, End of Period (in thousands) | ||||||||||||||||||||
Institutional Class | ||||||||||||||||||||||||||||||||
2012(2) | $8.94 | 0.02 | (3) | (0.12 | ) | (0.10 | ) | (0.01 | ) | — | (0.01 | ) | $8.83 | (1.15 | )% | 1.54 | %(4) | 0.40 | %(4) | 53 | % | $145,592 | ||||||||||
2011 | $10.24 | 0.04 | (3) | (1.34 | ) | (1.30 | ) | — | — | — | $8.94 | (12.70 | )% | 1.52 | % | 0.37 | % | 87 | % | $119,682 | ||||||||||||
2010 | $8.86 | 0.02 | (3) | 1.37 | 1.39 | (0.01 | ) | — | (0.01 | ) | $10.24 | 15.73 | % | 1.52 | % | 0.19 | % | 94 | % | $91,110 | ||||||||||||
2009 | $5.12 | 0.02 | (3) | 3.74 | 3.76 | (0.02 | ) | — | (0.02 | ) | $8.86 | 73.87 | % | 1.57 | % | 0.36 | % | 158 | % | $60,311 | ||||||||||||
2008 | $16.19 | 0.11 | (3) | (8.52 | ) | (8.41 | ) | (0.20 | ) | (2.46 | ) | (2.66 | ) | $5.12 | (61.75 | )% | 1.52 | % | 1.17 | % | 157 | % | $20,715 | |||||||||
2007 | $11.01 | 0.15 | 5.12 | 5.27 | (0.09 | ) | — | (0.09 | ) | $16.19 | 48.22 | % | 1.46 | % | 1.12 | % | 113 | % | $28,378 |
Notes to Financial Highlights
(1) | 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. |
(2) | Six months ended May 31, 2012 (unaudited). |
(3) | Computed using average shares outstanding throughout the period. |
(4) | Annualized. |
See Notes to Financial Statements.
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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.
©2012 American Century Proprietary Holdings, Inc. All rights reserved.
CL-SAN-75484 1207
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 30, 2012 | |||
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Jonathan S. Thomas | ||
Name: | Jonathan S. Thomas | ||
Title: | President | ||
(principal executive officer) | |||
Date: | July 30, 2012 |
By: | /s/ C. Jean Wade | ||
Name: | C. Jean Wade | ||
Title: | Vice President, Treasurer, and | ||
Chief Financial Officer | |||
(principal financial officer) | |||
Date: | July 30, 2012 |