AMERICAN CENTURY MUTUAL FUNDS INC (Form: 485BPOS, Received: 04/20/2001 11:58:04)

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 93 [X]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 93 [X]

(Check appropriate box or boxes.)

AMERICAN CENTURY MUTUAL FUNDS, INC.
_________________________________________________________________
(Exact Name of Registrant as Specified in Charter)

4500 Main Street, Kansas City, MO 64141-6200
_________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (816) 531-5575

David C. Tucker, Esq., 4500 Main Street, Kansas City, MO 64111
_________________________________________________________________
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: May 1, 2001

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)
[X] on May 1, 2001 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

[X] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

--------------------------------------------------------------------------------

Your
AMERICAN CENTURY
prospectus

Growth Fund
Ultra(reg.sm) Fund
Vista Fund
Heritage Fund

MAY 1, 2001
C CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

American Century
Investment Services, Inc.

[american century logo and text logo (reg.sm.)]

[left margin]
[american century logo and text logo (reg.sm.)]
American Century
Investments

P.O. Box 419385
Kansas City, MO
64141-6385

Dear Investor,

Planning and maintaining your investment portfolio is a big job. However, an
easy-to-understand Prospectus can make your work a lot less daunting. We hope
you'll find this Prospectus easy to understand, and, more importantly, that it
gives you confidence in the investment decisions you have made or are soon to
make.

As you begin to read this Prospectus, take a look at the table of contents to
understand how it is organized. The first four sections take a close-up look at
the funds - the funds' investment objectives, strategies and risks.

As you continue to read, the Prospectus will acquaint you with the fund
management teams and give you an overview about how to invest and manage your
account. You'll also find important financial information you'll need to make an
informed decision.

Naturally, you may have questions about investing after you read through the
Prospectus. Please contact your investment professional with questions or for
more information about the funds.

Sincerely,

/signature/Gordon Snyder
W. Gordon Snyder
President, Chief Marketing Officer
American Century Investment Services, Inc.

TABLE OF CONTENTS

An Overview of the Funds .................................................. 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 4
Objectives, Strategies and Risks .......................................... 5
Growth Fund
Ultra Fund
Vista Fund
Heritage Fund
Management ................................................................ 7
Investing with American Century ........................................... 10
Share Price and Distributions ............................................. 13
Taxes ..................................................................... 14
Multiple Class Information ................................................ 16
Performance Information of Other Class .................................... 17

[left margin]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.

[graphic of pointing finger]
This symbol highlights special information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUNDS

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek long-term capital growth.

WHAT ARE THE FUNDS' PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The funds look for common stocks of growing companies. The basis of the strategy
used by these funds is that, over the long term, stocks of companies with
earnings and revenue growth have a greater than average chance to increase in
value over time. A more detailed description of American Century's growth
investment style begins on page 5.

The funds' principal risks include

* MARKET RISK-The value of a fund's shares will go up and down based on the
performance of the companies whose securities it owns and other factors
generally affecting the securities market.

* PRICE VOLATILITY-The value of a fund's shares may fluctuate significantly in
the short term.

* PRINCIPAL LOSS-As with all mutual funds, it is possible to lose money by
investing in the fund.

WHO MAY WANT TO INVEST IN THE FUNDS?

The funds may be a good investment if you are

* seeking long-term capital growth from your investment
* comfortable with short-term price volatility
* comfortable with the risks associated with the funds' investment strategy
* investing through an IRA or other tax-advantaged retirement plan

WHO MAY NOT WANT TO INVEST IN THE FUNDS?

The funds may not be a good investment if you are

* seeking current income from your investment
* investing for a short period of time
* uncomfortable with short-term volatility in the value of your investment

[left margin]

[graphic of pointing finger]
An investment in the funds is not a bank deposit, and it is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

2 American Century Investments 1-800-345-3533

FUND PERFORMANCE HISTORY

When the C Class of a fund has investment results for a full calendar year, this
section will feature charts that show

* Annual Total Returns

* Highest and Lowest Quarterly Returns

* Average Annual Total Returns, including a comparison of these returns to a
benchmark index for the C Class of the fund

The performance of a fund's Investor Class shares for each full calendar year in
the life of the fund is shown below.(1)

[data from bar chart]

Growth Ultra Vista Heritage
2000 14.71% -19.91% -0.98% 17.39%
1999 34.68% 22.23% 119.11% 51.28%
1998 36.77% 34.55% -14.25% -0.15%
1997 29.28% 23.13% -8.68% 19.35%
1996 15.01% 13.85% 7.56% 15.31%
1995 20.35% 37.68% 46.13% 26.66%
1994 -1.49% -3.62% 4.68% -6.32%
1993 3.76% 21.81% 5.45% 20.43%
1992 -4.29% 1.27% -2.13% 10.13%
1991 69.02% 86.45% 73.69% 35.98%

(1) If the C Class had existed during the periods presented, its performance
would have been substantially similar to that of the Investor Class because
each represents an investment in the same portfolio of securities. However,
performance of the C Class would have been lower because of its higher
expense ratio.

[left margin]

[graphic of pointing finger]
The performance information on this page is designed to help you see how the
funds' returns can vary. Keep in mind that past performance does not predict how
the funds will perform in the future.

www.americancentury.com American Century Investments 3

FEES AND EXPENSES

There are no sales loads, fees or other charges

* to buy fund shares directly from American Century
* to reinvest dividends in additional shares
* to exchange into the C Class shares of other American Century funds
* to redeem your shares after you have held them for 18 months

The following table describes the fees and expenses you may pay if you buy and
hold shares of the funds.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
-----------------------------------------------------------------------------------
Maximum Deferred Sales Charge (load)(as a percentage of net asset value) 1.00% (1)

(1) The deferred sales charge is contingent on the length of time you have
owned your shares. The charge is 1.00% in the first year after purchase,
declines ratably over the next six months, and is eliminated thereafter.

ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

Management Distribution and Other Total Annual Fund
Fee Service (12b-1) Fees(1) Expenses(2) Operating Expenses
-------------------------------------------------------------------------------------
Growth 1.00% 1.00% 0.00% 2.00%
-------------------------------------------------------------------------------------
Ultra 0.99%(3) 1.00% 0.00% 1.99%
-------------------------------------------------------------------------------------
Vista 1.00% 1.00% 0.00% 2.00%
-------------------------------------------------------------------------------------
Heritage 1.00% 1.00% 0.00% 2.00%

(1) The 12b-1 fee is designed to permit investors to purchase C Class shares
through broker-dealers, banks, insurance companies and other financial
intermediaries. A portion of the fee is used to compensate them for ongoing
individual shareholder and administrative services, and a portion is used
to compensate them for distribution services. For more information, see
Service and Distribution Fees, page 16.

(2) Other expenses, which include the fees and expenses of the funds'
independent directors and their legal counsel, as well as interest, are
expected to be less than 0.005% for the current fiscal year.

(3) Based on expenses incurred by all classes of the fund during the fund's
most recent fiscal year. The fund has a stepped fee schedule. As a result,
the fund's management fee rate generally decreases as fund assets increase

EXAMPLE

The examples in the table below are intended to help you compare the costs of
investing in a fund with the costs of investing in other mutual funds. Assuming
you . . .

* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year

incur the same operating expenses as shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
------------------------------------------------------------------------------
Growth $305 $623 $1,069 $2,305
------------------------------------------------------------------------------
Ultra $304 $620 $1,064 $2,295
------------------------------------------------------------------------------
Vista $305 $623 $1,069 $2,305
------------------------------------------------------------------------------
Heritage $305 $623 $1,069 $2,305

You would pay the following expenses if you did not redeem your shares.

1 year 3 years 5 years 10 years
-------------------------------------------------------------------------------
Growth $202 $623 $1,069 $2,305
-------------------------------------------------------------------------------
Ultra $201 $620 $1,064 $2,295
-------------------------------------------------------------------------------
Vista $202 $623 $1,069 $2,305
-------------------------------------------------------------------------------
Heritage $202 $623 $1,069 $2,305

[left margin]

[graphic of pointing finger]
When purchasing through a financial intermediary you may be charged a fee.

[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

4 American Century Investments 1-800-345-3533

OBJECTIVES, STRATEGIES AND RISKS

GROWTH FUND
ULTRA FUND
VISTA FUND
HERITAGE FUND

WHAT ARE THE FUNDS' INVESTMENT OBJECTIVES?

These funds seek long-term capital growth.

HOW DO THE FUNDS PURSUE THEIR INVESTMENT OBJECTIVES?

The fund managers look for stocks of companies they believe will increase in
value over time, using a growth investment strategy developed by American
Century. This strategy looks for companies with earnings and revenues that are
not only growing, but growing at a successively faster, or accelerating pace.
This strategy is based on the premise that, over the long term, the stocks of
companies with accelerating earnings and revenues have a greater-than-average
chance to increase in value.

The managers use a bottom-up approach to select stocks to buy for the funds.
This means that they first look to invest in strong, growing companies, rather
than simply investing in any company in a growing industry or sector. Using
American Century's extensive computer database, the managers track financial
information for thousands of companies to identify trends in the companies'
earnings and revenues. This information is used to help the fund managers select
or hold the stocks of companies they believe will be able to sustain
accelerating growth, and sell the stocks of companies whose growth begins to
slow down.

Although most of the funds' assets will be invested in U.S. companies, there is
no limit on the amount of assets the funds can invest in foreign companies. Most
of the funds' foreign investments are in companies located and doing business in
developed countries. Investments in foreign securities present some unique risks
that are more fully described in the funds' Statement of Additional Information.

The fund managers do not attempt to time the market. Instead, under normal
market conditions, they intend to keep the funds essentially fully invested in
stocks regardless of the movement of stock prices generally. When the managers
believe it is prudent, the funds may invest a portion of their assets in
convertible debt securities, equity-equivalent securities, foreign securities,
short-term securities, nonleveraged stock index futures contracts and other
similar securities. Stock index futures contracts, a type of derivative
security, can help the funds' cash assets remain liquid while performing more
like stocks. The funds have a policy governing stock index futures contracts and
similar derivative securities to help manage the risk of these types of
investments. For example, the fund managers cannot invest in a derivative
security if it would be possible for a fund to lose more money than it invested.
A complete description of the derivatives policy is included in the Statement of
Additional Information.

Additional information about the funds' investments is available in their annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
funds' performance during the most recent fiscal period. You may get these
reports at no cost by calling us.

[left margin]

[graphic of pointing finger]
Accelerating growth is shown, for example, by growth that is faster this quarter
than last or faster this year than the year before.

www.americancentury.com American Century Investments 5

WHAT KINDS OF SECURITIES DO THE FUNDS BUY?

The funds will usually purchase common stocks, but they can purchase other types
of securities as well, such as domestic and foreign preferred stocks,
convertible debt securities, equity-equivalent securities, nonleveraged stock
index futures contracts and options, notes, bonds and other debt securities, as
discussed above. The funds generally limit their purchase of debt securities to
investment-grade obligations, except for convertible debt securities, which may
be rated below investment grade.

WHAT ARE THE DIFFERENCES BETWEEN THE FUNDS?

* Growth and Ultra generally invest in larger companies, although they may
purchase companies of any size.

* Vista and Heritage generally invest in companies that are medium-sized and
smaller at the time of purchase, although they may purchase companies of any
size.

When determining the size of a company, the fund managers will consider, among
other factors, the capitalization of the company and the amount of revenues as
well as other information they obtain about the company.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUNDS?

The value of a fund's shares depends on the value of the stocks and other
securities it owns. The value of the individual securities a fund owns will go
up and down depending on the performance of the companies that issued them,
general market and economic conditions, and investor confidence.

The fund managers may buy a large amount of a company's stock quickly, and often
will dispose of it quickly if the company's earnings or revenues decline. While
the managers believe this strategy provides substantial appreciation potential
over the long term, in the short term it can create a significant amount of
share price volatility. This volatility can be greater than that of the average
stock fund.

As with all funds, at any given time your shares may be worth more or less than
the price you paid for them. As a result, it is possible to lose money by
investing in the funds.

Market performance tends to be cyclical, and, in the various cycles, certain
investment styles may fall in and out of favor. If the market is not favoring a
fund's style, the fund's gains may not be as big as, or its losses may be bigger
than, other equity funds using different investment styles.

Although the fund managers intend to invest the funds' assets primarily in U.S.
stocks, the funds may invest in securities of foreign companies. Foreign
investment involves additional risks, including fluctuations in currency
exchange rates, less stable political and economic structures, reduced
availability of public information, and lack of uniform financial reporting and
regulatory practices similar to those that apply in the United States. These
factors make investing in foreign securities generally riskier than investing in
U.S. stocks. To the extent a fund invests in foreign securities, the overall
risk of that fund could be affected.

6 American Century Investments 1-800-345-3533

MANAGEMENT

WHO MANAGES THE FUNDS?

The Board of Directors, investment advisor and fund management teams play key
roles in the management of the funds.

THE BOARD OF DIRECTORS

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired an investment advisor to do
so. More than two-thirds of the directors are independent of the funds' advisor;
that is, they are not employed by and have no financial interest in the advisor.

THE INVESTMENT ADVISOR

The funds' investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolios of the funds
and directing the purchase and sale of their investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the funds to operate.

For the services it provides to the funds, the advisor receives a unified
management fee based on a percentage of the average net assets of each fund. The
amount of the management fee for the C Class is calculated daily and paid
monthly in arrears, taking into account the average net assets of all classes of
the funds. Growth, Vista and Heritage will pay the advisor a unified management
fee of 1.00% of the average net assets of the C Class shares of each fund. Ultra
will pay the advisor a unified management fee of 1.00% of its pro rata share of
the first $20 billion of the fund's average net assets and 0.95% of its pro rata
share over $20 billion of the fund's average net assets.

The Statement of Additional Information contains detailed information about the
calculation of the management fee. Out of each fund's fee, the advisor pays all
expenses of managing and operating the funds except brokerage expenses, taxes,
interest, fees and expenses of the independent directors (including legal
counsel fees), and extraordinary expenses. A portion of each fund's management
fee may be paid by the fund's advisor to unaffiliated third parties who provide
recordkeeping and administrative services that would otherwise be performed by
an affiliate of the advisor.

www.americancentury.com American Century Investments 7

THE FUND MANAGEMENT TEAMS

The advisor uses teams of portfolio managers, assistant portfolio managers and
analysts to manage the funds. The teams meet regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for a fund as they see fit, guided by the fund's investment
objectives and strategy.

The portfolio managers on the investment teams are identified below.

Growth

C. KIM GOODWIN

Ms. Goodwin, Senior Vice President and Senior Portfolio Manager, has been a
member of the team that manages Growth since joining American Century in October
1997. She also is the Chief Investment Officer-U.S. Equities and as such
oversees the investment discipline used by the fund and nine other growth funds.
Before joining American Century, she served as Senior Vice President and
Portfolio Manager at Putnam Investments from May 1996 to September 1997, and
Vice President and Portfolio Manager at Prudential Investments from February
1993 to April 1996. She has a bachelor of arts from Princeton University and an
MBA in finance and a master's in public affairs from the University of Texas.

GREGORY J. WOODHAMS

Mr. Woodhams, Vice President and Senior Portfolio Manager, has been a member of
the team that manages Growth since he joined American Century in September 1997
as an Investment Analyst. He was promoted to Portfolio Manager for the Growth
team in May 1998. Before joining American Century, he served as Vice President
and Director of Equity Research for Texas Commerce Bank, a subsidiary of Chase
Manhattan Bank. He has a bachelor's degree in economics from Rice University
and an M.A. in economics from the University of Wisconsin. He is a Chartered
Financial Analyst.

E. A. PRESCOTT LEGARD

Mr. LeGard, Portfolio Manager, has been a member of the team that manages Growth
since March 2000. Before joining American Century in March 1999, he was an
analyst for USAA Investment Management from March 1998 to March 1999 and a
portfolio manager for Commerce Bancshares from November 1993 to February 1998.
He has a bachelor's degree in economics from DePauw University. He is a
Chartered Financial Analyst.

Ultra

JAMES E. STOWERS III

Mr. Stowers, Co-Chairman and Portfolio Manager, has been a member of the team
that manages Ultra since 1981. He joined American Century in 1981. He has a
bachelor's degree in finance from Arizona State University.

JOHN R. SYKORA

Mr. Sykora, Vice President and Senior Portfolio Manager, has been a member of
the team that manages Ultra since November 1997. He joined American Century in
May 1994 as an Investment Analyst. He has a bachelor's degree in accounting and
finance from Creighton University and an MBA in finance from Michigan State
University. He is a Chartered Financial Analyst.

BRUCE A. WIMBERLY

Mr. Wimberly, Vice President and Senior Portfolio Manager, has been a member of
the team that manages Ultra since July 1996. He joined American Century in
September 1994 as an Investment Analyst. He has a bachelor of arts from
Middlebury College and an MBA from the Kellogg Graduate School of Management,
Northwestern University.

[left margin]

[graphic of pointing finger]

Code of Ethics

American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the funds.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the funds to obtain approval before executing permitted personal trades.

8 American Century Investments 1-800-345-3533

Vista

GLENN A. FOGLE

Mr. Fogle, Senior Vice President and Senior Portfolio Manager, has been a member
of the team that manages Vista since March 1993. He joined American Century in
September 1990 as an Investment Analyst. He has a bachelor of business
administration (management) and an MBA in finance from Texas Christian
University. He is a Chartered Financial Analyst.

DAVID M. ROSE

Mr. Rose, Portfolio Manager, has been a member of the team that manages Vista
since January 2001. He joined American Century in July 1998 as an investment
analyst. Before joining American Century, he was the business manager for
SingleLife Enterprises Inc. from September 1991 to May 1996. From August 1996
to May 1998, he attended the University of Wisconsin-Madison, where he earned an
MS in finance, investments and banking. He also has a bachelor's degree in
business administration from Washington University.

Heritage

LINDA K. PETERSON

Ms. Peterson, Vice President and Portfolio Manager, has been a member of the
team that manages Heritage since March 1998. She joined American Century in
1986. She served as an Investment Analyst for American Century's growth-oriented
equity funds, including Heritage, from April 1994 until February 1998. She has
a bachelor's degree in finance from the University of Northern Iowa and an MBA
from the University of Missouri-Kansas City. She is a Chartered Financial
Analyst.

KURT R. STALZER

Mr. Stalzer, Vice President and Portfolio Manager, has been a member of the team
that manages Heritage since joining American Century in January 2000. Before
joining American Century, he was a Portfolio Manager for Scudder Kemper
Investments from January 1997 to October 1999 and for Munder Capital Management
from January 1994 to December 1996. He has a BBA in finance and accounting from
the University of Michigan - Dearborn.

FUNDAMENTAL INVESTMENT POLICIES

Fundamental investment policies contained in the Statement of Additional
Information and the investment objectives of the funds may not be changed
without shareholder approval. The Board of Directors may change any other
policies and investment strategies.

www.americancentury.com American Century Investments 9

INVESTING WITH AMERICAN CENTURY

ELIGIBILITY FOR C CLASS SHARES

The C Class shares are intended for purchase by participants in
employer-sponsored retirement or savings plans and for persons purchasing shares
through broker-dealers, banks, insurance companies and other financial
intermediaries that provide various administrative, shareholder and distribution
services.

MINIMUM INITIAL INVESTMENT AMOUNTS

To open an account, the minimum investments are:
--------------------------------------------------------------------------------
Individual or Joint $2,500
--------------------------------------------------------------------------------
Traditional IRA $1,000
--------------------------------------------------------------------------------
Roth IRA $1,000
--------------------------------------------------------------------------------
Education IRA $500
--------------------------------------------------------------------------------
UGMA/UTMA $2,500
--------------------------------------------------------------------------------
403(b) $1,000(1)
--------------------------------------------------------------------------------
Qualified Retirement Plans $2,500(2)

(1) For each fund you select for your 403(b) plan, American Century will waive
the fund minimum if you make a contribution of at least $50 a month. If
your contribution is less than $50 a month, you may make only one fund
choice.

(2) The minimum investment requirements may be different for some types of
retirement accounts.

INVESTING THROUGH FINANCIAL INTERMEDIARIES

If you do business with us through a financial intermediary or a retirement
plan, your ability to purchase, exchange and redeem shares will depend on the
policies of that entity. Some policy differences may include

* minimum investment requirements
* exchange policies
* fund choices
* cutoff time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the funds' annual reports, semiannual
reports and Statement of Additional Information are available from your
intermediary or plan sponsor.

Certain financial intermediaries perform recordkeeping and administrative
services for their clients that would otherwise be performed by American
Century's transfer agent. In some circumstances, American Century will pay the
service provider a fee for performing those services.

Although fund share transactions may be made directly with American Century at
no charge, you also may purchase, redeem and exchange fund shares through
financial intermediaries that charge a transaction-based or other fee for their
services. Those charges are retained by the intermediary and are not shared with
American Century or the funds.

The funds have authorized certain financial intermediaries to accept orders on
each fund's behalf. American Century has contracts with these intermediaries
requiring them to track the time investment orders are received and to comply
with procedures relating to the transmission of orders. Orders must be received
by the intermediary on a fund's behalf before the time the net asset value is
determined in order to receive that day's share price. If those orders are
transmitted to American Century and paid for in accordance with the contract,
they will be priced at the net asset value next determined after your request is
received in the form required by the intermediary.

[left margin]

[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.

10 American Century Investments 1-800-345-3533

MODIFYING OR CANCELING AN INVESTMENT

Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. Each fund reserves the right to suspend the offering of shares for a period
of time, and to reject any specific investment (including a purchase by
exchange). Additionally, we may refuse a purchase if, in our judgment, it is of
a size that would disrupt the management of a fund.

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the funds and their shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor who we believe has a
history of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control.

YOUR RESPONSIBILITY FOR UNAUTHORIZED TRANSACTIONS

American Century and its affiliated companies use procedures reasonably designed
to confirm that telephone, electronic and other instructions are genuine. These
procedures include recording telephone calls, requesting personalized security
codes or other information, and sending confirmation of transactions. If we
follow these procedures, we are not responsible for any losses that may occur
due to unauthorized instructions. For transactions conducted over the Internet,
we recommend the use of a secure Internet browser. In addition, you should
verify the accuracy of your confirmation statements immediately after you
receive them.

REDEMPTIONS

Your redemption proceeds will be calculated using the NET ASSET VALUE (NAV) next
determined after we receive your transaction request in good order. Each time
you make an investment with American Century, there is a seven-day holding
period before you can redeem those shares, unless you provide us with
satisfactory proof that your purchase funds have cleared. However, investments
by wire require only a one-day holding period.

In addition, we reserve the right to delay delivery of redemption proceeds--up
to seven days--or to honor certain redemptions with securities, rather than
cash, as described in the next section.

[left margin]

A fund's NET ASSET VALUE, or NAV, is the price of the fund's shares.

www.americancentury.com American Century Investments 11

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

If, during any 90-day period, you redeem fund shares worth more than $250,000
(or 1% of the value of the fund's assets if that amount is less than $250,000),
we reserve the right to pay part or all of the redemption proceeds in excess of
this amount in readily marketable securities instead of in cash. The fund
managers would select these securities from the fund's portfolio. A payment in
securities can help the fund's remaining shareholders avoid tax liabilities that
they might otherwise have incurred had the fund sold securities prematurely to
pay the entire redemption amount in cash.

We will value these securities in the same manner as we do in computing the
fund's net asset value. We may provide these securities in lieu of cash without
prior notice. Also, if payment is made in securities, a shareholder may have to
pay brokerage or other transaction costs to convert the securities to cash.

If your redemption would exceed this limit and you would like to avoid being
paid in securities, please provide us with an unconditional instruction to
redeem at least 15 days prior to the date on which the redemption transaction is
to occur. The instruction must specify the dollar amount or number of shares to
be redeemed and the date of the transaction. This minimizes the effect of the
redemption on the fund and its remaining investors.

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

If your account balance falls below the minimum initial investment amount, we
will notify you and give you 90 days to meet the minimum. If you do not meet the
deadline, American Century will redeem the shares in the account and send the
proceeds to your address of record.

EXCHANGES BETWEEN FUNDS

You may exchange C Class shares of the fund for C Class shares of any other
American Century fund. You may not exchange from the C Class to any other class.
We will not charge a Contingent Deferred Sales Charge (CDSC) on the shares you
exchange, regardless of the length of time you have owned them. When you do
redeem shares that have been exchanged, the CDSC will be based on the date you
purchased the original shares.

[left margin]

[graphic of pointing finger]
A redemption is the sale of all or a portion of the shares in an account,
including those sold as a part of an exchange to another American Century
account.

12 American Century Investments 1-800-345-3533

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

American Century determines the NAV of each fund as of the close of regular
trading on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day
the Exchange is open. On days when the Exchange is closed (including certain
U.S. holidays), we do not calculate the NAV. A fund share's NAV is the current
value of the fund's assets, minus any liabilities, divided by the number of fund
shares outstanding.

If current market prices of securities owned by a fund are not readily
available, the advisor may determine their fair value in accordance with
procedures adopted by the fund's Board. Trading of securities in foreign markets
may not take place every day the Exchange is open. Also, trading in some foreign
markets and on some electronic trading networks may take place on weekends or
holidays when a fund's NAV is not calculated. So, the value of a fund's
portfolio may be affected on days when you can't purchase or redeem shares of
the fund.

We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.

DISTRIBUTIONS

Federal tax laws require each fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the funds will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by a fund, as well as CAPITAL GAINS realized
by a fund on the sale of its investment securities. Each fund generally pays
distributions from net income and capital gains, if any, once a year in
December. The funds may make more frequent distributions, if necessary, to
comply with Internal Revenue Code provisions.

You will participate in fund distributions when they are declared, starting the
next business day after your purchase is effective. For example, if you purchase
shares on a day a distribution is declared, you will not receive that
distribution. If you redeem shares, you will receive any distribution declared
on the day you redeem. If you redeem all shares, we will include any
distributions received with your redemption proceeds.

Participants in employer-sponsored retirement or savings plans must reinvest all
distributions. For investors investing through taxable accounts, we will
reinvest distributions unless you elect to receive them in cash.

[left margin]

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.

www.americancentury.com American Century Investments 13

TAXES

The tax consequences of owning shares of the funds will vary depending on
whether you own them through a taxable or tax-deferred account. Tax consequences
result from distributions by the funds of dividend and interest income they have
received or capital gains they have generated through their investment
activities. Tax consequences also may result when investors sell fund shares
after the net asset value has increased or decreased.

Tax-Deferred Accounts

If you purchase fund shares through a tax-deferred account, such as an IRA or a
qualified employer-sponsored retirement or savings plan, income and capital
gains distributions usually will not be subject to current taxation but will
accumulate in your account under the plan on a tax-deferred basis. Likewise,
moving from one fund to another fund within a plan or tax-deferred account
generally will not cause you to be taxed. For information about the tax
consequences of making purchases or withdrawals through a tax-deferred account,
please consult your plan administrator, your summary plan description or a tax
advisor.

Taxable Accounts

If you own fund shares through a taxable account, you may be taxed on your
investments if the fund makes distributions or if you sell your fund shares.

Taxability of Distributions

Fund distributions may consist of income such as dividends and interest earned
by the fund from its investments, or capital gains generated by the fund from
the sale of its investments. Distributions of income are taxed as ordinary
income. Distributions of capital gains are classified either as short term or
long term and are taxed as follows:

Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
--------------------------------------------------------------------------------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
--------------------------------------------------------------------------------------------------
Long-term capital gains (1-5 years) 10% 20%
--------------------------------------------------------------------------------------------------
Long-term capital gains (5 years) 8% 20%(1)

(1) The reduced rate for these gains will not begin until 2006 because the
security holding period must start after December 31, 2000. Once the
security has been held for more than 5 years, the rate will be 18%.

The tax status of any distributions of capital gains is determined by how long
the fund held the underlying security that was sold, not by how long you have
been invested in the fund, or whether you reinvest your distributions in
additional shares or take them in cash. For taxable accounts, American Century
will inform you of the tax status of fund distributions for each calendar year
in an annual tax mailing (Form 1099-DIV).

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.

[left margin]

[graphic of pointing finger]
Buying a Dividend

Purchasing fund shares in a taxable account shortly before a distribution is
sometimes known as buying a dividend. In taxable accounts, you must pay income
taxes on the distribution whether you reinvest the distribution or take it in
cash. In addition, you will have to pay taxes on the distribution whether the
value of your investment decreased, increased or remained the same after you
bought the fund shares.

The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The funds distribute those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

14 American Century Investments 1-800-345-3533

Taxes on Transactions

Your redemptions--including exchanges to other American Century funds--are
subject to capital gains tax. The table above can provide a general guide for
your potential tax liability when selling or exchanging fund shares. Short-term
capital gains are gains on fund shares you held for 12 months or less. Long-term
capital gains are gains on fund shares you held for more than 12 months. If your
shares decrease in value, their sale or exchange will result in a long-term or
short-term capital loss. However, you should note that loss realized upon the
sale or redemption of shares held for six months or less will be treated as a
long-term capital loss to the extent of any distribution of long-term capital
gain to you with respect to those shares. If a loss is realized on the
redemption of fund shares, the reinvestment in additional fund shares within 30
days before or after the redemption may be subject to the wash sale rules of the
Internal Revenue Code. This may result in a postponement of the recognition of
such loss for federal income tax purposes.

If you have not certified to us that your Social Security number or tax
identification number is correct and that you are not subject to 31%
withholding, we are required to withhold and pay 31% of dividends, capital gains
distributions and redemption proceeds to the IRS.

www.americancentury.com American Century Investments 15

MULTIPLE CLASS INFORMATION

American Century offers four classes of the funds: Investor Class, Institutional
Class, Advisor Class and C Class. The shares offered by this Prospectus are C
Class shares and are offered primarily through employer-sponsored retirement
plans, or through institutions like banks, broker-dealers and insurance
companies.

The other classes have different fees, expenses and/or minimum investment
requirements from the C Class. The difference in the fee structures between the
classes is the result of their separate arrangements for shareholder and
distribution services and not the result of any difference in amounts charged by
the advisor for core investment advisory services. Accordingly, the core
investment advisory expenses do not vary by class. Different fees and expenses
will affect performance. For additional information concerning the other classes
of shares not offered by this Prospectus, call us at

* 1-800-345-2021 for Investor Class shares
* 1-800-345-3533 for Institutional and Advisor Class shares

You also can contact a sales representative or financial intermediary who offers
those classes of shares.

Except as described below, all classes of shares of the funds have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting that class; (d) each class may
have different exchange privileges; and (e) the Institutional Class may provide
for automatic conversion from that class into shares of the Investor Class of
the same fund.

Contingent Deferred Sales Charge

If you sell C Class shares within 18 months of purchasing them, you will pay a
Contingent Deferred Sales Charge (CDSC). The charge is 1.00% in the first year
after purchase, declines ratably over the next six months and is eliminated
thereafter in accordance with the following chart:

After 13 months 0.833%
After 14 months 0.666%
After 15 months 0.500%
After 16 months 0.333%
After 17 months 0.167%
After 18 months 0.000%

The CDSC is calculated from your date of purchase, and will not be charged on
shares acquired through reinvestment of dividends or distributions, increases in
the net asset value of shares, or exchanges into the C Class of other American
Century funds. We will redeem shares not subject to the CDSC first, and other
shares will be redeemed in the order they were purchased.

Service and Distribution Fees

Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay certain expenses associated with the distribution of their shares out of
fund assets. The funds' C Class shares have a 12b-1 Plan. Under the Plan, the
funds' C Class pays an annual fee of 1.00% of C Class average net assets, 0.25%
for certain individual shareholder and administrative services and 0.75% for
distribution services. The advisor, as paying agent for the funds, pays all or a
portion of such fees to the banks, broker-dealers and insurance companies that
make C Class shares available. Because these fees are paid out of the funds'
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. For
additional information about the Plan and its terms, see Multiple Class
Structure - Master Distribution and Shareholder Services Plan in the Statement
of Additional Information.

16 American Century Investments 1-800-345-3533

PERFORMANCE INFORMATION OF OTHER CLASS

The following financial information is provided to show the performance of the
funds' original class of shares. This class, the Investor Class, has a total
expense ratio that is 1.00% lower than the C Class. If the C Class had existed
during the periods presented, its performance would have been lower because of
the additional expense.

The tables on the next few pages itemize what contributed to the changes in the
Investor Class share price during the most recently ended fiscal year. They also
show the changes in share price for this period in comparison to changes over
the last five fiscal years, or less, if the share class is not five years old.

On a per-share basis, each table includes as appropriate

* share price at the beginning of the period
* investment income and capital gains or losses
* distributions of income and capital gains paid to investors
* share price at the end of the period

Each table also includes some key statistics for the period as appropriate

* TOTAL RETURN - the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* EXPENSE RATIO - the operating expenses of the fund as a percentage of average
net assets

* NET INCOME RATIO - the net investment income of the fund as a percentage of
average net assets

* PORTFOLIO TURNOVER - the percentage of the fund's buying and selling activity

The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Reports and the financial statements are
included in the funds' annual reports, which are available upon request.

www.americancentury.com American Century Investments 17

GROWTH FUND
Investor Class

For a Share Outstanding Throughout the Years Ended October 31

Per-Share Data
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $31.60 $28.03 $27.86 $22.21 $23.88
------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.10) (0.07) (0.01) 0.01 (0.01)
Net Realized and Unrealized Gain on Investment Transactions 3.73 9.03 4.35 6.07 1.47
------- -------- -------- -------- --------
Total From Investment Operations 3.63 8.96 4.34 6.08 1.46
------- -------- -------- -------- --------
Distributions
From Net Investment Income -- -- -- (0.18) (0.07)
From Net Realized Gains on Investment Transactions (4.14) (5.39) (4.17) (0.25) (2.98)
In Excess of Net Realized Gains on Investment Transactions -- -- -- -- (0.08)
------- -------- -------- -------- --------
Total Distributions (4.14) (5.39) (4.17) (0.43) (3.13)
------- -------- -------- -------- --------
Net Asset Value, End of Period $31.09 $31.60 $28.03 $27.86 $22.21
======== ======== ======== ======== ========
Total Return(2) 11.49% 36.31% 18.53% 27.85% 8.18%

Ratios/Supplemental Data
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------
Ratio of Operating Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.30)% (0.24)% (0.02)% 0.02% (0.10)%
Portfolio Turnover Rate 102% 92% 126% 75% 122%
Net Assets, End of Period (in millions) $9,557 $8,333 $6,097 $5,113 $4,765

(1) Computed using average shares outstanding throughout the period.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

18 American Century Investments 1-800-345-3533

ULTRA FUND
Investor Class

For a Share Outstanding Throughout the Years Ended October 31

Per-Share Data
2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $38.97 $31.06 $33.46 $29.52 $28.03
-------- -------- -------- -------- --------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.28) (0.14) (0.02) 0.01 (0.05)
Net Realized and Unrealized Gain
on Investment Transactions 4.14 11.17 4.70 5.62 2.84
-------- -------- -------- -------- --------
Total From Investment Operations 3.86 11.03 4.68 5.63 2.79
-------- -------- -------- -------- --------
Distributions
From Net Investment Income -- -- (0.01) -- --
From Net Realized Gains on Investment Transactions (1.38) (3.12) (7.07) (1.69) (1.19)
In Excess of Net Realized Gains on Investment Transactions -- -- -- -- (0.11)
-------- -------- -------- -------- --------
Total Distributions (1.38) (3.12) (7.08) (1.69) (1.30)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $41.45 $38.97 $31.06 $33.46 $29.52
======== ======== ======== ======== ========
Total Return(2) 9.81% 37.94% 17.61% 19.95% 10.79%

Ratios/Supplemental Data
2000 1999 1998 1997 1996
--------------------------------------------------------------------------------------------------------------------
Ratio of Operating Expenses to Average Net Assets 0.99% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.64)% (0.39)% (0.08)% 0.03% (0.20)%
Portfolio Turnover Rate 62% 42% 128% 107% 87%
Net Assets, End of Period (in millions) $38,461 $35,752 $25,396 $21,695 $18,266

(1) Computed using average shares outstanding throughout the period.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

www.americancentury.com American Century Investments 19

VISTA FUND
Investor Class

For a Share Outstanding Throughout the Years Ended October 31

Per-Share Data
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $15.41 $9.27 $14.53 $15.68 $15.73
-------- ------- -------- -------- --------
Income From Investment Operations
Net Investment Loss(1) (0.16) (0.05) (0.05) (0.10) (0.11)
Net Realized and Unrealized Gain (Loss)
on Investment Transactions 10.07 6.19 (4.41) 0.13 1.09
-------- ------- -------- -------- --------
Total From Investment Operations 9.91 6.14 (4.49) 0.03 0.98
-------- ------- -------- -------- --------
Distributions
From Net Realized Gains on Investment Transactions (0.95) -- (0.80) (1.18) (1.02)
In Excess of Net Realized Gains on Investment Transactions -- -- -- -- (0.01)
-------- ------- -------- -------- --------
Total Distributions (0.95) -- (0.80) (1.18) (1.03)
-------- ------- -------- -------- --------
Net Asset Value, End of Period $24.37 $15.41 $9.27 $14.53 $15.68
======== ======== ======= ======== ========
Total Return(2) 66.16% 66.24% (31.94)% 0.29% 6.96%

-----------------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
Ratio of Operating Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.65)% (0.40)% (0.42)% (0.73)% (0.70)%
Portfolio Turnover Rate 135% 187% 229% 96% 91%
Net Assets, End of Period (in millions) $2,345 $1,146 $895 $1,828 $2,276

(1) Computed using average shares outstanding throughout the period.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

20 American Century Investments 1-800-345-3533

HERITAGE FUND
Investor Class

For a Share Outstanding Throughout the Years Ended October 31

Per-Share Data
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $13.02 $9.98 $14.86 $12.24 $11.75
-------- ------- -------- -------- --------
Income From Investment Operations
Net Investment Income (Loss)(1) (0.03) 0.02 0.03 0.01 --
Net Realized and Unrealized Gain (Loss)
on Investment Transactions 7.63 3.04 (2.14) 3.41 1.15
-------- ------- -------- -------- --------
Total From Investment Operations 7.60 3.06 (2.11) 3.42 1.15
-------- ------- -------- -------- --------
Distributions
From Net Investment Income (0.01) (0.02) (0.07) (0.09) (0.05)
In Excess of Net Investment Income (0.03) -- -- -- --
From Net Realized Gains on Investment Transactions (1.48) -- (2.70) (0.71) (0.61)
-------- ------- -------- -------- --------
Total Distributions (1.52) (0.02) (2.77) (0.80) (0.66)
-------- ------- -------- -------- --------
Net Asset Value, End of Period $19.10 $13.02 $9.98 $14.86 $12.24
======== ======= ======== ======== ========
Total Return(2) 62.61% 30.71% (15.87)% 29.56% 10.44%

Ratios/Supplemental Data
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------
Ratio of Operating Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 0.99%
Ratio of Net Investment Income (Loss) to Average Net Assets (0.17)% 0.19% 0.29% 0.05% --
Portfolio Turnover Rate 119% 134% 148% 69% 122%
Net Assets, End of Period (in millions) $1,975 $1,000 $978 $1,321 $1,083

(1) Computed using average shares outstanding throughout the period.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any.

www.americancentury.com American Century Investments 21

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS.

Annual and Semiannual Reports

Annual and semiannual reports contain more information about the funds'
investments and the market conditions and investment strategies that
significantly affected the funds' performance during the most recent fiscal
period.

Statement of Additional Information (SAI)

The SAI contains a more detailed, legal description of the funds' operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.

You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the funds or your accounts, by contacting American Century at
the address or telephone numbers listed below.

You also can get information about the funds (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.

In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.

On the Internet * EDGAR database at www.sec.gov
* By email request at publicinfo@sec.gov

By mail SEC Public Reference Section
Washington, D.C. 20549-0102

Investment Company Act File No. 811-0816

[american century logo and text logo (reg. sm.)]
American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

1-800-345-3533 or 816-531-5575

0105
SH-PRS-24812

Your
AMERICAN CENTURY
prospectus

High-Yield Fund

MAY 1, 2001
C CLASS

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANYONE WHO
TELLS YOU OTHERWISE IS COMMITTING A CRIME.

American Century
Investment Services, Inc.

[american century logo and text logo (reg. sm)]

[left margin]
[american century logo and text logo (reg. sm)]
American Century
Investments

P.O. Box 419385
Kansas City, MO
64141-63857

Dear Investor,

As you begin to read this Prospectus, take a look at the table of contents to
understand how it is organized. The first four sections take a close-up look at
the fund - the fund's investment objectives, strategies and risks.

As you continue to read, the Prospectus will acquaint you with the fund
management team and give you an overview about how to invest and manage your
account. You'll also find important financial information you'll need to make an
informed decision.

Naturally, you may have questions about investing after you read through the
Prospectus. Please contact your investment professional with questions or for
more information about our funds.

Sincerely,

/signature/Gordon Snyder
W. Gordon Snyder
President, Chief Marketing Officer
American Century Investment Services, Inc.

TABLE OF CONTENTS

An Overview of the Fund ................................................... 2
Fund Performance History .................................................. 3
Fees and Expenses ......................................................... 4
Objectives, Strategies and Risks .......................................... 5
Basics of Fixed-Income Investing .......................................... 6
Management ................................................................ 8
Investing with American Century ........................................... 9
Share Price and Distributions ............................................. 12
Taxes ..................................................................... 13
Multiple Class Information ................................................ 15
Performance Information of Other Class .................................... 16

[left margin]

Throughout this book you'll find definitions of key investment terms and
phrases. When you see a word printed in BLUE ITALICS, look for its definition in
the left margin.

[graphic of pointing finger]
This symbol highlights special information and helpful tips.

American Century Investments

AN OVERVIEW OF THE FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

This fund seeks high current income. As a secondary objective, the fund seeks
capital appreciation, but only when consistent with its primary objective of
maximizing current income.

WHAT ARE THE FUND'S PRIMARY INVESTMENT STRATEGIES AND PRINCIPAL RISKS?

The fund invests primarily in a diversified portfolio of lower-rated corporate
DEBT SECURITIES, which are subject to substantial risks and consequently pay
higher yields. Among these risks are

* credit risk
* liquidity risk
* interest rate risk

A detailed description of the fund's investment strategies and risks begins on
page 4.

WHO MAY WANT TO INVEST IN THE FUND?

The fund may be a good investment if you are

* seeking high current income with the potential for capital gains
* investing through an IRA or other tax-advantaged retirement plan

WHO MAY NOT WANT TO INVEST IN THE FUND?

The fund may not be a good investment if you are

* uncomfortable with the risk of investing in lower-rated debt securities
* looking for the added security of FDIC insurance

2 American Century Investments 1-800-345-3533

FUND PERFORMANCE HISTORY

When the C Class of the fund has investment results for a full calendar year,
this section will feature charts that show

* Annual Total Returns

* Highest and Lowest Quarterly Returns

* Average Annual Total Returns, including a comparison of these returns to a
benchmark index for the C Class of the fund

The performance of the fund's Investor Class shares for each full calendar year
in the life of the fund is shown below.(1)

[data from bar chart]

High-Yield
2000 -13.92%
1999 5.86%
1998 -1.25%

[left margin]

[graphic of pointing finger]
The performance information on this page is designed to help you see how fund
returns can vary. Keep in mind that past performance does not predict how the
fund will perform in the future.

www.americancentury.com American Century Investments 3

FEES AND EXPENSES

There are no sales loads, fees or other charges

The following table describes the fees and expenses you may pay if you buy and
hold shares of the fund.

SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
------------------------------------------------------------------------------------
Maximum Deferred Sales Charge (load)(as a percentage of net asset value) 0.75% (1)

(1) The deferred sales charge is contingent on the length of time you have
owned your shares. The charge is 0.75% in the first year after purchase,
declines ratably over the next six months, and is eliminated thereafter.

ANNUAL OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)

(2) Other expenses, which include the fees and expenses of the fund's
independent directors and their legal counsel, as well as interest, are
expected to be less than 0.005% for the current fiscal year.

EXAMPLE

The examples in the table below are intended to help you compare the costs of
investing in the fund with the costs of investing in other mutual funds.
Assuming you . . .

* invest $10,000 in the fund
* redeem all of your shares at the end of the periods shown below
* earn a 5% return each year
* incur the same operating expenses as shown above

. . . your cost of investing in the fund would be:

1 year 3 years 5 years 10 years
-------------------------------------------------------------------------------
High-Yield $244 $517 $891 $1,939

You would pay the following expenses if you did not redeem your shares.

1 year 3 years 5 years 10 years
-------------------------------------------------------------------------------
High-Yield $167 $517 $891 $1,939

[left margin]

[graphic of pointing finger]
When purchasing through a financial intermediary you may be charged a fee.

[graphic of pointing finger]
Use this example to compare the costs of investing in other funds. Of course,
your actual costs may be higher or lower.

4 American Century Investments 1-800-345-3533

OBJECTIVES, STRATEGIES AND RISKS

HIGH-YIELD FUND

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The fund seeks high current income by investing in a diversified portfolio of
high-yield corporate bonds and other debt securities.

HOW DOES THE FUND PURSUE ITS INVESTMENT OBJECTIVE?

The fund invests primarily in HIGH-YIELD corporate debt securities with an
emphasis on securities that are rated below investment grade.

Under normal market conditions, the fund managers will maintain at least 80% of
the fund's total assets in high-yield corporate bonds and other debt instruments
(including income-producing convertible and preferred securities). The remaining
assets may be invested in common stocks or other equity-related securities. The
fund buys securities that are below investment grade, including so-called junk
bonds. Issuers of these securities often have short financial histories or
questionable credit.

Up to 40% of the fund's total assets may be invested in fixed-income obligations
of foreign issuers. Under normal market conditions, the fund may invest up to
20% of its assets, and for temporary defensive purposes, up to 100% of its
assets, in short-term money market instruments and U.S. government securities.

The fund has no average maturity limitations, but it typically invests in
intermediate-term and long-term bonds.

Additional information about the fund's investments is available in its annual
and semiannual reports. In these reports you will find a discussion of the
market conditions and investment strategies that significantly affected the
fund's performance during the most recent fiscal period. You may get these
reports at no cost by calling us.

WHAT ARE THE PRINCIPAL RISKS OF INVESTING IN THE FUND?

The fund's investments often have high credit risk, which helps the fund pursue
a higher yield than more conservatively managed bond funds. Issuers of
high-yield securities are more vulnerable to real or perceived economic changes
(such as an economic downturn or a prolonged period of rising interest rates),
political changes or adverse developments specific to the issuer. These factors
may be more likely to cause an issuer of low-quality bonds to default on its
obligation to pay the interest and principal due under its securities.

The market for lower-quality debt securities is generally less liquid than the
market for higher-quality securities. Adverse publicity and investor
perceptions, as well as new and proposed laws, also may have a greater negative
impact on the market for lower-quality securities.

Because the fund typically invests in intermediate-term and long-term bonds, the
fund's interest rate risk is higher than for funds with shorter weighted average
maturities, such as money market and short-term bond funds. See the discussion
on page 6 for more information about the effects of changing interest rates on
the fund's portfolio.

High-Yield can invest up to 40% of its assets in securities of foreign
companies. Foreign securities can have certain unique risks, including
fluctuations in currency exchange rates, unstable political and economic
structures, reduced availability of public information, and the lack of uniform
financial reporting and regulatory practices similar to those that apply to U.S.
issuers.

As with all funds, at any given time your shares may be worth more or less than
the price you paid for them. As a result, it is possible to lose money by
investing in the fund.

[left margin]

A HIGH-YIELD security is one that has been rated below one of the four highest
categories used by a nationally recognized statistical rating organization, or
determined by the investment advisor to be of similar quality. A discussion of
the fund's authorized credit quality range and credit risk starts on page 7.

www.americancentury.com American Century Investments 5

BASICS OF FIXED-INCOME INVESTING

DEBT SECURITIES

When a fund buys a debt security, also called a fixed-income security, it is
essentially lending money to the security's issuer. Notes, bonds, commercial
paper and U. S. Treasury securities are examples of debt securities. After the
debt security is first sold by the issuer, it may be bought and sold by other
investors. The price of the debt security may rise or fall based on many
factors, including changes in interest rates, liquidity and credit quality.

The fund managers decide which debt securities to buy and sell by

* determining which debt securities help a fund meet its maturity requirements

* identifying debt securities that satisfy a fund's credit quality standards

* evaluating the current economic conditions and assessing the risk of inflation

* evaluating special features of the debt securities that may make them more or
less attractive

WEIGHTED AVERAGE MATURITY

Like most loans, debt securities eventually must be repaid or refinanced at some
date. This date is called the maturity date. The number of days left to a debt
security's maturity date is called the remaining maturity. The longer a debt
security's remaining maturity, generally the more sensitive its price is to
changes in interest rates.

Because a bond fund will own many debt securities, the fund managers calculate
the average of the remaining maturities of all the debt securities the fund owns
to evaluate the interest rate sensitivity of the entire portfolio. This average
is weighted according to the size of the fund's individual holdings and is
called the WEIGHTED AVERAGE MATURITY. The following chart shows how fund
managers would calculate the weighted average maturity for a fund that owned
only two debt securities.

Amount of Percent of Remaining Weighted
Security Owned Portfolio Maturity Maturity
---------------------------------------------------------------------------------
Debt Security A $100,000 25% 4 years 1 year
---------------------------------------------------------------------------------
Debt Security B $300,000 75% 12 years 9 years
---------------------------------------------------------------------------------
Weighted Average Maturity 10 years

TYPES OF RISK

The basic types of risk the fund faces are described below.

INTEREST RATE RISK

Generally, interest rates and the prices of debt securities move in opposite
directions. When interest rates fall, the prices of most debt securities rise;
when interest rates rise, prices fall. Because the fund invests primarily in
debt securities, changes in interest rates will affect the fund's performance.
This sensitivity to interest rate changes is called interest rate risk.

The degree to which interest rate changes affect a fund's performance varies and
is related to the weighted average maturity of a particular fund. For example,
when interest rates rise, you can expect the share value of a long-term bond
fund to fall more than that of a short-term bond fund. When rates fall, the
opposite is true.

[left margin]

[graphic of pointing finger]
The longer a fund's weighted average maturity, the more sensitive it is to
interest rate changes.

WEIGHTED AVERAGE MATURITY is a tool the fund managers use to approximate the
remaining term to maturity of a fund's investment portfolio.

6 American Century Investments 1-800-345-3533

The following table shows the likely effect of a 1% (100 basis points) increase
in interest rates on the price of 7% coupon bonds of differing maturities:

Remaining Maturity Current Price Price After 1% Increase Change in Price
----------------------------------------------------------------------------------
1 year $100.00 $99.06 -0.94%
----------------------------------------------------------------------------------
3 years $100.00 $97.38 -2.62%
----------------------------------------------------------------------------------
10 years $100.00 $93.20 -6.80%
----------------------------------------------------------------------------------
30 years $100.00 $88.69 -11.31%

CREDIT RISK

Credit risk is the risk that an obligation won't be paid and a loss will result.
A high credit rating indicates a high degree of confidence by the rating
organization that the issuer will be able to withstand adverse business,
financial or economic conditions and make interest and principal payments on
time. Generally, a lower credit rating indicates a greater risk of non-payment.
A lower rating also may indicate that the issuer has a more senior series of
debt securities, which means that if the issuer has difficulties making its
payments, the more senior series of debt is first in line for payment.

The fund managers do not invest solely on the basis of a debt security's credit
rating; they also consider other factors, including potential returns. Higher
credit ratings usually mean lower interest rate payments, so investors often
purchase debt securities that aren't the highest rated to increase return. If a
fund purchases lower-rated debt securities, it assumes additional credit risk.

The blue bar in the following chart shows the authorized credit quality ranges
for High-Yield.

-----------------------------------------

Quality
-----------------------------------------
High Quality
----------------------------
A-1 A-2 A-3
P-1 P-2 P-3
MIG-1 MIG-2 MIG-3
SP-1 SP-2 SP-3
AAA AA A BBB BB B CCC CC C D
--------------------------------------------------------------------------------
High Yield X X X X X X X
--------------------------------------------------------------------------------

INVESTMENT GRADE NON-INVESTMENT GRADE
---------------------------------------- --------------------------------------

LIQUIDITY RISK

Debt securities can become difficult to sell, or less liquid, for a variety of
reasons, such as lack of an active trading market. The chance that a fund will
have difficulty selling its debt securities is called liquidity risk.

[left margin]

[graphic of pointing finger]
Credit quality may be lower when the issuer has any of the following

* a high debt level
* a short operating history
* a senior level of debt
* a difficult, competitive environment
* a less stable cash flow

[graphic of pointing finger]
The Statement of Additional Information provides a detailed description of these
securities ratings.

www.americancentury.com American Century Investments 7

MANAGEMENT

WHO MANAGES THE FUND?

The Board of Directors, investment advisor and fund management team play key
roles in the management of the fund.

The Board of Directors oversees the management of the fund and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the fund, it has hired an investment advisor to do so.
More than two-thirds of the directors are independent of the fund's advisor;
that is, they are not employed by and have no financial interest in the advisor.

THE INVESTMENT ADVISOR

The fund's investment advisor is American Century Investment Management, Inc.
The advisor has been managing mutual funds since 1958 and is headquartered at
4500 Main Street, Kansas City, Missouri 64111.

The advisor is responsible for managing the investment portfolios of the fund
and directing the purchase and sale of its investment securities. The advisor
also arranges for transfer agency, custody and all other services necessary for
the fund to operate.

For the services it provides to the fund, the advisor receives a unified
management fee based on a percentage of the average net assets of the fund. The
amount of the management fee for the C Class is calculated daily and paid
monthly in arrears, taking into account the average net assets of all classes of
the fund. High-Yield will pay the advisor a unified management fee of 0.90% of
the average net assets of the C Class shares of the fund.

The Statement of Additional Information contains detailed information about the
calculation of the management fee. Out of the fund's fee, the advisor pays all
expenses of managing and operating the fund except brokerage expenses, taxes,
interest, fees and expenses of the independent directors (including legal
counsel fees), and extraordinary expenses. A portion of each fund's management
fee may be paid by the fund's advisor to unaffiliated third parties who provide
recordkeeping and administrative services that would otherwise be performed by
an affiliate of the advisor.

THE FUND MANAGEMENT TEAM

The advisor uses a team of portfolio managers, assistant portfolio managers and
analysts to manage the fund. The team meets regularly to review portfolio
holdings and discuss purchase and sale activity. Team members buy and sell
securities for the fund as they see fit, guided by the fund's investment
objective and strategy.

The portfolio manager who leads the team is identified below:

THERESA C. FENNELL

Ms. Fennell, Vice President and Senior Portfolio Manager, has been a member of
the team that manages High-Yield since its inception in September 1997. She
joined American Century in June 1997. Prior to joining American Century, she was
an Associate Portfolio Manager with Smith Barney Mutual Funds Management, Inc.
She has a bachelor's degree in economics from the University of Virginia. Ms.
Fennell is a Chartered Financial Analyst.

FUNDAMENTAL INVESTMENT POLICIES

Fundamental investment policies contained in the Statement of Additional
Information and the investment objective of the fund may not be changed without
shareholder approval. The Board of Directors may change any other policies and
investment strategies.

[left margin]

[graphic of pointing finger]

CODE OF ETHICS

American Century has a Code of Ethics designed to ensure that the interests of
fund shareholders come before the interests of the people who manage the fund.
Among other provisions, the Code of Ethics prohibits portfolio managers and
other investment personnel from buying securities in an initial public offering
or profiting from the purchase and sale of the same security within 60 calendar
days. In addition, the Code of Ethics requires portfolio managers and other
employees with access to information about the purchase or sale of securities by
the fund to obtain approval before executing permitted personal trades.

8 American Century Investments 1-800-345-3533

INVESTING WITH AMERICAN CENTURY

ELIGIBILITY FOR C CLASS SHARES

MINIMUM INITIAL INVESTMENT AMOUNTS

(1) For each fund you select for your 403(b) plan, American Century will waive
the fund minimum if you make a contribution of at least $50 a month. If your
contribution is less than $50 a month, you may make only one fund choice.

(2) The minimum investment requirements may be different for some types of
retirement accounts.

INVESTING THROUGH FINANCIAL INTERMEDIARIES

* minimum investment requirements
* exchange policies
* fund choices
* cutoff time for investments

Please contact your financial intermediary or plan sponsor for a complete
description of its policies. Copies of the fund's annual report, semiannual
report and Statement of Additional Information are available from your
intermediary or plan sponsor.

The fund has authorized certain financial intermediaries to accept orders on the
fund's behalf. American Century has contracts with these intermediaries
requiring them to track the time investment orders are received and to comply
with procedures relating to the transmission of orders. Orders must be received
by the intermediary on a fund's behalf before the time the net asset value is
determined in order to receive that day's share price. If those orders are
transmitted to American Century and paid for in accordance with the contract,
they will be priced at the net asset value next determined after your request is
received in the form required by the intermediary.

[left margin]

[graphic of pointing finger]
Financial intermediaries include banks, broker-dealers, insurance companies and
investment advisors.

www.americancentury.com American Century Investments 9

MODIFYING OR CANCELING AN INVESTMENT

Investment instructions are irrevocable. That means that once you have mailed or
otherwise transmitted your investment instruction, you may not modify or cancel
it. The fund reserves the right to suspend the offering of shares for a period
of time, and to reject any specific investment (including a purchase by
exchange). Additionally, we may refuse a purchase if, in our judgment, it is of
a size that would disrupt the management of a fund.

ABUSIVE TRADING PRACTICES

We do not permit market timing or other abusive trading practices in our funds.

Excessive, short-term (market timing) or other abusive trading practices may
disrupt portfolio management strategies and harm fund performance. To minimize
harm to the fund and its shareholders, we reserve the right to reject any
purchase order (including exchanges) from any investor who we believe has a
history of abusive trading or whose trading, in our judgment, has been or may be
disruptive to a fund. In making this judgment, we may consider trading done in
multiple accounts under common ownership or control.

YOUR RESPONSIBILITY FOR UNAUTHORIZED TRANSACTIONS

REDEMPTIONS

In addition, we reserve the right to delay delivery of redemption proceeds--up
to seven days--or to honor certain redemptions with securities, rather than
cash, as described in the next section.

[left margin]

A fund's NET ASSET VALUE, or NAV, is the price of the fund's shares.

10 American Century Investments 1-800-345-3533

SPECIAL REQUIREMENTS FOR LARGE REDEMPTIONS

REDEMPTION OF SHARES IN LOW-BALANCE ACCOUNTS

EXCHANGES BETWEEN FUNDS

[left margin]

[graphic of pointing finger]
A redemption is the sale of all or a portion of the shares in an account,
including those sold as a part of an exchange to another American Century
account.

www.americancentury.com American Century Investments 11

SHARE PRICE AND DISTRIBUTIONS

SHARE PRICE

American Century determines the NAV of the fund as of the close of regular
trading on the New York Stock Exchange (usually 4 p.m. Eastern time) on each day
the Exchange is open. On days when the Exchange is closed (including certain
U.S. holidays), we do not calculate the NAV. A fund share's NAV is the current
value of the fund's assets, minus any liabilities, divided by the number of fund
shares outstanding.

We will price your purchase, exchange or redemption at the NAV next determined
after we receive your transaction request in good order.

DISTRIBUTIONS

Federal tax laws require the fund to make distributions to its shareholders in
order to qualify as a "regulated investment company." Qualification as a
regulated investment company means the fund will not be subject to state or
federal income tax on amounts distributed. The distributions generally consist
of dividends and interest received by the fund, as well as CAPITAL GAINS
realized by the fund on the sale of its investment securities. The fund pays
distributions from net income monthly. The fund generally pays distributions of
capital gains, if any, once a year in December. A fund may make more frequent
distributions if necessary to comply with Internal Revenue Code provisions.

[left margin]

CAPITAL GAINS are increases in the values of capital assets, such as stock, from
the time the assets are purchased.

12 American Century Investments 1-800-345-3533

TAXES

The tax consequences of owning shares of the fund will vary depending on whether
you own them through a taxable or tax-deferred account. Tax consequences result
from distributions by the fund of dividend and interest income it has received
or capital gains it has generated through its investment activities. Tax
consequences also may result when investors sell fund shares after the net asset
value has increased or decreased.

Tax-Deferred Accounts

Taxable Accounts

If you own fund shares through a taxable account, you may be taxed on your
investments if the fund makes distributions or if you sell your fund shares.

Taxability of Distributions

Type of Distribution Tax Rate for 15% Bracket Tax Rate for 28% Bracket or Above
-------------------------------------------------------------------------------------------------
Short-term capital gains Ordinary income rate Ordinary income rate
-------------------------------------------------------------------------------------------------
Long-term capital gains (1-5 years) 10% 20%
-------------------------------------------------------------------------------------------------
Long-term capital gains (5 years) 8% 20%(1)

Distributions also may be subject to state and local taxes. Because everyone's
tax situation is unique, you may want to consult your tax professional about
federal, state and local tax consequences.

[left margin]

[graphic of pointing finger]
BUYING A DIVIDEND

The risk in buying a dividend is that the fund's portfolio may build up taxable
gains throughout the period covered by a distribution, as securities are sold at
a profit. The fund distributes those gains to you, after subtracting any losses,
even if you did not own the shares when the gains occurred.

If you buy a dividend, you incur the full tax liability of the distribution
period, but you may not enjoy the full benefit of the gains realized in the
fund's portfolio.

www.americancentury.com American Century Investments 13

Taxes on Transactions

14 American Century Investments 1-800-345-3533

MULTIPLE CLASS INFORMATION

American Century offers three classes of the fund: Investor Class, Advisor Class
and C Class. The shares offered by this Prospectus are C Class shares and are
offered primarily through employer-sponsored retirement plans, or through
institutions like banks, broker-dealers and insurance companies.

* 1-800-345-2021 for Investor Class shares
* 1-800-345-3533 for Advisor Class shares

You also can contact a sales representative or financial intermediary who offers
those classes of shares.

Except as described below, all classes of shares of the fund have identical
voting, dividend, liquidation and other rights, preferences, terms and
conditions. The only differences between the classes are (a) each class may be
subject to different expenses specific to that class; (b) each class has a
different identifying designation or name; (c) each class has exclusive voting
rights with respect to matters solely affecting that class; and (d) each class
may have different exchange privileges.

Contingent Deferred Sales Charge

If you sell C Class shares within 18 months of purchasing them, you will pay a
Contingent Deferred Sales Charge (CDSC). The charge is 0.75% in the first year
after purchase, declines ratably over the next six months, and is eliminated
thereafter in accordance with the following chart:

After 13 months 0.625%
After 14 months 0.500%
After 15 months 0.375%
After 16 months 0.250%
After 17 months 0.125%
After 18 months 0.000%

Service and Distribution Fees

Investment Company Act Rule 12b-1 permits mutual funds that adopt a written plan
to pay certain expenses associated with the distribution of their shares out of
fund assets. The fund's C Class shares have a 12b-1 Plan. Under the Plan, the
fund's C Class pays an annual fee of 0.75% of C Class average net assets, 0.25%
for certain individual shareholder and administrative services and 0.50% for
distribution services. The advisor, as paying agent for the fund, pays all or a
portion of such fees to the banks, broker-dealers and insurance companies that
make C Class shares available. Because these fees are paid out of the fund's
assets on an ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges. For
additional information about the Plan and its terms, see Multiple Class
Structure - Master Distribution and Shareholder Services Plan in the Statement
of Additional Information.

www.americancentury.com American Century Investments 15

PERFORMANCE INFORMATION OF OTHER CLASS

The following financial information is provided to show the performance of the
fund's original class of shares. This class, the Investor Class, has a total
expense ratio that is 0.75% lower than the C Class. If the C Class had existed
during the periods presented, its performance would have been lower because of
the additional expense.

The table on the next page itemizes what contributed to the changes in the
Investor Class share price during the most recently ended fiscal year. It also
shows the changes in share price for this period in comparison to changes over
the last five fiscal years, or less, if the share class is not five years old.

On a per-share basis, the table includes as appropriate

* share price at the beginning of the period
* investment income and capital gains or losses
* distributions of income and capital gains paid to investors
* share price at the end of the period

The table also includes some key statistics for the period as appropriate

* TOTAL RETURN - the overall percentage of return of the fund, assuming the
reinvestment of all distributions

* EXPENSE RATIO - the operating expenses of the fund as a percentage of average
net assets

* NET INCOME RATIO - the net investment income of the fund as a percentage of
average net assets

* PORTFOLIO TURNOVER - the percentage of the fund's buying and selling activity

The Financial Highlights have been audited by Deloitte & Touche LLP, independent
auditors. Their Independent Auditors' Report and the financial statements are
included in the fund's Annual Report, which is available upon request.

16 American Century Investments 1-800-345-3533

HIGH-YIELD FUND
Investor Class

For a Share Outstanding Throughout the Years Ended October 31 (except as noted)

Per-Share Data
2000 1999 1998 1997(1)
---------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period $8.54 $8.73 $9.91 $10.00
------- -------- -------- --------
Income From Investment Operations
Net Investment Income 0.85 0.80 0.83 0.06
Net Realized and Unrealized Loss on Investment Transactions (1.39) (0.18) (1.18) (0.09)
------- -------- -------- --------
Total From Investment Operations (0.54) 0.62 (0.35) (0.03)
------- -------- -------- --------
Distributions
From Net Investment Income (0.80) (0.80) (0.83) (0.06)
From Net Realized Gains on Investment Transactions -- (0.01) -- --
------- -------- -------- --------
Total Distributions (0.80) (0.81) (0.83) (0.06)
------- -------- -------- --------
Net Asset Value, End of Period $7.20 $8.54 $8.73 $9.91
======= ======== ======== ========
Total Return(2) (7.08)% 7.03% (4.09)% (0.27)%

Ratios/Supplemental Data
2000 1999 1998 1997(1)
---------------------------------------------------------------------------------------------------------
Ratio of Operating Expenses to Average Net Assets 0.90% 0.90% 0.90% 0.90%(3)
Ratio of Net Investment Income to Average Net Assets 10.09% 8.90% 8.41% 7.39%(3)
Portfolio Turnover Rate 77% 95% 85% --
Net Assets, End of Period (in thousands) $25,126 $33,537 $32,229 $11,072

(1) September 30, 1997 (inception) through October 31, 1997.

(2) Total return assumes reinvestment of dividends and capital gains
distributions, if any. Total returns for periods less than
one year are not annualized.

(3) Annualized.

www.americancentury.com American Century Investments 17

MORE INFORMATION ABOUT THE FUND IS CONTAINED IN THESE DOCUMENTS.

Annual and Semiannual Reports

Annual and semiannual reports contain more information about the fund's
investments and the market conditions and investment strategies that
significantly affected the fund's performance during the most recent fiscal
period.

Statement of Additional Information (SAI)

The SAI contains a more detailed, legal description of the fund's operations,
investment restrictions, policies and practices. The SAI is incorporated by
reference into this Prospectus. This means that it is legally part of this
Prospectus, even if you don't request a copy.

You may obtain a free copy of the SAI or annual and semiannual reports, and ask
questions about the fund or your accounts, by contacting American Century at the
address or telephone numbers listed below.

You also can get information about the fund (including the SAI) from the
Securities and Exchange Commission (SEC). The SEC charges a duplicating fee to
provide copies of this information.

In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.

On the Internet * EDGAR database at www.sec.gov
* By email request at publicinfo@sec.gov

By mail SEC Public Reference Section
Washington, D.C. 20549-0102

Investment Company Act File No. 811-0816

[american century logo and text logo (reg. sm.)]
American Century Investments
P.O. Box 419385
Kansas City, Missouri 64141-6385

1-800-345-3533 or 816-531-5575

0105
SH-PRS-24813

AMERICAN CENTURY
statement of
additional information

Growth Fund
Ultra(reg.sm) Fund
Select Fund
Vista Fund
Heritage Fund
Balanced Fund
Tax-Managed Value Fund
Giftrust(reg.tm) Fund
New Opportunities Fund
New Opportunities II Fund
Limited-Term Bond Fund
Intermediate-Term Bond Fund
Bond Fund
High-Yield Fund
Veedot(SM) Fund

MAY 1, 2001
American Century Mutual Funds, Inc.

THIS STATEMENT OF ADDITIONAL INFORMATION ADDS TO THE DISCUSSION IN THE FUNDS'
INVESTOR, ADVISOR AND INSTITUTIONAL CLASS PROSPECTUSES, DATED MARCH 1, 2001 AND
THE FUNDS' C CLASS PROSPECTUS DATED MAY 1, 2001, BUT IS NOT A PROSPECTUS. THE
STATEMENT OF ADDITIONAL INFORMATION SHOULD BE READ IN CONJUNCTION WITH THE
FUNDS' CURRENT PROSPECTUSES. IF YOU WOULD LIKE A COPY OF A PROSPECTUS, PLEASE
CONTACT US AT ONE OF THE ADDRESSES OR TELEPHONE NUMBERS LISTED ON THE BACK
COVER OR VISIT AMERICAN CENTURY'S WEB SITE AT WWW.AMERICANCENTURY.COM.

THIS STATEMENT OF ADDITIONAL INFORMATION INCORPORATES BY REFERENCE CERTAIN
INFORMATION THAT APPEARS IN THE FUNDS' ANNUAL AND SEMIANNUAL REPORTS, WHICH ARE
DELIVERED TO ALL INVESTORS. YOU MAY OBTAIN A FREE COPY OF THE FUNDS' ANNUAL OR
SEMIANNUAL REPORTS BY CALLING 1-800-345-2021.

American Century
Investment Services, Inc.

[american century logo and text logo (reg. sm])

TABLE OF CONTENTS

The Funds' History ........................................................ 2
Fund Investment Guidelines ................................................ 3
Growth, Ultra, Select, Vista, Heritage, Giftrust,
New Opportunities New Opportunities II and Veedot .................... 4
Balanced ................................................................ 4
Tax-Managed Value ....................................................... 5
Limited-Term Bond, Intermediate-Term Bond and Bond ...................... 5
High-Yield .............................................................. 6
Fund Investments and Risks ................................................ 8
Investment Strategies and Risks ......................................... 8
Investment Policies ..................................................... 21
Portfolio Turnover ...................................................... 23
Management ................................................................ 24
The Board of Directors .................................................. 24
Officers ................................................................ 27
Code of Ethics .......................................................... 28
The Funds' Principal Shareholders ......................................... 29
Service Providers ......................................................... 34
Investment Advisor ...................................................... 34
Transfer Agent and Administrator ........................................ 37
Distributor ............................................................. 37
Other Service Providers ................................................... 38
Custodian Banks ......................................................... 38
Independent Auditors .................................................... 38
Brokerage Allocation ...................................................... 38
Growth, Ultra, Select, Vista, Heritage, Tax-Managed Value, Giftrust,
New Opportunities, New Opportunities II,
Veedot and the Equity Portion of Balanced ............................ 38
Limited-Term Bond, Intermediate-Term Bond, Bond,
High-Yield and the Fixed-Income Portion of Balanced .................. 39
Information about Fund Shares ............................................. 40
Multiple Class Structure ................................................ 40
Buying and Selling Fund Shares .......................................... 46
Valuation of a Fund's Securities ........................................ 46
Taxes ..................................................................... 47
How Fund Performance Information Is Calculated ............................ 48
Performance Comparisons ................................................. 51
Permissible Advertising Information ..................................... 52
Multiple Class Performance Advertising .................................. 52
Financial Statements ...................................................... 52
Explanation of Fixed-Income Securities Ratings ............................ 53

www.americancentury.com American Century Investments 1

THE FUNDS' HISTORY

American Century Mutual Funds, Inc. is a registered open-end management
investment company that was organized in 1957 as a Delaware corporation under
the name Twentieth Century Investors, Inc. On June 2, 1990, the company
reorganized as a Maryland corporation, and in January 1997 it changed its name
to American Century Mutual Funds, Inc. Throughout this Statement of Additional
Information we refer to American Century Mutual Funds, Inc. as the corporation.

Each fund described in this Statement of Additional Information is a separate
series of the corporation and operates for many purposes as if it were an
independent company. Each fund has its own investment objective, strategy,
management team, assets, and tax identification and stock registration numbers.

INVESTOR CLASS ADVISOR CLASS
-----------------------------------------------------------------------------------------------------------------
Fund Ticker Symbol Inception Date Ticker Symbol Inception Date
-----------------------------------------------------------------------------------------------------------------
Growth TWCGX 10/31/1958 TWRAX 06/04/1997
-----------------------------------------------------------------------------------------------------------------
Ultra TWCUX 11/02/1981 TWUAX 10/02/1996
-----------------------------------------------------------------------------------------------------------------
Select TWCIX 10/31/1958 TWCAX 08/08/1997
-----------------------------------------------------------------------------------------------------------------
Vista TWCVX 11/25/1983 TWVAX 10/02/1996
-----------------------------------------------------------------------------------------------------------------
Heritage TWHIX 11/10/1987 ATHAX 07/11/1997
-----------------------------------------------------------------------------------------------------------------
Balanced TWBIX 11/20/1988 TWBAX 01/06/1997
-----------------------------------------------------------------------------------------------------------------
Tax-Managed Value ACTIX 03/01/1999 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Giftrust TWGTX 11/25/1983 N/A N/A
-----------------------------------------------------------------------------------------------------------------
New Opportunities TWNOX 12/26/1996 N/A N/A
-----------------------------------------------------------------------------------------------------------------
New Opportunities II N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Limited-Term Bond ABLIX 03/01/1994 ABLAX 11/12/1997
-----------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond TWITX 03/01/1994 TWTAX 08/14/1997
-----------------------------------------------------------------------------------------------------------------
Bond TWLBX 03/02/1987 ABBAX 08/08/1997
-----------------------------------------------------------------------------------------------------------------
High-Yield ABHIX 09/30/1997 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Veedot ABVIX 11/30/1999 N/A N/A
-----------------------------------------------------------------------------------------------------------------

2 American Century Investments 1-800-345-2021

INSTITUTIONAL CLASS C CLASS
-----------------------------------------------------------------------------------------------------------------
Fund Ticker Symbol Inception Date Ticker Symbol Inception Date
-----------------------------------------------------------------------------------------------------------------
Growth TWGIX 06/16/1997 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Ultra TWUIX 11/14/1996 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Select TWSIX 03/13/1997 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Vista TWVIX 11/14/1996 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Heritage ATHIX 06/16/1997 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Balanced N/A 05/01/2000 N/A N/A
-----------------------------------------------------------------------------------------------------------------
Tax-Managed Value N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Giftrust N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
New Opportunities N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
New Opportunities II N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Limited-Term Bond N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Intermediate-Term Bond N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Bond N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
High-Yield N/A N/A N/A N/A
-----------------------------------------------------------------------------------------------------------------
Veedot N/A 08/01/2000 N/A N/A
-----------------------------------------------------------------------------------------------------------------

FUND INVESTMENT GUIDELINES

This section explains the extent to which the funds' advisor, American Century
Investment Management, Inc., can use various investment vehicles and strategies
in managing a fund's assets. Descriptions of the investment techniques and risks
associated with each appear in the section, Investment Strategies and Risks,
which begins on page 8. In the case of the funds' principal investment
strategies, these descriptions elaborate upon discussions contained in the
Prospectuses.

Each fund, other than Veedot, is diversified as defined in the Investment
Company Act of 1940 (the Investment Company Act). Diversified means that, with
respect to 75% of its total assets, each fund will not invest more than 5% of
its total assets in the securities of a single issuer or own more than 10% of
the outstanding voting securities of a single issuer.

Veedot is nondiversified. Although Veedot's managers expect that it will
ordinarily satisfy the requirements of a diversified fund, its nondiversified
status gives it more flexibility to invest heavily in the most attractive
companies identified by the fund's methodology.

To meet federal tax requirements for qualification as a regulated investment
company, each fund must limit its investments so that at the close of each
quarter of its taxable year

(1) no more than 25% of its total assets are invested in the securities of a
single issuer (other than the U.S. government or a regulated investment
company), and

(2) with respect to at least 50% of its total assets, no more than 5% of its
total assets are invested in the securities of a single issuer.

www.americancentury.com American Century Investments 3

GROWTH, ULTRA, SELECT, VISTA, HERITAGE, GIFTRUST, NEW OPPORTUNITIES, NEW
OPPORTUNITIES II AND VEEDOT

In general, within the restrictions outlined here and in the funds'
Prospectuses, the fund managers have broad powers to decide how to invest fund
assets, including the power to hold them uninvested.

Investments are varied according to what is judged advantageous under changing
economic conditions. It is the advisor's policy to retain maximum flexibility in
management without restrictive provisions as to the proportion of one or another
class of securities that may be held, subject to the investment restrictions
described on the following pages. It is the advisor's intention that each fund
will generally consist of domestic and foreign common stocks, convertible debt
securities and equity equivalent securities. However, subject to the specific
limitations applicable to a fund, the funds' management teams may invest the
assets of each fund in varying amounts in other instruments and may use other
techniques, such as those reflected in Table 1 on page 7, when such a course is
deemed appropriate in order to pursue a fund's investment objective. Senior
securities that, in the opinion of the fund managers, are high-grade issues also
may be purchased for defensive purposes.

So long as a sufficient number of acceptable securities are available, the fund
managers intend to keep the funds fully invested, regardless of the movement of
stock or bond prices, generally. However, should the funds' investment
methodology fail to identify sufficient acceptable securities, or for any other
reason including the desire to take a temporary defensive position, the funds
may invest up to 100% of their assets in U.S. government securities. In most
circumstances, each fund's actual level of cash and cash equivalents will be
less than 10%. The managers may use stock index future contracts as a way to
expose each fund's cash assets to the market while maintaining liquidity. As
mentioned in the Prospectuses, the managers may not leverage a fund's
portfolios; so there is no greater market risk to the funds than if they
purchase stocks. See Derivative Securities, page 10, Short-Term Securities, page
13 and Futures and Options, page 14.

BALANCED

In general, within the restrictions outlined here and in this fund's Prospectus,
the fund managers have broad powers to decide how to invest fund assets,
including the power to hold them uninvested. As a matter of fundamental policy,
the managers will invest approximately 60% of the fund's portfolio in equity
securities and the remainder in bonds and other fixed-income securities. The
equity portion of the fund generally will be invested in equity securities of
companies comprising the 1,500 largest publicly traded companies in the United
States. The fund's investment approach may cause its equity portion to be more
heavily invested in some industries than in others. However, it may not invest
more than 25% of its total assets in companies whose principal business
activities are in the same industry. In addition, as a diversified investment
company, its investments in a single issue are limited, as described above in
Fund Investment Guidelines. The fund managers also may purchase foreign
securities, convertible debt securities, equity-equivalent securities,
non-leveraged stock index futures contracts and similar securities, and
short-term securities. See Table 1, page 7.

The fixed-income portion of the fund generally will be invested in a diversified
portfolio of high-grade government, corporate, asset-backed and similar
securities. There are no maturity restrictions on the fixed-income securities in
which the fund invests, but under normal conditions the weighted average
maturity for the fixed-income portion of the fund will be in the 3- to10-year
range. The managers will actively manage the portfolio, adjusting the
portfolio's weighted average maturity in response to expected changes in
interest rates. During periods of rising interest rates, a shorter weighted
average maturity may be adopted in order to reduce the effect of bond price
declines on the fund's net asset value. When interest rates are falling and bond
prices rising, a longer weighted average portfolio maturity

4 American Century Investments 1-800-345-2021

may be adopted. The restrictions on the quality of the fixed-income securities
the fund may purchase are described in the Prospectus. For a description of the
fixed-income securities rating system, see Explanation of Fixed-Income
Securities Ratings, on page 53.

TAX-MANAGED VALUE

The fund managers will invest primarily in stocks of medium to large companies
that the managers believe are undervalued at the time of purchase. The fund
manager will usually purchase common stocks of U.S. and foreign companies, but
they can purchase other types of securities as well, such as domestic and
foreign preferred stocks, convertible debt securities, equity-equivalent
securities, notes, bonds and other debt securities. See Table 1.

LIMITED-TERM BOND, INTERMEDIATE-TERM BOND AND BOND

To achieve their objectives, these funds may invest in diversified portfolios of
high- and medium-grade debt securities payable in U.S. currency. Under normal
market conditions, each fund will maintain at least 65% of the value of its
total assets in investment-grade bonds and other debt instruments. Under normal
market conditions, each of the funds may invest up to 35% of its assets, and for
temporary defensive purposes, up to 100% of its assets, in short-term
securities.

The funds may invest in securities that at the time of purchase are rated by a
nationally recognized statistical rating organization or, if not rated, are of
equivalent investment quality as determined by the advisor, as follows:
short-term notes within the two highest categories, (for example, at least MIG-2
by Moody's Investor Services (Moody's) or SP-2 by Standard and Poor's
Corporation (S&amp;P)); corporate, sovereign government, and municipal bonds within
the four highest categories (for example, at least Baa by Moody's or BBB by S&P)
; securities of the U.S. government and its agencies and instrumentalities
(described below); other types of securities rated at least P-2 by Moody's or
A-2 by S&amp;P.

The government securities in which the funds may invest include: (1) direct
obligations of the United States, such as Treasury bills, notes and bonds, which
are supported by the full faith and credit of the United States, and (2)
obligations (including mortgage-related securities) issued or guaranteed by
agencies and instrumentalities of the U.S. government that are established under
an act of Congress. The securities of some of these agencies and
instrumentalities, such as the Government National Mortgage Association, are
guaranteed as to principal and interest by the U.S. Treasury, and other
securities are supported by the right of the issuer, such as Federal Home Loan
Banks, to borrow from the Treasury. Other obligations, including those issued by
the Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, are supported only by the credit of the instrumentality.

The managers will actively manage the portfolios, adjusting each portfolio's
weighted average maturities as necessary in response to expected changes in
interest rates. During periods of rising interest rates, a shorter weighted
average may be adopted in order to reduce the effect of bond price declines on
that fund's net asset value. When interest rates are falling and bond prices are
rising, a longer weighted average portfolio maturity may be adopted.

Mortgage-related securities in which the funds may invest include collateralized
mortgage obligations (CMOs) issued by a U.S. agency or instrumentality. A CMO is
a debt security that is collateralized by a portfolio or pool of mortgages or
mortgage-backed securities. The issuer's obligation to make interest and
principal payments is secured by the underlying pool or portfolio of mortgages
or mortgage-backed securities.

The market value of mortgage-related securities, even those in which the
underlying pool of mortgage loans is guaranteed as to the payment of principal
and interest by the U.S. government, is not insured. When interest rates rise,
the market value of those securities

www.americancentury.com American Century Investments 5

may decrease in the same manner as other debt, but when interest rates decline,
their market value may not increase as much as other debt instruments because of
the prepayment feature inherent in the underlying mortgages. If such securities
are purchased at a premium, the fund will suffer a loss if the obligation is
prepaid. Prepayments will be reinvested at prevailing rates, which may be less
than the rate paid by the prepaid obligation.

For the purpose of determining the weighted average portfolio maturity of the
funds, the managers shall consider the maturity of a mortgage-related security
to be the remaining expected average life of the security. The average life of
such securities is likely to be substantially less than the original maturity as
a result of prepayments of principal on the underlying mortgages, especially in
a declining interest rate environment. In determining the remaining expected
average life, the managers make assumptions regarding repayments on underlying
mortgages. In a rising interest rate environment, those prepayments generally
decrease, and may decrease below the rate of prepayment assumed by the managers
when purchasing those securities. Such slowdown may cause the remaining maturity
of those securities to lengthen, which will increase the relative volatility of
those securities and, hence, the fund holding the securities. See Basics of
Fixed-Income Investing, in the funds' Prospectus.

As noted, each fund may invest up to 35% of its assets, and for temporary
defensive purposes as determined by the managers, up to 100% of its assets in
short-term securities. See Short-Term Securities, page 13. These investments
must meet the rating standards for the funds. To the extent a fund assumes a
defensive position, the weighted average maturity of its portfolio may not fall
within the ranges stated for the fund. The funds may buy and sell interest rate
futures contracts relating to debt securities and bond indexes and may write and
buy put and call options relating to interest rate futures contracts for the
purpose of achieving their investment objectives. See Futures and Options, page
14.

HIGH-YIELD

The fund invests primarily in lower-rated, higher-yielding corporate bonds,
debentures and notes, which are subject to greater credit risk and consequently
offer higher yield. The fund also may purchase

* government securities

* zero-coupon, step-coupon and pay-in-kind securities

* convertible securities

* loan interests

* common stock or other equity-related securities (limited to 20% of fund
assets)

* short-term securities

Up to 40% of the fund's assets may be invested in foreign securities. The fund
also may purchase and sell interest rate futures contracts and related options.
See Futures and Options, page 13.

The securities purchased by the fund generally will be rated in the lower rating
categories of recognized rating agencies, as low as Caa by Moody's or D by S&P,
or will be unrated securities that the managers deem of comparable quality. The
fund may hold securities with higher ratings when the yield differential between
low-rated and higher-rated securities narrows and the risk of loss may be
reduced substantially with only a relatively small reduction in yield. The fund
will not invest more than 10% of its total assets in securities rated lower than
B by both Moody's and S&P.

Issuers of high-yield securities are more vulnerable to real or perceived
economic changes (such as an economic downturn or a prolonged period of rising
interest rates), political changes or adverse developments specific to the
issuer. Adverse economic, political or other developments may impair the
issuer's ability to service principal and interest obligations,

6 American Century Investments 1-800-345-2021

to meet projected business goals and to obtain additional financing. In the
event of a default, the fund would experience a reduction of its income and
could expect a decline in the market value of the defaulted securities.

The market for lower quality securities is generally less liquid than the market
for higher quality securities. Adverse publicity and investor perceptions as
well as new or proposed laws also may have a greater negative impact on the
market for lower quality securities. Sovereign debt of foreign governments is
generally rated by country. Because these ratings do not take into account
individual factors relevant to each issue and may not be updated regularly, the
managers may elect to treat such securities as unrated debt.

TABLE 1
--------------------------------------------------------------------------------

Limited-
Term Bond, New
Growth Intermediate- Opportunities II Tax-
Ultra Vista High Term Bond, New Managed
Select Heritage Yield Bond Opportunities Giftrust Balanced Value Veedot
-----------------------------------------------------------------------------------------------------------------------------------
Foreign
Securities X X 40% X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Convertible
Debt
Securities X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Short Sales X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Portfolio
Lending 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3% 33 1/3%
-----------------------------------------------------------------------------------------------------------------------------------
Derivative
Securities X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Investments in Companies with
Limited Operating
Histories 5% 10% 15% 5% 10% 10% 5% X 10%
-----------------------------------------------------------------------------------------------------------------------------------
Other
Investment
Companies 10% 10% 10% 10% 10% 10% 10% 10% 10%
-----------------------------------------------------------------------------------------------------------------------------------
Repurchase
Agreement X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
When-Issued and Forward
Commitment
Agreements X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Illiquid
Securities 15% 15% 15% 15% 15% 15% 15% 15% 15%
-----------------------------------------------------------------------------------------------------------------------------------
Restricted
Securities X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Short-Term
Securities X X X 35% X X X X X

www.americancentury.com American Century Investments 7

Limited-
Term Bond, New
Growth Intermediate- Opportunities II Tax-
Ultra Vista High Term Bond, New Managed
Select Heritage Yield Bond Opportunities Giftrust Balanced Value Veedot
-----------------------------------------------------------------------------------------------------------------------------------
Futures
& Options X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Forward Currency
Exchange
Contracts X X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Equity
Equivalents X X X X X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Fixed Income Securities
-----------------------------------------------------------------------------------------------------------------------------------
Municipal
Notes X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Municipal
Bonds X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Variable- and
Floating-Rate
Obligations X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Obligations with Term
Puts Attached X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Tender Option Bonds X X
-----------------------------------------------------------------------------------------------------------------------------------
Zero-Coupon X X X
-----------------------------------------------------------------------------------------------------------------------------------
Inverse Floaters X X X X
-----------------------------------------------------------------------------------------------------------------------------------
Loan Interests X
-----------------------------------------------------------------------------------------------------------------------------------

FUND INVESTMENTS AND RISKS

INVESTMENT STRATEGIES AND RISKS

This section describes investment vehicles and techniques the fund managers can
use in managing a fund's assets. It also details the risks associated with each,
because each investment vehicle and technique contributes to a fund's overall
risk profile. To determine whether a fund may invest in a particular investment
vehicle, consult Table 1, page 7.

Foreign Securities

Each fund may invest in the securities of foreign issuers, including foreign
governments, when these securities meet its standards of selection. Securities
of foreign issuers may trade in the U.S. or foreign securities markets.

An unlimited portion of each fund's total assets may be invested in the
securities of foreign issuers, except for High-Yield, which may invest up to 40%
of its assets in foreign securities.

Investments in foreign securities may present certain risks, including:

CURRENCY RISK - The value of the foreign investments held by the funds may be
significantly affected by changes in currency exchange rates. The dollar value
of a foreign security generally decreases when the value of the dollar rises
against the foreign currency in which the security is denominated, and tends to
increase when the value of the dollar

8 American Century Investments 1-800-345-2021

falls against such currency. In addition, the value of fund assets may be
affected by losses and other expenses incurred in converting between various
currencies in order to purchase and sell foreign securities, and by currency
restrictions, exchange control regulation, currency devaluations and political
developments.

POLITICAL AND ECONOMIC RISK - The economies of many of the countries in which
the funds invest are not as developed as the economy of the United States and
may be subject to significantly different forces. Political or social
instability, expropriation, nationalization, confiscatory taxation and
limitations on the removal of funds or other assets also could adversely affect
the value of investments. Further, the funds may find it difficult or be unable
to enforce ownership rights, pursue legal remedies or obtain judgments in
foreign courts.

REGULATORY RISK - Foreign companies generally are not subject to the regulatory
controls imposed on U.S. issuers and, in general, there is less publicly
available information about foreign securities than is available about domestic
securities. Many foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, practices and requirements
comparable to those applicable to domestic companies. Income from foreign
securities owned by the funds may be reduced by a withholding tax at the source,
which would reduce dividend income payable to shareholders.

MARKET AND TRADING RISK - Brokerage commission rates in foreign countries, which
generally are fixed rather than subject to negotiation as in the United States,
are likely to be higher. The securities markets in many of the countries in
which the funds invest will have substantially less trading volume than the
principal U.S. markets. As a result, the securities of some companies in these
countries may be less liquid and more volatile than comparable U.S. securities.
Furthermore, one securities broker may represent all or a significant part of
the trading volume in a particular country, resulting in higher trading costs
and decreased liquidity due to a lack of alternative trading partners. There
generally is less government regulation and supervision of foreign stock
exchanges, brokers and issuers, which may make it difficult to enforce
contractual obligations.

CLEARANCE AND SETTLEMENT RISK - Foreign securities markets also have different
clearance and settlement procedures, and in certain markets there have been
times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions.
Delays in clearance and settlement could result in temporary periods when assets
of the funds are uninvested and no return is earned. The inability of the funds
to make intended security purchases due to clearance and settlement problems
could cause the funds to miss attractive investment opportunities. Inability to
dispose of portfolio securities due to clearance and settlement problems could
result either in losses to the funds due to subsequent declines in the value of
the portfolio security or, if the fund has entered into a contract to sell the
security, liability to the purchaser.

OWNERSHIP RISK - Evidence of securities ownership may be uncertain in many
foreign countries. As a result, there is a risk that a fund's trade details
could be incorrectly or fraudulently entered at the time of the transaction,
resulting in a loss to the fund.

Convertible Debt Securities

A convertible debt security is a fixed-income security that offers the potential
for capital appreciation through a conversion feature that enables the holder to
convert the fixed-income security into a stated number of shares of common
stock. As fixed-income securities, convertible debt securities provide a stable
stream of income, with generally higher yields than common stocks. Convertible
debt securities offer the potential to benefit from increases in the market
price of the underlying common stock, however, they generally offer lower yields
than non-convertible securities of similar quality. Of course, as with all
fixed-income securities, there can be no assurance of current income because the
issuers of the convertible debt securities may default on their obligations. In
addition, there can be no assurance of capital appreciation because the value of
the underlying common stock will fluctuate.

www.americancentury.com American Century Investments 9

Convertible debt securities generally are subordinated to other similar but
non-convertible securities of the same issuer, although convertible bonds, as
corporate debt obligations, enjoy seniority in right of payment to all equity
securities, and convertible preferred stock is senior to common stock of the
same issuer. Because of the subordination feature, however, convertible debt
securities typically have lower ratings from ratings organizations than similar
non-convertible securities.

Unlike a convertible security that is a single security, a synthetic convertible
security is comprised of two distinct securities that together resemble
convertible securities in certain respects. Synthetic convertible securities are
created by combining non-convertible bonds or preferred stocks with warrants or
stock call options. The options that will form elements of synthetic convertible
securities will be listed on a securities exchange or NASDAQ. The two components
of a synthetic convertible security, which will be issued with respect to the
same entity, generally are not offered as a unit, and may be purchased and sold
by the fund at different times. Synthetic convertible securities differ from
convertible securities in certain respects. Each component of a synthetic
convertible security has a separate market value and responds differently to
market fluctuations. Investing in a synthetic convertible security involves the
risk normally found in holding the securities comprising the synthetic
convertible security.

Short Sales

A fund may engage in short sales for cash management purposes only if, at the
time of the short sale, the fund owns or has the right to acquire securities
equivalent in kind and amount to the securities being sold short.

In a short sale, the seller does not immediately deliver the securities sold and
is said to have a short position in those securities until delivery occurs. To
make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If a fund engages in a short sale, the collateral account consisting of
cash, cash equivalents or other appropriate liquid securities in an amount
sufficient to meet the purchase price will be maintained by the fund's
custodian.

A fund may make a short sale, as described above, when it wants to sell the
security it owns at a current attractive price, but also wishes to defer
recognition of gain or loss for federal income tax purposes. There will be
certain additional transaction costs associated with short sales, but the fund
will endeavor to offset these costs with income from the investment of the cash
proceeds of short sales.

Portfolio Lending

In order to realize additional income, a fund may lend its portfolio securities.
Such loans may not exceed one-third of the fund's total assets valued at market
except

* through the purchase of debt securities in accordance with its investment
objectives, policies and limitations, or

* by engaging in repurchase agreements with respect to portfolio securities.

Derivative Securities

To the extent permitted by its investment objectives and policies, each of the
funds may invest in securities that are commonly referred to as derivative
securities. Generally, a derivative security is a financial arrangement the
value of which is based on, or derived from, a traditional security, asset, or
market index. Certain derivative securities are described more accurately as
index/structured securities. Index/structured securities are derivative
securities whose value or performance is linked to other equity securities (such
as depositary receipts), currencies, interest rates, indices or other financial
indicators (reference indices).

10 American Century Investments 1-800-345-2021

Some derivative securities, such as mortgage-related and other asset-backed
securities, are in many respects like any other investment, although they may be
more volatile or less liquid than more traditional debt securities.

There are many different types of derivative securities and many different ways
to use them. Futures and options are commonly used for traditional hedging
purposes to attempt to protect a fund from exposure to changing interest rates,
securities prices, or currency exchange rates and for cash management purposes
as a low-cost method of gaining exposure to a particular securities market
without investing directly in those securities.

No fund may invest in a derivative security unless the reference index or the
instrument to which it relates is an eligible investment for the fund. For
example, a security whose underlying value is linked to the price of oil would
not be a permissible investment because the funds may not invest in oil and gas
leases or futures.

The return on a derivative security may increase or decrease, depending upon
changes in the reference index or instrument to which it relates.

There are risks associated with investing in derivative securities, including:

* the risk that the underlying security, interest rate, market index or other
financial asset will not move in the direction the fund managers anticipate;

* the possibility that there may be no liquid secondary market, or the
possibility that price fluctuation limits may be imposed by the exchange,
either of which may make it difficult or impossible to close out a position
when desired;

* the risk that adverse price movements in an instrument can result in a loss
substantially greater than a fund's initial investment; and

* the risk that the counterparty will fail to perform its obligations.

The Board of Directors has approved the advisor's policy regarding investments
in derivative securities. That policy specifies factors that must be considered
in connection with a purchase of derivative securities and provides that a fund
may not invest in a derivative security if it would be possible for a fund to
lose more money than it had invested. The policy also establishes a committee
that must review certain proposed purchases before the purchases can be made.
The advisor will report on fund activity in derivative securities to the Board
of Directors as necessary.

Investment in Companies with Limited Operating Histories

The funds may invest a portion of their assets in the securities of issuers with
limited operating histories. The managers consider an issuer to have a limited
operating history if that issuer has a record of less than three years of
continuous operation. The managers will consider periods of capital formation,
incubation, consolidations, and research and development in determining whether
a particular issuer has a record of three years of continuous operation.

Investments in securities of issuers with limited operating histories may
involve greater risks than investments in securities of more mature issuers. By
their nature, such issuers present limited operating histories and financial
information upon which the managers may base their investment decision on behalf
of the funds. In addition, financial and other information regarding such
issuers, when available, may be incomplete or inaccurate.

Repurchase Agreements

Each fund may invest in repurchase agreements when they present an attractive
short-term return on cash that is not otherwise committed to the purchase of
securities pursuant to the investment policies of that fund.

A repurchase agreement occurs when, at the time a fund purchases an
interest-bearing obligation, the seller (a bank or a broker-dealer registered
under the Securities Exchange

www.americancentury.com American Century Investments 11

Act of 1934) agrees to purchase it on a specified date in the future at an
agreed-upon price. The repurchase price reflects an agreed-upon interest rate
during the time the fund's money is invested in the security.

Because the security purchased constitutes security for the repurchase
obligation, a repurchase agreement can be considered a loan collateralized by
the security purchased. The fund's risk is the seller's ability to pay the
agreed-upon repurchase price on the repurchase date. If the seller defaults, the
fund may incur costs in disposing of the collateral, which would reduce the
amount realized thereon. If the seller seeks relief under the bankruptcy laws,
the disposition of the collateral may be delayed or limited. To the extent the
value of the security decreases, the fund could experience a loss.

The funds will limit repurchase agreement transactions to securities issued by
the U.S. government and its agencies and instrumentalities, and will enter into
such transactions with those banks and securities dealers who are deemed
creditworthy by the funds' advisor.

Repurchase agreements maturing in more than seven days would count toward a
fund's 15% limit on illiquid securities.

When-Issued and Forward Commitment Agreements

The funds may sometimes purchase new issues of securities on a when-issued or
forward commitment basis in which the transaction price and yield are each fixed
at the time the commitment is made, but payment and delivery occur at a future
date (typically 15 to 45 days, but not more than 120 days, later).

For example, a fund may sell a security and at the same time make a commitment
to purchase the same or a comparable security at a future date and specified
price. Conversely, a fund may purchase a security and at the same time make a
commitment to sell the same or a comparable security at a future date and
specified price. These types of transactions are executed simultaneously in what
are known as dollar-rolls, cash and carry, or financing transactions. For
example, a broker-dealer may seek to purchase a particular security that a fund
owns. The fund will sell that security to the broker-dealer and simultaneously
enter into a forward commitment agreement to buy it back at a future date. This
type of transaction generates income for the fund if the dealer is willing to
execute the transaction at a favorable price in order to acquire a specific
security.

When purchasing securities on a when-issued or forward commitment basis, a fund
assumes the rights and risks of ownership, including the risks of price and
yield fluctuations. Market rates of interest on debt securities at the time of
delivery may be higher or lower than those contracted for on the when-issued
security. Accordingly, the value of that security may decline prior to delivery,
which could result in a loss to the fund. While the fund will make commitments
to purchase or sell securities with the intention of actually receiving or
delivering them, it may sell the securities before the settlement date if doing
so is deemed advisable as a matter of investment strategy.

In purchasing securities on a when-issued or forward commitment basis, a fund
will establish and maintain until the settlement date a segregated account
consisting of cash, cash equivalents or other appropriate liquid securities in
an amount sufficient to meet the purchase price. When the time comes to pay for
the when-issued securities, the fund will meet its obligations with available
cash, through the sale of securities, or, although it would not normally expect
to do so, by selling the when-issued securities themselves (which may have a
market value greater or less than the fund's payment obligation). Selling
securities to meet when-issued or forward commitment obligations may generate
taxable capital gains or losses.

12 American Century Investments 1-800-345-2021

Restricted and Illiquid Securities

The funds may, from time to time, purchase restricted or illiquid securities,
including Rule 144A securities, when they present attractive investment
opportunities that otherwise meet the funds' criteria for selection. Rule 144A
securities are securities that are privately placed with and traded among
qualified institutional investors rather than the general public. Although Rule
144A securities are considered restricted securities, they are not necessarily
illiquid.

With respect to securities eligible for resale under Rule 144A, the staff of the
Securities and Exchange Commission (SEC) has taken the position that the
liquidity of such securities in the portfolio of a fund offering redeemable
securities is a question of fact for the Board of Directors to determine, such
determination to be based upon a consideration of the readily available trading
markets and the review of any contractual restrictions. Accordingly, the Board
of Directors is responsible for developing and establishing the guidelines and
procedures for determining the liquidity of Rule 144A securities. As allowed by
Rule 144A, the Board of Directors has delegated the day-to-day function of
determining the liquidity of Rule 144A securities to the fund managers. The
board retains the responsibility to monitor the implementation of the guidelines
and procedures it has adopted.

Because the secondary market for such securities is limited to certain qualified
institutional investors, the liquidity of such securities may be limited
accordingly and a fund may, from time to time, hold a Rule 144A or other
security that is illiquid. In such an event, the fund managers will consider
appropriate remedies to minimize the effect on such fund's liquidity.

Short-Term Securities

In order to meet anticipated redemptions, anticipated purchases of additional
securities for a fund's portfolio, or, in some cases, for temporary defensive
purposes, these funds may invest a portion of their assets in money market and
other short-term securities.

Examples of those securities include:

* Securities issued or guaranteed by the U.S. government and its agencies and
instrumentalities

* Commercial Paper

* Certificates of Deposit and Euro Dollar Certificates of Deposit

* Bankers' Acceptances

* Short-term notes, bonds, debentures or other debt instruments

* Repurchase agreements

Under the Investment Company Act, a fund's investment in other investment
companies (including money market funds) currently is limited to (a) 3% of the
total voting stock of any one investment company; (b) 5% of the fund's total
assets with respect to any one investment company; and (c) 10% of a fund's total
assets in the aggregate. These investments may include investments in money
market funds managed by the advisor.

Other Investment Companies

Each of the funds may invest up to 10% of its total assets in other investment
companies, such as mutual funds, provided that the investment is consistent with
the fund's investment policies and restrictions. These investments may include
investments in money market funds managed by the advisor. Under the Investment
Company Act, a fund's investment in such securities, subject to certain
exceptions, currently is limited to

www.americancentury.com American Century Investments 13

* 3% of the total voting stock of any one investment company;

* 5% of the fund's total assets with respect to any one investment
company; and

* 10% of a fund's total assets in the aggregate.

Such purchases will be made in the open market where no commission or profit to
a sponsor or dealer results from the purchase other than the customary brokers'
commissions. As a shareholder of another investment company, a fund would bear,
along with other shareholders, its pro rata portion of the other investment
company's expenses, including advisory fees. These expenses would be in addition
to the management fee that each fund bears directly in connection with its own
operations.

Futures and Options

Each fund may enter into futures contracts, options or options on futures
contracts. Futures contracts provide for the sale by one party and purchase by
another party of a specific security at a specified future time and price.
Generally, futures transactions will be used to:

* protect against a decline in market value of the fund's securities (taking a
short futures position),

* protect against the risk of an increase in market value for securities in
which the fund generally invests at a time when the fund is not fully
invested (taking a long futures position), or

* provide a temporary substitute for the purchase of an individual security
that may not be purchased in an orderly fashion.

Some futures and options strategies, such as selling futures, buying puts and
writing calls, hedge a fund's investments against price fluctuations. Other
strategies, such as buying futures, writing puts and buying calls, tend to
increase market exposure.

Although other techniques may be used to control a fund's exposure to market
fluctuations, the use of futures contracts may be a more effective means of
hedging this exposure. While a fund pays brokerage commissions in connection
with opening and closing out futures positions, these costs are lower than the
transaction costs incurred in the purchase and sale of the underlying
securities.

For example, the sale of a future by a fund means the fund becomes obligated to
deliver the security (or securities, in the case of an index future) at a
specified price on a specified date. The purchase of a future means the fund
becomes obligated to buy the security (or securities) at a specified price on a
specified date. The fund managers may engage in futures and options transactions
based on securities indices, provided that the transactions are consistent with
the fund's investment objectives. Examples of indices that may be used include
the Bond Buyer Index of Municipal Bonds for fixed-income funds, or the S&P 500
Index for equity funds. The managers also may engage in futures and options
transactions based on specific securities, such as U.S. Treasury bonds or notes.
Futures contracts are traded on national futures exchanges. Futures exchanges
and trading are regulated under the Commodity Exchange Act by the Commodity
Futures Trading Commission (CFTC), a U.S. government agency.

Index futures contracts differ from traditional futures contracts in that when
delivery takes place, no stocks or bonds change hands. Instead, these contracts
settle in cash at the spot market value of the index. Although other types of
futures contracts by their terms call for actual delivery or acceptance of the
underlying securities, in most cases the contracts are closed out before the
settlement date. A futures position may be closed by taking an opposite position
in an identical contract (i.e., buying a contract that has previously been sold
or selling a contract that has previously been bought).

Unlike when the fund purchases or sells a bond, no price is paid or received by
the fund upon the purchase or sale of the future. Initially, the fund will be
required to deposit an

14 American Century Investments 1-800-345-2021

amount of cash or securities equal to a varying specified percentage of the
contract amount. This amount is known as initial margin. The margin deposit is
intended to ensure completion of the contract (delivery or acceptance of the
underlying security) if it is not terminated prior to the specified delivery
date. A margin deposit does not constitute a margin transaction for purposes of
the fund's investment restrictions. Minimum initial margin requirements are
established by the futures exchanges and may be revised. In addition, brokers
may establish margin deposit requirements that are higher than the exchange
minimums. Cash held in the margin accounts generally is not income-producing.
However, coupon bearing securities, such as Treasury bills and bonds, held in
margin accounts generally will earn income. Subsequent payments to and from the
broker, called variation margin, will be made on a daily basis as the price of
the underlying debt securities or index fluctuates, making the future more or
less valuable, a process known as marking the contract to market. Changes in
variation margin are recorded by the fund as unrealized gains or losses. At any
time prior to expiration of the future, the fund may elect to close the position
by taking an opposite position. A final determination of variation margin is
then made; additional cash is required to be paid by or released to the fund and
the fund realizes a loss or gain.

RISKS RELATED TO FUTURES AND OPTIONS TRANSACTIONS

Futures and options prices can be volatile, and trading in these markets
involves certain risks. If the fund managers apply a hedge at an inappropriate
time or judge interest rate or equity market trends incorrectly, futures and
options strategies may lower a fund's return.

A fund could suffer losses if it is unable to close out its position because of
an illiquid secondary market. Futures contracts may be closed out only on an
exchange that provides a secondary market for these contracts, and there is no
assurance that a liquid secondary market will exist for any particular futures
contract at any particular time. Consequently, it may not be possible to close a
futures position when the fund managers consider it appropriate or desirable to
do so. In the event of adverse price movements, a fund would be required to
continue making daily cash payments to maintain its required margin. If the fund
had insufficient cash, it might have to sell portfolio securities to meet daily
margin requirements at a time when the fund managers would not otherwise elect
to do so. In addition, a fund may be required to deliver or take delivery of
instruments underlying futures contracts it holds. The fund managers will seek
to minimize these risks by limiting the futures contracts entered into on behalf
of the funds to those traded on national futures exchanges and for which there
appears to be a liquid secondary market.

A fund could suffer losses if the prices of its futures and options positions
were poorly correlated with its other investments, or if securities underlying
futures contracts purchased by a fund had different maturities than those of the
portfolio securities being hedged. Such imperfect correlation may give rise to
circumstances in which a fund loses money on a futures contract at the same time
that it experiences a decline in the value of its hedged portfolio securities. A
fund also could lose margin payments it has deposited with a margin broker, if,
for example, the broker became bankrupt.

Most futures exchanges limit the amount of fluctuation permitted in futures
contract prices during a single trading day. The daily limit establishes the
maximum amount that the price of a futures contract may vary either up or down
from the previous day's settlement price at the end of the trading session. Once
the daily limit has been reached in a particular type of contract, no trades may
be made on that day at a price beyond the limit. However, the daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses. In addition, the daily limit may prevent liquidation
of unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.

www.americancentury.com American Century Investments 15

OPTIONS ON FUTURES

By purchasing an option on a futures contract, a fund obtains the right, but not
the obligation, to sell the futures contract (a put option) or to buy the
contract (a call option) at a fixed strike price. A fund can terminate its
position in a put option by allowing it to expire or by exercising the option.
If the option is exercised, the fund completes the sale of the underlying
security at the strike price. Purchasing an option on a futures contract does
not require a fund to make margin payments unless the option is exercised.

Although they do not currently intend to do so, the funds may write (or sell)
call options that obligate them to sell (or deliver) the option's underlying
instrument upon exercise of the option. While the receipt of option premiums
would mitigate the effects of price declines, the funds would give up some
ability to participate in a price increase on the underlying security. If a fund
were to engage in options transactions, it would own the futures contract at the
time a call were written and would keep the contract open until the obligation
to deliver it pursuant to the call expired.

RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS

Each fund may enter into futures contracts, options or options on futures
contracts.

Under the Commodity Exchange Act, a fund may enter into futures and options
transactions (a) for hedging purposes without regard to the percentage of assets
committed to initial margin and option premiums or (b) for purposes other than
hedging, provided that assets committed to initial margin and option premiums do
not exceed 5% of the fund's total assets. To the extent required by law, each
fund will segregate cash or securities on its records in an amount sufficient to
cover its obligations under the futures contracts and options.

Forward Currency Exchange Contracts

Each fund may purchase and sell foreign currency on a spot (i.e., cash) basis
and may engage in forward currency contracts, currency options and futures
transactions for hedging or any other lawful purpose. See Derivative Securities,
page 10.

The funds expect to use forward currency contracts under two circumstances:

(1) When the fund managers are purchasing or selling a security denominated in a
foreign currency and wish to lock in the U.S. dollar price of that security,
the fund managers would be able to enter into a forward currency contract to
do so;

(2) When the fund managers believe that the currency of a particular foreign
country may suffer a substantial decline against the U.S. dollar, a fund
would be able to enter into a forward currency contract to sell foreign
currency for a fixed U.S. dollar amount approximating the value of some or
all of its portfolio securities either denominated in, or whose value is
tied to, such foreign currency.

In the first circumstance, when a fund enters into a trade for the purchase or
sale of a security denominated in a foreign currency, it may be desirable to
establish (lock in) the U.S. dollar cost or proceeds. By entering into forward
currency contracts in U.S. dollars for the purchase or sale of a foreign
currency involved in an underlying security transaction, the fund will be able
to protect itself against a possible loss between trade and settlement dates
resulting from the adverse change in the relationship between the U.S. dollar
and the subject foreign currency.

In the second circumstance, when the fund managers believe that the currency of
a particular country may suffer a substantial decline relative to the U.S.
dollar, a fund could enter into a forward currency contract to sell for a fixed
dollar amount the amount in foreign currencies approximating the value of some
or all of its portfolio securities either denominated in, or whose value is tied
to, such foreign currency. The fund will segregate on its records cash or
securities in an amount sufficient to cover its obligations under the forward
currency contract.

16 American Century Investments 1-800-345-2021

The precise matching of forward currency contracts in the amounts and values of
securities involved generally would not be possible because the future values of
such foreign currencies will change as a consequence of market movements in the
values of those securities between the date the forward currency contract is
entered into and the date it matures. Predicting short-term currency market
movements is extremely difficult, and the successful execution of short-term
hedging strategy is highly uncertain. The fund managers do not intend to enter
into such contracts on a regular basis. Normally, consideration of the prospect
for currency parities will be incorporated into the long-term investment
decisions made with respect to overall diversification strategies. However, the
fund managers believe that it is important to have flexibility to enter into
such forward currency contracts when they determine that a fund's best interests
may be served.

When the forward currency contract matures, the fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate the obligation to deliver the foreign currency by
purchasing an offsetting forward currency contract with the same currency trader
that obligates the fund to purchase, on the same maturity date, the same amount
of the foreign currency.

It is impossible to forecast with absolute precision the market value of
portfolio securities at the expiration of the forward currency contract.
Accordingly, it may be necessary for a fund to purchase additional foreign
currency on the spot market (and bear the expense of such purchase) if the
market value of the security is less than the amount of foreign currency the
fund is obligated to deliver and if a decision is made to sell the security to
make delivery of the foreign currency the fund is obligated to deliver.

Equity Equivalents

In addition to investing in common stocks, the funds may invest in other equity
securities and equity equivalents, including securities that permit a fund to
receive an equity interest in an issuer, the opportunity to acquire an equity
interest in an issuer, or the opportunity to receive a return on its investment
that permits the fund to benefit from the growth over time in the equity of an
issuer. Examples of equity securities and equity equivalents include preferred
stock, convertible preferred stock and convertible debt securities.

Each fund (except High-Yield) will limit its holdings of convertible debt
securities to those that, at the time of purchase, are rated at least B- by S&P
or B3 by Moody's, or, if not rated by S&P or Moody's, are of equivalent
investment quality as determined by the advisor. Each fund's investments (except
High-Yield) in convertible debt securities and other high-yield, non-convertible
debt securities rated below investment-grade will comprise less than 35% of the
fund's net assets. Debt securities rated below the four highest categories are
not considered "investment-grade" obligations. These securities have speculative
characteristics and present more credit risk than investment-grade obligations.
Equity equivalents also may include securities whose value or return is derived
from the value or return of a different security. Depositary receipts, which are
described in the Foreign Securities section, page 8, are an example of the type
of derivative security in which a fund might invest.

Municipal Notes

Municipal notes are issued by state and local governments or government entities
to provide short-term capital or to meet cash flow needs.

Tax Anticipation Notes (TANs) are issued in anticipation of seasonal tax
revenues, such as ad valorem property, income, sales, use and business taxes,
and are payable from these future taxes. TANs usually are general obligations of
the issuer. General obligations are backed by the issuer's full faith and credit
based on its ability to levy taxes for the timely payment of interest and
repayment of principal, although such levies may be constitutionally or
statutorily limited as to rate or amount.

www.americancentury.com American Century Investments 17

Revenue Anticipation Notes (RANs) are issued with the expectation that receipt
of future revenues, such as federal revenue sharing or state aid payments, will
be used to repay the notes. Typically, these notes also constitute general
obligations of the issuer.

Bond Anticipation Notes (BANs) are issued to provide interim financing until
long-term financing can be arranged. In most cases, the long-term bonds provide
the money for repayment of the notes.

Municipal Bonds

Municipal bonds, which generally have maturities of more than one year when
issued, are designed to meet longer-term capital needs. These securities have
two principal classifications: general obligation bonds and revenue bonds.

General Obligation (GO) bonds are issued by states, counties, cities, towns and
regional districts to fund a variety of public projects, including construction
of and improvements to schools, highways, and water and sewer systems. GO bonds
are backed by the issuer's full faith and credit based on its ability to levy
taxes for the timely payment of interest and repayment of principal, although
such levies may be constitutionally or statutorily limited as to rate or amount.

Revenue Bonds are not backed by an issuer's taxing authority; rather, interest
and principal are secured by the net revenues from a project or facility.
Revenue bonds are issued to finance a variety of capital projects, including
construction or refurbishment of utility and waste disposal systems, highways,
bridges, tunnels, air and sea port facilities, schools and hospitals. Many
revenue bond issuers provide additional security in the form of a debt-service
reserve fund that may be used to make payments of interest and repayments of
principal on the issuer's obligations. Some revenue bond financings are further
protected by a state's assurance (without obligation) that it will make up
deficiencies in the debt-service reserve fund.

Industrial Development Bonds (IDBs), a type of revenue bond, are issued by or on
behalf of public authorities to finance privately operated facilities. These
bonds are used to finance business, manufacturing, housing, athletic and
pollution control projects, as well as public facilities such as mass transit
systems, air and sea port facilities and parking garages. Payment of interest
and repayment of principal on an IDB depend solely on the ability of the
facility's operator to meet financial obligations, and on the pledge, if any, of
the real or personal property financed. The interest earned on IDBs may be
subject to the federal alternative minimum tax.

Variable- and Floating-Rate Obligations

Variable- and floating-rate demand obligations (VRDOs and FRDOs) carry rights
that permit holders to demand payment of the unpaid principal plus accrued
interest, from the issuers or from financial intermediaries. Floating-rate
securities, or floaters, have interest rates that change whenever there is a
change in a designated base rate; variable-rate instruments provide for a
specified, periodic adjustment in the interest rate, which typically is based on
an index. These rate formulas are designed to result in a market value for the
VRDO or FRDO that approximates par value.

Obligations with Term Puts Attached

The funds may invest in fixed-rate bonds subject to third-party puts and
participation interests in such bonds that are held by a bank in trust or
otherwise, which have tender options or demand features attached. These tender
options or demand features permit the funds to tender (or put) their bonds to an
institution at periodic intervals and to receive the principal amount thereof.
The fund managers expect that the funds will pay more for securities with puts
attached than for securities without these liquidity features.

18 American Century Investments 1-800-345-2021

Some obligations with term puts attached may be issued by municipalities. The
fund managers may buy securities with puts attached to keep a fund fully
invested in municipal securities while maintaining sufficient portfolio
liquidity to meet redemption requests or to facilitate management of the funds'
investments.To ensure that the interest on municipal securities subject to puts
is tax-exempt to the funds, the advisor limits the funds' use of puts in
accordance with applicable interpretations and rulings of the Internal Revenue
Service (IRS).

Because it is difficult to evaluate the likelihood of exercise or the potential
benefit of a put, puts normally will be determined to have a value of zero,
regardless of whether any direct or indirect consideration is paid. Accordingly,
puts as separate securities are not expected to affect the funds' weighted
average maturities. When a fund has paid for a put, the cost will be reflected
as unrealized depreciation on the underlying security for the period the put is
held. Any gain on the sale of the underlying security will be reduced by the
cost of the put.

There is a risk that the seller of an obligation with a put attached will not be
able to repurchase the underlying obligation when (or if) a fund attempts to
exercise the put. To minimize such risks, the funds will purchase obligations
with puts attached only from sellers deemed creditworthy by the fund managers
under the direction of the Board of Directors.

Tender Option Bonds

Tender Option Bonds (TOBs) were created to increase the supply of high-quality,
short-term tax-exempt obligations, and thus they are of particular interest to
money market funds. However, any of the funds may purchase these instruments.

TOBs are created by municipal bond dealers who purchase long-term tax-exempt
bonds in the secondary market, place the certificates in trusts, and sell
interests in the trusts with puts or other liquidity guarantees attached. The
credit quality of the resulting synthetic short-term instrument is based on the
guarantor's short-term rating and the underlying bond's long-term rating.

There is some risk that a remarketing agent will renege on a tender option
agreement if the underlying bond is downgraded or defaults. Because of this, the
fund managers monitor the credit quality of bonds underlying the funds' TOB
holdings and intend to sell or put back any TOB if the rating on its underlying
bond falls below the second-highest rating category designated by a rating
agency.

The fund managers also take steps to minimize the risk that the fund may realize
taxable income as a result of holding TOBs. These steps may include
consideration of (a) legal opinions relating to the tax-exempt status of the
underlying municipal bonds, (b) legal opinions relating to the tax ownership of
the underlying bonds, and (c) other elements of the structure that could result
in taxable income or other adverse tax consequences. After purchase, the fund
managers monitor factors related to the tax-exempt status of the fund's TOB
holdings in order to minimize the risk of generating taxable income.

Zero-Coupon, Step-Coupon and Pay-In-Kind Securities

Zero-coupon, step-coupon and pay-in-kind securities are debt securities that do
not make regular cash interest payments. Zero-coupon and step-coupon securities
are sold at a deep discount to their face value. Pay-in-kind securities pay
interest through the issuance of additional securities. Because such securities
do not pay current cash income, the price of these securities can be volatile
when interest rates fluctuate. While these securities do not pay current cash
income, federal income tax law requires the holders of zero-coupon, step-coupon
and pay-in-kind securities to include in income each year the portion of the
original issue discount and other noncash income on such securities accrued
during that year. In order to continue to qualify for treatment as a regulated
investment company under the Internal Revenue Code and avoid certain excise tax,
the funds are required to make distributions of the original issue discount and
other noncash income accrued for

www.americancentury.com American Century Investments 19

each year. Accordingly, the funds may be required to dispose of other portfolio
securities, which may occur in periods of adverse market prices, in order to
generate cash to meet these distribution requirements.

Inverse Floaters

An inverse floater is a type of derivative security that bears an interest rate
that moves inversely to market interest rates. As market interest rates rise,
the interest rate on inverse floaters goes down, and vice versa. Generally, this
is accomplished by expressing the interest rate on the inverse floater as an
above-market fixed rate of interest, reduced by an amount determined by
reference to a market-based or bond-specific floating interest rate (as well as
by any fees associated with administering the inverse floater program).

Inverse floaters may be issued in conjunction with an equal amount of Dutch
Auction floating-rate bonds (floaters), or a market-based index may be used to
set the interest rate on these securities. A Dutch Auction is an auction system
in which the price of the security is gradually lowered until it meets a
responsive bid and is sold. Floaters and inverse floaters may be brought to
market by (1) a broker-dealer who purchases fixed-rate bonds and places them in
a trust, or (2) an issuer seeking to reduce interest expenses by using a
floater/inverse floater structure in lieu of fixed-rate bonds.

In the case of a broker-dealer structured offering (where underlying fixed-rate
bonds have been placed in a trust), distributions from the underlying bonds are
allocated to floater and inverse floater holders in the following manner:

(i) Floater holders receive interest based on rates set at a six-month
interval or at a Dutch Auction, which is typically held every 28 to 35 days.
Current and prospective floater holders bid the minimum interest rate that
they are willing to accept on the floaters, and the interest rate is set
just high enough to ensure that all of the floaters are sold.

(ii) Inverse floater holders receive all of the interest that remains, if any,
on the underlying bonds after floater interest and auction fees are paid.
The interest rates on inverse floaters may be significantly reduced, even to
zero, if interest rates rise.

Procedures for determining the interest payment on floaters and inverse floaters
brought to market directly by the issuer are comparable, although the interest
paid on the inverse floaters is based on a presumed coupon rate that would have
been required to bring fixed-rate bonds to market at the time the floaters and
inverse floaters were issued.

Where inverse floaters are issued in conjunction with floaters, inverse floater
holders may be given the right to acquire the underlying security (or to create
a fixed-rate bond) by calling an equal amount of corresponding floaters. The
underlying security may then be held or sold. However, typically, there are time
constraints and other limitations associated with any right to combine interests
and claim the underlying security.

Floater holders subject to a Dutch Auction procedure generally do not have the
right to put back their interests to the issuer or to a third party. If a Dutch
Auction fails, the floater holder may be required to hold its position until the
underlying bond matures, during which time interest on the floater is capped at
a predetermined rate.

The secondary market for floaters and inverse floaters may be limited. The
market value of inverse floaters tends to be significantly more volatile than
fixed-rate bonds.

Loan Interests

Loan interests are interests in amounts owed by a corporate, governmental or
other borrower to lenders or lending syndicates. Loan interests purchased by the
funds may have a maturity of any number of days or years, and may be acquired
from U.S. and foreign banks, insurance companies, finance companies or other
financial institutions that have made loans or are members of a lending
syndicate or from the holders of loan interests.

20 American Century Investments 1-800-345-2021

Loan interests involve the risk of loss in case of default or bankruptcy of the
borrower and, in the case of participation interests, involve a risk of
insolvency of the agent lending bank or other financial intermediary. Loan
interests are not rated by any nationally recognized securities rating
organization and are, at present, not readily marketable and may be subject to
contractual restrictions on resale.

INVESTMENT POLICIES

Unless otherwise indicated, with the exception of the percentage limitations on
borrowing, the policies described below apply at the time a fund enters into a
transaction. Accordingly, any later increase or decrease beyond the specified
limitation resulting from a change in a fund's net assets will not be considered
in determining whether it has complied with its investment policies.

Fundamental Investment Policies

The funds' fundamental investment policies are set forth below. These investment
policies may not be changed without approval of a majority of the outstanding
votes of shareholders of a fund, as determined in accordance with the Investment
Company Act.

Subject Policy
--------------------------------------------------------------------------------
Senior Securities A fund may not issue senior securities, except as permitted
under the Investment Company Act.
--------------------------------------------------------------------------------
Borrowing A fund may not borrow money, except for temporary or
emergency purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of the fund's total assets.
--------------------------------------------------------------------------------
Lending A fund may not lend any security or make any other loan if,
as a result, more than 33 1/3% of the fund's total assets
would be lent to other parties, except (i) through the
purchase of debt securities in accordance with its
investment objective, policies and limitations or (ii) by
engaging in repurchase agreements with respect to portfolio
securities.
--------------------------------------------------------------------------------
Real Estate A fund may not purchase or sell real estate unless acquired
as a result of ownership of securities or other
instruments. This policy shall not prevent a fund from
investing in securities or other instruments backed by real
estate or securities of companies that deal in real estate
or are engaged in the real estate business.
--------------------------------------------------------------------------------
Concentration A fund may not concentrate its investments in securities of
issuers in a particular industry (other than securities
issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities).
--------------------------------------------------------------------------------
Underwriting A fund may not act as an underwriter of securities issued
by others, except to the extent that the fund may be
considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted
securities.
--------------------------------------------------------------------------------
Commodities A fund may not purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments, provided that this limitation shall not
prohibit the fund from purchasing or selling options and
futures contracts or from investing in securities or other
instruments backed by physical commodities.
--------------------------------------------------------------------------------
Control A fund may not invest for purposes of exercising control
over management.
--------------------------------------------------------------------------------

For purposes of the investment restrictions relating to lending and borrowing,
the funds have received an exemptive order from the SEC regarding an interfund
lending program. Under the terms of the exemptive order, the funds may borrow
money from or lend money to other ACIM-advised funds that permit such
transactions. All such transactions will be subject to the limits for borrowing
and lending set forth above. The funds will borrow money through the program
only when the costs are equal to or lower than the costs of short-term bank
loans. Interfund loans and borrowings normally extend only

www.americancentury.com American Century Investments 21

overnight, but can have a maximum duration of seven days. The funds will
lend through the program only when the returns are higher than those available
from other short-term instruments (such as repurchase agreements). The funds may
have to borrow from a bank at a higher interest rate if an interfund loan is
called or not renewed. Any delay in repayment to a lending fund could result in
a lost investment opportunity or additional borrowing costs.

For purposes of the investment restriction relating to concentration, a fund
shall not purchase any securities that would cause 25% or more of the value of
the fund's total assets at the time of purchase to be invested in the securities
of one or more issuers conducting their principal business activities in the
same industry, provided that

(a) there is no limitation with respect to obligations issued or guaranteed by
the U.S. government, any state, territory or possession of the United States,
the District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions and repurchase agreements secured by
such obligations,

(b) wholly owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of their parents,

(c) utilities will be divided according to their services, for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered a
separate industry, and

(d) personal credit and business credit businesses will be considered separate
industries.

Nonfundamental Investment Policies

In addition, the funds are subject to the following investment policies that are
not fundamental and may be changed by the Board of Directors.

Subject Policy
--------------------------------------------------------------------------------
Leveraging A fund may not purchase additional investment securities at
any time during which outstanding borrowings exceed 5% of
the total assets of the fund.
--------------------------------------------------------------------------------
Liquidity A fund may not purchase any security or enter into a
repurchase agreement if, as a result, more than 15% of its
net assets would be invested in illiquid securities.
Illiquid securities include repurchase agreements not
entitling the holder to payment of principal and interest
within seven days, and securities that are illiquid by
virtue of legal or contractual restrictions on resale or the
absence of a readily available market.
--------------------------------------------------------------------------------
Short Sales A fund may not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amount
to the securities sold short, and provided that transactions
in futures contracts and options are not deemed to
constitute selling securities short.
--------------------------------------------------------------------------------
Margin A fund may not purchase securities on margin, except to
obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments
in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on
margin.
--------------------------------------------------------------------------------
Futures and Options A fund may enter into futures contracts and write and buy
put and call options relating to futures contracts. A fund
may not, however, enter into leveraged futures transactions
if it would be possible for the fund to lose more money than
it invested.
--------------------------------------------------------------------------------
Issuers with A fund may invest a portion of its assets in the securities
Limited Operating of issuers with limited operating histories. An issuer is
Histories considered to have a limited operating history if that
issuer has a record of less than three years of continuous
operation. Periods of capital formation, incubation,
consolidations, and research and development may be
considered in determining whether a particular issuer has
a record of three years of continuous operation.
--------------------------------------------------------------------------------

22 American Century Investments 1-800-345-2021

The Investment Company Act imposes certain additional restrictions upon the
funds' ability to acquire securities issued by insurance companies,
broker-dealers, underwriters or investment advisors, and upon transactions with
affiliated persons as defined by the Act. It also defines and forbids the
creation of cross and circular ownership. Neither the SEC nor any other agency
of the federal or state government participates in or supervises the management
of the funds or their investment practices or policies.

PORTFOLIO TURNOVER

The portfolio turnover rate of each fund (other than New Opportunities II) is
listed in the Financial Highlights table in that fund's Prospectus.

Tax-Managed Value Fund

The fund managers of Tax-Managed Value seek to minimize realized capital gains
by keeping portfolio turnover low and generally holding portfolio investments
for long periods. Because a higher turnover rate may increase taxable capital
gains, the managers carefully weigh the potential benefits of short-term
investing against the tax impact such investing would have on the fund's
shareholders. However, the fund managers may sell securities to realize losses
that can be used to offset realized capital gains. They will take such actions
when they believe the tax benefits from realizing losses offset the near-term
investment potential of that security.

Other Funds

With respect to each other fund, the managers will sell securities without
regard to the length of time the security has been held. Accordingly, each
fund's portfolio turnover rate may be substantial.

The fund managers intend to purchase a given security whenever they believe it
will contribute to the stated objective of a particular fund. In order to
achieve each fund's investment objective, the managers may sell a given security
regardless of the length of time it has been held in the portfolio, and
regardless of the gain or loss realized on the sale. The managers may sell a
portfolio security if they believe that the security is not fulfilling its
purpose because, among other things, it did not live up to the managers'
expectations, because it may be replaced with another security holding greater
promise, because it has reached its optimum potential, because of a change in
the circumstances of a particular company or industry or in general economic
conditions, or because of some combination of such reasons.

When a general decline in security prices is anticipated, the equity funds may
decrease or eliminate entirely their equity positions and increase their cash
positions, and when a general rise in price levels is anticipated, the equity
funds may increase their equity positions and decrease their cash positions.
However, it should be expected that the funds will, under most circumstances, be
essentially fully invested in equity securities.

Because investment decisions are based on a particular security's anticipated
contribution to a fund's investment objective, the managers believe that the
rate of portfolio turnover is irrelevant when they determine that a change is
required to pursue the fund's investment objective. As a result, a fund's annual
portfolio turnover rate cannot be anticipated and may be higher than that of
other mutual funds with similar investment objectives. Higher turnover would
generate correspondingly greater brokerage commissions, which is a cost the
funds pay directly. Portfolio turnover also may affect the character of capital
gains realized and distributed by the fund, if any, because short-term capital
gains are taxable as ordinary income.

www.americancentury.com American Century Investments 23

Because the managers do not take portfolio turnover rate into account in making
investment decisions, (1) the managers have no intention of maintaining any
particular rate of portfolio turnover, whether high or low, and (2) the
portfolio turnover rates in the past should not be considered as representative
of the rates that will be attained in the future.

For Ultra, the lower portfolio turnover rate for 1999 resulted from a
determination by fund managers that the current portfolio holdings were
demonstrating a greater than average chance to increase in value over time. As a
result, a fewer number of stocks were sold and purchased during 1999 than has
been the fund's historical practice.

MANAGEMENT

THE BOARD OF DIRECTORS

The Board of Directors oversees the management of the funds and meets at least
quarterly to review reports about fund operations. Although the Board of
Directors does not manage the funds, it has hired the advisor to do so.
Two-thirds of the directors are independent of the funds' advisor; that is, they
are not employed by and have no financial interest in the advisor.

The individuals listed in the table below whose names are marked by an asterisk
(*) are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with the funds;
the advisor, American Century Investment Management, Inc. (ACIM); the funds'
agent for transfer and administrative services, American Century Services
Corporation (ACSC); the parent corporation, American Century Companies, Inc.
(ACC) or ACC's subsidiaries (including ACIM and ACSC); the funds' distribution
agent, American Century Investment Services, Inc. (ACIS); or other funds advised
by the advisor. Each director listed below (except James E. Stowers III) serves
as a director of seven registered investment companies in the American Century
family of funds, which are also advised by the advisor. James E. Stowers III
serves as a director of 15 registered investment companies in the American
Century family of funds.

Name (Age) Position(s) Held Principal Occupation(s)
Address With Funds During Past Five Years
-------------------------------------------------------------------------------------------
James E. Stowers, Jr.* (77) Director, Chairman, Director and controlling
4500 Main Street Chairman of shareholder, ACC
Kansas City, MO 64111 the Board Chairman , ACIM, ACSC and six other ACC
subsidiaries
Director, ACIM, ACSC and eight other ACC
subsidiaries(1)
-------------------------------------------------------------------------------------------
James E. Stowers III* (42) Director Co-Chairman, ACC
4500 Main Street (September 2000 to present)
Kansas City, MO 64111 Chief Executive Officer, ACC
(June 1996 to September 2000)
Director, ACC, ACIM, ACSC and nine other
ACC subsidiaries
President, ACC (January 1995 to June 1997)
President, ACIM and ACSC (April 1993 to
August 1997)(2)
-------------------------------------------------------------------------------------------
Thomas A. Brown (61) Director Area Vice President, Plains States
4500 Main Street Development, Applied Industrial
Kansas City, MO 64111 Technologies, Inc., a corporation engaged
in the sale of bearings and power
transmission product
-------------------------------------------------------------------------------------------

Robert W. Doering, M.D. (68) Director Retired, formerly a general surgeon
4500 Main Street
Kansas City, MO 64111

24 American Century Investments 1-800-345-2021

Name (Age) Position(s) Held Principal Occupation(s)
Address With Funds During Past Five Years
-------------------------------------------------------------------------------------------
Andrea C. Hall, Ph.D. (56) Director Senior Vice President and Director,
4500 Main Street Midwest Research Institute
Kansas City, MO 64111
-------------------------------------------------------------------------------------------
D.D. (Del) Hock (66) Director Retired, formerly Chairman, Public
4500 Main Street Service Company of Colorado
Kansas City, MO 64111 Director, RMI.NET Inc., Hathaway
Corporation and J.D. Edwards & Company
-------------------------------------------------------------------------------------------
Donald H. Pratt (63) Director, Chairman of the Board and Director,
4500 Main Street Vice Chairman Butler Manufacturing Company,
Kansas City, MO 64111 of the Board Director, Atlas-Copco North America Inc
-------------------------------------------------------------------------------------------
Gale E. Sayers (57) Director President, Chief Executive Officer and
4500 Main Street Founder, Sayers Computer Source
Kansas City, MO 64111
-------------------------------------------------------------------------------------------
M. Jeannine Strandjord (55) Director Senior Vice President, Long Distance
4500 Main Street Finance, Sprint Corporation
Kansas City, MO 64111 Director, DST Systems, Inc.
-------------------------------------------------------------------------------------------

1 Father of James E. Stowers III

2 Son of James E. Stowers, Jr.

Committees

The Board has four standing committees to oversee specific functions of the
funds' operations. Information about these committees appears in the table
below. The director first named serves as chairman of the committee.

Committee Members Function of Committee
-------------------------------------------------------------------------------------------
Executive James E. Stowers, Jr. The Executive Committee performs the functions of the
Board of James E. Stowers III Directors between Board meetings, subject to the
Donald H. Pratt limitations on its power set out in the Maryland
General Corporation Law, and except for matters
required by the Investment Company Act to be acted
upon by the whole Board.
-------------------------------------------------------------------------------------------
Compliance Thomas A. Brown The Compliance Committee reviews the results of the
Donald H. Pratt funds' and compliance testing program, reviews
Gale E. Sayers quarterly reports from the Communications advisor to
Andrea C. Hall, Ph.D the Board regarding various compliance matters and
monitors the implementation of the funds' Code of
Ethics, including any violations.
-------------------------------------------------------------------------------------------
Audit Jeanine Strandjord The Audit Committee recommends the engagement of the
Robert W. Doering, M.D. funds' independent auditors and oversees its
D.D. (Del) Hock activities. The Committee receives reports from the
advisor's Internal Audit Department, which is
accountable to the Committee. The Committee also
receives reporting about compliance matters
affecting the funds.
-------------------------------------------------------------------------------------------
Nominating Donald H. Pratt The Nominating Committee primarily considers and
D.D. (Del) Hock recommends individuals for nomination as directors. The
Andrea C. Hall, PhD names of potential director candidates are drawn from a
number of sources, including recommendations from
members of the Board, management and shareholders.
This committee also reviews and makes recommendations
to the Board with respect to the composition of Board
committees and other Board-related matters, including
its organization, size, composition, responsibilities,
functions and compensation.
-------------------------------------------------------------------------------------------

www.americancentury.com American Century Investments 25

COMPENSATION OF DIRECTORS

The directors serve as directors for seven American Century investment
companies. Each director who is not an interested person as defined in the
Investment Company Act receives compensation for service as a member of the
Board of all seven such companies based on a schedule that takes into account
the number of meetings attended and the assets of the funds for which the
meetings are held. These fees and expenses are divided among the seven
investment companies based, in part, upon their relative net assets. Under the
terms of the management agreement with the advisor, the funds are responsible
for paying such fees and expenses.

The following table shows the aggregate compensation paid by the funds for the
periods indicated and by the seven investment companies served by the Board to
each director who is not an interested person as defined in the Investment
Company Act.

AGGREGATE DIRECTOR COMPENSATION FOR FISCAL YEAR ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
Total Compensation Total Compensation from the
Name of Director from the Funds(1) American Century Family of Funds(2)
--------------------------------------------------------------------------------
Thomas A. Brown $46,485 $57,000
Robert W. Doering, M.D. 43,233 53,000
Andrea C. Hall, Ph.D. 46,077 56,500
D.D. (Del) Hock 46,077 56,500
Donald H. Pratt 47,708 58,500
Gale E. Sayers (3) 0 0
Lloyd T. Silver, Jr.(4) 19,338 23,500
M. Jeannine Strandjord 46,476 57,000
--------------------------------------------------------------------------------

1 Includes compensation paid to the directors during the fiscal year ended
October 31, 2000, and also includes amounts deferred at the election of the
directors under the Amended and Restated American Century Mutual Funds
Deferred Compensation Plan for Non-Interested Directors. The total amount
of deferred compensation included in the preceding table is as follows: Mr.
Brown, $13,388; Dr. Hall, $35,805; Mr. Hock, $39,133; Mr. Pratt, $13,452;
Mr. Silver, $3,993 and Ms. Strandjord, $36,687.

2 Includes compensation paid by the seven investment company members of the
American Century family of funds served by this Board.

3 Mr. Sayers joined the board on November 18, 2000.

4 Mr. Silver retired from the board on March 4, 2000. During the fiscal year
ended October 31, 2000, he received $258,495 in deferred compensation under
the Amended and Restated American Century Mutual Funds Deferred
Compensation Plan.

The funds have adopted the Amended and Restated American Century Deferred
Compensation Plan for Non-Interested Directors. Under the plan, the independent
directors may defer receipt of all or any part of the fees to be paid to them
for serving as directors of the funds.

All deferred fees are credited to an account established in the name of the
directors. The amounts credited to the account then increase or decrease, as the
case may be, in accordance with the performance of one or more of the American
Century funds that are selected by the director. The account balance continues
to fluctuate in accordance with the performance of the selected fund or funds
until final payment of all amounts credited to the account. Directors are
allowed to change their designation of mutual funds from time to time.

No deferred fees are payable until such time as a director resigns, retires or
otherwise ceases to be a member of the Board of Directors. Directors may receive
deferred fee account balances either in a lump sum payment or in substantially
equal installment payments to be made over a period not to exceed 10 years. Upon
the death of a director, all remaining deferred fee account balances are paid to
the director's beneficiary or, if none, to the director's estate.

26 American Century Investments 1-800-345-2021

The plan is an unfunded plan and, accordingly, the funds have no obligation to
segregate assets to secure or fund the deferred fees. To date, the funds have
voluntarily funded their obligations. The rights of directors to receive their
deferred fee account balances are the same as the rights of a general unsecured
creditor of the funds. The plan may be terminated at any time by the
administrative committee of the plan. If terminated, all deferred fee account
balances will be paid in a lump sum.

OFFICERS

Background information about the officers of the funds is provided in the
following table. All persons named as officers of the funds also serve in
similar capacities for the 15 investment companies advised by ACIM. Not all
officers of the funds are listed; only those officers with policy-making
functions for the funds are listed. No officer is compensated for his or her
service as an officer of the funds. The individuals listed in the following
table are interested persons of the funds (as defined in the Investment Company
Act) by virtue of, among other considerations, their affiliation with the funds,
ACC or ACC's subsidiaries (including ACIM, ACSC and ACIS).

Name (Age) Positions Held with Principal Occupation(s)
Address the Funds During Past Five Years
-------------------------------------------------------------------------------------------
William M. Lyons (45) President Chief Executive Officer, ACC and six
ACC 4500 Main St. subsidiaries
Kansas City, MO 64111 (September 2000 to present)
President, ACC (June 1997 to present)
Chief Operating Officer, ACC
(June 1996 to September 2000)
General Counsel, ACC, ACIM, ACIS,
ACSC and other ACC subsidiaries
(June 1989 to June 1998)
Executive Vice President, ACC,
(January 1995 to June 1997)
Also serves as: Executive Vice President
and Chief Operating Officer, ACIM, ACIS,
ACSC and other ACC subsidiaries, and
Executive Vice President of other ACC
subsidiaries
-------------------------------------------------------------------------------------------
Robert T. Jackson (55) Executive Vice Chief Administrative Officer, ACC (August 1997
4500 Main St. President and to present)
Kansas City, MO 64111 Chief Financial Chief Financial Officer, ACC (May 1995
to Officer present)
President, ACSC (January 1999 to present)
Executive Vice President, ACC
(May 1995 to present)
Also serves as: Executive Vice President and
Chief Financial Officer ACIM, ACIS and other
ACC subsidiaries, and Treasurer of ACC and
other ACC subsidiaries
-------------------------------------------------------------------------------------------
Maryanne Roepke, CPA (45) Senior Vice Senior Vice President and Assistant
4500 Main St. President, Treasurer, ACSC
Kansas City, MO 64111 Treasurer and Chief
Accounting Officer
-------------------------------------------------------------------------------------------

www.americancentury.com American Century Investments 27

David C. Tucker (42) Senior Vice Senior Vice President, ACIM, ACIS,
4500 Main St. President and ACSC and other ACC subsidiaries
Kansas City, MO 64111 General Counsel (June 1998 to present)
General Counsel, ACC, ACIM, ACIS,
ACSC and other ACC subsidiaries
(June 1998 to present)
Consultant to mutual fund industry
(May 1997 to April 1998)
Vice President and General Counsel,
Janus Companies (1990 to 1997)
-------------------------------------------------------------------------------------------
Charles A. Etherington (43) Vice President Vice President, ACSC (October 1996 to present)
4500 Main St. Associate General Counsel, ACSC (December
Kansas City, MO 64111 1998 to present)
Counsel to ACSC (February 1994 to December 1998)
-------------------------------------------------------------------------------------------
Charles C. S. Park (33) Vice President Vice President, ACSC (February 2000 to present)
1665 Charleston Road Assistant General Counsel, ACSC
Mountain View, CA 94043 (January 1998 to present)
Counsel to ACSC (October 1995 to January 1998)
-------------------------------------------------------------------------------------------
David H. Reinmiller (37) Vice President Chief Compliance Officer, ACIM, ACSC, ACIS
4500 Main St. and American Century Brokerage, Inc.
Kansas City, MO 64111 (March 2001 to present)
Vice President, ACSC
(February 2000 to present)
Assistant General Counsel, ACSC
(August 1996 to present)
Counsel to ACSC
(January 1994 to August 1996)
-------------------------------------------------------------------------------------------
Paul Carrigan Jr. (51) Secretary Secretary, ACC (February 1998 to present)
4500 Main St. Director of Legal Operations, ACSC
Kansas City, MO 64111 (February 1996 to February 2001)
-------------------------------------------------------------------------------------------
Robert Leach (34) Controller Vice President, ACSC
4500 Main St. (February 2000 to present)
Kansas City, MO 64111 Controller-Fund Accounting, ACSC
-------------------------------------------------------------------------------------------
C. Jean Wade (37) Controller Vice President, ACSC
4500 Main St. (February 2000 to present)
Kansas City, MO 64111 Controller-Fund Accounting, ACSC
-------------------------------------------------------------------------------------------
Jon Zindel (33) Tax Officer Vice President, Corporate Tax, ACSC
4500 Main St. (April 1998 to present)
Kansas City, MO 64111 Vice President, ACIM, ACIS and other
ACC subsidiaries
(April 1999 to present)
President, American Century Employee
Benefit Services, Inc.
(January 2000 to December 2000)
Treasurer, American Century Employee
Benefit Services, Inc.
(December 2000 to present)
Treasurer, American Century Ventures, Inc.
(December 1999 to present)
-------------------------------------------------------------------------------------------

CODE OF ETHICS

The funds, their investment advisor and principal underwriter have adopted a
code of ethics under Rule 17j-1 of the Investment Company Act and the code of
ethics permits personnel subject to the code to invest in securities, including
securities that may be purchased or held by the funds, provided that they first
obtain approval from the compliance department before making such investments.

28 American Century Investments 1-800-345-2021

THE FUNDS' PRINCIPAL SHAREHOLDERS

As of April 2, 2001, the following companies were the record owners of more than
5% of the outstanding shares of any class of the fund:

Percentage of
Outstanding
Shares Fund Shareholder Owned
-------------------------------------------------------------------------------------------
Growth
Investor State Street Bank and Trust Co. Trustee
Martin Marietta Profit Sharing Plan and Trust
Boston, Massachusetts 11%

Advisor FNB Nominee Co.
c/o First Commonwealth Trust Co.
Indiana, Pennsylvania 19%

Charles Schwab & Co. Inc.
San Francisco, California 17%

UMBSC & Co.
FBO Diamant Boart
Kansas City, Missouri 11%

Firnbank Co.
Omaha, Nebraska 11%

Penfirn Co. Trust Department
Omaha, Nebraska 7%

Nationwide Trust Company
Columbus, Ohio 5%

Institutional The Chase Manhattan Bank NA TR
Norwest Financial Thrift & PSP Trust
New York, New York 63%

American Century Profit Sharing and 401K
Savings Plan and Trust
Kansas City, Missouri 13%

Charles Schwab & Co. Inc.
San Francisco, California 5%
-------------------------------------------------------------------------------------------
Select
Advisor Principal Life Insurance
Des Moines, Iowa 34%

Orchard Trust Company Custodian
RHD Investors Choice 403B
Englewood, Colorado 21%

Saxon & Co.
Philadelphia, Pennsylvania 11%

Charles Schwab & Co. Inc.
San Francisco, California 8%

United Missouri Bank Trustee
Carolina First Bancshares Profit Sharing Plan
Kansas City, Missouri 5%

Institutional The Chase Manhattan Bank NA Trustee
Robert Bosch Corporation New Star
Plan and Trust
New York, New York 33%

The Chase Manhattan Bank NA TR
Winnebago Industries Inc. Profit Sharing
& Deferred Savings Investment Paln
New York, New York 17%

www.americancentury.com American Century Investments 29

Percentage of
Outstanding
Shares Fund Shareholder Owned
--------------------------------------------------------------------------------
Institutional The Chase Manhattan Bank NA TR
Huntsman Corp. Salary Deferral Plan
New York, New York 13%

Morgan Guaranty Trust Company of New York TR
Champion International Corporation Plan for
Salaried Employees
New York, New York 8%

UMB NA Trustee
Buckeye Pipe Line Services Company
Retirement and Savings Plan
Kansas City, Missouri 7%

The Chase Manhattan Bank NA TR
Hunstman Corp MPP Plan & Trust
New York, New York 6%
--------------------------------------------------------------------------------
Heritage
Investor Bankers Trust Company Trustee
Kraft General Foods Inc. Master Savings
Plan and Trust
Jersey City, New Jersey 20%

Bankers Trust Company Trustee
Philip Morris Deferred Profit Sharing
Plan and Trust
Jersey City, New Jersey 13%

Advisor Charles Schwab & Co. Inc.
San Francisco, California 65%

Centura Bank
Rocky Mount, North Carolina 14%

Institutional American Century Profit Sharing and
401K Savings Plan and Trust
Kansas City, Missouri 73%

The Chase Manhattan Bank NA TR
Norwest Financial Thrift & PSP & Trust
New York, New York 15%

American Century Money Purchase Plan & Trust
Kansas City, Missouri 6%
--------------------------------------------------------------------------------
Ultra
Investor Charles Schwab & Co. Inc.
San Francisco, California 7%

Advisor Principal Life Insurance
Des Moines, Iowa 21%

Charles Schwab & Co. Inc.
San Francisco, California 7%

Invesco Trust Co. TTEE
Magellan Health Services Retirement Savings Plan
Concord, California 5%
--------------------------------------------------------------------------------

30 American Century Investments 1-800-345-2021

Percentage of
Outstanding
Shares Fund Shareholder Owned
--------------------------------------------------------------------------------
Ultra
Institutional The Chase Manhattan Bank NA Trustee
Robert Bosch Corporation New Star Plan and Trust
New York, New York 16%

Nationwide Insurance Company
QPVA
Columbus, Ohio 13%

Morgan Guaranty Trust Co TR Deferred PS Plan of
NY and Affiliated Companies for US Employees
New York, New York 11%

The Chase Manhattan Bank NA TR
Norwest Financial Thrift & PSP & Trust
New York, New York 9%

UMB Bank TR
BAE Employees Savings Investment Plan Trust
Kansas City, Missouri 7%

The Chase Manhattan Bank NA TR
Huntsman Corp Salary Deferral Plan
New York, New York 7%

The Chase Manhattan Bank NA TR
Winnebago Industries Inc. P/S &
Deferred Savings Investment Plan
New York, New York 7%

The Chase Manhattan Bank TR
Hayes Lemmerz International Inc.
Retirement Savings Plan Trust
New York, New York 6%
--------------------------------------------------------------------------------
Vista
Advisor American Chamber of Commerce Executives
Amended & Restated 401k Plan & Trust
Springfield, Missouri 42%

Charles Schwab & Co. Inc.
San Francisco, California 16%

American Chamber of Commerce Executives
Amended & Restated MPP Plan and Trust
Springfield, Missouri 14%

Orchard Trust Company Custodian
RHD Investors Choice 403B
Englewood, Colorado 6%

Institutional American Century Profit Sharing and 401K
Savings Plan and Trust
Kansas City, Missouri 32%

UMB Bank TR
BAE Employees Savings Investment Plan Trust
Kansas City, Missouri 30%

The Chase Manhattan Bank NA TR
Huntsman Corp Salary Deferral Plan & Trust
New York, New York 22%

The Chase Manhattan Bank NA TR
Huntsman Corp MPP Plan & Trust
New York, New York 6%

www.americancentury.com American Century Investments 31

Percentage of
Outstanding
Shares Fund Shareholder Owned
--------------------------------------------------------------------------------
Bond
Investor Charles Schwab & Co. Inc.
San Francisco, California 7%

Advisor Blush & Co
New York, New York 37%

Trust Lynx & Co.
Denver, Colorado 14%

Saxon & Co.
Philadelphia, Pennsylvania 9%

UMBSC & Co
FBO Manufacturers Bank & Trust
Kansas City, Missouri 9%

Charles Schwab & Co. Inc.
San Francisco, California 7%
--------------------------------------------------------------------------------
Balanced
Advisor Fulvest & Co
Lancaster, Pennsylvania 36%

UMBSC & Co
FBO The Medical Center
Kansas City, Missouri 9%

UMBSC & Co
FBO Bud Brown Chrysler
Kansas City, Missouri 8%

UMBSC & Co
FBO Parmelee Industries Inc. 401k
Kansas City, Missouri 7%

UMBSC & Co
FBO Toledo Clinic Inc.
Kansas City, Missouri 5%

Nationwide Trust Company
Columbus, Ohio 5%

UMBSC & Co
FBO Kendall State Bank
Kansas City, Missouri 5%

Institutional The Chase Manhattan Bank NA TR
Huntsman Corp Salary Deferral Plan
New York, New York 67%

The Chase Manhattan Bank NA TR
Huntsman Corp MPP Plan & Trust
New York, New York 33%
--------------------------------------------------------------------------------

32 American Century Investments 1-800-345-2021

Percentage of
Outstanding
Shares Fund Shareholder Owned
--------------------------------------------------------------------------------
Limited-Term Bond
Investor American Century Investment Management Inc.
Kansas City, Missouri 15%

Charles Schwab & Co. Inc.
San Francisco, California 14%

Advisor UMBSC & Co
FBO First American Bank Co.
Kansas City, Missouri 27%

Charles Schwab & Co. Inc.
San Francisco, California 20%

Columbus Circle Trust Company
Custodian For Garney Holding Co.
Employee Stock Ownership Plan and Trust
Stamford, Connecticut 20%

Columbus Circle Trust Company
C/F Madsen Kneppers and Assoc. Inc.
401k Profit Sharing Plan
Stamford, Connecticut 6%
--------------------------------------------------------------------------------
Intermediate-Term Bond
Investor Charles Schwab & Co. Inc.
San Francisco, California 6%

American Century Investment Management Inc.
Kansas City, Missouri 5%

Advisor Charles Schwab & Co,
San Francisco, California 18%

United Missouri Bank Trustee
Carolina First Bancshares Profit Sharing Plan
Kansas City, Missouri 12%
--------------------------------------------------------------------------------
New Opportunities
American Century Profit Sharing and 401k
Savings & Trust
Kansas City, Missouri 5%
--------------------------------------------------------------------------------
High-Yield
Investor American Century Investment Management Inc.
Kansas City, Missouri 8%

Morgan Guaranty Trust of NY
Newark, Delaware 6%
--------------------------------------------------------------------------------

www.americancentury.com American Century Investments 33

Percentage of
Outstanding
Shares Fund Shareholder Owned
--------------------------------------------------------------------------------
Veedot
Institutional American Century Profit Sharing & 401k
Savings Plan & Trust
Kansas City, Missouri 44%

American Century Investment Management Inc.
Kansas City, Missouri 19%

UMB TR
American Century Services Corp.
Stock Option Surrender Plan
Kansas City, Missouri 18%

UMB TR
American Century Executive
Defferred Comp Plan Trust
Kansas City, Missouri 10%

American Century Money Purchase
Plan & Trust
Kansas City, Missouri 8%
--------------------------------------------------------------------------------
Tax-Managed Value None

The funds are unaware of any other shareholders, beneficial or of record, who
own more than 5% of any class of a fund's outstanding shares. As of April 2,
2001, the officers and directors of the funds, as a group, owned less than 1% of
any class of a fund's outstanding shares.

SERVICE PROVIDERS

The funds have no employees. To conduct the funds' day-to-day activities, the
funds have hired a number of service providers. Each service provider has a
specific function to fill on behalf of the funds that is described below.

ACIM, ACSC and ACIS are wholly owned by ACC. James E. Stowers Jr., Chairman of
ACC, controls ACC by virtue of his ownership of a majority of its voting stock.

INVESTMENT ADVISOR

American Century Investment Management, Inc. (ACIM) serves as the investment
advisor for each of the funds. A description of the responsibilities of the
advisor appears in each Prospectus under the heading Management.

For services provided to the fund, the advisor receives a monthly fee based on a
percentage of the average net assets of the fund. Ultra, Balanced, Tax-Managed
Value and Veedot have a stepped fee structure, as follows:

34 American Century Investments 1-800-345-2021

Fund Class Percentage of Net Assets
--------------------------------------------------------------------------------
Ultra Investor and C 1.00% of first $20 billion
0.95% over $20 billion
----------------------------------------------------
Institutional 0.80% of first $20 billion
0.75% over $20 billion
----------------------------------------------------
Advisor 0.75% of first $20 billion
0.70% over $20 billion
--------------------------------------------------------------------------------
Balanced Investor 0.90% of first $1 billion
0.80% over $1 billion
----------------------------------------------------
Institutional 0.70% of first $1 billion
0.60% over $1 billion
----------------------------------------------------
Advisor 0.65% of first $1 billion
0.55% over $1 billion
--------------------------------------------------------------------------------
Tax-Managed Value Investor 1.10% of first $500 million
1.00% of next $500 million
0.90% of over $1 billion
----------------------------------------------------
Institutional 0.90% of first $500 million
0.80% of next $500 million
0.70% over $1 billion
----------------------------------------------------
Advisor 0.85% of first $500 million
0.75% of next $500 million
0.65% over $1 billion
--------------------------------------------------------------------------------
Veedot Investor 1.50% of first $500 million
1.45% of next $500 million
1.40% of over $1 billion
----------------------------------------------------
Institutional 1.30% of first $500 million
1.25% of next $500 million
1.20% over $1 billion
Advisor 1.25% of first $500 million
1.20% of next $500 million
1.15% over $1 billion
--------------------------------------------------------------------------------

The other funds do not have a stepped fee. Their management fee is described in
their respective Prospectuses.

On the first business day of each month, the funds pay a management fee to the
advisor for the previous month at the specified rate. The fee for the previous
month is calculated by multiplying the applicable fee for the fund by the
aggregate average daily closing value of a fund's net assets during the previous
month. This number is then multiplied by a fraction, the numerator of which is
the number of days in the previous month and the denominator of which is 365
(366 in leap years).

The management agreement between the corporation and the advisor shall continue
in effect until the earlier of the expiration of two years from the date of its
execution or until the first meeting of fund shareholders following such
execution and for as long thereafter as its continuance is specifically approved
at least annually by

(1) the funds' Board of Directors, or a majority of outstanding shareholder
votes (as defined in the Investment Company Act) and

(2) the vote of a majority of the directors of the funds who are not parties to
the agreement or interested persons of the advisor, cast in person at a
meeting called for the purpose of voting on such approval.

www.americancentury.com American Century Investments 35

The management agreement states that the funds' Board of Directors or a majority
of outstanding shareholder votes may terminate the management agreement at any
time without payment of any penalty on 60 days' written notice to the advisor.
The management agreement shall be automatically terminated if it is assigned.

The management agreement states the advisor shall not be liable to the funds or
their shareholders for anything other than willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.

The management agreement also provides that the advisor and its officers,
directors and employees may engage in other business, render services to others,
and devote time and attention to any other business whether of a similar or
dissimilar nature.

Certain investments may be appropriate for the funds and also for other clients
advised by the advisor. Investment decisions for the funds and other clients are
made with a view to achieving their respective investment objectives after
consideration of such factors as their current holdings, availability of cash
for investment and the size of their investment generally. A particular security
may be bought or sold for only one client or fund, or in different amounts and
at different times for more than one but less than all clients or funds. In
addition, purchases or sales of the same security may be made for two or more
clients or funds on the same date. Such transactions will be allocated among
clients in a manner believed by the advisor to be equitable to each. In some
cases this procedure could have an adverse effect on the price or amount of the
securities purchased or sold by a fund.

The advisor may aggregate purchase and sale orders of the funds with purchase
and sale orders of its other clients when the advisor believes that such
aggregation provides the best execution for the funds. The Board of Directors
has approved the policy of the advisor with respect to the aggregation of
portfolio transactions. Where portfolio transactions have been aggregated, the
funds participate at the average share price for all transactions in that
security on a given day and allocate transaction costs on a pro rata basis. The
advisor will not aggregate portfolio transactions of the funds unless it
believes such aggregation is consistent with its duty to seek best execution on
behalf of the funds and the terms of the management agreement. The advisor
receives no additional compensation or remuneration as a result of such
aggregation.

Unified management fees incurred by each fund by class for the fiscal periods
ended October 31, 2000, 1999 and 1998, are indicated in the following tables. As
a new class, information regarding the C Class was not available as of the end
of the fiscal year.

UNIFIED MANAGEMENT FEES (INVESTOR CLASS)
--------------------------------------------------------------------------------
Fund 2000 1999 1998
----------------------------------------------------------------------------
Growth $100,365,047 $75,334,938 $57,367,329
Ultra 411,243,949 323,012,542 246,426,714
Select 74,410,279 68,649,039 53,760,572
Vista 21,675,209 9,522,370 13,820,810
Heritage 16,346,863 9,817,953 12,484,448
Balanced 8,703,277 9,452,864 9,501,108
Tax-Managed Value 445,431 276,382 N/A
Giftrust 19,959,904 9,559,715 9,584,768
New Opportunities 12,892,612 4,174,987 3,605,875
New Opportunities II N/A N/A N/A
Veedot 4,117,607 N/A N/A
Limited-Term Bond 78,284 130,779 129,239
Intermediate-Term Bond 218,626 215,378 159,444
Bond 884,934 1,084,745 1,088,573
High-Yield 302,034 360,784 245,103
----------------------------------------------------------------------------

36 American Century Investments 1-800-345-2021

UNIFIED MANAGEMENT FEES (ADVISOR CLASS AND INSTITUTIONAL CLASS)
----------------------------------------------------------------------------
Fund 2000 1999 1998
----------------------------------------------------------------------------
Growth
Advisor $ 149,577 $ 70,294 $ 26,893
Institutional 212,927 8,214 3,902
----------------------------------------------------------------------------
Ultra
Advisor 3,157,451 1,351,217 502,147
Institutional 3,661,448 423,827 72,042
----------------------------------------------------------------------------
Select
Advisor 111,586 37,600 11,281
Institutional 1,578,151 137,485 106,461
----------------------------------------------------------------------------
Vista
Advisor 128,782 41,307 41,497
Institutional 246,228 1,048 27,834
----------------------------------------------------------------------------
Heritage
Advisor 12,566 8,268 5,250
Institutional 46,536 660 737
----------------------------------------------------------------------------
Balanced
Advisor 93,449 67,602 48,200
Institutional 76,113 N/A N/A
----------------------------------------------------------------------------
Veedot
Institutional 36,251 N/A N/A
----------------------------------------------------------------------------
Limited-Term Bond
Advisor 13,788 5,538 2,289
----------------------------------------------------------------------------
Intermediate-Term Bond
Advisor 16,915 21,941 13,376
----------------------------------------------------------------------------
Bond
Advisor 20,068 10,937 7,793
----------------------------------------------------------------------------

TRANSFER AGENT AND ADMINISTRATOR

American Century Services Corporation, 4500 Main Street, Kansas City, Missouri
64111, serves as transfer agent and dividend-paying agent for the funds. It
provides physical facilities, computer hardware and software and personnel for
the day-to-day administration of the funds and the advisor. The advisor pays
ACSC for these services.

From time to time, special services may be offered to shareholders who maintain
higher share balances in our family of funds. These services may include the
waiver of minimum investment requirements, expedited confirmation of shareholder
transactions, newsletters and a team of personal representatives. Any expenses
associated with these special services will be paid by the advisor.

DISTRIBUTOR

The funds' shares are distributed by American Century Investment Services, Inc.,
a registered broker-dealer. The distributor is a wholly owned subsidiary of ACC
and its principal business address is 4500 Main Street, Kansas City, Missouri
64111.

The distributor is the principal underwriter of the funds' shares. The
distributor makes a continuous, best-efforts underwriting of the funds' shares.
This means the distributor has no liability for unsold shares.

www.americancentury.com American Century Investments 37

OTHER SERVICE PROVIDERS

CUSTODIAN BANKS

J.P. Morgan Chase and Co., 770 Broadway, 10th Floor, New York, New York
10003-9598, and Commerce Bank, N.A., 1000 Walnut, Kansas City, Missouri 64105,
each serves as custodian of the funds' assets. The custodians take no part in
determining the investment policies of the funds or in deciding which securities
are purchased or sold by the funds. The funds, however, may invest in certain
obligations of the custodians and may purchase or sell certain securities from
or to the custodians.

INDEPENDENT AUDITORS

Deloitte & Touche LLP is the independent auditor of the funds. The address of
Deloitte & Touche LLP is 1010 Grand Boulevard, Kansas City, Missouri 64106. As
the independent auditor of the funds, Deloitte & Touche LLP provides services
including

(1) auditing of the annual financial statements for each fund,

(2) assisting and consultating in connection with SEC filings and

(3) reviewing of the annual federal income tax return filed for each fund.

BROKERAGE ALLOCATION

GROWTH, ULTRA, SELECT, VISTA, HERITAGE, TAX-MANAGED VALUE, GIFTRUST, NEW
OPPORTUNITIES, NEW OPPORTUNITIES II, VEEDOT AND THE EQUITY PORTION OF BALANCED

Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers and dealers to execute portfolio
transactions. The funds' policy is to secure the most favorable prices and
execution of orders on its portfolio transactions. So long as that policy is
met, the advisor may take into consideration the factors discussed below when
selecting brokers.

The advisor receives statistical and other information and services, including
research, without cost from brokers and dealers. The advisor evaluates such
information and services, together with all other information that it may have,
in supervising and managing the investments of the funds. Because such
information and services may vary in amount, quality and reliability, their
influence in selecting brokers varies from none to very substantial. The advisor
intends to continue to place some of the funds' brokerage business with one or
more brokers who provide information and services. Such information and services
will be in addition to and not in lieu of services required to be performed by
the advisor. The advisor does not utilize brokers that provide such information
and services for the purpose of reducing the expense of providing required
services to the funds.

In the years ended October 31, 2000, 1999 and 1998, the brokerage commissions of
each fund were:

38 American Century Investments 1-800-345-2021

Fund 2000 1999 1998
------------------------------------------------------------------------
Growth $9,949,477 $6,844,600 $10,326,945
Ultra $22,096,395 $13,462,555(1) $46,022,210
Select $6,782,094 $10,047,034 $12,083,920
Vista $4,205,307 $2,964,425 $5,035,186
Heritage $2,949,237 $2,371,345 $3,733,656
Balanced $493,080 $1,352,613 $1,112,389
Tax-Managed Value $39,005 $32,592 N/A
Giftrust $1,087,217 $1,495,040 $1,848,117
New Opportunities $464,626 $513,503 $420,737
New Opportunities II N/A N/A N/A
Veedot $1,095,419 N/A N/A
------------------------------------------------------------------------

1 The decrease in brokerage commissions paid by the fund in 1999 was a result
of lower portfolio turnover during that same period. Also, the average
commission rate paid by American Century declined during this same period.

The brokerage commissions paid by the funds may exceed those that another broker
might have charged for effecting the same transactions, because of the value of
the brokerage and research services provided by the broker. Research services
furnished by brokers through whom the funds effect securities transactions may
be used by the advisor in servicing all of its accounts, and not all such
services may be used by the advisor in managing the portfolios of the funds.

The staff of the SEC has expressed the view that the best price and execution of
over-the-counter transactions in portfolio securities may be secured by dealing
directly with principal market makers, thereby avoiding the payment of
compensation to another broker. In certain situations, the officers of the funds
and the advisor believe that the facilities, expert personnel and technological
systems of a broker often enable the funds to secure as good a net price by
dealing with a broker instead of a principal market maker, even after payment of
the compensation to the broker. The funds regularly place their over-the-counter
transactions with principal market makers, but also may deal on a brokerage
basis when utilizing electronic trading networks or as circumstances warrant.

LIMITED-TERM BOND, INTERMEDIATE-TERM BOND, BOND, HIGH-YIELD AND THE FIXED-INCOME
PORTION OF BALANCED

Under the management agreement between the funds and the advisor, the advisor
has the responsibility of selecting brokers and dealers to execute portfolio
transactions. In many transactions, the selection of the broker or dealer is
determined by the availability of the desired security and its offering price.
In other transactions, the selection of the broker or dealer is a function of
market selection and price negotiation, as well as the broker's general
execution and operational and financial capabilities in the type of transaction
involved. The advisor will seek to obtain prompt execution of orders at the most
favorable prices or yields. The advisor may choose to purchase and sell
portfolio securities from and to dealers who provide services or research,
statistical and other information to the funds and to the advisor. Such
information or services will be in addition to, and not in lieu of, the services
required to be performed by the advisor, and the expenses of the advisor will
not necessarily be reduced as a result of the receipt of such supplemental
information.

www.americancentury.com American Century Investments 39

The funds generally purchase and sell debt securities through principal
transactions, meaning the funds normally purchase securities on a net basis
directly from the issuer or a primary market-maker acting as principal for the
securities. The funds do not pay brokerage commissions on these transactions,
although the purchase price for debt securities usually includes an undisclosed
compensation. Purchases of securities from underwriters typically include a
commission or concession paid by the issuer to the underwriter, and purchases
from dealers serving as market-makers typically include a dealer's mark-up
(i.e., a spread between the bid and asked prices). During the fiscal years
ended October 31, 2000, 1999, and 1998, the funds did not pay any brokerage
commissions.

INFORMATION ABOUT FUND SHARES

Each of the funds named on the front of this Statement of Additional Information
is a series of shares issued by the corporation, and shares of each fund have
equal voting rights. In addition, each series (or fund) may be divided into
separate classes. See Multiple Class Structure, which follows. Additional funds
and classes may be added without a shareholder vote.

Each fund votes separately on matters affecting that fund exclusively. Voting
rights are not cumulative, so investors holding more than 50% of the
corporation's (all funds') outstanding shares may be able to elect a Board of
Directors. The corporation undertakes dollar-based voting, meaning that the
number of votes a shareholder is entitled to is based upon the dollar amount of
the shareholder's investment. The election of directors is determined by the
votes received from all the corporation's shareholders without regard to whether
a majority of shares of any one fund voted in favor of a particular nominee or
all nominees as a group.

The assets belonging to each series or class of shares are held separately by
the custodian and the shares of each series or class represent a beneficial
interest in the principal, earnings and profit (or losses) of investments and
other assets held for each series or class. Within their respective series or
class, all shares have equal redemption rights. Each share, when issued, is
fully paid and non-assessable.

In the event of complete liquidation or dissolution of the funds, shareholders
of each series or class of shares will be entitled to receive, pro rata, all of
the assets less the liabilities of that series or class.

Each shareholder has rights to dividends and distributions declared by the fund
he or she owns and to the net assets of such fund upon its liquidation or
dissolution proportionate to his or her share ownership interest in the fund.

MULTIPLE CLASS STRUCTURE

The corporation's Board of Directors has adopted a multiple class plan (the
Multiclass Plan) pursuant to Rule 18f-3 adopted by the SEC. Pursuant to such
plan, the funds may issue up to four classes of shares: an Investor Class, an
Institutional Class, an Advisor Class and a C Class. Not all funds offer all
four classes.

The Investor Class is made available to investors directly without any load or
commission, for a single unified management fee. The Institutional and Advisor
Classes are made available to institutional shareholders or through financial
intermediaries that do not require the same level of shareholder and
administrative services from the advisor as Investor Class shareholders. As a
result, the advisor is able to charge these classes a lower total management
fee. In addition to the management fee, however the Advisor Class shares are
subject to a Master Distribution and Shareholder Services Plan (the Advisor
Class Plan). The C Class also is made available through financial
intermediaries, for purchase by individual investors using "wrap account" style
advisory and personal services from the

40 American Century Investments 1-800-345-2021

intermediary. The total management fee is the same as for Investor Class, but
the C Class shares also are subject to a Master Distribution and Individual
Shareholder Services Plan (the C Class Plan) described below. The Advisor Class
Plan and the C Class Plan have been adopted by the funds' Board of Directors and
initial shareholder in accordance with Rule 12b-1 adopted by the SEC under the
Investment Company Act.

Rule 12b-1

Rule 12b-1 permits an investment company to pay expenses associated with the
distribution of its shares in accordance with a plan adopted by its Board of
Directors and approved by its shareholders. Pursuant to such rule, the Board of
Directors and initial shareholder of the funds' Advisor and C Classes have
approved and entered into the Advisor Class Plan and the C Class Plan. The Plans
are described below.

In adopting the Plans, the Board of Directors (including a majority of directors
who are not interested persons of the funds [as defined in the Investment
Company Act], hereafter referred to as the independent directors) determined
that there was a reasonable likelihood that the Plan would benefit the funds and
the shareholders of the affected class. Pursuant to Rule 12b-1, information with
respect to revenues and expenses under the Plans is presented to the Board of
Directors quarterly for its consideration in connection with its deliberations
as to the continuance of the Plans. Continuance of the Plans must be approved by
the Board of Directors (including a majority of the independent directors)
annually. The Plans may be amended by a vote of the Board of Directors
(including a majority of the independent directors), except that the Plans may
not be amended to materially increase the amount to be spent for distribution
without majority approval of the shareholders of the affected class. The Plans
terminate automatically in the event of an assignment and may be terminated upon
a vote of a majority of the independent directors or by vote of a majority of
outstanding shareholder votes of the affected class.

All fees paid under the Plans will be made in accordance with Section 26 of the
Rules of Fair Practice of the National Association of Securities Dealers (NASD).

Master Distribution and Shareholder Services Plan (Advisor Class Plan)

As described in the Prospectuses, the funds' Advisor Class shares are made
available to participants in employer-sponsored retirement or savings plans and
to persons purchasing through financial intermediaries such as banks,
broker-dealers and insurance companies. The funds' distributor enters into
contracts with various banks, broker-dealers, insurance companies and other
financial intermediaries, with respect to the sale of the funds' shares and/or
the use of the funds' shares in various investment products or in connection
with various financial services.

Certain recordkeeping and administrative services that are provided by the
funds' transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for Advisor Class
investors. In addition to such services, the financial intermediaries provide
various distribution services.

To enable the funds' shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the funds'
advisor has reduced its management fee by 0.25% per annum with respect to the
Advisor Class shares, and the funds' Board of Directors has adopted the Advisor
Class Plan. Pursuant to the Advisor Class Plan, the Advisor Class pays the
distributor a fee of 0.50% annually of the aggregate average daily asset value
of the funds' Advisor Class shares, 0.25% of which is paid for shareholder
services (as described below) and 0.25% of which is paid for distribution
services. During the fiscal year ended October 31, 2000, the aggregate amount of
fees paid under the Advisor Class Plan were:

www.americancentury.com American Century Investments 41

Growth $99,672
Ultra $2,127,314
Select $74,358
Vista $85,823
Heritage $8,374
Balanced $64,959
Limited-Term Bond $15,314
Intermediate-Term Bond $16,909
Bond $18,238

Payments may be made for a variety of shareholder services, including, but not
limited to:

(a) receiving, aggregating and processing purchase, exchange and redemption
requests from beneficial owners (including contract owners of insurance
products that utilize the funds as underlying investment media) of shares
and placing purchase, exchange and redemption orders with the funds'
distributor;

(b) providing shareholders with a service that invests the assets of their
accounts in shares pursuant to specific or pre-authorized instructions;

(c) processing dividend payments from a fund on behalf of shareholders and
assisting shareholders in changing dividend options, account designations
and addresses;

(d) providing and maintaining elective services such as check writing and wire
transfer services;

(e) acting as shareholder of record and nominee for beneficial owners;

(f) maintaining account records for shareholders and/or other beneficial owners;

(g) issuing confirmations of transactions;

(h) providing subaccounting with respect to shares beneficially owned by
customers of third parties or providing the information to a fund as
necessary for such subaccounting;

(i) preparing and forwarding investor communications from the funds (such as
proxies, shareholder reports, annual and semi-annual financial statements
and dividend, distribution and tax notices) to shareholders and/or other
beneficial owners;

(j) providing other similar administrative and sub-transfer agency services; and

(k) paying service fees for the provision of personal, continuing services to
the shareholders as contemplated by the Rules of Fair Practice of the NASD.

42 American Century Investments 1-800-345-2021

Shareholder services do not include those activities and expenses that are
primarily intended to result in the sale of additional shares of the funds.
During the fiscal year ended October 31, 2000, the amount of fees paid under the
Advisor Class Plan for shareholder services were:

Growth $49,836
Ultra $1,063,657
Select $37,179
Vista $42,911
Heritage $4,187
Balanced $32,480
Limited-Term Bond $7,657
Intermediate-Term Bond $8,454
Bond $9,119

Distribution services include any activity undertaken or expense incurred that
is primarily intended to result in the sale of Advisor Class shares, which
services may include but are not limited to:

(a) the payment of sales commissions, on-going commissions and other payments to
brokers, dealers, financial institutions or others who sell Advisor Class
shares pursuant to selling agreements;

(b) compensation to registered representatives or other employees of the
distributor who engage in or support distribution of the funds' Advisor
Class shares;

(d) printing prospectuses, statements of additional information and reports for
other-than-existing shareholders;

(e) preparing, printing and distributing of sales literature and advertising
materials provided to the funds' shareholders and prospective shareholders;

(f) receiving and answering correspondence from prospective shareholders,
including distributing prospectuses, statements of additional information,
and shareholder reports;

(g) providing facilities to answer questions from prospective shareholders about
fund shares;

(h) complying with federal and state securities laws pertaining to the sale of
fund shares;

(i) assisting shareholders in completing application forms and selecting
dividend and other account options;

(j) providing other reasonable assistance in connection with the distribution of
fund shares;

(k) organizing and conducting of sales seminars and payments in the form of
transactional and compensation or promotional incentives;

(l) profit on the foregoing;

(m) paying service fees for the provision of personal, continuing services to
investors, as contemplated by the Rules of Fair Practice of the NASD; and

(n) such other distribution and services activities as the advisor determines
may be paid for by the funds pursuant to the terms of the agreement between
the corporation and the fund's distributor and in accordance with Rule 12b-1
of the Investment Company Act.

www.americancentury.com American Century Investments 43

During the fiscal year ended October 31, 2000, the amount of fees paid under the
Advisor Class Plan for distribution services were:

Growth $49,836
Ultra $1,063,657
Select $37,179
Vista $42,911
Heritage $4,187
Balanced $32,480
Limited-Term Bond $7,657
Intermediate-Term Bond $8,454
Bond $9,119

Master Distribution and Individual Shareholder Services Plan (C Class Plan)

As described in the Prospectuses, the C Class shares of the funds are made
available to participants in employer-sponsored retirement or savings plans and
to persons purchasing through broker-dealers, banks, insurance companies and
other financial intermediaries that provide various administrative, shareholder
and distribution services. The funds' distributor enters into contracts with
various banks, broker-dealers, insurance companies and other financial
intermediaries, with respect to the sale of the funds' shares and/or the use of
the funds' shares in various investment products or in connection with various
financial services.

Certain recordkeeping and administrative services that are provided by the
funds' transfer agent for the Investor Class shareholders may be performed by a
plan sponsor (or its agents) or by a financial intermediary for C Class
investors. In addition to such services, the financial intermediaries provide
various individual shareholder and distribution services.

To enable the funds' shares to be made available through such plans and
financial intermediaries, and to compensate them for such services, the funds'
Board of Directors has adopted the C Class Plan. Pursuant to the C Class Plan,
the C Class pays the Advisor, as paying agent for the fund, a fee equal to .75%
annually of the average daily net asset value of the C Class shares of
High-Yield, .25% of which is paid for individual shareholder services as
described below and .50% of which is paid for distribution services as described
below, and 1.00% annually of the average daily net asset value of the C Class
shares of Ultra, Vista, Growth and Heritage, .25% of which is paid for
shareholder services as described below and .75% of which is paid for
distribution services as described below. Because this is a new class, no fees
were paid under the C Class Plan for the most recent fiscal year.

Payments may be made for a variety of individual shareholder services,
including, but not limited to:

(a) providing individualized and customized investment advisory services,
including the consideration of shareholder profiles and specific goals;

(b) creating investment models and asset allocation models for use by
shareholders in selecting appropriate funds;

(d) periodic rebalancing of shareholder accounts to ensure compliance with the
selected asset allocation;

44 American Century Investments 1-800-345-2021

(e) consolidating shareholder accounts in one place; and

(f) other individual services.

Individual shareholder services do not include those activities and expenses
that are primarily intended to result in the sale of additional shares of the
funds.

Distribution services include any activity undertaken or expense incurred that
is primarily intended to result in the sale of C Class shares, which services
may include but are not limited to:

(a) the payment of sales commissions, on-going commissions and other payments to
brokers, dealers, financial institutions or others who sell C Class shares
pursuant to selling agreements;

(b) compensation to registered representatives or other employees of the
distributor who engage in or support distribution of the funds' C Class
shares;

(d) printing prospectuses, statements of additional information and reports for
other-than-existing shareholders;

(e) preparing, printing and distributing sales literature and advertising
materials provided to the funds' shareholders and prospective shareholders;

(f) receiving and answering correspondence from prospective shareholders,
including distributing prospectuses, statements of additional information,
and shareholder reports;

(g) providing facilities to answer questions from prospective shareholders about
fund shares;

(h) complying with federal and state securities laws pertaining to the sale of
fund shares;

(i) assisting shareholders in completing application forms and selecting
dividend and other account options;

(j) providing other reasonable assistance in connection with the distribution of
fund shares;

(k) organizing and conducting of sales seminars and payments in the form of
transactional and compensation or promotional incentives;

(l) profit on the foregoing;

(m) paying service fees for providing personal, continuing services to
investors, as contemplated by the Rules of Fair Practice of the NASD; and

(n) such other distribution and services activities as the advisor determines
may be paid for by the funds pursuant to the terms of the agreement between
the corporation and the funds' distributor and in accordance with Rule 12b-1
of the Investment Company Act.

Dealer Concessions

The fund's distributor expects to pay sales commissions to the financial
intermediaries who sell C Class shares of the fund at the time of such sales.
Payments will equal .75% of the purchase price of the C Class shares of
High-Yield and 1.00% of the purchase price of the C Class shares of Ultra,
Vista, Growth and Heritage sold by the intermediary. The distributor will retain
the distribution fee paid by the funds for the first 13 months after the shares
are purchased. This fee is intended in part to permit the distributor to recoup
a portion of on-going sales commissions to dealers plus financing costs, if any.
After the first 13 months, the distributor will make the distribution and
individual shareholder services fee payments described above to the financial
intermediaries involved on a monthly basis.

www.americancentury.com American Century Investments 45

BUYING AND SELLING FUND SHARES

Information about buying, selling and exchanging fund shares is contained in the
funds' Prospectuses and in Your Guide to American Century Services. The
Prospectuses and guide are available to investors without charge and may be
obtained by calling us.

VALUATION OF A FUND'S SECURITIES

Each fund's net asset value per share (NAV) is calculated as of the close of
business of the New York Stock Exchange (the Exchange) each day the Exchange is
open for business. The Exchange usually closes at 4 p.m. Eastern time. The
Exchange typically observes the following holidays: New Year's Day, Martin
Luther King Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Although the funds expect
the same holidays to be observed in the future, the Exchange may modify its
holiday schedule at any time.

Each fund's NAV is calculated by adding the value of all portfolio securities
and other assets, deducting liabilities and dividing the result by the number of
shares outstanding. Expenses and interest earned on portfolio securities are
accrued daily.

The portfolio securities of each fund that are listed or traded on a domestic
securities exchange are valued at the last sale price on that exchange, except
as otherwise noted. Portfolio securities primarily traded on foreign securities
exchanges generally are valued at the preceding closing values of such
securities on the exchange where primarily traded. If no sale 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 priced at the mean of the latest bid and asked prices, or
at the last sale price. When market quotations are not readily available,
securities and other assets are valued at fair value as determined in accordance
with procedures adopted by the Board of Directors.

Debt securities not traded on a principal securities exchange are valued through
valuations obtained from a commercial pricing service or at the most recent mean
of the bid and asked prices provided by investment dealers in accordance with
procedures established by the Board of Directors.

Because there are hundreds of thousands of municipal issues outstanding, and the
majority of them do not trade daily, the prices provided by pricing services for
these types of securities are generally determined without regard to bid or last
sale prices. In valuing securities, the pricing services generally take into
account institutional trading activity, trading in similar groups of securities,
and any developments related to specific securities. The methods used by the
pricing service and the valuations so established are reviewed by the advisor
under the general supervision of the Board of Directors. There are a number of
pricing services available, and the advisor, on the basis of ongoing evaluation
of these services, may use other pricing services or discontinue the use of any
pricing service in whole or in part.

Securities maturing within 60 days of the valuation date may be valued at cost,
plus or minus any amortized discount or premium, unless the directors determine
that this would not result in fair valuation of a given security. Other assets
and securities for which quotations are not readily available are valued in good
faith at their fair value using methods approved by the Board of Directors.

The value of an exchange-traded foreign security is determined in its national
currency as of the close of trading on the foreign exchange on which it is
traded or as of the close of business on the New York Stock Exchange, if that is
earlier. That value is then translated to dollars at the prevailing foreign
exchange rate.

Trading in securities on European and Far Eastern securities exchanges and
over-the-counter markets is normally completed at various times before the close
of business on each day

46 American Century Investments 1-800-345-2021

that the New York Stock Exchange is open. If an event were to occur after the
value of a security was established, but before the net asset value per share
was determined, that was likely to materially change the net asset value, then
that security would be valued at fair value as determined in accordance with
procedures adopted by the Board of Directors.

Trading of these securities in foreign markets may not take place on every day
that the Exchange is open. In addition, trading may take place in various
foreign markets and on some electronic trading networks on Saturdays or on other
days when the Exchange is not open and on which the funds' net asset values are
not calculated. Therefore, such calculations do not take place contemporaneously
with the determination of the prices of many of the portfolio securities used in
such calculation, and the value of the funds' portfolios may be affected on days
when shares of the funds may not be purchased or redeemed.

TAXES

Federal Income Tax

Each fund intends to qualify annually as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the Code). By so
qualifying, a fund will be exempt from federal income taxes to the extent that
it distributes substantially all of its net investment income and net realized
capital gains (if any) to investors. If a fund fails to qualify as a regulated
investment company, it will be liable for taxes, significantly reducing its
distributions to investors and eliminating investors' ability to treat
distributions received from the funds in the same manner in which they were
realized by the funds.

If fund shares are purchased through taxable accounts, distributions of net
investment income and net short-term capital gains are taxable to you as
ordinary income. Dividends received by the funds on shares of stock of domestic
corporations may qualify for the 70% dividends-received deduction to the extent
that the fund held those shares for more than 45 days. Distributions from gains
on assets held by the funds longer than 12 months are taxable as long-term gains
regardless of the length of time you have held your shares in the fund. If you
purchase shares in the fund and sell them at a loss within six months, your loss
on the sale of those shares will be treated as a long-term capital loss to the
extent of any long-term capital gains dividend you received on those shares.

Dividends and interest received by a fund on foreign securities may give rise to
withholding and other taxes imposed by foreign countries. However, tax
conventions between certain countries and the United States may reduce or
eliminate such taxes. Foreign countries generally do not impose taxes on capital
gains with respect to investments by non-resident investors. Any foreign taxes
paid by a fund will reduce its dividend distributions to investors.

If more than 50% of the value of a fund's total assets at the end of its fiscal
year consists of securities of foreign corporations, the fund may qualify for
and make an election with the Internal Revenue Service with respect to such
fiscal year so that fund shareholders may be able to claim a foreign tax credit
in lieu of a deduction for foreign income taxes paid by the fund. If such an
election is made, the foreign taxes paid by the fund will be treated as income
received by you. In order for you to utilize the foreign tax credit, you must
have held your shares for 16 days or more during the 30-day period, beginning 15
days prior to the ex-dividend date for the mutual fund shares. The mutual fund
must meet a similar holding period requirement with respect to foreign
securities to which a dividend is attributable. Any portion of the foreign tax
credit that is ineligible as a result of the fund not meeting the holding period
requirement will be deducted in computing net investment income.

If a fund purchases the securities of certain foreign investment funds or trusts
called passive foreign investment companies (PFIC), capital gains on the sale of
such holdings will be deemed ordinary income regardless of how long the fund
holds the investment.

www.americancentury.com American Century Investments 47

The fund also may be subject to corporate income tax and an interest charge on
certain dividends and capital gains earned from these investments, regardless of
whether such income and gains are distributed to shareholders. In the
alternative, the fund may elect to recognize cumulative gains on such
investments as of the last day of its fiscal year and distribute them to
shareholders. Any distribution attributable to a PFIC is characterized as
ordinary income.

As of October 31, 2000, the funds in the table below had the following capital
loss carryovers. When a fund has a capital loss carryover, it does not make
capital gains distributions until the loss has been offset or expired.

Fund Capital Loss Carryover
---------------------------------------------------------------------------
Tax-Managed Value $1,535,337 (expiring in 2007 through 2008)
Veedot $80,643,875 (expiring in 2008)
Limited-Term Bond $376,775 (expiring in 2007 through 2008)
Intermediate-Term Bond $1,087,936 (expiring in 2007 through 2008)
Bond $5,270,950 (expiring in 2007 through 2008)
High-Yield $4,813642 (expiring in 2007 through 2008)
---------------------------------------------------------------------------

If you have not complied with certain provisions of the Internal Revenue Code
and Regulations, either American Century or your financial intermediary is
required by federal law to withhold and remit 31% of reportable payments (which
may include dividends, capital gains distributions and redemption proceeds) to
the IRS. Those regulations require you to certify that the Social Security
number or tax identification number you provide is correct and that you are not
subject to 31% withholding for previous under-reporting to the IRS. You will be
asked to make the appropriate certification on your account application.
Payments reported by us to the IRS that omit your Social Security number or tax
identification number will subject us to a non-refundable penalty of $50, which
will be charged against your account if you fail to provide the certification by
the time the report is filed.

A redemption of shares of a fund (including a redemption made in an exchange
transaction) will be a taxable transaction for federal income tax purposes and
you generally will recognize gain or loss in an amount equal to the difference
between the basis of the shares and the amount received. If a loss is realized
on the redemption of fund shares, the reinvestment in additional fund shares
within 30 days before or after the redemption may be subject to the "wash sale"
rules of the Code, resulting in a postponement of the recognition of such loss
for federal income tax purposes.

State and Local Taxes

Distributions by the funds also may be subject to state and local taxes, even if
all or a substantial part of such distributions are derived from interest on
U.S. government obligations which, if you received such interest directly, would
be exempt from state income tax. However, most but not all states allow this tax
exemption to pass through to fund shareholders when a fund pays distributions to
its shareholders. You should consult your tax advisor about the tax status of
such distributions in your state.

HOW FUND PERFORMANCE INFORMATION IS CALCULATED

The funds may quote performance in various ways. Fund performance may be shown
by presenting one or more performance measurements, including cumulative total
return, average annual total return or yield.

All performance information advertised by the funds is historical in nature and
is not intended to represent or guarantee future results. The value of fund
shares when redeemed may be more or less than their original cost.

48 American Century Investments 1-800-345-2021

Equity Funds

Total returns quoted in advertising and sales literature reflect all aspects of
a fund's return, including the effect of reinvesting dividends and capital gains
distributions (if any) and any change in the fund's NAV during the period.

Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in a fund during a stated
period and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant throughout the period. For example, a cumulative total return of 100%
over 10 years would produce an average annual return of 7.18%, which is the
steady annual rate that would equal 100% growth on a compounded basis in 10
years. While average annual total returns are a convenient means of comparing
investment alternatives, investors should realize that the funds' performance is
not constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to actual year-to-year
performance.

The tables on page 45 set forth the average annual total returns for the various
classes of the equity funds and the equity portion of Balanced for the one-,
five- and 10-year periods (or the period since inception) ended October 31,
2000, the last day of the funds' fiscal year.

In addition to average annual total returns, each fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period, including periods other than one, five and 10 years.
Average annual and cumulative total returns may be quoted as percentages or as
dollar amounts and may be calculated for a single investment, a series of
investments, or a series of redemptions over any time period. Total returns may
be broken down into components of income and capital (including capital gains
and changes in share price) to illustrate the relationship of these factors and
their contributions to total return.

As a new fund, performance information for New Opportunities II and the C Class
is not available as of the date of this Statement of Additional Information.

AVERAGE ANNUAL TOTAL RETURNS - INVESTOR CLASS
--------------------------------------------------------------------------------
Fund 1 year 5 years 10 years From Inception Inception Date
--------------------------------------------------------------------------------
Growth 11.49% 20.03% 19.17% 18.81% June 30, 1971(1)
Ultra 9.81% 18.81% 34.43% 18.36% November 2, 1981
Select 7.64% 21.61% 16.18% 17.31% June 30, 1971(1)
Vista 66.16% 15.06% 20.12% 14.72% November 25, 1983
Heritage 62.61% 20.67% 19.13% 17.92% November 10, 1987
Balanced 5.90% 11.70% 12.60% 11.85% October 20, 1988
Giftrust 63.10% 14.71% 25.41% 19.99% November 25, 1983
New Opportunities 83.28% N/A N/A 37.01% December 26, 1996
Tax-Managed Value 7.23% N/A N/A 6.85% March 31, 1999
Veedot N/A N/A N/A 18.40% November 30, 1999
--------------------------------------------------------------------------------

1 Commenced operations on June 30, 1971. This inception date corresponds with
the management company's implementation of its current investment
philosophy and practices, although the fund's actual inception date was
October 31, 1958.

www.americancentury.com American Century Investments 49

AVERAGE ANNUAL TOTAL RETURNS - ADVISOR CLASS
--------------------------------------------------------------------------------
Fund 1 year From Inception Inception Date
--------------------------------------------------------------------------------
Growth 11.23% 23.32% June 4, 1997
Ultra 9.72% 20.19% October 2, 1996
Select 7.54% 17.47% August 8, 1997
Vista 65.98% 14.54% October 2, 1996
Heritage 62.26% 20.52% July 11, 1997
Balanced 5.63% 10.71% January 6, 1997
Tax-Managed Value N/A N/A N/A
Veedot N/A N/A N/A
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURNS - INSTITUTIONAL CLASS
--------------------------------------------------------------------------------
Fund 1 year From Inception Inception Date
--------------------------------------------------------------------------------
Growth 11.70% 22.11% June 16, 1997
Ultra 9.87% 20.06% November 14, 1996
Select 7.77% 22.26% March 13, 1997
Vista 66.28% 17.47% November 14, 1996
Heritage 63.00% 22.20% June 16, 1997
Balanced -0.63% N/A May 1, 2000
Tax-Managed Value N/A N/A N/A
Veedot N/A -3.27% August 1, 2000
--------------------------------------------------------------------------------

Fixed Income Funds and Balanced

Yield is calculated by adding over a 30-day (or one-month) period all interest
and dividend income (net of fund expenses) calculated on each day's market
values, dividing this sum by the average number of fund shares outstanding
during the period, and expressing the result as a percentage of the fund's share
price on the last day of the 30-day (or one-month) period. The percentage is
then annualized. Capital gains and losses are not included in the calculation.

The following table sets forth yield quotations pursuant to computation methods
prescribed by the SEC for the various classes of the fixed-income funds and the
fixed-income portion of Balanced for the 30-day period ended October 31, 2000,
the last day of the fiscal year.

Fund Investor Class Advisor Class Institutional Class
--------------------------------------------------------------------------------
Limited-Term Bond 6.41% 6.16% N/A
Intermediate-Term Bond 6.42 6.1% N/A
Bond 6.49% 6.23% N/A
Balanced 2.79% 2.55% 2.99%
High-Yield 13.02% N/A N/A
--------------------------------------------------------------------------------

The fixed-income funds may also elect to advertise cumulative total returns and
average annual total returns, computed as described under the heading Equity
Funds above.

50 American Century Investments 1-800-345-2021

The following table shows the cumulative total returns and the average annual
total returns of the Investor Class of the fixed-income funds since their
respective dates of inception (as noted) through October 31, 2000.

Cumulative
Total Return Average
Since Annual Date of
Fund Inception Total Return Inception
--------------------------------------------------------------------------------
Limited-Term Bond 41.08% 5.30% March 1, 1994
Intermediate-TermBond 44.18% 5.64% March 1, 1994
Bond 147.43% 6.85% March 3, 1987
Balanced 284.60% 11.85% October 20, 1988
High-Yield -4.97% -1.64% September 30, 1997
--------------------------------------------------------------------------------

PERFORMANCE COMPARISONS

The funds' performance may be compared with the performance of other mutual
funds tracked by mutual fund rating services or with other indices of market
performance. This may include comparisons with funds that are sold with a sales
charge or deferred sales charge. Sources of economic data that may be used for
such comparisons may include, but are not limited to: U.S. Treasury bill, note
and bond yields, money market fund yields, U.S. government debt and percentage
held by foreigners, the U.S. money supply, net free reserves, and yields on
current-coupon GNMAs (source: Board of Governors of the Federal Reserve System);
the federal funds and discount rates (source: Federal Reserve Bank of New York);
yield curves for U.S. Treasury securities and AA/AAA-rated corporate securities
(source: Bloomberg Financial Markets); yield curves for AAA-rated, tax-free
municipal securities (source: Telerate); yield curves for foreign government
securities (sources: Bloomberg Financial Markets and Data Resources, Inc.);
total returns on foreign bonds (source: J.P. Morgan Securities Inc.); various
U.S. and foreign government reports; the junk bond market (source: Data
Resources, Inc.); the CRB Futures Index (source: Commodity Index Report); the
price of gold (sources: London a.m./p.m. fixing and New York Comex Spot Price);
rankings of any mutual fund or mutual fund category tracked by Lipper, Inc. or
Morningstar, Inc.; mutual fund rankings published in major, nationally
distributed periodicals; data provided by the Investment Company Institute;
Ibbotson Associates, Stocks, Bonds, Bills, and Inflation; major indices of stock
market performance; and indices and historical data supplied by major securities
brokerage or investment advisory firms. The funds also may utilize reprints from
newspapers and magazines furnished by third parties to illustrate historical
performance or to provide general information about the funds.

www.americancentury.com American Century Investments 51

PERMISSIBLE ADVERTISING INFORMATION

From time to time, the funds may, in addition to any other permissible
information, include the following types of information in advertisements,
supplemental sales literature and reports to shareholders:

(1) discussions of general economic or financial principles (such as the effects
of compounding and the benefits of dollar-cost averaging);

(2) discussions of general economic trends;

(3) presentations of statistical data to supplement such discussions;

(4) descriptions of past or anticipated portfolio holdings for one or more of
the funds;

(5) descriptions of investment strategies for one or more of the funds;

(6) descriptions or comparisons of various savings and investment products
(including, but not limited to, qualified retirement plans and individual
stocks and bonds), which may or may not include the funds;

(7) comparisons of investment products (including the funds) with relevant
market or industry indices or other appropriate benchmarks;

(8) discussions of fund rankings or ratings by recognized rating organizations;
and

(9) testimonials describing the experience of persons who have invested in one
or more of the funds.

The funds also may include calculations, such as hypothetical compounding
examples, which describe hypothetical investment results. Such performance
examples will be based on an express set of assumptions and are not indicative
of the performance of any of the funds.

MULTIPLE CLASS PERFORMANCE ADVERTISING

Pursuant to the Multiple Class Plan, the corporation may issue additional
classes of existing funds or introduce new funds with multiple classes available
for purchase. To the extent a new class is added to an existing fund, the
advisor may, in compliance with SEC and NASD rules, regulations and guidelines,
market the new class of shares using the historical performance information of
the original class of shares. When quoting performance information for a new
class of shares for periods prior to the first full quarter after inception, the
original class' performance will be restated to reflect the expenses of the new
class and for periods after the first full quarter after inception, actual
performance of the new class will be used.

FINANCIAL STATEMENTS

The financial statements for the funds (except New Opportunities II) have been
audited by Deloitte & Touche LLP, independent auditors. Their Independent
Auditors' Reports and the financial statements included in the funds' Annual
Reports for the fiscal year ended October 31, 2000 are incorporated herein by
reference.

52 American Century Investments 1-800-345-2021

EXPLANATION OF FIXED-INCOME SECURITIES RATINGS

As described in the Prospectuses, some of the funds will invest in fixed-income
securities. Those investments, however, are subject to certain credit quality
restrictions, as noted in the Prospectuses. The following is a summary of the
rating categories referenced in the prospectus.

BOND RATINGS
--------------------------------------------------------------------------------
S&P Moody's Description
--------------------------------------------------------------------------------
AAA Aaa These are the highest ratings assigned by S&P and
Moody's to a debt obligation. They indicate an
extremely strong capacity to pay interest and
repay principal.
--------------------------------------------------------------------------------
AA Aa Debt rated in this category is considered to have
a very strong capacity to pay interest and repay
principal and differs from AAA/Aaa issues only
in a small degree.
--------------------------------------------------------------------------------
A A Debt rated A has a strong capacity to pay
interest and repay principal, although it is
somewhat more susceptible to the adverse effects
of changes in circumstances and economic
conditions than debt in higher-rated categories.
--------------------------------------------------------------------------------
BBB Baa Debt rated BBB/Baa is regarded as having an
adequate capacity to pay interest and repay
principal. Whereas it normally exhibits adequate
protection parameters, adverse economic
conditions or changing circumstances are more
likely to lead to a weakened capacity to pay
interest and repay principal for debt in this
category than in higher-rated categories. Debt
rated below BBB/Baa is regarded as having
significant speculative characteristics.
--------------------------------------------------------------------------------
BB Ba Debt rated BB/Ba has less near-term vulnerability
to default than other speculative issues.
However, it faces major ongoing uncertainties or
exposure to adverse business, financial or
economic conditions that could lead to inadequate
capacity to meet timely interest and principal
payments. The BB rating category also is used
for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
================================================================================
B B Debt rated B has a greater vulnerability to
default but currently has the capacity to meet
interest payments and principal repayments.
Adverse business, financial or economic
conditions will likely impair capacity or
willingness to pay interest and repay principal.
The B rating category is also used for debt
subordinated to senior debt that is assigned an
actual or implied BB/Ba or BB-/Ba3 rating.
--------------------------------------------------------------------------------
CCC Caa Debt rated CCC/Caa has a currently identifiable
vulnerability to default and is dependent upon
favorable business, financial and economic
conditions to meet timely payment of interest
and repayment of principal. In the event of
adverse business, financial or economic
conditions, it is not likely to have the
capacity to pay interest and repay principal. The
CCC/Caa rating category is also used for debt
subordinated to senior debt that is assigned an
actual or implied B or B-/B3 rating.
--------------------------------------------------------------------------------
CC Ca The rating CC/Ca typically is applied to debt
subordinated to senior debt that is assigned an
actual or implied CCC/Caa rating.
--------------------------------------------------------------------------------

www.americancentury.com American Century Investments 53

S&P Moody's Description
--------------------------------------------------------------------------------
C C The rating C typically is applied to debt
subordinated to senior debt, which is assigned
an actual or implied CCC-/Caa3 debt rating. The
C rating may be used to cover a situation where
a bankruptcy petition has been filed, but debt
service payments are continued.
--------------------------------------------------------------------------------
CI - The rating CI is reserved for income bonds on
which no interest is being paid.
--------------------------------------------------------------------------------
D D Debt rated D is in payment default. The D rating
category is used when interest payments or
principal payments are not made on the date due
even if the applicable grace period has not
expired, unless S&P believes that such payments
will be made during such grace period. The D
rating also will be used upon the filing of a
bankruptcy petition if debt service payments
are jeopardized.

To provide more detailed indications of credit quality, the Standard & Poor's
ratings from AA to CCC may be modified by the addition of a plus or minus sign
to show relative standing within these major rating categories. Similarly,
Moody's adds numerical modifiers (1,2,3) to designate relative standing within
its major bond rating categories. Fitch Investors Service, Inc. also rates bonds
and uses a ratings system that is substantially similar to that used by Standard
& Poor's.

COMMERCIAL PAPER RATINGS
--------------------------------------------------------------------------------
S&P Moody's Description
--------------------------------------------------------------------------------
A-1 Prime-1 This indicates that the degree of safety
(P-1) regarding timely payment is strong. Standard &
Poor's rates those issues determined to possess
extremely strong safety characteristics as A-1+.
--------------------------------------------------------------------------------
A-2 Prime-2 Capacity for timely payment on commercial paper
(P-2) is satisfactory, but the relative degree of
safety is not as high as for issues designated
A-1. Earnings trends and coverage ratios, while
sound, will be more subject to variation.
Capitalization characteristics, while still
appropriated, may be more affected by external
conditions. Ample alternate liquidity is
maintained.
--------------------------------------------------------------------------------
A-3 Prime-3 Satisfactory capacity for timely repayment.
(P-3) Issues that carry this rating are somewhat more
vulnerable to the adverse changes in
circumstances than obligations carrying the
higher designations.
--------------------------------------------------------------------------------

NOTE RATINGS
--------------------------------------------------------------------------------
S&P Moody's Description
--------------------------------------------------------------------------------
SP-1 MIG-1; VMIG-1 Notes are of the highest quality enjoying strong
protection from established cash flows of funds
for their servicing or from established and
broad-based access to the market for
refinancing, or both.
--------------------------------------------------------------------------------
SP-2 MIG-2; VMIG-2 Notes are of high quality, with margins of
protection ample, although not so large as in
the preceding group.
--------------------------------------------------------------------------------
SP-3 MIG-3; VMIG-3 Notes are of favorable quality, with all security
elements accounted for, but lacking the
undeniable strength of the preceding grades.
Market access for refinancing, in particular, is
likely to be less well established.
--------------------------------------------------------------------------------
SP-4 MIG-4; VMIG-4 Notes are of adequate quality, carrying specific
risk but having protection and not distinctly or
predominantly speculative.
--------------------------------------------------------------------------------

54 American Century Investments 1-800-345-2021

MORE INFORMATION ABOUT THE FUNDS IS CONTAINED IN THESE DOCUMENTS

ANNUAL AND SEMIANNUAL REPORTS

You can receive a free copy of the annual and semiannual reports, and ask
questions about the funds and your accounts, by contacting American Century at
the address or telephone numbers listed below.

If you own or are considering purchasing fund shares through

* an employer-sponsored retirement plan
* a bank
* a broker-dealer
* an insurance company
* another financial intermediary

you can receive the annual and semiannual reports directly from them.

You also can get information about the funds from the Securities and Exchange
Commission (SEC). The SEC charges a duplicating fee to provide copies of this
information.

In person SEC Public Reference Room
Washington, D.C.
Call 202-942-8090 for
location and hours.

On the Internet * EDGAR database at www.sec.gov

* By email request at publicinfo@sec.gov

By mail SEC Public Reference Section
Washington, D.C. 20549-0102

Investment Company Act File No. 811-0816

[american century logo and text logo (reg. tm])

AMERICAN CENTURY INVESTMENTS
P.O. Box 419200
Kansas City, Missouri 64141-6200

INVESTOR RELATIONS
1-800-345-2021 or 816-531-5575

AUTOMATED INFORMATION LINE
1-800-345-8765

WWW.AMERICANCENTURY.COM

FAX
816-340-7962

TELECOMMUNICATIONS DEVICE FOR THE DEAF
1-800-634-4113 or 816-444-3485

BUSINESS; NOT-FOR-PROFIT AND
EMPLOYER-SPONSORED RETIREMENT PLANS
1-800-345-353

SH-SAI-24845 0105

PART C. OTHER INFORMATION.

ITEM 23. Exhibits (all exhibits not filed herewith are being incorporated
herein by reference)

(a) (1) Articles of Incorporation of Twentieth Century Investors, Inc.,
dated June 26, 1990 (filed electronically as Exhibit b1a to
Post-Effective Amendment No. 73 to the Registration Statement of the
Registrant on February 29, 1996, File No. 2-14213).

(2) Articles of Amendment of Twentieth Century Investors, Inc., dated
November 19, 1990 (filed electronically as Exhibit b1b to
Post-Effective Amendment No. 73 to the Registration Statement of the
Registrant on February 29, 1996, File No. 2-14213).

(3) Articles of Merger of Twentieth Century Investors, Inc., a
Maryland corporation and Twentieth Century Investors, Inc., a Delaware
corporation, dated February 22, 1991 (filed electronically as Exhibit
b1c to Post-Effective Amendment No. 73 to the Registration Statement
of the Registrant on February 29, 1996, File No. 2-14213).

(4) Articles of Amendment of Twentieth Century Investors, Inc., dated
August 10, 1993 (filed electronically as Exhibit b1d to Post-Effective
Amendment No. 73 to the Registration Statement of the Registrant on
February 29, 1996, File No. 2-14213).

(5) Articles Supplementary of Twentieth Century Investors, Inc., dated
September 3, 1993 (filed electronically as Exhibit b1e to
Post-Effective Amendment No. 73 to the Registration Statement of the
Registrant on February 29, 1996, File No. 2-14213).

(6) Articles Supplementary of Twentieth Century Investors, Inc., dated
April 24, 1995 (filed electronically as Exhibit b1f to Post-Effective
Amendment No. 73 to the Registration Statement of the Registrant on
February 29, 1996, File No. 2-14213).

(7) Articles Supplementary of Twentieth Century Investors, Inc., dated
October 11, 1995 (filed electronically as Exhibit b1g to
Post-Effective Amendment No. 73 to the Registration Statement of the
Registrant on February 29, 1996, File No. 2-14213).

(8) Articles Supplementary of Twentieth Century Investors, Inc., dated
January 22, 1996 (filed electronically as Exhibit b1h to
Post-Effective Amendment No. 73 to the Registration Statement of the
Registrant on February 29, 1996, File No. 2-14213).

(9) Articles Supplementary of Twentieth Century Investors, Inc., dated
March 11, 1996 (filed electronically as Exhibit b1i to Post-Effective
Amendment No. 75 to the Registration Statement of the Registrant on
June 14, 1996, File No. 2-14213).

(10) Articles Supplementary of Twentieth Century Investors, Inc.,
dated September 9, 1996 (filed electronically as Exhibit a10 to
Post-Effective Amendment No. 85 to the Registration Statement of the
Registrant on September 1, 1999, File No. 2-14213).

(11) Articles of Amendment of Twentieth Century Investors, Inc., dated
December 2, 1996 (filed electronically as Exhibit b1j to
Post-Effective Amendment No. 76 to the Registration Statement of the
Registrant on February 28, 1997, File No. 2-14213).

(12) Articles Supplementary of American Century Mutual Funds, Inc.,
dated December 2, 1996 (filed electronically as Exhibit b1k to
Post-Effective Amendment No. 76 to the Registration Statement of the
Registrant on February 28, 1997, File No. 2-14213).

(13) Articles Supplementary of American Century Mutual Funds, Inc.,
dated July 28, 1997 (filed electronically as Exhibit b1l to
Post-Effective Amendment No. 78 to the Registration Statement of the
Registrant on February 26, 1998, File No. 2-14213).

(14) Articles Supplementary of American Century Mutual Funds, Inc.,
dated November 28, 1997 (filed electronically as Exhibit a13 to
Post-Effective Amendment No. 83 to the Registration Statement of the
Registrant on February 26, 1999, File No. 2-14213).

(15) Certificate of Correction to Articles Supplementary of American
Century Mutual Funds, Inc., dated December 18, 1997 (filed
electronically as Exhibit a14 to Post-Effective Amendment No. 83 to
the Registration Statement of the Registrant on February 26, 1999,
File No. 2-14213).

(16) Articles Supplementary of American Century Mutual Funds, Inc.,
dated December 18, 1997 (filed electronically as Exhibit b1m to
Post-Effective Amendment No. 78 to the Registration Statement of the
Registrant on February 26, 1998, File No. 2-14213).

(17) Articles Supplementary of American Century Mutual Funds, Inc.,
dated January 25, 1999 (filed electronically as Exhibit a16 to
Post-Effective Amendment No. 83 to the Registration Statement of the
Registrant on February 26, 1999, File No. 2-14213).

(18) Articles Supplementary of American Century Mutual Funds, Inc.,
dated February 16, 1999 (filed electronically as Exhibit a17 to
Post-Effective Amendment No. 83 to the Registration Statement of the
Registrant on February 26, 1999, File No. 2-14213).

(19) Article Supplementary of American Century Mutual Funds, Inc.,
dated August 2, 1999 (filed electronically as Exhibit a19 to
Post-Effective Amendment No. 89 to the Registration Statement of the
Registrant on December 1, 2000, File No. 2-14213).

(20) Articles Supplementary of American Century Mutual Funds, Inc.,
dated November 19, 1999 (filed electronically as Exhibit a19 to
Post-Effective Amendment No. 87 to the Registration Statement of the
Registrant on November 29, 1999, File No. 2-14213).

(21) Articles Supplementary of American Century Mutual Funds, Inc.,
dated March 5, 2001 are included herein.

(22) Certificate of Correction to Articles Supplementary, dated April
3, 2001 is included herein.

(b) (1) By-laws of Twentieth Century Investors, Inc., (filed
electronically as Exhibit b2 to Post-Effective Amendment No. 73 to the
Registration Statement of the Registrant on February 29, 1996, File
No. 2-14213).

(2) Amendment to By-laws of American Century Mutual Funds, Inc.,
(filed electronically as Exhibit b2b to Post-Effective Amendment No. 9
to the Registration Statement of American Century Capital Portfolios,
Inc. on February 17, 1998, File No. 33-64872).

(c) Registrant hereby incorporates by reference, as though set forth fully
herein, Article Fifth, Article Seventh, and Article Eighth, of
Registrant's Articles of Incorporation, appearing as Exhibit (a)(1) to
Post-Effective Amendment No. 76 on Form N-1A of the Registrant, and
Article Fifth of Registrant's Articles of Amendment, appearing as
Exhibit (a)(4) to Post-Effective Amendment No. 76 to the Registration
Statement on February 28, 1997; and Sections 3, 4, 5, 6, 7, 8, 9, 10,
11, 22, 24, 25, 30, 31, 33, 39, 45 and 46 of Registrant's By-Laws
appearing as Exhibit (b)(2) to Post-Effective Amendment No. 73 on Form
N-1A, and Sections 25, 30 & 31 of Registrant's By-Laws appearing as
Exhibit (b)(2) to Post-Effective Amendment No. 9 on Form N-1A of
American Century Capital Portfolios, Inc., File No. 33-64872.

(d) (1) Management Agreement between American Century Mutual Funds, Inc.
and American Century Investment Management, Inc., dated August 1, 1997
(filed electronically as Exhibit b5 to Post-Effective Amendment No. 78
to the Registration Statement of the Registrant on February 26, 1998,
File No. 2-14213).

(2) Addendum to the Management Agreement between American Century
Mutual Funds, Inc. and American Century Investment Management, Inc.,
dated September 15, 1997 (filed electronically as Exhibit d2 to
Post-Effective Amendment No. 89 to the Registration Statement of the
Registrant on December 1, 2000, File No. 2-14213) .

(3) Addendum to the Management Agreement between American Century
Mutual Funds, Inc. and American Century Investment Management, Inc.,
dated February 16, 1999 (filed electronically as Exhibit d2 to
Post-Effective Amendment No. 83 to the Registration Statement of the
Registrant on February 26, 1999, File No. 2-14213).

(4) Addendum to the Management Agreement between American Century
Mutual Funds, Inc. and American Century Investment Management, Inc.,
dated November 30, 1999 (filed electronically as Exhibit d3 to
Post-Effective Amendment No. 87 to the Registration Statement of the
Registrant on November 29, 1999, File No. 2-14213).

(5) Amendment No. 1 to the Management Agreement between American
Century Mutual Funds, Inc. and American Century Investment Management,
Inc., dated August 1, 2000 (filed electronically as Exhibit d5 to
Post-Effective Amendment No. 89 to the Registration Statement of the
Registrant on December 1, 2000, File No. 2-14213).

(6) Addendum to the Management Agreement between American Century
Mutual Funds, Inc. and American Century Investment Management, Inc.,
dated May 1, 2001 is included herein.

(e) (1) Distribution Agreement between American Century Mutual Funds, Inc.
and American Century Investment Services, Inc., dated March 13, 2000
(filed electronically as Exhibit e7 to Post-Effective Amendment No. 17
to the Registration Statement of American Century World Mutual Funds,
Inc. on March 30, 2000, File No 33-39242).

(2) Amendment No. 1 to the Distribution Agreement between American
Century Mutual Funds, Inc. and American Century Investment Services,
Inc., dated June 1, 2000 (filed electronically as Exhibit e9 to
Post-Effective Amendment No. 19 to the Registration Statement of
American Century World Mutual Funds, Inc. on May 24, 2000, File No.
33-39242).

(3) Amendment No. 2 to the Distribution Agreement between American
Century Mutual Funds, Inc. and American Century Investment Services,
Inc., dated November 20, 2000 (filed electronically as Exhibit e10 to
Post-Effective Amendment No. 29 to the Registration Statement of
American Century Variable Portfolios, Inc. on December 1, 2000, File
No. 33-14567).

(4) Amendment No. 3 to the Distribution Agreement between American
Century Mutual Funds, Inc. and American Century Investment Services,
Inc., dated March 1, 2001 dated March 1, 2001 (filed electronically as
Exhibit e4 to Post-Effective Amendment No. 35 to the Registration
Statement of American Century Target Maturities Trust on April 17,
2001, File No. 2-94608).

(5) Amendment No. 4 to the Distribution Agreement between American
Century Mutual Funds, Inc. and American Century Investment Services,
Inc. dated April 30, 2001 (filed electronically as Exhibit e5 to
Post-Effective Amendment No. 35 to the Registration Statement of
American Century Target Maturities Trust on April 17, 2001, File No.
2-94608).

(f) Not Applicable.

(g) (1) Master Agreement by and between Commerce Bank, N.A. and Twentieth
Century Services, Inc., dated January 22, 1997 (filed electronically
as Exhibit 8e to Post-Effective Amendment No. 76 to the Registration
Statement of the Registrant on February 28, 1997, File No. 2-14213).

(2) Global Custody Agreement between American Century Investments and
The Chase Manhattan Bank, dated August 9, 1996 (filed electronically
as Exhibit 8 to Post-Effective Amendment No. 31 to the Registration
Statement of American Century Government Income Trust on February 7,
1997, File No. 2-99222).

(3) Amendment to the Global Custody Agreement between American Century
Investments and The Chase Manhattan Bank, dated December 9, 2000
(filed electronically as Exhibit g2 to Pre-Effective Amendment No. 2
to the Registration Statement of American Century Variable Portfolios
II, Inc. on January 9, 2001, File No. 333-46922).

(h) (1) Transfer Agency Agreement by and between Twentieth Century
Investors, Inc. and Twentieth Century Services, Inc., dated as of
March 1, 1991 (filed electronically as Exhibit 9 to Post-Effective
Amendment No. 76 to the Registration Statement of the Registrant on
February 28, 1997, File No. 2-14213).

(2) Credit Agreement between American Century Funds and The Chase
Manhattan Bank, as Administrative Agent, dated as of December 19, 2000
(filed electronically as Exhibit h5 to Post-Effective Amendment No. 33
to the Registration Statement of American Century Target Maturities
Trust on January 31, 2001, File No. 2-94608).

(i) Opinion and Consent of Counsel (filed electronically as Exhibit i to
Post-Effective Amendment No. 89 to the Registration Statement of the
Registrant on December 1, 2000, File No. 2-14213).

(j) (1) Consent of Deloitte & Touche, independent auditors is included
herein.

(2) Power of Attorney, dated November 18, 2000 (filed electronically
as Exhibit j2 to Post-Effective Amendment No. 89 to the Registration
Statement of the Registrant on December 1, 2000, File No. 2-14213).

(k) Not applicable.

(l) Not applicable.

(m) (1) Master Distribution and Shareholder Services Plan of Twentieth
Century Capital Portfolios, Inc., Twentieth Century Investors, Inc.,
Twentieth Century Strategic Asset Allocations, Inc. and Twentieth
Century World Investors, Inc. (Advisor Class), dated September 3, 1996
(filed electronically as Exhibit b15a to Post-Effective Amendment No.
9 to the Registration Statement of American Century Capital
Portfolios, Inc. on February 17, 1998, File No. 33-64872).

(2) Amendment No. 1 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated June 13, 1997 (filed electronically as Exhibit
b15d to Post-Effective Amendment No. 77 to the Registration Statement
of the Registrant on July 17, 1997, File No. 2-14213).

(3) Amendment No. 2 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated September 30, 1997 (filed electronically as
Exhibit b15c to Post-Effective Amendment No. 78 to the Registration
Statement of the Registrant on February 26, 1998, File No. 2-14213).

(4) Amendment No. 3 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated June 30, 1998 (filed electronically as Exhibit
b15e to Post-Effective Amendment No. 11 to the Registration Statement
of American Century Capital Portfolios, Inc. on June 26, 1998, File
No. 33-39242).

(5) Amendment No. 4 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated November 13, 1998 (filed electronically as
Exhibit b15e to Post-Effective Amendment No. 12 to the Registration
Statement of American Century World Mutual Funds, Inc. on November 13,
1998, File No. 33-39242).

(6) Amendment No. 5 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated February 16, 1999 (filed electronically as
Exhibit m6 to Post-Effective Amendment No. 83 to the Registration
Statement of the Registrant on February 26, 1999, File No. 2-14213).

(7) Amendment No. 6 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated July 30, 1999 (filed electronically as Exhibit
m7 to Post-Effective Amendment No. 16 to the Registration Statement of
American Century Capital Portfolios, Inc. on July 29, 1999, File No.
33-64872).

(8) Amendment No. 7 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated November 19, 1999 (filed electronically as
Exhibit m8 to Post-Effective Amendment No. 87 to the Registration
Statement of the Registrant on November 29, 1999, File No. 2-14213)

(9) Amendment No. 8 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocation,. Inc., and American Century World Mutual Funds, Inc.
(Advisor Class), dated June 1, 2000 (filed electronically as Exhibit
m9 to Post-Effective Amendment No. 19 to the Registration Statement of
American Century World Mutual Funds, Inc. on May 24, 2000, File No.
33-39242).

(10) Amendment No. 9 to the Master Distribution and Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc.
(Advisor Class), dated April 30, 2001 (filed electronically as Exhibit
m10 to Post-Effective Amendment No. 24 to the Registration Statement
of American Century World Mutual Funds, Inc. on April 19, 2001, File
No. 33-39242).

(11) Master Distribution and Individual Shareholder Services Plan of
American Century Capital Portfolios, Inc., American Century Mutual
Funds, Inc., American Century Strategic Asset Allocations, Inc. and
American Century World Mutual Funds, Inc. (C Class), dated March 1,
2001 (filed electronically as Exhibit m11 to Post-Effective Amendment
No. 24 to the Registration Statement of American Century World Mutual
Funds, Inc. on April 19, 2001, File No. 33-39242).

(12) Amendment No. 1 to Master Distribution and Individual Shareholder
Services Plan of American Century Capital Portfolios, Inc., American
Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc. (C
Class), dated April 30, 2001 (filed electronically as Exhibit m12 to
Post-Effective Amendment No. 24 to the Registration Statement of
American Century World Mutual Funds, Inc. on April 19, 2001, File No.
33-39242).

(13) Shareholder Services Plan of Twentieth Century Capital
Portfolios, Inc., Twentieth Century Investors, Inc., Twentieth Century
Strategic Asset Allocations, Inc. and Twentieth Century World
Investors, Inc. (Service Class), dated September 3, 1996 (filed
electronically as Exhibit b15b to Post-Effective Amendment No. 9 to
the Registration Statement of American Century Capital Portfolios,
Inc. on February 17, 1998, File No. 33-64872).

(n) (1) Multiple Class Plan of American Century Capital Portfolios, Inc.,
American Century Mutual Funds, Inc., American Century Strategic Asset
Allocations, Inc. and American Century World Mutual Funds, Inc., dated
March 1, 2001 (filed electronically as Exhibit n1 to Post-Effective
Amendment No. 24 to the Registration Statement of American Century
World Mutual Funds, Inc. on April 19, 2001, File No. 33-39242).

(2) Amendment No. 1 to Multiple Class Plan of American Century Capital
Portfolios, Inc., American Century Mutual Funds, Inc., American
Century Strategic Asset Allocations, Inc. and American Century World
Mutual Funds, Inc., dated April 30, 2001 (filed electronically as
Exhibit n2 to Post-Effective Amendment No. 24 to the Registration
Statement of American Century World Mutual Funds, Inc. on April 19,
2001, File No. 33-39242).

(o) Not applicable.

(p) American Century Investments Code of Ethics (filed electronically as
Exhibit p to Post-Effective Amendment No. 30 to the Registration
Statement of American Century California Tax-Free and Municipal Funds
on December 29, 2000, File No. 2-82734).

ITEM 24. Persons Controlled by or Under Common Control with Registrant.

Not Applicable.

ITEM 25. Indemnification.

The Corporation is a Maryland corporation. Section 2-418 of the General
Corporation Law of Maryland allows a Maryland corporation to indemnify its
directors, officers, employees and agents to the extent provided in such
statute.

Article Eighth of the Articles of Incorporation requires the
indemnification of the corporation's directors and officers to the extent
permitted by the General Corporation Law of Maryland, the Investment
Company Act and all other applicable laws.

The registrant has purchased an insurance policy insuring its officers and
directors against certain liabilities which such officers and directors may
incur while acting in such capacities and providing reimbursement to the
registrant for sums which it may be permitted or required to pay to its
officers and directors by way of indemnification against such liabilities,
subject in either case to clauses respecting deductibility and
participation.

ITEM 26. Business and Other Connections of Investment Advisor.

None.

ITEM 27. Principal Underwriter.

I. (a) American Century Investment Services, Inc. (ACIS) acts as principal
underwriter for the following investment companies:

American Century California Tax-Free and Municipal Funds
American Century Capital Portfolios, Inc.
American Century Government Income Trust
American Century International Bond Funds
American Century Investment Trust
American Century Municipal Trust
American Century Mutual Funds, Inc.
American Century Premium Reserves, Inc.
American Century Quantitative Equity Funds
American Century Strategic Asset Allocations, Inc.
American Century Target Maturities Trust
American Century Variable Portfolios, Inc.
American Century Variable Portfolios II, Inc.
American Century World Mutual Funds, Inc.

ACIS is registered with the Securities and Exchange Commission as a
broker-dealer and is a member of the National Association of Securities Dealers.
ACIS is located at 4500 Main Street, Kansas City, Missouri 64111. ACIS is a
wholly-owned subsidiary of American Century Companies, Inc.

(b) The following is a list of the directors, executive officers and
partners of ACIS:

Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
--------------------------------------------------------------------------------
James E. Stowers, Jr. Chairman and Director Chairman and
Director

James E. Stowers III Co-Chairman and Director Director

W. Gordon Snyder President none

William M. Lyons Chief Executive Officer, President
Executive Vice President and Director

Robert T. Jackson Executive Vice President, Executive Vice
Chief Financial Officer President and
and Chief Accounting Officer Chief Financial
Officer

Kevin Cuccias Senior Vice President none

Joseph Greene Senior Vice President none

Brian Jeter Senior Vice President none

Mark Killen Senior Vice President none

Tom Kmak Senior Vice President none

David C. Tucker Senior Vice President Senior Vice President
and General Counsel

* All addresses are 4500 Main Street, Kansas City, Missouri 64111

ITEM 28. Location of Accounts and Records.

All accounts, books and other documents required to be maintained by
Section 31(a) of the 1940 Act, and the rules promulgated thereunder, are in
the possession of American Century Mutual Funds, Inc., American Century
Services Corporation and American Century Investment Management, Inc., all
located at American Century Tower, 4500 Main Street, Kansas City, Missouri
64111.

ITEM 29. Management Services

Not Applicable.

ITEM 30. Undertakings.

Not Applicable.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment No. 93 to its
Registration Statement pursuant to Rule 485(b) promulgated under the Securities
Act of 1933, as amended, and has duly caused this Post-Effective Amendment No.
93 to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Kansas City, State of Missouri on the 20th day of April, 2001.

American Century Mutual Funds, Inc.
(Registrant)

By: /*/William M. Lyons
President and Principal Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 93 has been signed below by the following persons
in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

*William M. Lyons President and April 20, 2001
William M. Lyons Principal Executive Officer

*Maryanne Roepke Senior Vice President, April 20, 2001
Maryanne Roepke Treasurer and Chief
Accounting Officer

*James E. Stowers, Jr. Chairman of the Board and April 20, 2001
James E. Stowers, Jr. Director

*James E. Stowers III Director April 20, 2001
James E. Stowers III

*Thomas A. Brown Director April 20, 2001
Thomas A. Brown

*Robert W. Doering, M.D. Director April 20, 2001
Robert W. Doering, M.D.

*Andrea C. Hall, Ph.D. Director April 20, 2001
Andrea C. Hall, Ph.D.

*D. D. (Del) Hock Director April 20, 2001
D. D. (Del) Hock

*Donald H. Pratt Director April 20, 2001
Donald H. Pratt

*Gale E. Sayers Director April 20, 2001
Gale E. Sayers

*M. Jeannine Strandjord Director April 20, 2001
M. Jeannine Strandjord

*By /s/Janet A. Nash
Janet A. Nash

Attorney-in-Fact



                                  EXHIBIT INDEX


EXHIBIT      DESCRIPTION OF DOCUMENT
NUMBER

EX-99.a1     Articles of Incorporation  of Twentieth  Century  Investors,  Inc.,
             dated  June  26,  1990  (filed  as  Exhibit  b1a to  Post-Effective
             Amendment No. 73 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a2     Articles of Amendment of Twentieth Century  Investors,  Inc., dated
             November 19, 1990 (filed as Exhibit b1b to Post-Effective Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a3     Articles of Merger of Twentieth Century Investors, Inc., a Maryland
             corporation  and  Twentieth  Century  Investors,  Inc.,  a Delaware
             corporation,  dated  February  22,  1991  (filed as Exhibit  b1c to
             Post-Effective  Amendment No. 73 to the  Registration  Statement on
             Form N-1A of the Registrant,  File No.  2-14213,  filed on February
             29, 1996, and incorporated herein by reference).

EX-99.a4     Articles of Amendment of Twentieth Century  Investors,  Inc., dated
             August 10, 1993 (filed as Exhibit b1d to  Post-Effective  Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a5     Articles Supplementary of Twentieth Century Investors,  Inc., dated
             September 3, 1993 (filed as Exhibit b1e to Post-Effective Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a6     Articles Supplementary of Twentieth Century Investors,  Inc., dated
             April 24, 1995 (filed as Exhibit  b1f to  Post-Effective  Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a7     Articles Supplementary of Twentieth Century Investors,  Inc., dated
             October 11, 1995 (filed as Exhibit b1g to Post-Effective  Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a8     Articles Supplementary of Twentieth Century Investors,  Inc., dated
             January 22, 1996 (filed as Exhibit b1h to Post-Effective  Amendment
             No.  73  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  29,  1996,  and
             incorporated herein by reference).

EX-99.a9     Articles Supplementary of Twentieth Century Investors,  Inc., dated
             March 11, 1996 (filed as Exhibit  b1i to  Post-Effective  Amendment
             No.  75  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,   File  No.  2-14213,  filed  on  June  14,  1996,  and
             incorporated herein by reference).

EX-99.a10    Articles Supplementary of Twentieth Century Investors,  Inc., dated
             September 9, 1996 (filed as Exhibit a10 to Post-Effective Amendment
             No.  85  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on  September  1, 1999,  and
             incorporated herein by reference).

EX-99.a11    Articles of Amendment of Twentieth Century  Investors,  Inc., dated
             December 2, 1996 (filed as Exhibit b1j to Post-Effective  Amendment
             No.  76  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  28,  1997,  and
             incorporated herein by reference).

EX-99.a12    Articles Supplementary of American Century Mutual Funds, Inc., dated
             December 2, 1996 (filed as Exhibit b1k to Post-Effective  Amendment
             No.  76  to  the  Registration   Statement  on  Form  N-1A  of  the
             Registrant,  File No.  2-14213,  filed on February  28,  1997,  and
             incorporated herein by reference).

EX-99.a13    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  July  28,  1997  (filed  as  Exhibit  b1l to  Post-Effective
             Amendment No. 78 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1998,  and
             incorporated herein by reference).

EX-99.a14    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  November  28, 1997  (filed as Exhibit a13 to  Post-Effective
             Amendment No. 83 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1999,  and
             incorporated herein by reference).

EX-99.a15    Certificate  of  Correction to Articles  Supplementary  of American
             Century  Mutual  Funds,  Inc.,  dated  December  18, 1997 (filed as
             Exhibit a14 to Post-Effective  Amendment No. 83 to the Registration
             Statement on Form N-1A of the Registrant,  File No. 2-14213,  filed
             on February 26, 1999, and incorporated herein by reference).

EX-99.a16    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  December  18, 1997  (filed as Exhibit b1m to  Post-Effective
             Amendment No. 78 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1998,  and
             incorporated herein by reference).

EX-99.a17    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  January 25,  1999  (filed as Exhibit  a16 to  Post-Effective
             Amendment No. 83 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1999,  and
             incorporated herein by reference).

EX-99.a18    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  February  16, 1999  (filed as Exhibit a17 to  Post-Effective
             Amendment No. 83 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1999,  and
             incorporated herein by reference).

EX-99.a19    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  August  2,  1999  (filed as  Exhibit  a19 to  Post-Effective
             Amendment No. 89 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on  December  1,  2000,  and
             incorporated herein by reference.

EX-99.a20    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated  November  19, 1999  (filed as Exhibit a19 to  Post-Effective
             Amendment No. 87 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on November  29,  1999,  and
             incorporated herein by reference).

EX-99.a21    Articles  Supplementary  of American  Century  Mutual Funds,  Inc.,
             dated March 5, 2001.

EX-99.a22    Certificate of Correction to Articles Supplementary, dated April 3,
             2001.

EX-99.b1     Bylaws of Twentieth Century Investors, Inc. (filed as Exhibit b2 to
             Post-Effective  Amendment No. 73 to the  Registration  Statement on
             Form N-1A of the Registrant,  File No.  2-14213,  filed on February
             29, 1996, and incorporated herein by reference).

EX-99.b2     Amendment to Bylaws of American  Century Mutual Funds,  Inc. (filed
             as  Exhibit  b2b  to   Post-Effective   Amendment   No.  9  to  the
             Registration  Statement  on Form N-1A of American  Century  Capital
             Portfolios,  Inc., File No.  33-64872,  filed on February 17, 1998,
             and incorporated herein by reference).

EX-99.d1     Management  Agreement  between American Century Mutual Funds,  Inc.
             and American Century  Investment  Management,  Inc., dated August 1,
             1997 (filed as Exhibit b5 to Post-Effective Amendment No. 78 to the
             Registration  Statement  on Form N-1A of the  Registrant,  File No.
             2-14213,  filed on February 26, 1998,  and  incorporated  herein by
             reference).

EX-99.d2     Addendum  to the  Management  Agreement  between  American  Century
             Mutual  Funds,  Inc. and American  Century  Investment  Management,
             Inc.,   dated   September   15,   1997  (filed  as  Exhibit  d2  to
             Post-Effective  Amendment No. 89 to the  Registration  Statement on
             Form N-1A of the Registrant, File No. 2-14213, filed on December 1,
             2000, and incorporated herein by reference).

EX-99.d3     Addendum  to the  Management  Agreement  between  American  Century
             Mutual  Funds,  Inc. and American  Century  Investment  Management,
             Inc.,   dated   February   16,   1999   (filed  as  Exhibit  d2  to
             Post-Effective  Amendment No. 83 to the  Registration  Statement on
             Form N-1A of the Registrant,  File No.  2-14213,  filed on February
             26, 1999, and incorporated herein by reference).

EX-99.d4     Addendum  to the  Management  Agreement  between  American  Century
             Mutual  Funds,  Inc. and American  Century  Investment  Management,
             Inc.,   dated   November   30,   1999   (filed  as  Exhibit  d3  to
             Post-Effective  Amendment No. 87 to the  Registration  Statement on
             Form N-1A of the Registrant,  File No.  2-14213,  filed on November
             29, 1999, and incorporated herein by reference).

EX-99.d5     Amendment  No.  1 to  the  Management  Agreement  between  American
             Century  Mutual  Funds,   Inc.  and  American  Century   Investment
             Management,  Inc.,  dated  August 1, 2000  (filed as  Exhibit d5 to
             Post-Effective  Amendment No. 89 to the  Registration  Statement on
             Form N-1A of the Registrant, File No. 2-14213, filed on December 1,
             2000, and incorporated herein by reference).

EX-99.d6     Addendum  to the  Management  Agreement  between  American  Century
             Mutual  Funds,  Inc. and American  Century  Investment  Management,
             Inc., dated May 1, 2001.

EX-99.e1     Distribution  Agreement between American Century Mutual Funds, Inc.
             and American  Century  Investment  Services,  Inc., dated March 13,
             2000 (filed as Exhibit e7 to Post-Effective Amendment No. 17 to the
             Registration  Statement  on Form  N-1A of  American  Century  World
             Mutual Funds, Inc., File No. 33-39242, filed on March 30, 2000, and
             incorporated herein by reference).

EX-99.e2     Amendment  No. 1 to the  Distribution  Agreement  between  American
             Century  Mutual  Funds,   Inc.  and  American  Century   Investment
             Services,  Inc.,  dated  June  1,  2000  (filed  as  Exhibit  e9 to
             Post-Effective  Amendment No. 19 to the  Registration  Statement on
             Form N-1A of American  Century World Mutual Funds,  Inc.,  File No.
             33-39242,  filed  on May  24,  2000,  and  incorporated  herein  by
             reference).

EX-99.e3     Amendment  No. 2 to the  Distribution  Agreement  between  American
             Century  Mutual  Funds,   Inc.  and  American  Century   Investment
             Services,  Inc.,  dated  November 20, 2000 (filed as Exhibit e10 to
             Post-Effective  Amendment No. 29 to the  Registration  Statement on
             Form N-1A of American Century Variable  Portfolios,  Inc., File No.
             33-14567,  filed on December 1, 2000,  and  incorporated  herein by
             reference).

EX-99.e4     Amendment  No. 3 to the  Distribution  Agreement  between  American
             Century  Mutual  Funds,   Inc.  and  American  Century   Investment
             Services,  Inc.,  dated  March 1,  2001  (filed  as  Exhibit  e4 to
             Post-Effective  Amendment No. 35 to the  Registration  Statement on
             Form N-1A of American  Century Target  Maturities  Trust,  File No.
             2-94608,  filed on April  17,  2001,  and  incorporated  herein  by
             reference).

EX-99.e5     Amendment  No. 4 to the  Distribution  Agreement  between  American
             Century  Mutual  Funds,   Inc.  and  American  Century   Investment
             Services,  Inc.  dated  April  30,  2001  (filed as  Exhibit  e5 to
             Post-Effective  Amendment No. 35 to the  Registration  Statement on
             Form N-1A of American  Century Target  Maturities  Trust,  File No.
             2-94608,  filed on April  17,  2001,  and  incorporated  herein  by
             reference).

EX-99.g1     Master  Agreement by and between  Commerce Bank, N.A. and Twentieth
             Century Services, Inc., dated January 22, 1997 (filed as Exhibit 8e
             to Post-Effective Amendment No. 76 to the Registration Statement on
             Form N-1A of the Registrant,  File No.  2-14213,  filed on February
             28, 1997, and incorporated herein by reference).

EX-99.g2     Global Custody Agreement  between American Century  Investments and
             The Chase Manhattan Bank,  dated August 9, 1996 (filed as Exhibit 8
             to Post-Effective Amendment No. 31 to the Registration Statement on
             Form N-1A of American  Century  Government  Income Trust,  File No.
             2-99222,  filed on February  7, 1997,  and  incorporated  herein by
             reference).

EX-99.g3     Amendment to the Global Custody  Agreement between American Century
             Investments and The Chase  Manhattan  Bank,  dated December 9, 2000
             (filed  as  Exhibit  g2 to  Pre-Effective  Amendment  No.  2 to the
             Registration  Statement on Form N-1A of American  Century  Variable
             Portfolios II, Inc., File No. 333-46922,  filed on January 9, 2001,
             and incorporated herein by reference).

EX-99.h1     Transfer  Agency  Agreement  by  and  between   Twentieth   Century
             Investors,  Inc. and Twentieth Century Services,  Inc., dated as of
             March 1, 1991 (filed as Exhibit 9 to  Post-Effective  Amendment No.
             76 to the  Registration  Statement on Form N-1A of the  Registrant,
             File No.  2-14213,  filed on February  28, 1997,  and  incorporated
             herein by reference).

EX-99.h2     Credit  Agreement  between  American  Century  Funds  and The Chase
             Manhattan Bank, as Administrative  Agent,  dated as of December 19,
             2000  (filed   electronically   as  Exhibit  h5  to  Post-Effective
             Amendment  No.  33 to the  Registration  Statement  on Form N-1A of
             American Century Target Maturities  Trust, File No. 2-94608,  filed
             on January 31, 2001, and incorporated herein by reference).

EX-99.i      Opinion   and   Consent   of   Counsel   (filed  as  Exhibit  i  to
             Post-Effective  Amendment No. 89 to the  Registration  Statement on
             Form N-1A of the Registrant, File No. 2-14213, filed on December 1,
             2000, and incorporated herein by reference).

EX-99.j1     Consent of Deloitte & Touche, LLP, independent auditors.

EX-99.j2     Power of Attorney,  dated November 18, 2000 (filed as Exhibit j2 to
             Post-Effective  Amendment No. 89 to the  Registration  Statement on
             Form N-1A of the Registrant, File No. 2-14213, filed on December 1,
             2000 and incorporated herein by reference).

EX-99.m1     Master  Distribution  and  Shareholder  Services  Plan of Twentieth
             Century Capital  Portfolios,  Inc.,  Twentieth  Century  Investors,
             Inc.,  Twentieth  Century  Strategic  Asset  Allocations,  Inc. and
             Twentieth  Century World Investors,  Inc.  (Advisor  Class),  dated
             September  3,  1996  (filed  as  Exhibit  b15a  to   Post-Effective
             Amendment  No.  9 to the  Registration  Statement  on Form  N-1A of
             American Century Capital Portfolios, Inc., File No. 33-64872, filed
             on February 17, 1998, and incorporated herein by reference).

EX-99.m2     Amendment No. 1 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  June 13,  1997  (filed  as  Exhibit  b15d to  Post-Effective
             Amendment No. 77 to the Registration  Statement on Form N-1A of the
             Registrant,   File  No.  2-14213,  filed  on  July  17,  1997,  and
             incorporated herein by reference).

EX-99.m3     Amendment No. 2 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  September 30, 1997 (filed as Exhibit b15c to  Post-Effective
             Amendment No. 78 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1998,  and
             incorporated herein by reference).

EX-99.m4     Amendment No. 3 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  June 30,  1998  (filed  as  Exhibit  b15e to  Post-Effective
             Amendment  No.  11 to the  Registration  Statement  on Form N-1A of
             American Century Capital Portfolios, Inc., File No. 33-64872, filed
             on June 26, 1998, and incorporated herein by reference).

EX-99.m5     Amendment No. 4 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  November 13, 1998 (filed as Exhibit  b15e to  Post-Effective
             Amendment  No.  12 to the  Registration  Statement  on Form N-1A of
             American Century World Mutual Funds, Inc., File No. 33-39242, filed
             on November 13, 1998, and incorporated herein by reference).

EX-99.m6     Amendment No. 5 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  February  16,  1999  (filed as Exhibit m6 to  Post-Effective
             Amendment No. 83 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on February  26,  1999,  and
             incorporated herein by reference).

EX-99.m7     Amendment No. 6 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  July  30,  1999  (filed  electronically  as  Exhibit  m7  to
             Post-Effective  Amendment  No. 16 on Form N-1A of American  Century
             Capital  Portfolios,  Inc.,  File No.  33-64872,  filed on July 29,
             1999, and incorporated herein by reference).

EX-99.m8     Amendment No. 7 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  November  19,  1999  (filed as Exhibit m8 to  Post-Effective
             Amendment No. 87 to the Registration  Statement on Form N-1A of the
             Registrant,  File No.  2-14213,  filed on November  29,  1999,  and
             incorporated herein by reference).

EX-99.m9     Amendment No. 8 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated June 1, 2000 (filed as Exhibit m9 to Post-Effective Amendment
             No.  19 to the  Registration  Statement  on Form  N-1A of  American
             Century World Mutual Funds,  Inc., File No. 33-39242,  filed on May
             24, 2000, and incorporated herein by reference).

EX-99.m10    Amendment No. 9 to the Master Distribution and Shareholder Services
             Plan of American Century Capital Portfolios, Inc., American Century
             Mutual Funds,  Inc.,  American Century Strategic Asset Allocations,
             Inc. and American Century World Mutual Funds, Inc. (Advisor Class),
             dated  April 30,  2001  (filed  as  Exhibit  m10 to  Post-Effective
             Amendment  No.  24 to the  Registration  Statement  on Form N-1A of
             American Century World Mutual Funds, Inc., File No. 33-39242, filed
             on April 19, 2001, and incorporated herein by reference).

EX-99.m11    Master  Distribution  and Individual  Shareholder  Services Plan of
             American Century Capital Portfolios,  Inc., American Century Mutual
             Funds Inc., American Century Strategic Asset Allocations, Inc., and
             American Century World Mutual Funds, Inc. (C Class), dated March 1,
             2001 (filed as Exhibit m11 to  Post-Effective  Amendment  No. 24 to
             the  Registration  Statement on Form N-1A of American Century World
             Mutual Funds, Inc., File No. 33-39242, filed on April 19, 2001, and
             incorporated herein by reference).

EX-99.m12    Amendment No. 1 to Master  Distribution and Individual  Shareholder
             Services  Plan  of  American  Century  Capital  Portfolios,   Inc.,
             American  Century  Mutual Funds Inc.,  American  Century  Strategic
             Asset  Allocations,  Inc., and American Century World Mutual Funds,
             Inc.  (C  Class),  dated  March 1, 2001  (filed as  Exhibit  m12 to
             Post-Effective  Amendment No. 24 to the  Registration  Statement on
             Form N-1A of American  Century World Mutual Funds,  Inc.,  File No.
             33-39242,  filed on April  19,  2001,  and  incorporated  herein by
             reference).

EX-99.m13    Shareholder  Services Plan of Twentieth Century Capital Portfolios,
             Inc.,   Twentieth  Century  Investors,   Inc.,   Twentieth  Century
             Strategic  Asset  Allocations,  Inc. and  Twentieth  Century  World
             Investors,  Inc. (Service Class), dated September 3, 1996 (filed as
             Exhibit b15b to Post-Effective  Amendment No. 9 to the Registration
             Statement  on Form N-1A of  American  Century  Capital  Portfolios,
             Inc.,  File  No.   33-64872,   filed  on  February  17,  1998,  and
             incorporated herein by reference).

EX-99.n1     Multiple Class Plan of American Century Capital  Portfolios,  Inc.,
             American Century Mutual Funds,  Inc.,  American  Century  Strategic
             Asset  Allocations,  Inc. and American  Century World Mutual Funds,
             Inc.,  dated March 1, 2001  (filed as Exhibit n1 to  Post-Effective
             Amendment  No.  24 to the  Registration  Statement  on Form N-1A of
             American Century World Mutual Funds, Inc., File No. 33-39242, filed
             on April 19, 2001, and incorporated herein by reference).

EX-99.n2     Amendment No. 1 to Multiple Class Plan of American  Century Capital
             Portfolios,  Inc.,  American Century Mutual Funds,  Inc.,  American
             Century  Strategic  Asset  Allocations,  Inc. and American  Century
             World Mutual Funds, Inc., dated April 30, 2001 (filed as Exhibit n2
             to Post-Effective Amendment No. 24 to the Registration Statement on
             Form N-1A of American  Century World Mutual Funds,  Inc.,  File No.
             33-39242,  filed on April  19,  2001,  and  incorporated  herein by
             reference).

EX-99.p      American Century  Investments Code of Ethics (filed as Exhibit p to
             Post-Effective  Amendment No. 30 to the  Registration  Statement on
             Form N-1A of American  Century  California  Tax-Free and  Municipal
             Funds, File No. 2-82734,  filed December 29, 2000, and incorporated

             herein by reference).

                       AMERICAN CENTURY MUTUAL FUNDS, INC.

                             ARTICLES SUPPLEMENTARY

         AMERICAN CENTURY MUTUAL FUNDS, INC., a Maryland corporation whose
principal Maryland office is located in Baltimore, Maryland (the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:

         FIRST: Pursuant to the authority expressly vested in the Board of
Directors by Article FIFTH and Article SEVENTH of the Articles of Incorporation
of the Corporation, the Board of Directors of the Corporation has (1) duly
established a new series of shares titled New Opportunities II Fund for the
Corporation's stock and has allocated Three Hundred Million (300,000,000) shares
of the Eleven Billion One Hundred Million (11,100,000,000) shares of authorized
capital stock of the Corporation, par value One Cent ($0.01) per share, for the
aggregate par value of Six Million Dollars ($3,000,000) to the new series and
(2) duly established a new class of shares titled C for five (5) of the sixteen
(16) series of the capital stock of the Corporation. As a result of the action
taken by the Board of Directors referenced in Article FIRST of these Articles
Supplementary, the sixteen (16) series (hereinafter referred to as "Series") of
stock of the Corporation and the number of shares and aggregate par value of
each is as follows:



                                                                     Aggregate
Series                                        No. of Shares          Par Value
------                                        -------------          ---------
Growth Fund                                   1,000,000,000        $10,000,000
Select Fund                                     500,000,000          5,000,000
Ultra Fund                                    4,000,000,000         40,000,000
Vista Fund                                    1,000,000,000         10,000,000
Heritage Fund                                   500,000,000          5,000,000
Giftrust Fund                                   200,000,000          2,000,000
Balanced Fund                                   200,000,000          2,000,000
Bond Fund                                       200,000,000          2,000,000
Limited-Term Bond Fund                          200,000,000          2,000,000
Intermediate-Term Bond Fund                     200,000,000          2,000,000
New Opportunities Fund                          200,000,000          2,000,000
High-Yield Fund                                 200,000,000          2,000,000
Tax-Managed Value Fund                          200,000,000          2,000,000
Veedot Fund                                     300,000,000          3,000,000
Veedot Large-Cap Fund                           300,000,000          3,000,000
New Opportunities II Fund                       300,000,000          3,000,000


The par value of each share of stock in each Series is One Cent ($0.01) per
share.

         SECOND: Pursuant to authority expressly vested in the Board of
Directors by Article FIFTH and Article SEVENTH of the Articles of Incorporation,
the Board of Directors of the Corporation (a) has duly established classes of
shares (each hereinafter referred to as a "Class") for the Series of the capital
stock of the Corporation and (b) has allocated the shares designated to the
Series in Article FIRST above among the Classes of shares. As a result of the
action taken by the Board of Directors, the Classes of shares of the sixteen
(16) Series of stock of the Corporation and the number of shares and aggregate
par value of each is as follows:



                                                                                    Aggregate
Series Name                           Class Name              No. of Shares         Par Value
-----------                           ----------              -------------         ---------
Growth Fund                           Investor                  710,000,000        $7,100,000
                                      Institutional              80,000,000           800,000
                                      Service                             0                 0
                                      Advisor                   210,000,000         2,100,000
                                      C                         100,000,000         1,000,000

Select Fund                           Investor                  360,000,000         3,600,000
                                      Institutional              40,000,000           400,000
                                      Service                             0                 0
                                      Advisor                   100,000,000         1,000,000

Ultra Fund                            Investor                3,500,000,000        35,000,000
                                      Institutional             200,000,000         2,000,000
                                      Service                             0                 0
                                      Advisor                   300,000,000         3,000,000
                                      C                         100,000,000         1,000,000

Vista Fund                            Investor                  710,000,000         7,100,000
                                      Institutional              80,000,000           800,000
                                      Service                             0                 0
                                      Advisor                   210,000,000         2,100,000
                                      C                         100,000,000         1,000,000

Heritage Fund                         Investor                  354,000,000         3,540,000
                                      Institutional              41,000,000           410,000
                                      Service                             0                 0
                                      Advisor                   105,000,000         1,050,000
                                      C                         100,000,000         1,000,000

Giftrust Fund                         Investor                  200,000,000         2,000,000

Balanced Fund                         Investor                  134,000,000         1,340,000
                                      Institutional              16,000,000           160,000
                                      Service                             0                 0
                                      Advisor                    50,000,000           500,000

Bond Fund                             Investor                150,000,000           1,500,000
                                      Service                           0                   0
                                      Advisor                  50,000,000             500,000

Limited-Term Bond Fund                Investor                150,000,000           1,500,000
                                      Service                           0                   0
                                      Advisor                  50,000,000             500,000

                                                                                    Aggregate
Series Name                           Class Name             No. of Shares          Par Value
-----------                           ----------             -------------          ---------
Intermediate-Term Bond Fund           Investor                150,000,000           1,500,000
                                      Service                           0                   0
                                      Advisor                  50,000,000             500,000

New Opportunities Fund                Investor                200,000,000           2,000,000

High Yield Fund                       Investor                100,000,000           1,000,000
                                      Advisor                 100,000,000           1,000,000
                                      C                       100,000,000           1,000,000

Tax-Managed Value Fund                Investor                134,000,000           1,340,000
                                      Institutional            16,000,000             160,000
                                      Advisor                  50,000,000             500,000

Veedot Fund                           Investor                200,000,000           2,000,000
                                      Institutional            50,000,000             500,000
                                      Advisor                  50,000,000             500,000

Veedot Large-Cap Fund                 Investor                200,000,000           2,000,000
                                      Institutional            50,000,000             500,000
                                      Advisor                  50,000,000             500,000

New Opportunities II Fund             Investor                250,000,000           2,500,000
                                      Institutional            50,000,000             500,000



         THIRD: Except as otherwise provided by the express provisions of these
Articles Supplementary, nothing herein shall limit, by inference or otherwise,
the discretionary right of the Board of Directors to serialize, classify or
reclassify and issue any unissued shares of any Series or Class or any unissued
shares that have not been allocated to a Series or Class, and to fix or alter
all terms thereof, to the full extent provided by the Articles of Incorporation
of the Corporation.

         FOURTH: A description of the series and classes of shares, including
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions for
redemption is set forth in the Articles of Incorporation of the Corporation and
is not changed by these Articles Supplementary, except with respect to the
creation and/or designation of the various Series.

         FIFTH: The Board of Directors of the Corporation duly adopted
resolutions dividing into Series the authorized capital stock of the Corporation
and allocating shares to each Series as set forth in these Articles
Supplementary.

         SIXTH: The Board of Directors of the Corporation duly adopted
resolutions establishing the Series and allocating shares to the Series, as set
forth in Article FIRST, and dividing the Series of capital stock of the
Corporation into Classes as set forth in Article SECOND.

         IN WITNESS WHEREOF, AMERICAN CENTURY MUTUAL FUNDS, INC. has caused
these Articles Supplementary to be signed and acknowledged in its name and on
its behalf by its Vice President and attested to by its Assistant Secretary on
this 5th day of March, 2001.




                                           AMERICAN CENTURY MUTUAL
                                           FUNDS, INC.
ATTEST:


/*/Janet A. Nash                           By:/*/David C. Tucker
--------------------------------------        -----------------------------------
Name:  Janet A. Nash                          Name:  David C. Tucker

Title:    Assistant Secretary                 Title:    Senior Vice President


         THE UNDERSIGNED Senior Vice President of AMERICAN CENTURY MUTUAL FUNDS,
INC., who executed on behalf of said Corporation the foregoing Articles
Supplementary to the Charter, of which this certificate is made a part, hereby
acknowledges, in the name of and on behalf of said Corporation, the foregoing
Articles Supplementary to the Charter to be the corporate act of said
Corporation, and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects under the penalties of
perjury.


Dated:  March 5, 2001                       /*/David C. Tucker
                                            --------------------------------------
                                            David C. Tucker, Senior Vice President

                       AMERICAN CENTURY MUTUAL FUNDS, INC.

                            CERTIFICATE OF CORRECTION
                            TO ARTICLES SUPPLEMENTARY

         AMERICAN CENTURY MUTUAL FUNDS, INC., a Maryland corporation whose
principal Maryland office is located in Baltimore, Maryland (the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of Maryland
that:

         1. This  Certificate  of Correction  is filed to correct  typographical
errors in the Corporation's Articles Supplementary.

         2. Said Articles  Supplementary  were filed by the Corporation on March
15, 2001.

         3. The Article requiring correction as previously filed is as follows:

         FIRST: Pursuant to the authority expressly vested in the Board of
Directors by Article FIFTH and Article SEVENTH of the Articles of Incorporation
of the Corporation, the Board of Directors of the Corporation has (1) duly
established a new series of shares titled New Opportunities II Fund for the
Corporation's stock and has allocated Three Hundred Million (300,000,000) shares
of the Eleven Billion One Hundred Million (11,100,000,000) shares of authorized
capital stock of the Corporation, par value One Cent ($0.01) per share, for the
aggregate par value of Six Million Dollars ($3,000,000) to the new series and
(2) duly established a new class of shares titled C for five (5) of the sixteen
(16) series of the capital stock of the Corporation. As a result of the action
taken by the Board of Directors referenced in Article FIRST of these Articles
Supplementary, the sixteen (16) series (hereinafter referred to as "Series") of
stock of the Corporation and the number of shares and aggregate par value of
each is as follows:



                                                                  Aggregate
Series                                     No. of Shares          Par Value
------                                     -------------          ---------
Growth Fund                                1,000,000,000        $10,000,000
Select Fund                                  500,000,000          5,000,000
Ultra Fund                                 4,000,000,000         40,000,000
Vista Fund                                 1,000,000,000         10,000,000
Heritage Fund                                500,000,000          5,000,000
Giftrust Fund                                200,000,000          2,000,000
Balanced Fund                                200,000,000          2,000,000
Bond Fund                                    200,000,000          2,000,000
Limited-Term Bond Fund                       200,000,000          2,000,000
Intermediate-Term Bond Fund                  200,000,000          2,000,000
New Opportunities Fund                       200,000,000          2,000,000
High-Yield Fund                              200,000,000          2,000,000
Tax-Managed Value Fund                       200,000,000          2,000,000
Veedot Fund                                  300,000,000          3,000,000
Veedot Large-Cap Fund                        300,000,000          3,000,000
New Opportunities II Fund                    300,000,000          3,000,000


The par value of each share of stock in each Series is One Cent ($0.01) per
share.

         4. The No. of Shares and  Aggregate Par Value for five Series listed in
the above Article are hereby corrected to read as follows:



                                                              Aggregate Par
Series Name                                 No. of Shares             Value
-----------                                 -------------             -----
Growth Fund                                 1,100,000,000       $11,000,000
Ultra Fund                                  4,100,000,000        41,000,000
Vista Fund                                  1,100,000,000        11,000,000
Heritage Fund                                 600,000,000         6,000,000
High-Yield Fund                               300,000,000         3,000,000



         IN WITNESS WHEREOF, AMERICAN CENTURY MUTUAL FUNDS, INC. has caused this
Certificate of Correction to the Articles Supplementary to be signed and
acknowledged in its name and on its behalf by its Vice President and attested to
by its Assistant Secretary on this 3rd day of April, 2001.



                                          AMERICAN CENTURY MUTUAL
ATTEST:                                   FUNDS, INC.


/*/Janet A. Nash                            By:/*/Charles A. Etherington
------------------------------------        ------------------------------------
Name:   Janet A. Nash                       Name:   Charles A. Etherington
Title:   Assistant Secretary                Title:      Vice President



         THE UNDERSIGNED Vice President of AMERICAN CENTURY MUTUAL FUNDS, INC.,
who executed on behalf of said Corporation the foregoing Certificate of
Correction to the Articles Supplementary to the Charter, of which this
certificate is made a part, hereby acknowledges, in the name of and on behalf of
said Corporation, the foregoing Certificate of Correction to be the corporate
act of said Corporation, and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects under the
penalties of perjury.





Dated:  April 3, 2001                       /*/Charles A. Etherington
                                            ------------------------------------
                                            Charles A. Etherington

                                            Vice President

ADDENDUM TO MANAGEMENT AGREEMENT

This Addendum, dated as of May 1, 2001, supplements the Management
Agreement (the "Agreement") dated as of August 1, 1997, by and between American
Century Mutual Funds, Inc. ("ACMF") and American Century Investment Management,
Inc. ("ACIM").

IN CONSIDERATION of the mutual promises and conditions herein
contained, the parties agree as follows (all capitalized terms used herein and
not otherwise defined having the meaning given them in the Agreement):

1. ACIM shall manage the following class (the "New Class") of shares to
be issued by ACMF, and for such management shall receive the Applicable Fee set
forth below:

Average Applicable
Name of Series Name of Class Net Assets Fee Rate
-------------- ------------- ---------- --------

Growth Fund C Class no breakpoints 1.00%

Ultra Fund C Class first $20 billion 1.00%
over $20 billion 0.95%

Vista Fund C Class no breakpoints 1.00%

High-Yield Fund C Class no breakpoints 0.90%

Heritage Fund C Class no breakpoints 1.00%

2. ACIM shall manage the following series (the "New Series") of shares
to be issued by ACMF, and for such management shall receive the Applicable Fee
set forth below:

Average Applicable
Name of Series Name of Class Net Assets Fee Rate
-------------- ------------- ---------- --------

New Opportunities II Fund Investor Class no breakpoints 1.50%
Institutional Class no breakpoints 1.30%

3. ACIM shall manage the New Class and the New Series in accordance
with the terms and conditions specified in the Agreement for its existing
management responsibilities.

IN WITNESS WHEREOF, the parties have caused this Addendum to the
Agreement to be executed by their respective duly authorized officers as of the
day and year first above written.

Attest: AMERICAN CENTURY MUTUAL FUNDS, INC.

/*/Charles A. Etherington /*/David C. Tucker
-------------------------- -------------------------------
Charles A. Etherington David C. Tucker
Vice President Senior Vice President

Attest: AMERICAN CENTURY INVESTMENT
MANAGEMENT, INC.

/*/Charles A. Etherington /*/David C. Tucker
-------------------------- -------------------------------
Charles A. Etherington David C. Tucker

Assistant Secretary Senior Vice President

INDEPENDENT AUDITORS' CONSENT



We consent to the incorporation by reference in this Post-Effective Amendment
No. 93 to Registration Statement No. 2-14213 of American Century Mutual Funds,
Inc. on Form N-1A of our reports dated December 8, 2000, appearing in the Annual
Reports of Growth Fund, Ultra Fund, Vista Fund, Heritage Fund, and High-Yield
Fund, five of the funds comprising American Century Mutual Funds, Inc. for the
year ended October 31, 2000, in the Statement of Additional Information, which
is part of this Registration Statement, and to the reference to us under the
caption "Financial Highlights" in the Prospectuses, which is also part of such
Registration Statement.



/*/ Deloitte & Touche LLP
Deloitte & Touche LLP

Kansas City, Missouri
April 16, 2001