UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR
                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES



Investment Company Act file number                811-21591
                                   ---------------------------------------------


               AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.
--------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)


                  4500 MAIN STREET, KANSAS CITY, MISSOURI  64111
--------------------------------------------------------------------------------
           (Address of principal executive offices)     (Zip code)


      CHARLES A. ETHERINGTON, 4500 MAIN STREET, KANSAS CITY, MISSOURI 64111
--------------------------------------------------------------------------------
                    (Name and address of agent for service)

Registrant's telephone number, including area code:      816-531-5575
                                                    ----------------------------

Date of fiscal year end:       07-31
                           -----------------------------------------------------

Date of reporting period:      07-31-2007
                           -----------------------------------------------------







ITEM 1.  REPORTS TO STOCKHOLDERS.


[front cover]

[american century investments logo and text logo]
[livestrong(TM) portfolios text logo]

LIVESTRONG(TM) PORTFOLIOS FROM
AMERICAN CENTURY INVESTMENTS

Annual Report

LIVESTRONG Income Portfolio
LIVESTRONG 2015 Portfolio
LIVESTRONG 2025 Portfolio
LIVESTRONG 2035 Portfolio
LIVESTRONG 2045 Portfolio

[photo of man]

July 31, 2007


OUR MESSAGE TO YOU

We have the privilege of providing you with the annual report for
LIVESTRONG(TM) Portfolios from American Century Investments® for the 12 months
ended July 31, 2007, to help you monitor your investment.

2007 has been an eventful year for the financial markets and for us. While the
markets experienced subprime-related turbulence, we've been working to secure
a smooth executive leadership transition. In our semiannual report, we
announced the promotion of former international equity chief investment
officer (CIO) Enrique Chang to overall CIO. One of Enrique's immediate
challenges was to hire a new international equity CIO, which he accomplished
in May when Mark On joined us from AXA Rosenberg. Enrique also hired Steve
Lurito from MUUS Asset Management LLC in July to fill our vacant U.S. growth
equity CIO position.

We also announced the promotion of Jonathan Thomas to chief executive officer,
effective March 1. In June, Jonathan hired Barry Fink, who came to us from
Morgan Stanley, as chief operating officer. This completed our leadership
transition, and helped make it possible for my son, Jim Stowers III, to step
down from the American Century Companies, Inc. (ACC) board of directors at the
end of July to focus on his new business ventures. I remain co-chair of the
ACC board with Richard Brown, who has been on the board since 1998 and also
co-chairs the Stowers Institute for Medical Research board.

Jim's recent departure, after he relinquished his executive leadership and
investment management responsibilities in early 2005, reflects his comfort
with the firm's direction and new leadership. As with Jim before them, we've
been energized by the skills and experience brought to the leadership team by
Jonathan, Enrique, Barry, Mark, and Steve. They've already had a positive
impact on the development and management of the products and services we take
pride in delivering to you.

[photo of James E. Stowers, Jr.]

/s/James E. Stowers, Jr.
James E. Stowers, Jr.
FOUNDER AND CO-CHAIRMAN OF THE BOARD
AMERICAN CENTURY COMPANIES, INC.




TABLE OF CONTENTS

LIVESTRONG(TM) PORTFOLIOS FROM AMERICAN CENTURY INVESTMENTS

     Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   2
     Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . .   7
      Market Index Total Returns . . . . . . . . . . . . . . . . . . . . .   7
      Underlying Fund Allocations. . . . . . . . . . . . . . . . . . . . .   8
      Types of Investments in LIVESTRONG Portfolios. . . . . . . . . . . .   9
     Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . .  11
     Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . .  15

FINANCIAL STATEMENTS

     Statement of Assets and Liabilities . . . . . . . . . . . . . . . . .  18
     Statement of Operations . . . . . . . . . . . . . . . . . . . . . . .  20
     Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . .  22
     Notes to Financial Statements . . . . . . . . . . . . . . . . . . . .  25
     Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . .  39
     Report of Independent Registered Public Accounting Firm . . . . . . .  59

OTHER INFORMATION

     Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . .  60
     Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  61
     Approval of Management Agreements for LIVESTRONG Portfolios . . . . .  64
     Share Class Information . . . . . . . . . . . . . . . . . . . . . . .  69
     Additional Information. . . . . . . . . . . . . . . . . . . . . . . .  70
     Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .  71

American Century Investment Services, Inc., has entered into an agreement with
the Lance Armstrong Foundation for rights to use the LIVESTRONG name.
LIVESTRONG is a trademark of the Lance Armstrong Foundation. For more
information about the foundation, visit livestrong.org.

The opinions expressed in the Portfolio Commentary reflect those of the
portfolio management team as of the date of the report, and do not necessarily
represent the opinions of American Century or any other person in the American
Century organization. Any such opinions are subject to change at any time
based upon market or other conditions and American Century disclaims any
responsibility to update such opinions. These opinions may not be relied upon
as investment advice and, because investment decisions made by American
Century funds are based on numerous factors, may not be relied upon as an
indication of trading intent on behalf of any American Century fund. Security
examples are used for representational purposes only and are not intended as
recommendations to purchase or sell securities. Performance information for
comparative indices and securities is provided to American Century by third
party vendors. To the best of American Century's knowledge, such information
is accurate at the time of printing.




PERFORMANCE
LIVESTRONG Portfolios

Total Returns as of July 31, 2007
                                                    Average Annual
                                                       Returns
                                                        Since         Inception
                                         1 year       Inception          Date

LIVESTRONG INCOME PORTFOLIO
INVESTOR CLASS                           10.51%         7.38%          8/31/04
Institutional Class                      10.73%         7.59%          8/31/04
Advisor Class                            10.13%         7.09%          8/31/04
R Class                                   9.97%         6.84%          8/31/04

LIVESTRONG 2015 PORTFOLIO
INVESTOR CLASS                           12.46%         9.59%          8/31/04
Institutional Class                      12.77%         9.82%          8/31/04
Advisor Class                            12.20%         9.32%          8/31/04
R Class                                  11.92%         9.07%          8/31/04

LIVESTRONG 2025 PORTFOLIO
INVESTOR CLASS                           14.45%         11.43%         8/31/04
Institutional Class                      14.67%         11.67%         8/31/04
Advisor Class                            14.17%         11.17%         8/31/04
R Class                                  13.90%         10.90%         8/31/04

RUSSELL 3000 INDEX(1)                    16.08%         12.80%            --

CITIGROUP US BROAD
INVESTMENT-GRADE BOND INDEX(1)(2)         5.55%         3.42%             --

LEHMAN BROTHERS
U.S. AGGREGATE INDEX(1)                   5.58%         3.37%             --

(1) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
  The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.

(2) In September of 2006, LIVESTRONG Portfolios changed their fixed income
benchmark from the Lehman Brothers U.S. Aggregate Index to the Citigroup US
Broad Investment-Grade Bond Index. The fund's investment advisor believes this
index better represents the fixed income portion of the fund's portfolio
composition.

The Russell 3000 Index represents approximately 98% of the investable U.S.
equity market and provides a broad measure of equity performance. The Lehman
Brothers U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond
Index represent the U.S. investment-grade fixed-rate bond market and provides
a broad measure of bond market performance. Performance for these indices is
provided for reference only. Neither index is intended to represent the
composition of the portfolio, which invests in a mix of equity and
fixed-income securities. (See the Schedule of Investments for each LIVESTRONG
Portfolio's asset allocations as of July 31, 2007.)

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.

Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as administrative fees) that reduce returns, while
the total returns of the indices do not.


------
2


LIVESTRONG Portfolios

Total Returns as of July 31, 2007
                                                   Average Annual
                                                       Returns
                                                        Since         Inception
                                         1 year       Inception         Date

LIVESTRONG 2035 PORTFOLIO
INVESTOR CLASS                           16.86%        13.31%          8/31/04
Institutional Class                      17.07%        13.54%          8/31/04
Advisor Class                            16.67%        13.06%          8/31/04
R Class                                  16.30%        12.77%          8/31/04

LIVESTRONG 2045 PORTFOLIO
INVESTOR CLASS                           18.23%        14.26%          8/31/04
Institutional Class                      18.44%        14.49%          8/31/04
Advisor Class                            17.96%        13.98%          8/31/04
R Class                                  17.58%        13.70%          8/31/04

RUSSELL 3000 INDEX(1)                    16.08%        12.80%            --

CITIGROUP US BROAD
INVESTMENT-GRADE BOND INDEX(1)(2)         5.55%         3.42%            --

LEHMAN BROTHERS
U.S. AGGREGATE INDEX(1)                   5.58%         3.37%            --

(1) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
  The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.

(2) In September of 2006, LIVESTRONG Portfolios changed their fixed income
benchmark from the Lehman Brothers U.S. Aggregate Index to the Citigroup US
Broad Investment-Grade Bond Index. The fund's investment advisor believes this
index better represents the fixed income portion of the fund's portfolio
composition.

The Russell 3000 Index represents approximately 98% of the investable U.S.
equity market and provides a broad measure of equity performance. The Lehman
Brothers U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond
Index represent the U.S. investment-grade fixed-rate bond market and provides
a broad measure of bond market performance. Performance for these indices is
provided for reference only. Neither index is intended to represent the
composition of the portfolio, which invests in a mix of equity and
fixed-income securities. (See the Schedule of Investments for each LIVESTRONG
Portfolio's asset allocations as of July 31, 2007.)

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.

Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as administrative fees) that reduce returns, while
the total returns of the indices do not.


------
3


LIVESTRONG Portfolios

Growth of $10,000 Over Life of LIVESTRONG Income Portfolio -- Investor Class
$10,000 investment made August 31, 2004

*From 8/31/04, the Investor Class's inception date. Not annualized.

Growth of $10,000 Over Life of LIVESTRONG 2015 Portfolio -- Investor Class
$10,000 investment made August 31, 2004

*From 8/31/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.

Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as administrative fees) that reduce returns, while
the total returns of the indices do not.


------
4


LIVESTRONG Portfolios

Growth of $10,000 Over Life of LIVESTRONG 2025 Portfolio -- Investor Class
$10,000 investment made August 31, 2004

*From 8/31/04, the Investor Class's inception date. Not annualized.

Growth of $10,000 Over Life of LIVESTRONG 2035 Portfolio -- Investor Class
$10,000 investment made August 31, 2004

*From 8/31/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.

Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as administrative fees) that reduce returns, while
the total returns of the indices do not.


------
5


LIVESTRONG Portfolios

Growth of $10,000 Over Life of LIVESTRONG 2045 Portfolio -- Investor Class
$10,000 investment made August 31, 2004

*From 8/31/04, the Investor Class's inception date. Not annualized.

One-Year Returns Over Life of Class
Periods ended July 31
                                                     2005*      2006       2007

LIVESTRONG Income Portfolio -- Investor Class        8.14%      2.99%     10.51%
LIVESTRONG 2015 Portfolio -- Investor Class          11.17%     4.46%     12.46%
LIVESTRONG 2025 Portfolio -- Investor Class          13.57%     5.48%     14.45%
LIVESTRONG 2035 Portfolio -- Investor Class          15.71%     6.45%     16.86%
LIVESTRONG 2045 Portfolio -- Investor Class          16.86%     6.76%     18.23%
Russell 3000 Index                                   16.43%     5.14%     16.08%
Citigroup US Broad Investment-Grade Bond Index       2.99%      1.47%     5.55%
Lehman Brothers U.S. Aggregate Index                 2.83%      1.46%     5.58%

*From 8/31/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of LIVESTRONG Portfolios is dependent on
the performance of their underlying American Century funds, and will assume
the risks associated with these funds. The risks will vary according to each
LIVESTRONG Portfolio's asset allocation, and a fund with a later target date
is expected to be more volatile than one with an earlier target date.
International investing involves special risks, such as political instability
and currency fluctuations. Investing in emerging markets may accentuate these
risks.

Unless otherwise indicated, performance reflects Investor Class shares;
performance for other share classes will vary due to differences in fee
structure. For information about other share classes available, please consult
the prospectus. Data assumes reinvestment of dividends and capital gains, and
none of the charts reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares. Returns for the
indices are provided for comparison. The fund's total returns include
operating expenses (such as administrative fees) that reduce returns, while
the total returns of the indices do not.


------
6


PORTFOLIO COMMENTARY
LIVESTRONG Portfolios

Portfolio Managers: Jeff Tyler and Irina Torelli

PERFORMANCE SUMMARY

All five LIVESTRONG Portfolios enjoyed strong results for the year ended July
31, 2007. Returns ranged from 10.51%* for LIVESTRONG Income Portfolio to
18.23% for LIVESTRONG 2045 Portfolio (see pages 2-6 for more detailed
performance information). LIVESTRONG Portfolios' performance reflected
double-digit gains for stocks, both in the U.S. and overseas, as well as solid
gains in the bond market.

Because of LIVESTRONG Portfolios' strategic exposure to the various asset
classes, a review of the financial markets helps explain much of their
performance.

STOCK MARKET REVIEW

U.S. stocks produced robust returns during the past year despite an economic
slowdown brought on by a sharp decline in the housing market. Corporate
earnings growth decelerated -- ending a streak of double-digit quarterly
earnings growth for the S&P 500 Index that began in 2002 -- but continued to
outshine expectations. In addition, heavy merger activity provided support for
stocks thanks to a deluge of leveraged buy-outs from private equity firms.

Although the broad stock indexes returned more than 15% for the one-year
period, the market hit a couple of speed bumps over the last six months.
Stocks stumbled in late February, mirroring a drop in the Chinese stock
market, but rebounded quickly in early March. The market grew choppy in the
last two months and ended the period with a sharp decline as higher energy
prices and deteriorating credit conditions -- sparked by problems in the
subprime lending industry -- weighed on investor confidence.

Mid-cap stocks led the market's advance, followed by large-cap shares, while
small-cap issues lagged. After trailing value stocks for six consecutive
years, growth-oriented issues outperformed by a wide margin over the past 12
months.

Market Index Total Returns
For the year ended July 31, 2007

U.S. STOCKS
Russell 1000 (Large-Cap)(1)              16.45%
Russell Midcap(1)                        18.93%
Russell 2000 (Small-Cap)(1)              12.12%

INTERNATIONAL STOCKS
MSCI EAFE                                23.91%
MSCI EM                                  50.94%

U.S. FIXED INCOME
Lehman Brothers U.S. Aggregate(1)         5.58%
10-year U.S. Treasury Note                5.87%
90-Day U.S. Treasury Bill(1)              5.21%

INTERNATIONAL BONDS
Citigroup Non-U.S. World
 Government Bond                          4.86%

(1) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
  The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.
*All fund returns referenced in this commentary are for Investor Class shares.


------
7


LIVESTRONG Portfolios

International stocks outperformed the domestic market as improving global
economic conditions and a declining U.S. dollar boosted foreign markets. The
top performers were emerging markets, with Latin America generating the
largest gains. Among developed markets, European bourses posted the best
returns, while Japanese shares lagged as a burgeoning economic recovery in the
country appeared to stall.

BOND MARKET REVIEW

The U.S. bond market delivered solid gains during the period as interest rates
declined overall. The Federal Reserve (the Fed) held short-term interest rates
steady throughout the one-year period as economic activity decelerated while
inflation remained above the Fed's comfort level, largely because of
stubbornly high energy prices.

Although bond yields fluctuated in response to economic data, energy price
volatility, and subprime lending woes, yields were little changed overall
between July 2006 and June 2007. In July 2007, however, a "flight to quality"
resulting from a worsening credit environment led to a sizable decline in
yields, producing higher bond prices.

Underlying Fund Allocations -- Institutional Class as a % of net assets as of
July 31, 2007
                    LIVESTRONG   LIVESTRONG  LIVESTRONG   LIVESTRONG   LIVESTRONG
                      Income        2015        2025         2035         2045
                     Portfolio   Portfolio    Portfolio    Portfolio    Portfolio

NT Equity Growth
Fund                   12.5%       12.1%        12.2%        13.7%        14.8%

NT Growth Fund         6.4%         8.2%        11.7%        14.0%        15.1%

NT Large Company
Value Fund             10.5%       10.8%        11.8%        13.6%        14.9%

NT Mid Cap Value
Fund                   3.8%         5.0%        5.0%         6.7%         7.2%

NT Small Company
Fund                   1.9%         1.9%        3.6%         3.8%         4.5%

NT Vista Fund          2.5%         4.0%        5.0%         7.1%         7.6%

Real Estate Fund       0.9%         1.2%        1.7%         2.2%         2.7%

NT Emerging
Markets Fund            --          1.8%        3.1%         4.9%         6.5%

NT International
Growth Fund            4.9%         6.4%        9.0%         10.1%        9.8%

High-Yield Fund        3.8%         3.5%        3.0%         2.2%         1.6%

Inflation-Adjusted
Bond Fund              7.9%         7.4%        6.2%         4.5%         3.4%

NT Diversified
Bond Fund              27.3%       25.8%        21.3%        16.1%        11.8%

International
Bond Fund              7.3%         5.6%        1.1%          --           --

Premium Money
Market Fund*           10.1%        6.1%        5.1%         1.0%          --

Other Assets and
Liabilities            0.2%         0.2%        0.2%         0.1%         0.1%

*Investor Class


------
8


LIVESTRONG Portfolios

High-yield corporate bonds were the best performers for the one-year period,
though they underperformed in the flight to quality late in the period. In
contrast, Treasury bonds benefited the most from the flight to quality, and as
a result they generated the best returns among investment-grade bond sectors.

Foreign bonds also produced positive results as the U.S. dollar fell against
most major currencies (with the notable exception of the Japanese yen).
Overseas bond returns were positive despite stronger economic growth that led
central banks in many countries to raise interest rates.

Types of Investments in LIVESTRONG Portfolios as a % of net assets as of July 31,
2007
                    LIVESTRONG   LIVESTRONG  LIVESTRONG   LIVESTRONG   LIVESTRONG
                      Income        2015        2025         2035         2045
                     Portfolio   Portfolio    Portfolio    Portfolio    Portfolio

EQUITY

 Large Cap
 Blend                 12.5%       12.1%        12.2%        13.7%        14.8%

 Large Cap
 Value                 10.5%       10.8%        11.8%        13.6%        14.9%

 Large Cap
 Growth                6.4%         8.2%        11.7%        14.0%        15.1%

 Large Cap
 Blend --
 International         4.9%         6.4%        9.0%         10.1%        9.8%

 Large Cap
 Growth --
 International          --          1.8%        3.1%         4.9%         6.5%

 Mid Cap
 Growth                2.5%         4.0%        5.0%         7.1%         7.6%

 Mid Cap Value         3.8%         5.0%        5.0%         6.7%         7.2%

 Small Cap
 Value                 1.9%         1.9%        3.6%         3.8%         4.5%
 Real Estate           0.9%         1.2%        1.7%         2.2%         2.7%

TOTAL EQUITY           43.4%       51.4%        63.1%        76.1%        83.1%

FIXED INCOME

 Investment
 Grade                 35.2%       33.2%        27.5%        20.6%        15.2%

 High-Yield            3.8%         3.5%        3.0%         2.2%         1.6%

 International         7.3%         5.6%        1.1%          --           --

TOTAL FIXED INCOME     46.3%       42.3%        31.6%        22.8%        16.8%

MONEY MARKET           10.1%        6.1%        5.1%         1.0%          --

OTHER ASSETS AND
LIABILITIES            0.2%         0.2%        0.2%         0.1%         0.1%


------
9


LIVESTRONG Portfolios

PORTFOLIO PERFORMANCE

Each LIVESTRONG Portfolio is a "fund of funds" that invests in other American
Century mutual funds to achieve its investment objective and target asset
allocation. (See page 8 for the specific underlying fund allocations for each
LIVESTRONG Portfolio.)

Most of the equity funds in LIVESTRONG Portfolios registered double-digit
gains for the one-year period. NT Emerging Markets was the top performer,
advancing sharply thanks to surging markets in developing countries. NT
International Growth also produced a healthy gain for the period. Among
domestic holdings, NT Vista was the best performer, reflecting the
outperformance of mid-cap stocks. The LIVESTRONG Portfolios' large-cap growth
component, which includes NT Growth and NT Equity Growth, also fared well. The
weakest performer was Real Estate, which posted a fractionally positive return
overall in the wake of a double-digit decline in the last few months of the
period. Real Estate stocks fell as the worsening environment for debt
financing reduced the likelihood of private equity buyouts in the sector.

The performance of LIVESTRONG Portfolios' fixed-income funds were in line with
the broad returns of the bond market. International Bond was the best
performer, followed by NT Diversified Bond and High Yield. Inflation-Adjusted
Bond posted the lowest returns among the LIVESTRONG Portfolios' fixed-income
holdings, but it outperformed over the last three months of the period as
energy prices rose. Premium Money Market provided principal protection and a
return that outpaced the three-month U.S. Treasury bill.

STARTING POINT FOR NEXT REPORTING PERIOD

Although corporate earnings have held up better than expected, the dollar's
decline has played a key role -- 49% of the sales for the companies in the S&P
500 come from foreign operations, and a weaker dollar makes those overseas
revenues worth more at home. Going forward, however, we expect the economic
slowdown of the past year to take its toll on corporate profits as consumer
spending succumbs to higher gas prices and declining mortgage equity
withdrawals.

Market volatility has increased considerably in recent months, and we expect
that to continue going forward. This environment reinforces the need for
diversified investments like LIVESTRONG Portfolios.


------
10


SHAREHOLDER FEE EXAMPLES (UNAUDITED)

Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds. As a shareholder in the underlying American Century funds, your fund
will indirectly bear its pro rata share of the expenses incurred by the
underlying funds. These expenses are not included in the fund's annualized
expense ratio or the expenses paid during the period. These expenses are,
however, included in the effective expenses paid during the period.

The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from February 1, 2007 to July 31, 2007.

ACTUAL EXPENSES

The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.

If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.


------
11


Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.

                                                                   Effective
                                           Expenses                 Expenses
                                          Paid                     Paid
                  Beginning     Ending      During                   During     Effective
                   Account     Account    Period(1)   Annualized   Period(2)   Annualized
                    Value       Value      2/1/07 -     Expense     2/1/07 -     Expense
                    2/1/07     7/31/07     7/31/07     Ratio(1)     7/31/07     Ratio(2)

LIVESTRONG Income Portfolio

ACTUAL
Investor Class      $1,000    $1,026.60     $1.00        0.20%       $3.77        0.75%
Institutional
Class               $1,000    $1,027.70     $0.00      0.00%(3)      $2.77        0.55%
Advisor Class       $1,000    $1,025.40     $2.26        0.45%       $5.02        1.00%
R Class             $1,000    $1,024.10     $3.51        0.70%       $6.27        1.25%

HYPOTHETICAL
Investor Class      $1,000    $1,023.80     $1.00        0.20%       $3.76        0.75%
Institutional
Class               $1,000    $1,024.79     $0.00      0.00%(3)      $2.76        0.55%
Advisor Class       $1,000    $1,022.56     $2.26        0.45%       $5.01        1.00%
R Class             $1,000    $1,021.32     $3.51        0.70%       $6.26        1.25%

(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 181, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period. The fees and expenses of
the underlying American Century funds in which the fund invests are not
included in the class's annualized expense ratio.

(2) Effective expenses reflect the sum of expenses borne directly by the class
plus the fund's pro rata share of the weighted average expense ratio of the
underlying funds in which it invests. The effective annualized expense ratio
combines the class's annualized expense ratio and the annualized weighted
average expense ratio of the underlying funds. The annualized weighted average
expense ratio of the underlying funds for the one-half year period reflects
the actual expense ratio of each underlying fund from its most recent
shareholder report, annualized and weighted for the fund's relative average
investment therein during the period.

(3) Other expenses, which include the fees and expenses of the fund's
independent directors and its legal counsel, as well as interest, did not
exceed 0.005%.


------
12


                                                                   Effective
                                           Expenses                 Expenses
                                          Paid                     Paid
                  Beginning     Ending      During                   During     Effective
                   Account     Account    Period(1)   Annualized   Period(2)   Annualized
                    Value       Value      2/1/07 -     Expense     2/1/07 -     Expense
                    2/1/07     7/31/07     7/31/07     Ratio(1)     7/31/07     Ratio(2)

LIVESTRONG 2015 Portfolio

ACTUAL
Investor Class      $1,000    $1,033.00     $1.01        0.20%       $4.03        0.80%
Institutional
Class               $1,000    $1,034.70     $0.00      0.00%(3)      $3.03        0.60%
Advisor Class       $1,000    $1,032.10     $2.27        0.45%       $5.29        1.05%
R Class             $1,000    $1,031.30     $3.53        0.70%       $6.55        1.30%

HYPOTHETICAL
Investor Class      $1,000    $1,023.80     $1.00        0.20%       $4.01        0.80%
Institutional
Class               $1,000    $1,024.79     $0.00      0.00%(3)      $3.01        0.60%
Advisor Class       $1,000    $1,022.56     $2.26        0.45%       $5.26        1.05%
R Class             $1,000    $1,021.32     $3.51        0.70%       $6.51        1.30%

LIVESTRONG 2025 Portfolio

ACTUAL
Investor Class      $1,000    $1,036.90     $1.01        0.20%       $4.29        0.85%
Institutional
Class               $1,000    $1,038.60     $0.00      0.00%(3)      $3.29        0.65%
Advisor Class       $1,000    $1,036.10     $2.27        0.45%       $5.55        1.10%
R Class             $1,000    $1,034.40     $3.53        0.70%       $6.81        1.35%

HYPOTHETICAL
Investor Class      $1,000    $1,023.80     $1.00        0.20%       $4.26        0.85%
Institutional
Class               $1,000    $1,024.79     $0.00      0.00%(3)      $3.26        0.65%
Advisor Class       $1,000    $1,022.56     $2.26        0.45%       $5.51        1.10%
R Class             $1,000    $1,021.32     $3.51        0.70%       $6.76        1.35%

(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 181, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period. The fees and expenses of
the underlying American Century funds in which the fund invests are not
included in the class's annualized expense ratio.

(2) Effective expenses reflect the sum of expenses borne directly by the class
plus the fund's pro rata share of the weighted average expense ratio of the
underlying funds in which it invests. The effective annualized expense ratio
combines the class's annualized expense ratio and the annualized weighted
average expense ratio of the underlying funds. The annualized weighted average
expense ratio of the underlying funds for the one-half year period reflects
the actual expense ratio of each underlying fund from its most recent
shareholder report, annualized and weighted for the fund's relative average
investment therein during the period.

(3) Other expenses, which include the fees and expenses of the fund's
independent directors and its legal counsel, as well as interest, did not
exceed 0.005%.


------
13


                                                                   Effective
                                           Expenses                 Expenses
                                          Paid                     Paid
                  Beginning     Ending      During                   During     Effective
                   Account     Account    Period(1)   Annualized   Period(2)   Annualized
                    Value       Value      2/1/07 -     Expense     2/1/07 -     Expense
                    2/1/07     7/31/07     7/31/07     Ratio(1)     7/31/07     Ratio(2)

LIVESTRONG 2035 Portfolio

ACTUAL
Investor Class      $1,000    $1,043.00     $1.01        0.20%       $4.61        0.91%
Institutional
Class               $1,000    $1,043.80     $0.00      0.00%(3)      $3.60        0.71%
Advisor Class       $1,000    $1,042.20     $2.28        0.45%       $5.87        1.16%
R Class             $1,000    $1,040.60     $3.54        0.70%       $7.13        1.41%

HYPOTHETICAL
Investor Class      $1,000    $1,023.80     $1.00        0.20%       $4.56        0.91%
Institutional
Class               $1,000    $1,024.79     $0.00      0.00%(3)      $3.56        0.71%
Advisor Class       $1,000    $1,022.56     $2.26        0.45%       $5.81        1.16%
R Class             $1,000    $1,021.32     $3.51        0.70%       $7.05        1.41%

LIVESTRONG 2045 Portfolio

ACTUAL
Investor Class      $1,000    $1,046.90     $1.02        0.20%       $4.72        0.93%
Institutional
Class               $1,000    $1,048.40     $0.00      0.00%(3)      $3.71        0.73%
Advisor Class       $1,000    $1,045.30     $2.28        0.45%       $5.98        1.18%
R Class             $1,000    $1,044.60     $3.55        0.70%       $7.25        1.43%

HYPOTHETICAL
Investor Class      $1,000    $1,023.80     $1.00        0.20%       $4.66        0.93%
Institutional
Class               $1,000    $1,024.79     $0.00      0.00%(3)      $3.66        0.73%
Advisor Class       $1,000    $1,022.56     $2.26        0.45%       $5.91        1.18%
R Class             $1,000    $1,021.32     $3.51        0.70%       $7.15        1.43%

(1) Expenses are equal to the class's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 181, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period. The fees and expenses of
the underlying American Century funds in which the fund invests are not
included in the class's annualized expense ratio.

(2) Effective expenses reflect the sum of expenses borne directly by the class
plus the fund's pro rata share of the weighted average expense ratio of the
underlying funds in which it invests. The effective annualized expense ratio
combines the class's annualized expense ratio and the annualized weighted
average expense ratio of the underlying funds. The annualized weighted average
expense ratio of the underlying funds for the one-half year period reflects
the actual expense ratio of each underlying fund from its most recent
shareholder report, annualized and weighted for the fund's relative average
investment therein during the period.

(3) Other expenses, which include the fees and expenses of the fund's
independent directors and its legal counsel, as well as interest, did not
exceed 0.005%.


------
14


SCHEDULE OF INVESTMENTS
LIVESTRONG Portfolios

JULY 31, 2007

Shares                                                                       Value

LIVESTRONG Income Portfolio

Mutual Funds(1) -- 99.8%

DOMESTIC FIXED INCOME FUNDS -- 39.0%
       369,407  High-Yield Fund Institutional Class                    $ 2,268,159
       450,390  Inflation-Adjusted Bond Fund Institutional Class         4,778,638
     1,647,816  NT Diversified Bond Fund Institutional Class            16,560,557
                                                                      ------------
                                                                        23,607,354
                                                                      ------------
DOMESTIC EQUITY FUNDS -- 38.5%
       682,400  NT Equity Growth Fund Institutional Class                7,595,113
       339,967  NT Growth Fund Institutional Class                       3,892,622
       568,193  NT Large Company Value Fund Institutional Class          6,375,126
       204,460  NT Mid Cap Value Fund Institutional Class                2,287,907
       113,463  NT Small Company Fund Institutional Class                1,133,495
       128,983  NT Vista Fund Institutional Class(2)                     1,502,652
        20,947  Real Estate Fund Institutional Class                       548,392
                                                                      ------------
                                                                        23,335,307
                                                                      ------------
MONEY MARKET FUNDS -- 10.1%
     6,151,530  Premium Money Market Fund Investor Class                 6,151,530
                                                                      ------------
INTERNATIONAL FIXED INCOME FUNDS -- 7.3%
       313,676  International Bond Fund Institutional Class              4,416,558
                                                                      ------------
INTERNATIONAL EQUITY FUNDS -- 4.9%
       255,233  NT International Growth Fund Institutional Class         2,993,883
                                                                      ------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Cost $57,934,272)                                                      60,504,632
                                                                      ------------
OTHER ASSETS AND LIABILITIES -- 0.2%                                       130,746
                                                                      ------------
TOTAL NET ASSETS -- 100.0%                                             $60,635,378
                                                                      ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

(2) Non-income producing.

Shares                                                                       Value

LIVESTRONG 2015 Portfolio

Mutual Funds(1) -- 99.8%

DOMESTIC EQUITY FUNDS -- 43.2%
    1,931,325  NT Equity Growth Fund Institutional Class              $ 21,495,646
    1,270,356  NT Growth Fund Institutional Class                       14,545,576
    1,710,273  NT Large Company Value Fund Institutional Class          19,189,263
      789,561  NT Mid Cap Value Fund Institutional Class                 8,835,188
      333,840  NT Small Company Fund Institutional Class                 3,335,062
      607,646  NT Vista Fund Institutional Class(2)                      7,079,076
       86,244  Real Estate Fund Institutional Class                      2,257,868
                                                                      ------------
                                                                        76,737,679
                                                                      ------------
DOMESTIC FIXED INCOME FUNDS -- 36.7%
    1,015,434  High-Yield Fund Institutional Class                       6,234,765
    1,247,402  Inflation-Adjusted Bond Fund Institutional Class         13,234,935
    4,558,835  NT Diversified Bond Fund Institutional Class             45,816,282
                                                                      ------------
                                                                        65,285,982
                                                                      ------------
INTERNATIONAL EQUITY FUNDS -- 8.2%
      221,121  NT Emerging Markets Fund Institutional Class              3,184,142
      976,930  NT International Growth Fund Institutional Class         11,459,389
                                                                      ------------
                                                                        14,643,531
                                                                      ------------
MONEY MARKET FUNDS -- 6.1%
   10,863,093  Premium Money Market Fund Investor Class                 10,863,093
                                                                      ------------
INTERNATIONAL FIXED INCOME FUNDS -- 5.6%
      712,586  International Bond Fund Institutional Class              10,033,211
                                                                      ------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Cost $167,640,078)                                                    177,563,496
                                                                      ------------
OTHER ASSETS AND LIABILITIES -- 0.2%                                       353,685
                                                                      ------------
TOTAL NET ASSETS -- 100.0%                                            $177,917,181
                                                                      ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.
(2) Non-income producing.

See Notes to Financial Statements.


------
15


LIVESTRONG PORTFOLIOS

Shares                                                                       Value

LIVESTRONG 2025 Portfolio

Mutual Funds(1) -- 99.8%

DOMESTIC EQUITY FUNDS -- 51.0%
    2,597,176  NT Equity Growth Fund Institutional Class              $ 28,906,569
    2,433,050  NT Growth Fund Institutional Class                       27,858,423
    2,504,489  NT Large Company Value Fund Institutional Class          28,100,367
    1,061,868  NT Mid Cap Value Fund Institutional Class                11,882,303
      864,264  NT Small Company Fund Institutional Class                 8,633,997
    1,021,337  NT Vista Fund Institutional Class(2)                     11,898,576
      157,448  Real Estate Fund Institutional Class                      4,121,989
                                                                      ------------
                                                                       121,402,224
                                                                      ------------
DOMESTIC FIXED INCOME FUNDS -- 30.5%
    1,154,173  High-Yield Fund Institutional Class                       7,086,622
    1,384,426  Inflation-Adjusted Bond Fund Institutional Class         14,688,760
    5,052,386  NT Diversified Bond Fund Institutional Class             50,776,493
                                                                      ------------
                                                                        72,551,875
                                                                      ------------
INTERNATIONAL EQUITY FUNDS -- 12.1%
      509,743  NT Emerging Markets Fund Institutional Class              7,340,299
    1,819,108  NT International Growth Fund Institutional Class         21,338,137
                                                                      ------------
                                                                        28,678,436
                                                                      ------------
MONEY MARKET FUNDS -- 5.1%
   12,175,305  Premium Money Market Fund Investor Class                 12,175,305
                                                                      ------------
INTERNATIONAL FIXED INCOME FUNDS -- 1.1%
      177,465  International Bond Fund Institutional Class               2,498,707
                                                                      ------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Cost $220,639,519)                                                    237,306,547
                                                                      ------------
OTHER ASSETS AND LIABILITIES -- 0.2%                                       381,947
                                                                      ------------
TOTAL NET ASSETS -- 100.0%                                            $237,688,494
                                                                      ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

(2) Non-income producing.

Shares                                                                       Value

LIVESTRONG 2035 Portfolio

Mutual Funds(1) -- 99.9%

DOMESTIC EQUITY FUNDS -- 61.1%
   1,575,446  NT Equity Growth Fund Institutional Class               $ 17,534,714
   1,569,905  NT Growth Fund Institutional Class                        17,975,412
   1,550,388  NT Large Company Value Fund Institutional Class           17,395,353
     766,999  NT Mid Cap Value Fund Institutional Class                  8,582,719
     486,423  NT Small Company Fund Institutional Class                  4,859,366
     774,181  NT Vista Fund Institutional Class(2)                       9,019,209
     107,785  Real Estate Fund Institutional Class                       2,821,811
                                                                      ------------
                                                                        78,188,584
                                                                      ------------
DOMESTIC FIXED INCOME FUNDS -- 22.8%
     448,136  High-Yield Fund Institutional Class                        2,751,555
     546,547  Inflation-Adjusted Bond Fund Institutional Class           5,798,864
   2,045,986  NT Diversified Bond Fund Institutional Class              20,562,163
                                                                      ------------
                                                                        29,112,582
                                                                      ------------
INTERNATIONAL EQUITY FUNDS -- 15.0%
     436,927  NT Emerging Markets Fund Institutional Class               6,291,749
   1,094,619  NT International Growth Fund Institutional Class          12,839,881
                                                                      ------------
                                                                        19,131,630
                                                                      ------------
MONEY MARKET FUNDS -- 1.0%
   1,319,087  Premium Money Market Fund Investor Class                   1,319,087
                                                                      ------------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Cost $117,564,901)                                                    127,751,883
                                                                      ------------
OTHER ASSETS AND LIABILITIES -- 0.1%                                       134,887
                                                                      ------------
TOTAL NET ASSETS -- 100.0%                                            $127,886,770
                                                                      ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

(2) Non-income producing.

See Notes to Financial Statements.


------
16


LIVESTRONG PORTFOLIOS

Shares                                                                       Value

LIVESTRONG 2045 Portfolio

Mutual Funds(1) -- 99.9%

DOMESTIC EQUITY FUNDS -- 66.8%
   1,146,959  NT Equity Growth Fund Institutional Class                $12,765,645
   1,142,994  NT Growth Fund Institutional Class                        13,087,281
   1,147,523  NT Large Company Value Fund Institutional Class           12,875,208
     558,336  NT Mid Cap Value Fund Institutional Class                  6,247,780
     392,443  NT Small Company Fund Institutional Class                  3,920,506
     563,617  NT Vista Fund Institutional Class(2)                       6,566,138
      88,467  Real Estate Fund Institutional Class                       2,316,066
                                                                      ------------
                                                                        57,778,624
                                                                      ------------
DOMESTIC FIXED INCOME FUNDS -- 16.8%
     226,553  High-Yield Fund Institutional Class                        1,391,035
     276,330  Inflation-Adjusted Bond Fund Institutional Class           2,931,861
   1,019,975  NT Diversified Bond Fund Institutional Class              10,250,749
                                                                      ------------
                                                                        14,573,645
                                                                      ------------
INTERNATIONAL EQUITY FUNDS -- 16.3%
     390,776  NT Emerging Markets Fund Institutional Class               5,627,174
     725,229  NT International Growth Fund Institutional Class           8,506,937
                                                                      ------------
                                                                        14,134,111
                                                                      ------------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Cost $78,976,138)                                                      86,486,380
                                                                      ------------
OTHER ASSETS AND LIABILITIES -- 0.1%                                        69,412
                                                                      ------------
TOTAL NET ASSETS -- 100.0%                                             $86,555,792
                                                                      ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

(2) Non-income producing.

See Notes to Financial Statements.


------
17


STATEMENT OF ASSETS AND LIABILITIES

JULY 31, 2007
                                        LIVESTRONG     LIVESTRONG
                                            Income           2015      LIVESTRONG
                                         Portfolio      Portfolio  2025 Portfolio
ASSETS

Investment securities in
affiliates, at value (cost of
$57,934,272, $167,640,078 and
$220,639,519, respectively)            $60,504,632   $177,563,496    $237,306,547

Cash                                        11,019         34,714          41,238

Receivable for capital
shares sold                                     --         11,157             888

Distributions receivable
from affiliates                            130,356        341,371         377,621
                                      ------------   ------------    ------------
                                        60,646,007    177,950,738     237,726,294
                                      ------------   ------------    ------------
LIABILITIES

Accrued administrative fees                  8,869         28,058          33,512

Distribution and service
fees payable                                 1,760          5,499           4,288
                                      ------------   ------------    ------------
                                            10,629         33,557          37,800
                                      ------------   ------------    ------------

NET ASSETS                             $60,635,378   $177,917,181    $237,688,494
                                      ============   ============    ============
NET ASSETS CONSIST OF:

Capital (par value and
paid-in surplus)                       $58,029,956   $165,958,224    $218,326,752

Undistributed net
investment income                          175,113      1,843,861       2,164,319

Accumulated undistributed net
realized gain (loss) on
investment transactions                  (140,051)        191,678         530,395

Net unrealized appreciation
on investments                           2,570,360      9,923,418      16,667,028
                                      ------------   ------------    ------------
                                       $60,635,378   $177,917,181    $237,688,494
                                      ============   ============    ============

INVESTOR CLASS, $0.01 PAR VALUE
Net assets                             $44,108,615   $139,725,011    $174,983,751
Shares outstanding                       3,989,899     11,733,254      14,164,363
Net asset value per share                   $11.06         $11.91          $12.35

INSTITUTIONAL CLASS, $0.01 PAR VALUE
Net assets                              $8,284,994    $15,735,527     $44,250,466
Shares outstanding                         749,302      1,319,515       3,577,301
Net asset value per share                   $11.06         $11.93          $12.37

ADVISOR CLASS, $0.01 PAR VALUE
Net assets                              $8,129,494    $19,269,895     $17,076,431
Shares outstanding                         735,649      1,620,750       1,384,040
Net asset value per share                   $11.05         $11.89          $12.34

R CLASS, $0.01 PAR VALUE
Net assets                                $112,275     $3,186,748      $1,377,846
Shares outstanding                          10,163        268,348         111,849
Net asset value per share                   $11.05         $11.88          $12.32

See Notes to Financial Statements.


------
18


JULY 31, 2007
                                                        LIVESTRONG
                                                              2035      LIVESTRONG
                                                         Portfolio  2045 Portfolio
ASSETS

Investment securities in affiliates,
at value (cost of $117,564,901 and $78,976,138,
respectively)                                         $127,751,883     $86,486,380

Cash                                                        20,130          12,863

Receivable for capital shares sold                             597           3,296

Distributions receivable from affiliates                   135,700          65,666
                                                      ------------    ------------
                                                       127,908,310      86,568,205
                                                      ------------    ------------
LIABILITIES

Accrued administrative fees                                 18,240          10,107

Distribution and service fees payable                        3,300           2,306
                                                      ------------    ------------
                                                            21,540          12,413
                                                      ------------    ------------

NET ASSETS                                            $127,886,770     $86,555,792
                                                      ============    ============
NET ASSETS CONSIST OF:

Capital (par value and paid-in surplus)               $116,560,671     $78,397,308

Undistributed net investment income                        857,316         485,931

Undistributed net realized gain
on investment transactions                                 281,801         162,311

Net unrealized appreciation on investments              10,186,982       7,510,242
                                                      ------------    ------------
                                                      $127,886,770     $86,555,792
                                                      ============    ============

INVESTOR CLASS, $0.01 PAR VALUE
Net assets                                             $91,220,387     $48,229,392
Shares outstanding                                       6,966,465       3,598,909
Net asset value per share                                   $13.09          $13.40

INSTITUTIONAL CLASS, $0.01 PAR VALUE
Net assets                                             $22,313,884     $28,482,515
Shares outstanding                                       1,701,454       2,122,584
Net asset value per share                                   $13.11          $13.42

ADVISOR CLASS, $0.01 PAR VALUE
Net assets                                             $13,377,786      $9,091,029
Shares outstanding                                       1,022,889         679,490
Net asset value per share                                   $13.08          $13.38

R CLASS, $0.01 PAR VALUE
Net assets                                                $974,713        $752,856
Shares outstanding                                          74,627          56,344
Net asset value per share                                   $13.06          $13.36

See Notes to Financial Statements.


------
19


STATEMENT OF OPERATIONS

YEAR ENDED JULY 31, 2007
                                          LIVESTRONG     LIVESTRONG     LIVESTRONG
                                              Income           2015           2025
                                           Portfolio      Portfolio      Portfolio
INVESTMENT INCOME (LOSS)

INCOME:

Income distributions from
underlying funds - affiliates             $1,549,901    $ 4,283,284    $ 5,089,312
                                         -----------    -----------    -----------

EXPENSES:

Administrative fees                           84,039        265,347        322,360

Distribution and service fees:
 Advisor Class                                14,531         38,471         32,800
 R Class                                         317          7,977          5,519

Directors' fees and expenses                     867          2,637          3,486
                                         -----------    -----------    -----------
                                              99,754        314,432        364,165
                                         -----------    -----------    -----------

NET INVESTMENT INCOME (LOSS)               1,450,147      3,968,852      4,725,147
                                         -----------    -----------    -----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES

NET REALIZED GAIN (LOSS) ON:

Sale of investments in underlying
funds                                       (26,392)        242,383        554,700

Capital gain distributions received
from underlying funds                         16,942         73,634        138,979
                                         -----------    -----------    -----------
                                             (9,450)        316,017        693,679
                                         -----------    -----------    -----------

CHANGE IN NET UNREALIZED
APPRECIATION (DEPRECIATION)
ON INVESTMENTS                             2,759,798     11,245,515     19,418,380
                                         -----------    -----------    -----------

NET REALIZED AND UNREALIZED
GAIN (LOSS)                                2,750,348     11,561,532     20,112,059
                                         -----------    -----------    -----------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS          $4,200,495    $15,530,384    $24,837,206
                                         ===========    ===========    ===========

See Notes to Financial Statements.


------
20


YEAR ENDED JULY 31, 2007
                                                                        LIVESTRONG
                                                          LIVESTRONG          2045
                                                      2035 Portfolio     Portfolio
INVESTMENT INCOME (LOSS)

INCOME:

Income distributions from
underlying funds - affiliates                            $ 2,081,277    $1,197,437
                                                         -----------   -----------

EXPENSES:

Administrative fees                                          166,312        88,946

Distribution and service fees:
 Advisor Class                                                24,015        16,388
 R Class                                                       3,063         2,297

Directors' fees and expenses                                   1,780         1,163
                                                         -----------   -----------
                                                             195,170       108,794
                                                         -----------   -----------

NET INVESTMENT INCOME (LOSS)                               1,886,107     1,088,643
                                                         -----------   -----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES

NET REALIZED GAIN (LOSS) ON:

Sale of investments in underlying funds                      274,695       158,432

Capital gain distributions received
from underlying funds                                         86,095        66,625
                                                         -----------   -----------
                                                             360,790       225,057
                                                         -----------   -----------

CHANGE IN NET UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS                             11,667,564     8,371,833
                                                         -----------   -----------

NET REALIZED AND UNREALIZED GAIN (LOSS)                   12,028,354     8,596,890
                                                         -----------   -----------

NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS                                $13,914,461    $9,685,533
                                                         ===========   ===========

See Notes to Financial Statements.


------
21


STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                                   LIVESTRONG Income
                                           Portfolio     LIVESTRONG 2015 Portfolio
Increase (Decrease) in
Net Assets                        2007          2006           2007           2006

OPERATIONS

Net investment income
(loss)                     $ 1,450,147     $ 963,734    $ 3,968,852    $ 2,355,575

Net realized
gain (loss)                    (9,450)       491,794        316,017      3,025,866

Change in net
unrealized appreciation
(depreciation)               2,759,798     (550,729)     11,245,515    (2,621,574)
                           -----------    ----------    -----------   ------------
Net increase (decrease)
in net assets resulting
from operations              4,200,495       904,799     15,530,384      2,759,867
                           -----------    ----------    -----------   ------------

DISTRIBUTIONS TO SHAREHOLDERS

From net investment
income:
 Investor Class            (1,047,364)     (740,215)    (2,492,556)    (1,494,047)
 Institutional
 Class                       (174,881)     (123,487)      (296,721)      (101,538)
 Advisor Class               (147,969)      (48,341)      (318,604)       (73,173)
 R Class                       (1,399)         (437)        (9,697)          (461)

From net
realized gains:
 Investor Class              (470,015)      (26,989)    (2,496,248)       (57,984)
 Institutional
 Class                        (67,991)       (4,013)      (272,911)        (3,679)
 Advisor Class                (72,923)       (1,746)      (358,795)        (3,112)
 R Class                         (648)          (14)       (12,472)           (22)
                           -----------   -----------   ------------   ------------
Decrease in net assets
from distributions         (1,983,190)     (945,242)    (6,258,004)    (1,734,016)
                           -----------   -----------   ------------   ------------

CAPITAL SHARE TRANSACTIONS

Net increase (decrease)
in net assets from
capital share
transactions                23,632,442    15,136,327     58,866,551     64,687,101
                           -----------   -----------   ------------   ------------

NET INCREASE (DECREASE)
IN
NET ASSETS                  25,849,747    15,095,884     68,138,931     65,712,952

NET ASSETS

Beginning of period         34,785,631    19,689,747    109,778,250     44,065,298
                           -----------   -----------   ------------   ------------
End of period              $60,635,378   $34,785,631   $177,917,181   $109,778,250
                           ===========   ===========   ============   ============
Undistributed net
investment income             $175,113       $96,579     $1,843,861       $992,587
                           ===========   ===========   ============   ============

See Notes to Financial Statements.


------
22


YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                            LIVESTRONG 2025 Portfolio    LIVESTRONG 2035 Portfolio
Increase (Decrease) in
Net Assets                        2007           2006           2007          2006

OPERATIONS

Net investment income
(loss)                     $ 4,725,147    $ 3,376,289    $ 1,886,107   $ 1,187,047

Net realized
gain (loss)                    693,679      7,946,235        360,790     3,744,415

Change in net
unrealized
appreciation
(depreciation)              19,418,380    (6,077,343)     11,667,564   (2,785,173)
                          ------------   ------------   ------------   -----------
Net increase
(decrease) in net
assets resulting from
operations                  24,837,206      5,245,181     13,914,461     2,146,289
                          ------------   ------------   ------------   -----------

DISTRIBUTIONS TO SHAREHOLDERS

From net investment
income:
 Investor Class            (2,728,920)    (1,904,998)    (1,038,223)     (741,605)
 Institutional
 Class                       (782,731)      (702,282)      (266,923)     (121,935)
 Advisor Class               (222,178)       (63,954)      (107,434)      (33,882)
 R Class                      (13,994)        (1,781)        (5,618)         (801)

From net
realized gains:
 Investor Class            (5,948,432)      (100,651)    (2,806,849)      (29,595)
 Institutional
 Class                     (1,544,817)       (34,639)      (635,902)       (4,508)
 Advisor Class               (556,560)        (3,737)      (349,261)       (1,501)
 R Class                      (41,251)          (116)       (22,938)          (40)
                          ------------   ------------   ------------   -----------
Decrease in net assets
from distributions        (11,838,883)    (2,812,158)    (5,233,148)     (933,867)
                          ------------   ------------   ------------   -----------

CAPITAL SHARE TRANSACTIONS

Net increase
(decrease) in net
assets from capital
share transactions          73,140,620     73,921,053     50,376,625    42,524,951
                          ------------   ------------   ------------   -----------

NET INCREASE
(DECREASE) IN
NET ASSETS                  86,138,943     76,354,076     59,057,938    43,737,373

NET ASSETS

Beginning of period        151,549,551     75,195,475     68,828,832    25,091,459
                          ------------   ------------   ------------   -----------
End of period             $237,688,494   $151,549,551   $127,886,770   $68,828,832
                          ============   ============   ============   ===========
Undistributed net
investment income           $2,164,319     $1,186,995       $857,316      $389,407
                          ============   ============   ============   ===========

See Notes to Financial Statements.


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23


YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                                                         LIVESTRONG 2045 Portfolio
Increase (Decrease) in Net Assets                               2007          2006

OPERATIONS

Net investment income (loss)                             $ 1,088,643     $ 692,802

Net realized gain (loss)                                     225,057     2,435,830

Change in net unrealized appreciation (depreciation)       8,371,833   (1,825,720)
                                                         -----------   -----------
Net increase (decrease) in net assets
resulting from operations                                  9,685,533     1,302,912
                                                         -----------   -----------
DISTRIBUTIONS TO SHAREHOLDERS

From net investment income:
 Investor Class                                            (468,015)     (322,350)
 Institutional Class                                       (256,627)     (240,707)
 Advisor Class                                              (61,872)      (15,750)
 R Class                                                     (2,066)         (228)

From net realized gains:
 Investor Class                                          (1,476,282)      (32,689)
 Institutional Class                                       (698,729)      (22,737)
 Advisor Class                                             (242,944)       (1,761)
 R Class                                                    (10,785)          (29)
                                                         -----------   -----------
Decrease in net assets from distributions                (3,217,320)     (636,251)
                                                         -----------   -----------

CAPITAL SHARE TRANSACTIONS

Net increase (decrease) in net assets from capital
share transactions                                        39,912,717    24,476,051
                                                         -----------   -----------

NET INCREASE (DECREASE) IN NET ASSETS                     46,380,930    25,142,712

NET ASSETS

Beginning of period                                       40,174,862    15,032,150
                                                         -----------   -----------
End of period                                            $86,555,792   $40,174,862
                                                         ===========   ===========
Undistributed net investment income                         $485,931      $185,868
                                                         ===========   ===========

See Notes to Financial Statements.


------
24


NOTES TO FINANCIAL STATEMENTS

JULY 31, 2007

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION -- American Century Asset Allocation Portfolios, Inc. (the
corporation) is registered under the Investment Company Act of 1940 (the 1940
Act), as amended, as an open-end management investment company. LIVESTRONG
Income Portfolio, LIVESTRONG 2015 Portfolio, LIVESTRONG 2025 Portfolio,
LIVESTRONG 2035 Portfolio and LIVESTRONG 2045 Portfolio (collectively, the
funds) are five funds in a series issued by the corporation. The funds operate
as "fund of funds," meaning substantially all of the funds' assets will be
invested in other funds in the American Century family of funds (the
underlying funds). Because the funds directly invest in a relatively small
number of underlying funds, they are not diversified as defined by the 1940
Act. However, the underlying funds are generally diversified and so indirectly
provide broad exposure to a large number of securities. The investment
objective of LIVESTRONG Income Portfolio is to seek current income. Capital
appreciation is a secondary objective. The investment objectives of the four
target-year LIVESTRONG Portfolios are to seek the highest total return
consistent with their respective asset mix. The funds pursue their objectives
by investing in underlying funds that represent a variety of asset classes and
investment styles. For each fund with a target year, the target asset mix will
be adjusted annually in a step-like fashion. In general, as the target year
approaches, the allocation to stocks will decrease and the allocation to bonds
and money market instruments will increase. When a fund reaches its most
conservative planned target asset allocation, which is expected to occur on
approximately November 30 of the year before the target year, its target asset
mix will become fixed and will match that of LIVESTRONG Income Portfolio. The
following is a summary of the funds' significant accounting policies.

MULTIPLE CLASS -- The funds are authorized to issue the Investor Class,
Institutional Class, Advisor Class and R Class. The share classes differ
principally in their respective distribution and shareholder servicing
expenses and arrangements. All shares of each fund represent an equal pro rata
interest in the net assets of the class to which such shares belong, and have
identical voting, dividend, liquidation and other rights and the same terms
and conditions, except for class specific expenses and exclusive rights to
vote on matters affecting only individual classes. Income, non-class specific
expenses, and realized and unrealized capital gains and losses of the funds
are allocated to each class of shares based on their relative net assets.

UNDERLYING FUNDS -- Each fund's assets are allocated among underlying funds
that represent major asset classes, including equity securities (stocks),
fixed-income securities (bonds) and cash-equivalent instruments (money
markets). The underlying NT Diversified Bond, NT Emerging Markets, NT Equity
Growth, NT Growth, NT International Growth, NT Large Company Value, NT Mid Cap
Value, NT Small Company and NT Vista funds are not permitted to invest in
securities issues by companies assigned the Global Industry Classification
Standard (GICS) for the tobacco industry. A brief description of each of the
underlying funds follows.

DOMESTIC EQUITY FUNDS

NT EQUITY GROWTH seeks long-term capital growth. It uses a quantitative
investment strategy to construct an optimized portfolio drawn primarily from
the 1,500 largest publicly traded U.S. companies without regard to dividend
yield.

NT GROWTH seeks long-term capital growth. It uses a growth investment strategy
and generally invests in larger U.S. companies.

NT LARGE COMPANY VALUE seeks long-term capital growth with income as a
secondary objective. It uses a value investment strategy and invests primarily
in larger U.S. companies.

NT MID CAP VALUE seeks long-term capital growth with income as a secondary
objective. It uses a value investment strategy and invests primarily in
mid-sized U.S. companies.

NT SMALL COMPANY seeks long-term capital growth. It uses a quantitative
investment strategy and invests primarily in smaller U.S. companies.

NT VISTA seeks long-term capital growth. It uses a growth investment strategy
and generally invests in medium-sized and smaller U.S. companies.

REAL ESTATE seeks high total investment return through a combination of
capital appreciation and current income. It invests primarily in equity
securities issued by real estate investment trusts and companies engaged in
the real estate industry.


------
25


INTERNATIONAL EQUITY FUNDS

NT EMERGING MARKETS seeks capital growth. It uses a growth investment strategy
and invests primarily in securities of companies located in emerging market
countries and companies that derive a significant portion of their business
from emerging market countries.

NT INTERNATIONAL GROWTH seeks capital growth. It uses a growth investment
strategy and invests primarily in securities of companies located in developed
countries other than the United States.

DOMESTIC FIXED INCOME FUNDS

HIGH-YIELD seeks high current income by investing in a diversified portfolio
of high-yield corporate bonds and other debt securities. As a second
objective, the fund seeks capital appreciation, but only when consistent with
its primary objective of managing current income.

INFLATION-ADJUSTED BOND seeks to provide total return and inflation protection
consistent with investment in inflation-indexed securities.

NT DIVERSIFIED BOND seeks a high level of income by investing primarily in
high- and medium-grade non-money market debt securities. These securities,
which may be payable in U.S. or foreign currencies, may include corporate
bonds and notes, government securities and securities backed by mortgages or
other assets.

INTERNATIONAL FIXED INCOME FUNDS

INTERNATIONAL BOND seeks high total return by investing in high-quality,
non-dollar-denominated government and corporate debt securities outside the
United States.

MONEY MARKET FUNDS

PREMIUM MONEY MARKET seeks to earn the highest level of current income while
preserving the value of shareholder investments by investing in high-quality,
cash-equivalent securities.

SECURITY VALUATIONS -- Investments in the underlying funds are valued at their
reported net asset value. The underlying funds have specific valuation
policies. If an event occurs after the value of a security was established but
before the net asset value per share of an underlying fund was determined that
was likely to materially change the net asset value of the underlying fund,
that security would be valued as determined in accordance with procedures
adopted by the Board of Directors/Trustees. If the underlying fund determines
that the market price of a portfolio security is not readily available, or
that the valuation methods mentioned above do not reflect the security's fair
value, such security is valued as determined by, or in accordance with
procedures adopted by, the Board of Directors/Trustees or its designee if such
determination would materially impact an underlying fund's net asset value.
Certain other circumstances may cause the underlying fund to use alternative
procedures to value a security such as: a security has been declared in
default; trading in a security has been halted during the trading day; or
there is a foreign market holiday and no trading will commence.

SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified
cost basis, which is also used for federal income tax purposes.

INVESTMENT INCOME -- Income and capital gain distributions, if any, from the
underlying funds are recorded as of the ex-dividend date. Long-term capital
gain distributions, if any, from the underlying funds are a component of net
realized gain (loss).

EXPENSES -- The expenses included in the accompanying financial statements
reflect the expenses of each fund and do not include any expenses associated
with the underlying funds.

INCOME TAX STATUS -- It is the fund's policy to distribute substantially all
net investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under provisions of the Internal
Revenue Code. At this time, management has not identified any uncertain tax
positions that would materially impact the financial statements. Accordingly,
no provision has been made for federal or state income taxes. Interest and
penalties associated with any federal or state income tax obligations, if any,
are recorded as interest expense.


------
26


DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid quarterly for LIVESTRONG Income Portfolios.
Distributions from net investment income, if any, are generally declared and
paid annually for the four target-date LIVESTRONG Portfolios. Distributions
from net realized gains, if any, are generally declared and paid annually for
all funds.

INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.

USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.

2. FEES AND TRANSACTIONS WITH RELATED PARTIES

ADMINISTRATIVE FEES -- The corporation has entered into a Management Agreement
with American Century Investment Management, Inc. (ACIM), under which ACIM
provides the funds with shareholder services in exchange for an administrative
fee (the fee). The fee is computed and accrued daily based on the daily net
assets of each specific class of shares of each fund and paid monthly in
arrears. The rate of the fee for the Investor Class, Advisor Class and R Class
of the funds is 0.20%. There is no administrative fee for the Institutional
Class.

DISTRIBUTION FEES -- The Board of Directors has adopted a separate Master
Distribution and Individual Shareholder Services Plan for the Advisor Class
and R Class (collectively, the plans), pursuant to Rule 12b-1 of the 1940 Act.
The plans provide that the Advisor Class will pay American Century Investment
Services, Inc. (ACIS) an annual distribution and service fee of 0.25%. The
plans provide that the R Class will pay ACIS an annual distribution and
service fee of 0.50%. The fees are computed and accrued daily based on each
class's daily net assets and paid monthly in arrears. These fees are used to
pay for distribution services and shareholder services. Fees incurred under
the plans during the year ended July 31, 2007, are detailed in the Statement
of Operations.

MANAGEMENT FEES -- Each fund will indirectly realize its pro rata share of the
fees and expenses of the underlying funds in which it invests. These fees and
expenses are already reflected in the valuation of the underlying funds.

RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACIM, the distributor of the corporation, ACIS, and the
corporation's transfer agent, American Century Services, LLC. The directors of
the corporation are also directors of some underlying funds and therefore
those underlying funds may be deemed to be under common control with the
corporation. The officers of the corporation are also officers of all the
underlying funds. ACIM or American Century Global Investment Management, Inc.,
a wholly-owned subsidiary of ACIM, serves as the investment advisor for the
underlying funds.

3. INVESTMENT TRANSACTIONS

Investment transactions for the year ended July 31, 2007, were as follows:


                LIVESTRONG    LIVESTRONG    LIVESTRONG     LIVESTRONG   LIVESTRONG
                  Income         2015          2025           2035         2045
                Portfolio     Portfolio      Portfolio     Portfolio     Portfolio

Purchases      $33,714,863   $83,255,516   $102,220,299   $70,535,517   $54,262,070

Proceeds
from sales     $10,660,815   $26,773,236    $36,215,964   $23,490,133   $16,468,740


------
27


4. CAPITAL SHARE TRANSACTIONS

The corporation is authorized to issue 3,000,000,000 shares. Transactions in
shares of the funds were as follows:

                             Year ended July 31, 2007     Year ended July 31, 2006
                                Shares         Amount        Shares         Amount

LIVESTRONG Income Portfolio

INVESTOR CLASS
Sold                         2,462,543   $ 26,953,295     1,865,285   $ 19,417,311
Issued in reinvestment
of distributions               129,852      1,409,610        65,833        680,610
Redeemed                   (1,222,262)   (13,344,056)     (793,132)    (8,273,388)
                           -----------   ------------   -----------   ------------
                             1,370,133     15,018,849     1,137,986     11,824,533
                           -----------   ------------   -----------   ------------
INSTITUTIONAL CLASS
Sold                           429,024      4,691,259       197,184      2,062,635
Issued in reinvestment
of distributions                22,300        242,560        12,315        127,282
Redeemed                     (123,853)    (1,333,750)      (89,121)      (934,968)
                           -----------   ------------   -----------   ------------
                               327,471      3,600,069       120,378      1,254,949
                           -----------   ------------   -----------   ------------
ADVISOR CLASS
Sold                           526,267      5,759,864       289,089      3,021,063
Issued in reinvestment
of distributions                20,308        220,892         4,853         50,087
Redeemed                      (94,859)    (1,039,319)      (99,509)    (1,043,161)
                               451,716      4,941,437       194,433      2,027,989
R CLASS
Sold                             8,006         87,439         3,442         35,859
Issued in reinvestment
of distributions                   188          2,047            44            451
Redeemed                       (1,605)       (17,399)         (724)        (7,454)
                           -----------   ------------   -----------   ------------
                                 6,589         72,087         2,762         28,856
                           -----------   ------------   -----------   ------------
Net increase (decrease)      2,155,909   $ 23,632,442     1,455,559   $ 15,136,327
                           ===========   ============   ===========   ============

LIVESTRONG 2015 Portfolio

INVESTOR CLASS
Sold                         6,051,177   $ 70,849,640     5,549,139   $ 61,147,153
Issued in reinvestment
of distributions               430,453      4,928,684       140,409      1,524,842
Redeemed                   (2,813,749)   (32,877,851)   (1,350,088)   (14,856,888)
                           -----------   ------------   -----------   ------------
                             3,667,881     42,900,473     4,339,460     47,815,107
                           -----------   ------------   -----------   ------------
INSTITUTIONAL CLASS
Sold                           573,261      6,672,802       758,066      8,404,619
Issued in reinvestment
of distributions                48,962        561,103         9,680        105,217
Redeemed                     (242,895)    (2,850,614)     (102,771)    (1,134,102)
                           -----------   ------------   -----------   ------------
                               379,328      4,383,291       664,975      7,375,734
                           -----------   ------------   -----------   ------------
ADVISOR CLASS
Sold                           949,444     11,088,609       891,334      9,793,874
Issued in reinvestment
of distributions                59,162        677,399         7,024         76,285
Redeemed                     (251,099)    (2,909,393)      (64,749)      (710,437)
                           -----------   ------------   -----------   ------------
                               757,507      8,856,615       833,609      9,159,722
                           -----------   ------------   -----------   ------------
R CLASS
Sold                           247,594      2,854,414        33,377        368,054
Issued in reinvestment
of distributions                 1,934         22,169            44            483
Redeemed                      (12,938)      (150,411)       (2,932)       (31,999)
                           -----------   ------------   -----------   ------------
                               236,590      2,726,172        30,489        336,538
                           -----------   ------------   -----------   ------------
Net increase (decrease)      5,041,306   $ 58,866,551     5,868,533   $ 64,687,101
                           ===========   ============   ===========   ============


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28


                             Year ended July 31, 2007     Year ended July 31, 2006
                                Shares         Amount        Shares         Amount

LIVESTRONG 2025 Portfolio

INVESTOR CLASS
Sold                         6,934,370   $ 84,059,562     6,131,308   $ 69,967,543
Issued in reinvestment
of distributions               730,389      8,611,314       176,795      1,988,938
Redeemed                   (3,262,907)   (39,307,539)   (1,298,238)   (14,798,332)
                           -----------   ------------   -----------   ------------
                             4,401,852     53,363,337     5,009,865     57,158,149
                           -----------   ------------   -----------   ------------
INSTITUTIONAL CLASS
Sold                         1,131,075     13,609,369       986,172     11,275,206
Issued in reinvestment
of distributions               190,800      2,249,531        65,504        736,921
Redeemed                     (473,019)    (5,782,282)     (234,870)    (2,674,891)
                           -----------   ------------   -----------   ------------
                               848,856     10,076,618       816,806      9,337,236
                           -----------   ------------   -----------   ------------
ADVISOR CLASS
Sold                           948,240     11,464,534       665,010      7,572,377
Issued in reinvestment
of distributions                65,995        778,738         6,012         67,691
Redeemed                     (275,276)    (3,302,202)      (60,570)      (694,686)
                           -----------   ------------   -----------   ------------
                               738,959      8,941,070       610,452      6,945,382
                           -----------   ------------   -----------   ------------
R CLASS
Sold                            92,621      1,106,787        55,608        638,412
Issued in reinvestment
of distributions                 4,682         55,245           169          1,897
Redeemed                      (33,004)      (402,437)      (14,043)      (160,023)
                           -----------   ------------   -----------   ------------
                                64,299        759,595        41,734        480,286
                           -----------   ------------   -----------   ------------
Net increase (decrease)      6,053,966   $ 73,140,620     6,478,857   $ 73,921,053
                           ===========   ============   ===========   ============

LIVESTRONG 2035 Portfolio

INVESTOR CLASS
Sold                         4,307,986   $ 55,031,500     3,133,987   $ 36,820,309
Issued in reinvestment
of distributions               306,847      3,801,836        65,522        758,749
Redeemed                   (2,053,913)   (26,048,629)     (677,940)    (7,960,207)
                           -----------   ------------   -----------   ------------
                             2,560,920     32,784,707     2,521,569     29,618,851
                           -----------   ------------   -----------   ------------
INSTITUTIONAL CLASS
Sold                           983,032     12,436,788       694,353      8,252,385
Issued in reinvestment
of distributions                67,322        834,796        10,919        126,443
Redeemed                     (284,507)    (3,669,430)      (69,706)      (818,529)
                           -----------   ------------   -----------   ------------
                               765,847      9,602,154       635,566      7,560,299
                           -----------   ------------   -----------   ------------
ADVISOR CLASS
Sold                           709,861      8,993,384       507,513      5,948,743
Issued in reinvestment
of distributions                36,830        456,695         3,055         35,383
Redeemed                     (165,199)    (2,093,911)      (79,097)      (925,996)
                           -----------   ------------   -----------   ------------
                               581,492      7,356,168       431,471      5,058,130
                           -----------   ------------   -----------   ------------
R CLASS
Sold                            67,584        865,775        25,918        304,212
Issued in reinvestment
of distributions                 2,303         28,556            73            841
Redeemed                      (20,300)      (260,735)       (1,493)       (17,382)
                           -----------   ------------   -----------   ------------
                                49,587        633,596        24,498        287,671
                           -----------   ------------   -----------   ------------
Net increase (decrease)      3,957,846   $ 50,376,625     3,613,104   $ 42,524,951
                           ===========   ============   ===========   ============


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29


                              Year ended July 31, 2007    Year ended July 31, 2006
                                 Shares         Amount        Shares        Amount
LIVESTRONG 2045 Portfolio

INVESTOR CLASS
Sold                          3,075,123   $ 39,756,020     1,513,147   $17,989,677
Issued in reinvestment
of distributions                152,330      1,922,401        29,951       349,831
Redeemed                    (1,504,146)   (19,352,541)     (314,171)   (3,729,359)
                            -----------   ------------   -----------   -----------
                              1,723,307     22,325,880     1,228,927    14,610,149
                            -----------   ------------   -----------   -----------
INSTITUTIONAL CLASS
Sold                          1,159,259     14,839,594       583,552     6,945,344
Issued in reinvestment
of distributions                 75,565        953,638        22,555       263,444
Redeemed                      (230,636)    (3,028,804)     (108,965)   (1,293,059)
                            -----------   ------------   -----------   -----------
                              1,004,188     12,764,428       497,142     5,915,729
                            -----------   ------------   -----------   -----------
ADVISOR CLASS
Sold                            410,315      5,320,358       348,190     4,162,541
Issued in reinvestment
of distributions                 24,153        304,816         1,501        17,511
Redeemed                      (104,700)    (1,345,029)      (32,947)     (387,544)
                            -----------   ------------   -----------   -----------
                                329,768      4,280,145       316,744     3,792,508
                            -----------   ------------   -----------   -----------
R CLASS
Sold                             51,269        654,681        14,010       166,299
Issued in reinvestment
of distributions                  1,018         12,851            22           257
Redeemed                        (9,741)      (125,268)         (765)       (8,891)
                            -----------   ------------   -----------   -----------
                                 42,546        542,264        13,267       157,665
                            -----------   ------------   -----------   -----------
Net increase (decrease)       3,099,809   $ 39,912,717     2,056,080   $24,476,051
                            ===========   ============   ===========   ===========


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30


5. AFFILIATED COMPANY TRANSACTIONS

Investments are funds within the American Century family of funds, of which
certain funds may be deemed to be under common control because of the same
board of directors. A summary of the transactions for each underlying fund
during the year ended July 31, 2007 follows:

                                                                                           July 31, 2007
                  July 31,
                     2006                                  Realized
Fund/             Share         Purchase       Sales      Gain        Distributions     Share        Market
Underlying Fund    Balance        Cost          Cost        (Loss)     Received(1)     Balance       Value

LIVESTRONG Income Portfolio

High-Yield Fund
Institutional
Class                205,631   $ 1,361,839     $ 315,779   $ (3,446)       $ 121,107     369,407   $ 2,268,159

Inflation-Adjusted
Bond Fund
Institutional
Class                243,667     2,826,585       649,383    (24,795)         174,414     450,390     4,778,638

NT Diversified
Bond Fund
Institutional
Class                901,183     9,755,482     2,208,011    (22,675)         665,218   1,647,816    16,560,557

NT Equity
Growth Fund
Institutional
Class                466,081     3,942,462     1,603,261     (2,078)          68,113     682,400     7,595,113

NT Growth Fund
Institutional
Class                235,532     1,970,721       855,612         490           8,617     339,967     3,892,622

NT Large
Company Value
Fund
Institutional
Class                388,517     3,335,755     1,347,691     (5,054)         107,123     568,193     6,375,126

NT Mid Cap
Value Fund
Institutional
Class                141,077     1,212,278       517,665         351          52,550     204,460     2,287,907

NT Small
Company Fund
Institutional
Class                 75,409       616,821       247,663     (3,491)           2,870     113,463     1,133,495

NT Vista Fund
Institutional
Class(2)             100,680       757,338       497,454      32,442              --     128,983     1,502,652

Real Estate
Fund
Institutional
Class                 12,122       395,114       129,668         976          51,157      20,947       548,392

Premium Money
Market Fund
Investor Class     3,405,795     3,567,202       821,467          --         233,843   6,151,530     6,151,530

International
Bond Fund
Institutional
Class                177,722     2,457,629       590,071    (14,695)          74,795     313,676     4,416,558

NT
International
Growth Fund
Institutional
Class                196,623     1,515,637       903,482      15,583           7,036     255,233     2,993,883
                   ---------   -----------   -----------   ---------      ----------   ---------   -----------
                               $33,714,863   $10,687,207   $(26,392)      $1,566,843               $60,504,632
                               ===========   ===========   =========      ==========               ===========

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

(2) Non-income producing.


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31


                                                                                           July 31, 2007
                  July 31,
                     2006                                 Realized
Fund/             Share         Purchase       Sales      Gain       Distributions      Share        Market
Underlying Fund    Balance        Cost          Cost       (Loss)     Received(1)      Balance        Value

LIVESTRONG 2015 Portfolio

NT Equity
Growth Fund
Institutional
Class              1,380,570   $ 8,937,739   $ 2,972,058   $(8,542)       $ 198,057    1,931,325   $ 21,495,646

NT Growth Fund
Institutional
Class              1,024,610     6,076,971     3,416,461     32,240          33,804    1,270,356     14,545,576

NT Large
Company Value
Fund
Institutional
Class              1,248,519     8,087,676     2,963,327   (20,235)         332,086    1,710,273     19,189,263

NT Mid Cap
Value Fund
Institutional
Class                581,803     3,773,599     1,491,548    (1,889)         211,873      789,561      8,835,188

NT Small
Company Fund
Institutional
Class                266,651     1,485,720       837,899   (10,555)           8,787      333,840      3,335,062

NT Vista Fund
Institutional
Class(2)             537,679     2,923,828     2,316,072    152,762              --      607,646      7,079,076

Real Estate
Fund
Institutional
Class                 55,301     1,428,330       499,252     12,993         222,029       86,244      2,257,868

High-Yield Fund
Institutional
Class                595,761     3,248,600       571,014   (13,392)         340,639    1,015,434      6,234,765

Inflation-Adjusted
Bond Fund
Institutional
Class                706,080     6,884,246     1,174,344   (51,604)         487,473    1,247,402     13,234,935

NT Diversified
Bond Fund
Institutional
Class              2,622,086    23,552,303     3,993,348   (67,355)       1,883,373    4,558,835     45,816,282

NT Emerging
Markets Fund
Institutional
Class                253,841     1,305,706     1,615,830    189,450          19,522      221,121      3,184,142

NT
International
Growth Fund
Institutional
Class                802,143     4,672,435     2,854,584     65,992          28,248      976,930     11,459,389

Premium Money
Market Fund
Investor Class     5,894,217     5,908,936       940,060         --         413,711   10,863,093     10,863,093

International
Bond Fund
Institutional
Class                415,182     4,969,427       885,056   (37,482)         177,316      712,586     10,033,211
                   ---------   -----------   -----------   --------      ----------   ----------   ------------
                               $83,255,516   $26,530,853   $242,383      $4,356,918                $177,563,496
                               ===========   ===========   ========      ==========                ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

(2) Non-income producing.


------
32


                                                                                             July 31, 2007
                  July 31,
                     2006                                   Realized
Fund/             Share         Purchase        Sales      Gain        Distributions      Share        Market
Underlying Fund    Balance        Cost           Cost        (Loss)     Received(1)      Balance        Value

LIVESTRONG 2025 Portfolio

NT Equity
Growth Fund
Institutional
Class              1,937,538   $ 10,870,170   $ 3,733,255   $(14,116)       $ 270,460    2,597,176   $ 28,906,569

NT Growth Fund
Institutional
Class              1,917,716     10,347,432     4,840,699     (7,499)          66,968    2,433,050     27,858,423

NT Large
Company Value
Fund
Institutional
Class              1,869,552     10,652,719     3,615,658    (28,507)         492,483    2,504,489     28,100,367

NT Mid Cap
Value Fund
Institutional
Class                799,340      4,564,648     1,693,604     (3,274)         291,965    1,061,868     11,882,303

NT Small
Company Fund
Institutional
Class                651,704      3,386,130     1,319,138     (7,144)          23,018      864,264      8,633,997

NT Vista Fund
Institutional
Class(2)             913,828      4,412,186     3,497,797     241,693              --    1,021,337     11,898,576

Real Estate
Fund
Institutional
Class                102,308      2,503,066       853,496      20,095         417,110      157,448      4,121,989

High-Yield Fund
Institutional
Class                677,982      3,689,011       657,633    (15,437)         389,784    1,154,173      7,086,622

Inflation-Adjusted
Bond Fund
Institutional
Class                796,775      7,506,851     1,319,888    (56,827)         539,504    1,384,426     14,688,760

NT Diversified
Bond Fund
Institutional
Class              2,928,445     25,917,429     4,481,008    (71,426)       2,110,150    5,052,386     50,776,493

NT Emerging
Markets Fund
Institutional
Class                550,499      2,646,693     3,023,994     386,032          46,524      509,743      7,340,299

NT
International
Growth Fund
Institutional
Class              1,571,037      7,890,909     5,331,741     120,689          54,386    1,819,108     21,338,137

Premium Money
Market Fund
Investor Class     7,362,225      5,883,661     1,070,581          --         480,756   12,175,305     12,175,305

International
Bond Fund
Institutional
Class                 54,841      1,949,394       222,772     (9,579)          45,183      177,465      2,498,707
                   ---------   ------------   -----------    --------      ----------   ----------   ------------
                               $102,220,299   $35,661,264    $554,700      $5,228,291                $237,306,547
                               ============   ===========    ========      ==========                ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

(2) Non-income producing.


------
33


                                                                                            July 31, 2007
                  July 31,
                     2006                                  Realized
Fund/             Share         Purchase       Sales      Gain        Distributions     Share        Market
Underlying Fund    Balance        Cost          Cost        (Loss)     Received(1)     Balance        Value

LIVESTRONG 2035 Portfolio

NT Equity
Growth Fund
Institutional
Class                998,380   $ 8,982,907   $ 2,671,974   $(10,931)       $ 151,583   1,575,446   $ 17,534,714

NT Growth Fund
Institutional
Class              1,008,391     8,982,821     2,910,176    (21,374)          39,354   1,569,905     17,975,412

NT Large
Company Value
Fund
Institutional
Class              1,000,250     9,149,457     2,989,861    (16,446)         282,173   1,550,388     17,395,353

NT Mid Cap
Value Fund
Institutional
Class                481,782     4,468,195     1,305,695       1,372         192,066     766,999      8,582,719

NT Small
Company Fund
Institutional
Class                294,609     2,688,582       795,459     (5,595)          12,070     486,423      4,859,366

NT Vista Fund
Institutional
Class(2)             550,757     4,500,589     2,407,732     132,856              --     774,181      9,019,209

Real Estate
Fund
Institutional
Class                 58,093     2,131,428       637,780       2,990         259,217     107,785      2,821,811

High-Yield Fund
Institutional
Class                216,648     1,848,057       370,092     (2,622)         139,024     448,136      2,751,555

Inflation-Adjusted
Bond Fund
Institutional
Class                259,945     3,777,517       755,120    (19,790)         199,488     546,547      5,798,864

NT Diversified
Bond Fund
Institutional
Class                982,924    13,391,823     2,669,500    (36,379)         784,719   2,045,986     20,562,163

NT Emerging
Markets Fund
Institutional
Class                394,918     3,076,821     2,597,728     208,550          36,320     436,927      6,291,749

NT
International
Growth Fund
Institutional
Class                767,610     6,383,640     2,936,938      42,064          29,795   1,094,619     12,839,881

Premium Money
Market Fund
Investor Class       332,790     1,153,680       167,383          --          41,563   1,319,087      1,319,087
                    --------   -----------   -----------    --------      ----------   ---------   ------------
                               $70,535,517   $23,215,438    $274,695      $2,167,372               $127,751,883
                               ===========   ===========    ========      ==========               ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

(2) Non-income producing.


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34


                                                                                           July 31, 2007
                   July 31,
                     2006                                  Realized
Fund/              Share        Purchase       Sales      Gain        Distributions     Share        Market
Underlying Fund     Balance       Cost          Cost        (Loss)     Received(1)     Balance       Value

LIVESTRONG 2045 Portfolio

NT Equity Growth
Fund
Institutional
Class                622,511   $ 7,719,068   $ 2,050,630   $(17,455)       $ 105,967   1,146,959   $12,765,645

NT Growth Fund
Institutional
Class                628,776     7,610,025     2,120,885    (19,519)          26,983   1,142,994    13,087,281

NT Large Company
Value Fund
Institutional
Class                623,017     7,941,509     2,136,955    (18,775)         199,745   1,147,523    12,875,208

NT Mid Cap Value
Fund
Institutional
Class                300,760     3,803,024       970,049       3,735         132,811     558,336     6,247,780

NT Small Company
Fund
Institutional
Class                203,767     2,506,892       662,329     (6,761)           9,335     392,443     3,920,506

NT Vista Fund
Institutional
Class(2)             343,690     3,833,082     1,787,159      78,391              --     563,617     6,566,138

Real Estate Fund
Institutional
Class                 40,745     1,964,209       526,200       2,434         201,356      88,467     2,316,066

High-Yield Fund
Institutional
Class                 92,365     1,062,856       206,801     (1,958)          67,026     226,553     1,391,035

Inflation-Adjusted
Bond Fund
Institutional
Class                109,499     2,186,220       418,371     (8,715)          98,416     276,330     2,931,861

NT Diversified
Bond Fund
Institutional
Class                416,572     7,559,595     1,464,150    (16,574)         373,254   1,019,975    10,250,749

NT Emerging
Markets Fund
Institutional
Class                299,005     3,192,312     2,215,553     150,747          30,580     390,776     5,627,174

NT International
Growth Fund
Institutional
Class                424,763     4,883,278     1,751,226      12,882          18,589     725,229     8,506,937
                    --------   -----------   -----------    --------      ----------   ---------   -----------
                               $54,262,070   $16,310,308    $158,432      $1,264,062               $86,486,380
                               ===========   ===========    ========      ==========               ===========

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

(2) Non-income producing.


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35


6. INVESTMENTS IN UNDERLYING FUNDS

The funds do not invest in the underlying funds for the purpose of exercising
management or control; however, investments by the funds within their
investment strategies may represent a significant portion of the underlying
funds' net assets. As of July 31, 2007, the following LIVESTRONG Portfolios
owned 25% or more of the total outstanding shares of the underlying funds:

                                        LIVESTRONG                     LIVESTRONG
                         LIVESTRONG        2025         LIVESTRONG        2045
                       2015 Portfolio    Portfolio    2035 Portfolio   Portfolio
NT Diversified
Bond Fund                   32%             35%             --             --

NT Emerging
Markets Fund                 --             33%            28%            25%

NT Equity
Growth Fund                  --             33%             --             --

NT Growth Fund               --             36%             --             --

NT International
Growth Fund                  --             37%             --             --

NT Large Company
Value Fund                   --             33%             --             --

NT Mid Cap
Value Fund                   --             31%             --             --

NT Small
Company Fund                 --             39%             --             --

NT Vista Fund                --             33%            25%             --

As of July 31, 2007, the funds, in aggregate, owned 100% of the total
outstanding shares of the underlying NT Diversified Bond, NT Emerging Markets,
NT Equity Growth, NT Growth, NT International Growth, NT Large Company Value,
NT Mid Cap Value, NT Small Company and NT Vista funds.

7. RISK FACTORS

Some of the underlying funds invest in foreign securities, which are generally
riskier than U.S. securities. As a result, the funds are subject to foreign
risk, meaning that political events (such as civil unrest, national elections
and imposition of exchange controls), social, and economic events (such as
labor strikes and rising inflation), and natural disasters occurring in a
country where the funds invest could cause the funds' investments in that
country to experience gains or losses. Investing in emerging markets may
accentuate these risks.


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36


8. FEDERAL TAX INFORMATION

The tax character of distributions paid during the years ended July 31, 2007
and July 31, 2006 were as follows:

                        LIVESTRONG Income Portfolio    LIVESTRONG 2015 Portfolio
                            2007           2006            2007           2006
DISTRIBUTIONS
PAID FROM

Ordinary income          $1,578,720      $912,480       $3,923,292     $1,669,219

Long-term
capital gains             $404,470        $32,762       $2,334,712      $64,797

                         LIVESTRONG 2025 Portfolio     LIVESTRONG 2035 Portfolio
                            2007           2006            2007           2006
DISTRIBUTIONS
PAID FROM

Ordinary income          $5,667,867     $2,673,015      $2,698,108      $898,223

Long-term
capital gains            $6,171,016      $139,143       $2,535,040      $35,644

                                                       LIVESTRONG 2045 Portfolio
                                                           2007           2006
DISTRIBUTIONS
PAID FROM

Ordinary income                                         $1,417,217      $579,035

Long-term
capital gains                                           $1,800,103      $57,216

The book-basis character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. These differences reflect
the differing character of certain income items and net realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.

As of July 31, 2007, the components of distributable earnings on a tax-basis
and the federal tax cost of investments were as follows:


                     LIVESTRONG     LIVESTRONG     LIVESTRONG     LIVESTRONG    LIVESTRONG
                         Income           2015           2025           2035          2045
                      Portfolio      Portfolio      Portfolio      Portfolio     Portfolio
Federal tax cost
of investments      $58,162,301   $168,037,383   $221,102,110   $117,808,083   $79,174,606
                    ===========   ============   ============   ============   ===========
Gross tax
appreciation of
investments          $2,584,459    $10,174,332    $16,955,591    $10,341,323    $7,616,871

Gross tax
depreciation of
investments           (242,128)      (648,219)      (751,154)      (397,523)     (305,097)
                    -----------   ------------   ------------   ------------   -----------
Net tax
appreciation
(depreciation)
of investments       $2,342,331    $ 9,526,113    $16,204,437    $ 9,943,800    $7,311,774
                    ===========   ============   ============   ============   ===========
Undistributed
ordinary income        $210,039     $2,138,574     $2,601,238     $1,171,914      $705,047

Accumulated
long-term gains         $53,052       $294,270       $556,067       $210,385      $141,663

The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales.


------
37


9. RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.

The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.

10. OTHER TAX INFORMATION (UNAUDITED)

The following information is provided pursuant to provisions of the Internal
Revenue Code.

The funds hereby designate capital gain distributions for the fiscal year
ended July 31, 2007, as follows:

    LIVESTRONG        LIVESTRONG      LIVESTRONG      LIVESTRONG      LIVESTRONG
 Income Portfolio   2015 Portfolio  2025 Portfolio  2035 Portfolio  2045 Portfolio

     $404,470         $2,334,712      $6,171,016      $2,535,040      $1,800,103

For corporate taxpayers, the following ordinary income distributions paid
during the fiscal year ended July 31, 2007, qualify for the corporate
dividends received deduction.

    LIVESTRONG        LIVESTRONG      LIVESTRONG      LIVESTRONG      LIVESTRONG
 Income Portfolio   2015 Portfolio  2025 Portfolio  2035 Portfolio  2045 Portfolio

     $211,274          $673,031        $991,263        $578,899        $407,229

The funds hereby designate qualified dividend income for the fiscal year ended
July 31, 2007, as follows:

    LIVESTRONG        LIVESTRONG      LIVESTRONG      LIVESTRONG      LIVESTRONG
 Income Portfolio   2015 Portfolio  2025 Portfolio  2035 Portfolio  2045 Portfolio

     $212,853          $700,392       $1,056,842       $622,313        $444,246

The funds hereby designate qualified short-term capital gain distributions for
purposes of Internal Revenue Code 871 for the fiscal year ended July 31, 2007,
as follows:

    LIVESTRONG        LIVESTRONG      LIVESTRONG      LIVESTRONG      LIVESTRONG
 Income Portfolio   2015 Portfolio  2025 Portfolio  2035 Portfolio  2045 Portfolio

     $207,107          $805,714       $1,920,044      $1,279,910       $628,637


------
38


FINANCIAL HIGHLIGHTS
LIVESTRONG Income Portfolio

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $10.45      $10.51     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.33        0.37       0.29

 Net Realized and Unrealized Gain (Loss)               0.75      (0.07)       0.52
                                                    -------     -------    -------
 Total From Investment Operations                      1.08        0.30       0.81
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.32)      (0.35)     (0.30)

 From Net Realized Gains                             (0.15)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.47)      (0.36)     (0.30)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $11.06      $10.45     $10.51
                                                    =======     =======    =======

TOTAL RETURN(3)                                      10.51%       2.99%      8.14%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.20%       0.20%   0.20%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 3.03%       3.51%   3.16%(5)

Portfolio Turnover Rate                                 22%        120%         6%

Net Assets, End of Period (in thousands)            $44,109     $27,374    $15,572

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
39


LIVESTRONG Income Portfolio

Institutional Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $10.45      $10.51     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.35        0.37       0.34

 Net Realized and Unrealized Gain (Loss)               0.75      (0.05)       0.48
                                                    -------     -------    -------
 Total From Investment Operations                      1.10        0.32       0.82
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.34)      (0.37)     (0.31)

 From Net Realized Gains                             (0.15)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.49)      (0.38)     (0.31)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $11.06      $10.45     $10.51
                                                    =======     =======    -------

TOTAL RETURN(3)                                      10.73%       3.20%      8.31%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 3.23%       3.71%   3.36%(5)

Portfolio Turnover Rate                                 22%        120%         6%

Net Assets, End of Period (in thousands)             $8,285      $4,409     $3,169

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
40


LIVESTRONG Income Portfolio

Advisor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $10.45      $10.51     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.31        0.33       0.18

 Net Realized and Unrealized Gain (Loss)               0.74      (0.05)       0.61
                                                    -------     -------    -------
 Total From Investment Operations                      1.05        0.28       0.79
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.30)      (0.33)     (0.28)

 From Net Realized Gains                             (0.15)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.45)      (0.34)     (0.28)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $11.05      $10.45     $10.51
                                                    =======     =======    =======

TOTAL RETURN(3)                                      10.13%       2.83%      7.82%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.45%       0.45%   0.45%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.78%       3.26%   2.91%(5)

Portfolio Turnover Rate                                 22%        120%         6%

Net Assets, End of Period (in thousands)             $8,129      $2,966       $940

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
41


LIVESTRONG Income Portfolio

R Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006     2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $10.44      $10.50      $10.00
                                                    -------     -------     -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.27        0.26        0.29

 Net Realized and Unrealized Gain (Loss)               0.76      (0.01)        0.46
                                                    -------     -------     -------
 Total From Investment Operations                      1.03        0.25        0.75
                                                    -------     -------     -------
Distributions

 From Net Investment Income                          (0.27)      (0.30)      (0.25)

 From Net Realized Gains                             (0.15)      (0.01)          --
                                                    -------     -------     -------
 Total Distributions                                 (0.42)      (0.31)      (0.25)
                                                    -------     -------     -------
Net Asset Value, End of Period                       $11.05      $10.44      $10.50
                                                    =======     =======     =======

TOTAL RETURN(3)                                       9.97%       2.48%       7.61%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.70%       0.70%    0.70%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.53%       3.01%    2.66%(5)

Portfolio Turnover Rate                                 22%        120%          6%

Net Assets, End of Period (in thousands)               $112         $37          $9

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.


------
42


See Notes to Financial Statements.

LIVESTRONG 2015 Portfolio

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006     2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.09      $10.93      $10.00
                                                    -------     -------     -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.32        0.37        0.25

 Net Realized and Unrealized Gain (Loss)               1.04        0.11        0.86
                                                    -------     -------     -------
 Total From Investment Operations                      1.36        0.48        1.11
                                                    -------     -------     -------
Distributions

 From Net Investment Income                          (0.27)      (0.31)      (0.18)

 From Net Realized Gains                             (0.27)      (0.01)          --
                                                    -------     -------     -------
 Total Distributions                                 (0.54)      (0.32)      (0.18)
                                                    -------     -------     -------
Net Asset Value, End of Period                       $11.91      $11.09      $10.93
                                                    =======     =======     =======

TOTAL RETURN(3)                                      12.46%       4.46%      11.17%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.20%       0.20%    0.20%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.74%       3.27%    2.61%(5)

Portfolio Turnover Rate                                 18%        123%          2%

Net Assets, End of Period (in thousands)           $139,725     $89,431     $40,717

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
43


LIVESTRONG 2015 Portfolio

Institutional Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.10      $10.94     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.34        0.33       0.29

 Net Realized and Unrealized Gain (Loss)               1.05        0.17       0.84
                                                    -------     -------    -------
 Total From Investment Operations                      1.39        0.50       1.13
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.29)      (0.33)     (0.19)

 From Net Realized Gains                             (0.27)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.56)      (0.34)     (0.19)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $11.93      $11.10     $10.94
                                                    =======     =======    =======

TOTAL RETURN(3)                                      12.77%       4.67%     11.32%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.94%       3.47%   2.81%(5)

Portfolio Turnover Rate                                 18%        123%         2%

Net Assets, End of Period (in thousands)            $15,736     $10,439     $3,011

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
44


LIVESTRONG 2015 Portfolio

Advisor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006     2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.07      $10.91      $10.00
                                                    -------     -------     -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.30        0.31        0.17

 Net Realized and Unrealized Gain (Loss)               1.03        0.14        0.91
                                                    -------     -------     -------
 Total From Investment Operations                      1.33        0.45        1.08
                                                    -------     -------     -------
Distributions

 From Net Investment Income                          (0.24)      (0.28)      (0.17)

 From Net Realized Gains                             (0.27)      (0.01)          --
                                                    -------     -------     -------
 Total Distributions                                 (0.51)      (0.29)      (0.17)
                                                    -------     -------     -------
Net Asset Value, End of Period                       $11.89      $11.07      $10.91
                                                    =======     =======     =======

TOTAL RETURN(3)                                      12.20%       4.22%      10.88%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.45%       0.45%    0.45%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.49%       3.02%    2.36%(5)

Portfolio Turnover Rate                                 18%        123%          2%

Net Assets, End of Period (in thousands)            $19,270      $9,556        $323

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
45


LIVESTRONG 2015 Portfolio

R Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.06      $10.90     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.25        0.19       0.24

 Net Realized and Unrealized Gain (Loss)               1.05        0.23       0.82
                                                    -------     -------    -------
 Total From Investment Operations                      1.30        0.42       1.06
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.21)      (0.25)     (0.16)

 From Net Realized Gains                             (0.27)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.48)      (0.26)     (0.16)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $11.88      $11.06     $10.90
                                                    =======     =======    =======

TOTAL RETURN(3)                                      11.92%       4.05%     10.59%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.70%       0.70%   0.70%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.24%       2.77%   2.11%(5)

Portfolio Turnover Rate                                 18%        123%         2%

Net Assets, End of Period (in thousands)             $3,187        $351        $14

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
46


LIVESTRONG 2025 Portfolio

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.49      $11.21     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.28        0.34       0.18

 Net Realized and Unrealized Gain (Loss)               1.34        0.27       1.17
                                                    -------     -------    -------
 Total From Investment Operations                      1.62        0.61       1.35
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.24)      (0.31)     (0.14)

 From Net Realized Gains                             (0.52)      (0.02)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.76)      (0.33)     (0.14)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $12.35      $11.49     $11.21
                                                    =======     =======    =======

TOTAL RETURN(3)                                      14.45%       5.48%     13.57%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.20%       0.20%   0.20%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.34%       2.98%   2.08%(5)

Portfolio Turnover Rate                                 18%        120%         2%

Net Assets, End of Period (in thousands)           $174,984    $112,202    $53,285

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
47


LIVESTRONG 2025 Portfolio

Institutional Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.51      $11.23     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.31        0.37       0.27

 Net Realized and Unrealized Gain (Loss)               1.34        0.26       1.11
                                                    -------     -------    -------
 Total From Investment Operations                      1.65        0.63       1.38
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.27)      (0.33)     (0.15)

 From Net Realized Gains                             (0.52)      (0.02)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.79)      (0.35)     (0.15)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $12.37      $11.51     $11.23
                                                    =======     =======    =======

TOTAL RETURN(3)                                      14.67%       5.77%     13.74%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.54%       3.18%   2.28%(5)

Portfolio Turnover Rate                                 18%        120%         2%

Net Assets, End of Period (in thousands)            $44,250     $31,399    $21,458

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
48


LIVESTRONG 2025 Portfolio

Advisor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.48      $11.19     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.26        0.29       0.12

 Net Realized and Unrealized Gain (Loss)               1.33        0.30       1.20
                                                    -------     -------    -------
 Total From Investment Operations                      1.59        0.59       1.32
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.21)      (0.28)     (0.13)

 From Net Realized Gains                             (0.52)      (0.02)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.73)      (0.30)     (0.13)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $12.34      $11.48     $11.19
                                                    =======     =======    =======

TOTAL RETURN(3)                                      14.17%       5.30%     13.28%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.45%       0.45%   0.45%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.09%       2.73%   1.83%(5)

Portfolio Turnover Rate                                 18%        120%         2%

Net Assets, End of Period (in thousands)            $17,076      $7,404       $388

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
49


LIVESTRONG 2025 Portfolio

R Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.46      $11.18     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.22        0.19       0.15

 Net Realized and Unrealized Gain (Loss)               1.34        0.36       1.15
                                                    -------     -------    -------
 Total From Investment Operations                      1.56        0.55       1.30
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.18)      (0.25)     (0.12)

 From Net Realized Gains                             (0.52)      (0.02)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.70)      (0.27)     (0.12)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $12.32      $11.46     $11.18
                                                    =======     =======    =======

TOTAL RETURN(3)                                      13.90%       4.95%     13.10%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.70%       0.70%   0.70%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.84%       2.48%   1.58%(5)

Portfolio Turnover Rate                                 18%        120%         2%

Net Assets, End of Period (in thousands)             $1,378        $545        $65

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
50


LIVESTRONG 2035 Portfolio

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.85      $11.43     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.24        0.31       0.17

 Net Realized and Unrealized Gain (Loss)               1.71        0.42       1.39
                                                    -------     -------    -------
 Total From Investment Operations                      1.95        0.73       1.56
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.19)      (0.30)     (0.13)

 From Net Realized Gains                             (0.52)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.71)      (0.31)     (0.13)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.09      $11.85     $11.43
                                                    =======     =======    =======

TOTAL RETURN(3)                                      16.86%       6.45%     15.71%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.20%       0.20%   0.20%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.87%       2.61%   1.62%(5)

Portfolio Turnover Rate                                 23%        141%         3%

Net Assets, End of Period (in thousands)            $91,220     $52,206    $21,537

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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51


LIVESTRONG 2035 Portfolio

Institutional Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.87      $11.45     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.26        0.30       0.16

 Net Realized and Unrealized Gain (Loss)               1.72        0.45       1.43
                                                    -------     -------    -------
 Total From Investment Operations                      1.98        0.75       1.59
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.22)      (0.32)     (0.14)

 From Net Realized Gains                             (0.52)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.74)      (0.33)     (0.14)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.11      $11.87     $11.45
                                                    =======     =======    =======

TOTAL RETURN(3)                                      17.07%       6.66%     15.98%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.07%       2.81%   1.82%(5)

Portfolio Turnover Rate                                 23%        141%         3%

Net Assets, End of Period (in thousands)            $22,314     $11,104     $3,435

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
52


LIVESTRONG 2035 Portfolio

Advisor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.83      $11.42     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.21        0.26       0.11

 Net Realized and Unrealized Gain (Loss)               1.72        0.43       1.44
                                                    -------     -------    -------
 Total From Investment Operations                      1.93        0.69       1.55
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.16)      (0.27)     (0.13)

 From Net Realized Gains                             (0.52)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.68)      (0.28)     (0.13)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.08      $11.83     $11.42
                                                    =======     =======    =======

TOTAL RETURN(3)                                      16.67%       6.10%     15.53%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.45%       0.45%   0.45%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.62%       2.36%   1.37%(5)

Portfolio Turnover Rate                                 23%        141%         3%

Net Assets, End of Period (in thousands)            $13,378      $5,224       $113

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
53


LIVESTRONG 2035 Portfolio

R Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.82      $11.40     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.18        0.16       0.22

 Net Realized and Unrealized Gain (Loss)               1.71        0.51       1.30
                                                    -------     -------    -------
 Total From Investment Operations                      1.89        0.67       1.52
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.13)      (0.24)     (0.12)

 From Net Realized Gains                             (0.52)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.65)      (0.25)     (0.12)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.06      $11.82     $11.40
                                                    =======     =======    =======

TOTAL RETURN(3)                                      16.30%       5.93%     15.24%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.70%       0.70%   0.70%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.37%       2.11%   1.12%(5)

Portfolio Turnover Rate                                 23%        141%         3%

Net Assets, End of Period (in thousands)               $975        $296         $6

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
54


LIVESTRONG 2045 Portfolio

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.96      $11.54     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.22        0.31       0.12

 Net Realized and Unrealized Gain (Loss)               1.92        0.46       1.56
                                                    -------     -------    -------
 Total From Investment Operations                      2.14        0.77       1.68
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.17)      (0.32)     (0.14)

 From Net Realized Gains                             (0.53)      (0.03)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.70)      (0.35)     (0.14)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.40      $11.96     $11.54
                                                    =======     =======    =======

TOTAL RETURN(3)                                      18.23%       6.76%     16.86%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.20%       0.20%   0.20%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.62%       2.62%   1.83%(5)

Portfolio Turnover Rate                                 25%        137%        17%

Net Assets, End of Period (in thousands)            $48,229     $22,437     $7,465

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
55


LIVESTRONG 2045 Portfolio

Institutional Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.98      $11.56     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.23        0.35       0.25

 Net Realized and Unrealized Gain (Loss)               1.93        0.44       1.45
                                                    -------     -------    -------
 Total From Investment Operations                      2.16        0.79       1.70
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.19)      (0.34)     (0.14)

 From Net Realized Gains                             (0.53)      (0.03)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.72)      (0.37)     (0.14)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.42      $11.98     $11.56
                                                    =======     =======    =======

TOTAL RETURN(3)                                      18.44%       6.96%     17.11%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.82%       2.82%   2.03%(5)

Portfolio Turnover Rate                                 25%        137%        17%

Net Assets, End of Period (in thousands)            $28,483     $13,397     $7,181

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
56


LIVESTRONG 2045 Portfolio

Advisor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.94      $11.53     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.18        0.20       0.07

 Net Realized and Unrealized Gain (Loss)               1.92        0.53       1.59
                                                    -------     -------    -------
 Total From Investment Operations                      2.10        0.73       1.66
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.13)      (0.29)     (0.13)

 From Net Realized Gains                             (0.53)      (0.03)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.66)      (0.32)     (0.13)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.38      $11.94     $11.53
                                                    =======     =======    =======

TOTAL RETURN(3)                                      17.96%       6.51%     16.57%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.45%       0.45%   0.45%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.37%       2.37%   1.58%(5)

Portfolio Turnover Rate                                 25%        137%        17%

Net Assets, End of Period (in thousands)             $9,091      $4,177       $380

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
57


LIVESTRONG 2045 Portfolio

R Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007       2006     2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.93     $11.51      $10.00
                                                    -------    -------     -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.12       0.12        0.18

 Net Realized and Unrealized Gain (Loss)               1.94       0.59        1.45
                                                    -------    -------     -------
 Total From Investment Operations                      2.06       0.71        1.63
                                                    -------    -------     -------
Distributions

 From Net Investment Income                          (0.10)     (0.26)      (0.12)

 From Net Realized Gains                             (0.53)     (0.03)          --
                                                    -------    -------     -------
 Total Distributions                                 (0.63)     (0.29)      (0.12)
                                                    -------    -------     -------
Net Asset Value, End of Period                       $13.36     $11.93      $11.51
                                                    =======    =======     =======

TOTAL RETURN(3)                                      17.58%      6.24%      16.38%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.70%      0.70%    0.70%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.12%      2.12%    1.33%(5)

Portfolio Turnover Rate                                 25%       137%         17%

Net Assets, End of Period (in thousands)               $753       $165          $6

(1) August 31, 2004 (fund inception) through July 31, 2005.

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

(3) Total return assumes reinvestment of net investment income and capital
gains distributions, if any. Total returns for periods less than one year are
not annualized. The total return of the classes may not precisely reflect the
class expense differences because of the impact of calculating the net asset
values to two decimal places. If net asset values were calculated to three
decimal places, the total return differences would more closely reflect the
class expense differences. The calculation of net asset values to two decimal
places is made in accordance with SEC guidelines and does not result in any
gain or loss of value between one class and another.

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


------
58


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders,
American Century Asset Allocation Portfolios, Inc.:

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of LIVESTRONG Income Portfolio,
LIVESTRONG 2015 Portfolio, LIVESTRONG 2025 Portfolio, LIVESTRONG 2035
Portfolio, and LIVESTRONG 2045 Portfolio (collectively the "Funds"), five of
the mutual funds comprising American Century Asset Allocation Portfolios, Inc.
as of July 31, 2007, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and the financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
July 31, 2007, by correspondence with the transfer agent. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds comprising American Century Asset Allocation Portfolios, Inc. as
of July 31, 2007, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then
ended, and the financial highlights for the periods presented, in conformity
with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
September 14, 2007


------
59


PROXY VOTING RESULTS

A special meeting of shareholders was held on July 27, 2007, to vote on the
following proposal. The proposal received the required number of votes of the
American Century Asset Allocation Portfolios, Inc. and was adopted. A summary
of voting results is listed below the proposal.

PROPOSAL:

To elect nine Directors to the Board of Directors of American Century Asset
Allocation Portfolios, Inc. (the proposal was voted on by all shareholders of
funds issued by American Century Asset Allocation Portfolios, Inc.):


James E. Stowers, Jr.       For:                 1,416,441,649
                            Withhold:               10,836,309
                            Abstain:                         0
                            Broker Non-Vote:                 0

Jonathan S. Thomas          For:                 1,417,375,725
                            Withhold:                9,902,233
                            Abstain:                         0
                            Broker Non-Vote:                 0

Thomas A. Brown             For:                 1,417,853,110
                            Withhold:                9,424,849
                            Abstain:                         0
                            Broker Non-Vote:                 0

Andrea C. Hall              For:                 1,417,179,388
                            Withhold:               10,098,571
                            Abstain:                         0
                            Broker Non-Vote:                 0

James A. Olson              For:                 1,417,931,210
                            Withhold:                9,346,748
                            Abstain:                         0
                            Broker Non-Vote:                 0

Donald H. Pratt             For:                 1,417,345,399
                            Withhold:                9,932,560
                            Abstain:                         0
                            Broker Non-Vote:                 0

Gale E. Sayers              For:                 1,417,193,268
                            Withhold:               10,084,690
                            Abstain:                         0
                            Broker Non-Vote:                 0

M. Jeannine Strandjord      For:                 1,416,594,224
                            Withhold:               10,683,734
                            Abstain:                         0
                            Broker Non-Vote:                 0

Timothy S. Webster          For:                 1,417,239,775
                            Withhold:               10,038,183
                            Abstain:                         0
                            Broker Non-Vote:                 0


------
60


MANAGEMENT

The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Investment Management, Inc. (ACIM); the funds' principal underwriter,
American Century Investment Services, Inc. (ACIS); and the funds' transfer
agent, American Century Services, LLC (ACS).

The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACIM, ACIS, and ACS. The directors serve
in this capacity for seven registered investment companies in the American
Century family of funds.

All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies advised by ACIM or American Century
Global Investment Management, Inc. (ACGIM), a wholly owned subsidiary of ACIM,
unless otherwise noted. Only officers with policy-making functions are listed.
No officer is compensated for his or her service as an officer of the funds.
The listed officers are interested persons of the funds and are appointed or
re-appointed on an annual basis.

INTERESTED DIRECTORS

JAMES E. STOWERS, JR.
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

JONATHAN S. THOMAS
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 109
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None


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INDEPENDENT DIRECTORS

THOMAS A. BROWN
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

ANDREA C. HALL, PH.D.
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

JAMES A. OLSON
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust

DONALD H. PRATT
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

GALE E. SAYERS
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and service provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

M. JEANNINE STRANDJORD
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.


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TIMOTHY S. WEBSTER
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); President and Chief
Executive Officer, American Italian Pasta Company (2001 to December 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

OFFICERS

MARYANNE ROEPKE
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS

CHARLES A. ETHERINGTON
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACC (November
2005 to present); General Counsel, ACC (March 2007 to present). Also serves
as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and
Senior Vice President, ACIM, ACGIM and ACS

ROBERT LEACH
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present); and Controller, various American Century funds (1997 to
September 2006)

C. JEAN WADE
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1964
POSITION(S) HELD WITH FUNDS: Controller (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present)

JON ZINDEL
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS

The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.


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APPROVAL OF MANAGEMENT AGREEMENTS
LIVESTRONG Portfolios

Under Section 15(c) of the Investment Company Act, contracts for investment
advisory services are required to be reviewed, evaluated and approved by a
majority of a fund's independent directors or trustees (the "Directors") each
year. At American Century, this process is referred to as the "15(c) Process."
As a part of this process, the board reviews fund performance, shareholder
services, audit and compliance information, and a variety of other reports
from the advisor concerning fund operations. In addition to this annual
review, the board of directors oversees and evaluates on a continuous basis at
its quarterly meetings the nature and quality of significant services
performed by the advisor, fund performance, audit and compliance information,
and a variety of other reports relating to fund operations. The board, or
committees of the board, also holds special meetings as needed.

Under a Securities and Exchange Commission rule, each fund is required to
disclose in its annual or semiannual report, as appropriate, the material
factors and conclusions that formed the basis for the board's approval or
renewal of any advisory agreements within the fund's most recently completed
fiscal half-year period.

ANNUAL CONTRACT REVIEW PROCESS

As part of the annual 15(c) Process undertaken during the most recent fiscal
half-year period, the Directors reviewed extensive data and information
compiled by the advisor and certain independent providers of evaluative data
(the "15(c) Providers") concerning LIVESTRONG Income Portfolio, LIVESTRONG
2015 Portfolio, LIVESTRONG 2025 Portfolio, LIVESTRONG 2035 Portfolio and
LIVESTRONG 2045 Portfolio (the "funds") and the services provided to the funds
under the management agreement. The information considered and the discussions
held at the meetings included, but were not limited to:

* the nature, extent and quality of investment management, shareholder
services and other services provided to the funds under the management
agreement;

* reports on the advisor's activities relating to the wide range of programs
and services the advisor provides to the funds and their shareholders on a
routine and non-routine basis;

* data comparing the cost of owning the funds to the cost of owning similar
funds;

* data comparing the funds' performance to appropriate benchmarks and/or a
peer group of other mutual funds with similar investment objectives and
strategies;

* financial data showing the profitability of the funds to the advisor and the
overall profitability of the advisor; and

* data comparing services provided and charges to other investment management
clients of the advisor.

In keeping with its practice, the funds' board of directors held two regularly
scheduled meetings and one special meeting to review and discuss the
information provided by the advisor and to complete its negotiations with the
advisor regarding the renewal of the management agreement. The board also had
the benefit of the advice of its independent counsel throughout the period.


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64


FACTORS CONSIDERED

The Directors considered all of the information provided by the advisor, the
15(c) Providers, and the board's independent counsel, and evaluated such
information for each fund for which the board has responsibility. The
Directors did not identify any single factor as being all-important or
controlling, and each Director may have attributed different levels of
importance to different factors. In deciding to renew the agreement under the
terms ultimately determined by the board to be appropriate, the Directors'
decision was based on the following factors.

NATURE, EXTENT AND QUALITY OF SERVICES -- GENERALLY. Under the management
agreement, the advisor is responsible for providing or arranging for all
services necessary for the operation of the funds. The board noted that under
the management agreement, the advisor provides or arranges at its own expense
a wide variety of services including:

* fund construction and design

* portfolio security selection

* initial capitalization/funding

* securities trading

* custody of fund assets

* daily valuation of the funds' portfolio

* shareholder servicing and transfer agency, including shareholder
confirmations, recordkeeping and communications

* legal services

* regulatory and portfolio compliance

* financial reporting

* marketing and distribution

The Directors noted that many of these services have expanded over time both
in terms of quantity and complexity in response to shareholder demands,
competition in the industry and the changing regulatory environment. In
performing their evaluation, the Directors considered information received in
connection with the annual review, as well as information provided on an
ongoing basis at their regularly scheduled board and committee meetings.

INVESTMENT MANAGEMENT SERVICES. The nature of the investment management
services provided is quite complex and allows fund shareholders access to
professional money management, instant diversification of their investments
within an asset class, the opportunity to easily diversify among asset
classes, and liquidity. In evaluating investment performance, the board
expects the advisor to manage the funds in accordance with their investment
objectives and approved strategies. In providing these services, the advisor
utilizes teams of investment professionals (portfolio managers, analysts,
research assistants, and securities traders) who require extensive information
technology, research, training, compliance and other systems to conduct their
business.


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65


At each quarterly meeting the Directors review investment performance
information for the funds, together with comparative information for
appropriate benchmarks and peer groups of funds managed similarly to the
funds. The Directors also review detailed performance information during the
15(c) Process comparing the funds' performance with that of similar funds not
managed by the advisor. If performance concerns are identified, the Directors
discuss with the advisor the reasons for such results (e.g., market
conditions, security selection) and any efforts being undertaken to improve
performance. LIVESTRONG Income Portfolio's performance for both the one- and
three-year periods was above the median for its peer group. LIVESTRONG 2015
Portfolio's and LIVESTRONG 2035 Portfolio's performance fell below the median
for both the one- and three-year periods during part of the past year.
LIVESTRONG 2025 Portfolio's performance fell below the median for the one-year
period and was equal to the median for the three-year period. LIVESTRONG 2045
Portfolio's performance was slightly below the median for the one-year period
and above the median for the three-year period. The board discussed the funds'
performance with the advisor and was satisfied with the efforts being
undertaken by the advisor.

SHAREHOLDER AND OTHER SERVICES. The advisor provides the funds with a
comprehensive package of transfer agency, shareholder, and other services. The
Directors review reports and evaluations of such services at their regular
quarterly meetings, including the annual meeting concerning contract review,
and reports to the board. These reports include, but are not limited to,
information regarding the operational efficiency and accuracy of the
shareholder and transfer agency services provided, staffing levels,
shareholder satisfaction (as measured by external as well as internal
sources), technology support, new products and services offered to fund
shareholders, securities trading activities, portfolio valuation services,
auditing services, and legal and operational compliance activities. Certain
aspects of shareholder and transfer agency service level efficiency and the
quality of securities trading activities are measured by independent third
party providers and are presented in comparison to other fund groups not
managed by the advisor.

COSTS OF SERVICES PROVIDED AND PROFITABILITY TO THE ADVISOR. The advisor
provides detailed information concerning its cost of providing various
services to the funds, its profitability in managing the funds, its overall
profitability, and its financial condition. The Directors have reviewed with
the advisor the methodology used to prepare this financial information. This
financial information regarding the advisor is considered in order to evaluate
the advisor's financial condition, its ability to continue to provide services
under the management agreement, and the reasonableness of the current
management fee.

ETHICS OF THE ADVISOR. The Directors generally consider the advisor's
commitment to providing quality services to shareholders and to conducting its
business ethically. They noted that the advisor's practices generally meet or
exceed industry best practices.

ECONOMIES OF SCALE. The Directors review reports provided by the advisor on
economies of scale for the complex as a whole and the year-over-year changes
in revenue, costs, and profitability. The Directors concluded that economies
of scale are difficult to measure and predict with precision, especially on a
fund-by-fund basis. This analysis is also complicated by the additional
services and content provided by the advisor and its reinvestment in its
ability to provide and expand those services. Accordingly, the Directors also
seek to evaluate economies of scale by reviewing other information, such as
year-over-year profitability of the advisor generally, the profitability of
its management of the funds specifically, the expenses incurred by the advisor
in providing various functions to the funds, and the breakpoint fees of
competitive funds


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66


not managed by the advisor. The Directors believe the advisor is appropriately
sharing economies of scale through its competitive fee structure, fee
breakpoints as the funds increase in size, and through reinvestment in its
business to provide shareholders additional content and services.

COMPARISON TO OTHER FUNDS' FEES. The funds invest their non-cash assets
entirely in other American Century funds. The funds do not pay an investment
advisor fee to the advisor. Rather, each fund indirectly bears its pro rata
share of the expenses incurred by the underlying funds. Each of the underlying
funds pay the advisor a single, all-inclusive (or unified) management fee for
providing all services necessary for the management and operation of the
funds, other than brokerage expenses, taxes, interest, extraordinary expenses,
and the fees and expenses of the funds' independent directors (including their
independent legal counsel). Under the unified fee structure, the advisor is
responsible for providing all investment advisory, custody, audit,
administrative, compliance, recordkeeping, marketing and shareholder services,
or arranging and supervising third parties to provide such services. By
contrast, most other funds are charged a variety of fees, including an
investment advisory fee, a transfer agency fee, an administrative fee,
distribution charges and other expenses. Other than their investment advisory
fees and Rule 12b-1 distribution fees, all other components of the total fees
charged by these other funds may be increased without shareholder approval.
The board believes the unified fee structure is a benefit to fund shareholders
because it clearly discloses to shareholders the cost of owning fund shares,
and, since the unified fee cannot be increased without a vote of fund
shareholders, it shifts to the advisor the risk of increased costs of
operating the funds and provides a direct incentive to minimize administrative
inefficiencies. Part of the Directors' analysis of fee levels involves
reviewing certain evaluative data compiled by a 15(c) Provider comparing the
portion of the expenses incurred by the underlying funds to the total expense
ratio of other funds in the funds' peer group. The expenses of LIVESTRONG
Income Portfolio were in the lowest quartile of the total expense ratios of
its peer group. All other funds' expenses were above the median of the total
expense ratios of their respective peer groups.

COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The
Directors also requested and received information from the advisor concerning
the nature of the services, fees, and profitability of its advisory services
to advisory clients other than the funds. They observed that these varying
types of client accounts require different services and involve different
regulatory and entrepreneurial risks than the management of the funds. The
Directors analyzed this information and concluded that the fees charged and
services provided to the funds were reasonable by comparison.

COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information
from the advisor concerning collateral benefits it receives as a result of its
relationship with the funds. They concluded that the advisor's primary
business is managing mutual funds and it generally does not use fund or
shareholder information to generate profits in other lines of business, and
therefore does not derive any significant collateral benefits from them. The
Directors noted that the advisor receives proprietary research from
broker-dealers that execute fund portfolio transactions and concluded that
this research is likely to benefit fund shareholders. The Directors also
determined that the advisor is able to provide investment management services
to certain clients other than the funds, at least in part, due to its existing
infrastructure built to serve the fund complex. The Directors concluded,
however, that the assets of those other clients are not material to the
analysis and, in any event, are included with the assets of the funds to
determine breakpoints in the funds' fee schedule, provided they are managed
using the same investment team and strategy.


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67


CONCLUSIONS OF THE DIRECTORS

As a result of this process, the independent directors, in the absence of
particular circumstances and assisted by the advice of legal counsel that is
independent of the advisor, taking into account all of the factors discussed
above and the information provided by the advisor concluded that the
investment management agreement between the funds and the advisor is fair and
reasonable in light of the services provided and should be renewed.


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SHARE CLASS INFORMATION

Four classes of shares are authorized for sale by the funds: Investor Class,
Institutional Class, Advisor Class and R Class. The total expense ratio of
Institutional Class shares is lower than that of Investor Class shares; the
total expense ratios of the Advisor Class and R Class shares is higher than
that of Investor Class shares.

INVESTOR CLASS shares are available for purchase in two ways: 1) directly from
American Century without any commissions or other fees; or 2) through certain
financial intermediaries (such as banks, broker-dealers, insurance companies
and investment advisors), which may require payment of a transaction fee to
the financial intermediary.

INSTITUTIONAL CLASS shares are available to large investors such as
endowments, foundations, and retirement plans, and to financial intermediaries
serving these investors. This class recognizes the relatively lower cost of
serving institutional customers and others who invest at least $5 million ($3
million for endowments and foundations) in an American Century fund or at
least $10 million in multiple funds. In recognition of the larger investments
and account balances and comparatively lower transaction costs, the total
expense ratio of Institutional Class shares is 0.20% less than the total
expense ratio of Investor Class shares.

ADVISOR CLASS shares are sold primarily through institutions such as
investment advisors, banks, broker-dealers, insurance companies, and financial
advisors. Advisor Class shares are subject to a 0.25% annual Rule 12b-1
distribution and service fee. The total expense ratio of Advisor Class shares
is 0.25% higher than the total expense ratio of Investor Class shares.

R CLASS shares are sold primarily through employer-sponsored retirement plans
and through institutions such as investment advisors, banks, broker-dealers,
and insurance companies. R Class shares are subject to a 0.50% annual Rule
12b-1 distribution and service fee. The total expense ration of R Class shares
is 0.50% higher than the total expense ration of Investor Class shares.

All classes of shares represent a pro rata interest in the funds and generally
have the same rights and preferences.


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ADDITIONAL INFORMATION

RETIREMENT ACCOUNT INFORMATION

As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.

If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. Even if you plan to roll over the amount you
withdraw to another tax-deferred account, the withholding rate still applies
to the withdrawn amount unless we have received notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.

Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments
are not sufficient.

State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.

PROXY VOTING GUIDELINES

American Century Investment Management, Inc., the funds' investment advisor,
is responsible for exercising the voting rights associated with the securities
purchased and/or held by the funds. A description of the policies and
procedures the advisor uses in fulfilling this responsibility is available
without charge, upon request, by calling 1-800-345-2021. It is also available
on American Century's website at americancentury.com and on the Securities and
Exchange Commission's website at sec.gov. Information regarding how the
investment advisor voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available on the "About Us" page
at americancentury.com. It is also available at sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.


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INDEX DEFINITIONS

The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.

The CITIGROUP NON-U.S. WORLD GOVERNMENT BOND INDEX is based on the Citigroup
World Bond Index, and excludes issues denominated in U.S. dollars. The index
measures the total return of government securities in major sectors of the
international bond market.

The CITIGROUP US BROAD INVESTMENT-GRADE (BIG) BOND INDEX is a market-
capitalization-weighted index that includes fixed-rate Treasury, government-
sponsored, mortgage, asset-backed, and investment-grade issues with a maturity
of one year or longer.

The LEHMAN BROTHERS U.S. AGGREGATE INDEX represents securities that are
taxable, registered with the Securities and Exchange Commission, and U.S.
dollar-denominated. The index covers the U.S. investment-grade fixed-rate bond
market, with index components for government and corporate securities,
mortgage pass-through securities, and asset-backed securities.

Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.

The MSCI EAFE® (Europe, Australasia, Far East) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.

The MSCI EM® (Emerging Markets) INDEX represents the performance of stocks in
global emerging market countries.

The RUSSELL 1000® INDEX is a market-capitalization weighted, large-cap index
created by Frank Russell Company to measure the performance of the 1,000
largest companies in the Russell 3000 Index (the 3,000 largest publicly traded
U.S. companies, based on total market capitalization).

The RUSSELL 2000® INDEX is a market-capitalization weighted index created by
Frank Russell Company to measure the performance of the 2,000 smallest of the
3,000 largest publicly traded U.S. companies, based on total market
capitalization.

The RUSSELL 3000® INDEX measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.

The RUSSELL MIDCAP® INDEX measures the performance of the 800 smallest of the
1,000 largest publicly traded U.S. companies, based on total market
capitalization.

The S&P 500 INDEX is a market value-weighted index of the stocks of 500
publicly traded U.S. companies chosen for market size, liquidity, and industry
group representation that are considered to be leading firms in dominant
industries. Each stock's weight in the index is proportionate to its market
value. Created by Standard & Poor's, it is considered to be a broad measure of
U.S. stock market performance.


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NOTES


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[back cover]

CONTACT US

AMERICANCENTURY.COM

AUTOMATED INFORMATION LINE:
1-800-345-8765

INVESTOR SERVICES REPRESENTATIVE:
1-800-345-2021 or 816-531-5575

BUSINESS, NOT-FOR-PROFIT,
EMPLOYER-SPONSORED RETIREMENT PLANS:
1-800-345-3533

BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL PROFESSIONALS, INSURANCE COMPANIES:
1-800-345-6488

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

AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.

INVESTMENT ADVISOR:
American Century Investment Management, Inc.
Kansas City, Missouri

THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.

American Century Investment Services, Inc., Distributor

©2007 American Century Proprietary Holdings, Inc. All rights reserved.

The American Century Investments logo, American Century and American Century
Investments are service marks of American Century Proprietary Holdings, Inc.

0709
SH-ANN-56322N






[front cover

AMERICAN CENTURY INVESTMENTS
Annual Report               July 31, 2007

[photo of summer]

One Choice Portfolio(SM): Very Conservative
One Choice Portfolio(SM): Conservative
One Choice Portfolio(SM): Moderate
One Choice Portfolio(SM): Aggressive
One Choice Portfolio(SM): Very Aggressive

[american century investments logo and text logo]




OUR MESSAGE TO YOU

We have the privilege of providing you with the annual report for the American
Century® One Choice Portfolios for the 12 months ended July 31, 2007, to help
you monitor your investment.

2007 has been an eventful year for the financial markets and for us. While the
markets experienced subprime-related turbulence, we've been working to secure
a smooth executive leadership transition. In our semiannual report, we
announced the promotion of former international equity chief investment
officer (CIO) Enrique Chang to overall CIO. One of Enrique's immediate
challenges was to hire a new international equity CIO, which he accomplished
in May when Mark On joined us from AXA Rosenberg. Enrique also hired Steve
Lurito from MUUS Asset Management LLC in July to fill our vacant U.S. growth
equity CIO position.

We also announced the promotion of Jonathan Thomas to chief executive officer,
effective March 1. In June, Jonathan hired Barry Fink, who came to us from
Morgan Stanley, as chief operating officer. This completed our leadership
transition, and helped make it possible for my son, Jim Stowers III, to step
down from the American Century Companies, Inc. (ACC) board of directors at the
end of July to focus on his new business ventures. I remain co-chair of the
ACC board with Richard Brown, who has been on the board since 1998 and also
co-chairs the Stowers Institute for Medical Research board.

Jim's recent departure, after he relinquished his executive leadership and
investment management responsibilities in early 2005, reflects his comfort
with the firm's direction and new leadership. As with Jim before them, we've
been energized by the skills and experience brought to the leadership team by
Jonathan, Enrique, Barry, Mark, and Steve. They've already had a positive
impact on the development and management of the products and services we take
pride in delivering to you.

[photo of James E. Stowers, Jr.]

/s/James E. Stowers, Jr.
FOUNDER AND CO-CHAIRMAN OF THE BOARD
AMERICAN CENTURY COMPANIES, INC.




TABLE OF CONTENTS

ONE CHOICE PORTFOLIOS

     Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2
     Portfolio Commentary. . . . . . . . . . . . . . . . . . . . . . . . .      6
      Market Index Total Returns . . . . . . . . . . . . . . . . . . . . .      6
      Underlying Fund Allocations. . . . . . . . . . . . . . . . . . . . .      7
      Types of Investments in Portfolios . . . . . . . . . . . . . . . . .      8
     Shareholder Fee Examples. . . . . . . . . . . . . . . . . . . . . . .     10
     Schedule of Investments . . . . . . . . . . . . . . . . . . . . . . .     12

FINANCIAL STATEMENTS

     Statement of Assets and Liabilities . . . . . . . . . . . . . . . . .     15
     Statement of Operations . . . . . . . . . . . . . . . . . . . . . . .     17
     Statement of Changes in Net Assets. . . . . . . . . . . . . . . . . .     19
     Notes to Financial Statements . . . . . . . . . . . . . . . . . . . .     22
     Financial Highlights. . . . . . . . . . . . . . . . . . . . . . . . .     30
     Report of Independent Registered Public Accounting Firm . . . . . . .     35

OTHER INFORMATION

     Proxy Voting Results. . . . . . . . . . . . . . . . . . . . . . . . .     36
     Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     37
     Approval of Management Agreement for One Choice Portfolios. . . . . .     40
     Additional Information. . . . . . . . . . . . . . . . . . . . . . . .     45
     Index Definitions . . . . . . . . . . . . . . . . . . . . . . . . . .     46

The opinions expressed in the Portfolio Commentary reflect those of the
portfolio management team as of the date of the report, and do not necessarily
represent the opinions of American Century or any other person in the American
Century organization. Any such opinions are subject to change at any time
based upon market or other conditions and American Century disclaims any
responsibility to update such opinions. These opinions may not be relied upon
as investment advice and, because investment decisions made by American
Century funds are based on numerous factors, may not be relied upon as an
indication of trading intent on behalf of any American Century fund. Security
examples are used for representational purposes only and are not intended as
recommendations to purchase or sell securities. Performance information for
comparative indices and securities is provided to American Century by third
party vendors. To the best of American Century's knowledge, such information
is accurate at the time of printing.




PERFORMANCE
One Choice Portfolios

Total Returns as of July 31, 2007
                                                       Average Annual
                                                          Returns
                                                                        Inception
                                            1 year    Since Inception      Date
ONE CHOICE PORTFOLIO:
VERY CONSERVATIVE -- INVESTOR CLASS         7.23%          5.62%         9/30/04

ONE CHOICE PORTFOLIO:
CONSERVATIVE -- INVESTOR CLASS              10.41%         8.08%         9/30/04

ONE CHOICE PORTFOLIO:
MODERATE -- INVESTOR CLASS                  14.56%         11.61%        9/30/04

ONE CHOICE PORTFOLIO:
AGGRESSIVE -- INVESTOR CLASS                18.78%         14.16%        9/30/04

ONE CHOICE PORTFOLIO:
VERY AGGRESSIVE -- INVESTOR CLASS           21.87%         16.42%        9/30/04

RUSSELL 3000 INDEX(1)                       16.08%         12.60%           --

CITIGROUP US BROAD
INVESTMENT-GRADE BOND INDEX(1)(2)           5.55%          3.43%            --

LEHMAN BROTHERS
U.S. AGGREGATE INDEX(1)                     5.58%          3.37%            --

(1) Data provided by Lipper Inc. - A Reuters Company. © 2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
  The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.

(2) In September of 2006, the portfolios changed their fixed income index from
the Lehman Brothers U.S. Aggregate Index to the Citigroup US Broad
Investment-Grade Bond Index. The fund's investment advisor believes this index
better represents the fixed income portion of the fund's portfolio composition.

The Russell 3000 Index represents approximately 98% of investable U.S. equity
market and provides a broad measure of equity performance. The Lehman Brothers
U.S. Aggregate Index and the Citigroup US Broad Investment-Grade Bond Index
represent the U.S. investment-grade fixed-rate bond market and provide a broad
measure of bond market performance. Performance for these indices is provided
for reference only. None of the indices are intended to represent the
composition of the portfolio, which invests in a mix of equity and
fixed-income securities. (See the Schedule of Investments for the portfolio's
asset allocations as of July 31, 2007.)

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. International investing involves special risks, such as political
instability and currency fluctuations. Investing in emerging markets may
accentuate these risks.

Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the indices are
provided for comparison. The fund's total returns include operating expenses
that reduce returns, while the total returns of the indices do not.


------
2


One Choice Portfolios

Growth of $10,000 Over Life of One Choice Portfolio: Very Conservative
$10,000 investment made September 30, 2004

*From 9/30/04, the Investor Class's inception date. Not annualized.

Growth of $10,000 Over Life of One Choice Portfolio: Conservative
$10,000 investment made September 30, 2004

*From 9/30/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. International investing involves special risks, such as political
instability and currency fluctuations. Investing in emerging markets may
accentuate these risks.

Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the indices are
provided for comparison. The fund's total returns include operating expenses
that reduce returns, while the total returns of the indices do not.


------
3


One Choice Portfolios

Growth of $10,000 Over Life of One Choice Portfolio: Moderate
$10,000 investment made September 30, 2004

*From 9/30/04, the Investor Class's inception date. Not annualized.

Growth of $10,000 Over Life of One Choice Portfolio: Aggressive
$10,000 investment made September 30, 2004

*From 9/30/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. International investing involves special risks, such as political
instability and currency fluctuations. Investing in emerging markets may
accentuate these risks.

Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the indices are
provided for comparison. The fund's total returns include operating expenses
that reduce returns, while the total returns of the indices do not.


------
4


One Choice Portfolios

Growth of $10,000 Over Life of One Choice Portfolio: Very Aggressive
$10,000 investment made September 30, 2004

*From 9/30/04, the Investor Class's inception date. Not annualized.

One-Year Returns Over Life of Class
Periods ended July 31
                                                   2005*       2006      2007
One Choice Portfolio:
Very Conservative -- Investor Class                5.43%      3.27%     7.23%

One Choice Portfolio:
Conservative -- Investor Class                     8.08%      4.45%     10.41%

One Choice Portfolio:
Moderate -- Investor Class                         11.71%     6.68%     14.56%

One Choice Portfolio:
Agressive -- Investor Class                        13.61%     7.84%     18.78%

One Choice Portfolio:
Very Aggressive -- Investor Class                  15.81%     9.00%     21.87%

Russell 3000 Index                                 14.67%     5.14%     16.08%

Citigroup US Broad
Investment-Grade Bond Index                        2.72%      1.47%     5.55%

Lehman Brothers U.S. Aggregate Index               2.55%      1.46%     5.58%

*From 9/30/04, the Investor Class's inception date. Not annualized.

Data presented reflect past performance. Past performance is no guarantee of
future results. Current performance may be higher or lower than the
performance shown. Investment return and principal value will fluctuate, and
redemption value may be more or less than original cost. To obtain performance
data current to the most recent month end, please call 1-800-345-2021 or visit
americancentury.com. The performance of the portfolios is dependent on the
performance of their underlying American Century funds, and will assume the
risks associated with these funds. The risks will vary according to each
portfolio's asset allocation, and the risk level assigned to each portfolio is
intended to reflect the relative short-term price volatility among the funds
in each. International investing involves special risks, such as political
instability and currency fluctuations. Investing in emerging markets may
accentuate these risks.

Data assumes reinvestment of dividends and capital gains, and none of the
charts reflect the deduction of taxes that a shareholder would pay on fund
distributions or the redemption of fund shares. Returns for the indices are
provided for comparison. The fund's total returns include operating expenses
that reduce returns, while the total returns of the indices do not.


------
5


PORTFOLIO COMMENTARY
One Choice Portfolios

Portfolio Managers: Jeff Tyler and Irina Torelli

PERFORMANCE SUMMARY

All five of the One Choice Portfolios enjoyed strong results for the year
ended July 31, 2007. Returns ranged from 7.23% for One Choice: Very
Conservative to 21.87% for One Choice: Very Aggressive (see pages 2-5 for more
detailed performance information). The Portfolios' performance reflected
double-digit gains for stocks, both in the U.S. and overseas, as well as solid
gains in the bond market.

Because of the Portfolios' strategic exposure to the various asset classes, a
review of the financial markets helps explain much of their performance.

STOCK MARKET REVIEW

U.S. stocks produced robust returns during the past year despite an economic
slowdown brought on by a sharp decline in the housing market. Corporate
earnings growth decelerated -- ending a streak of double-digit quarterly
earnings growth for the S&P 500 Index that began in 2002 -- but continued to
outshine expectations. In addition, heavy merger activity provided support for
stocks thanks to a deluge of leveraged buy-outs from private equity firms.

Although the broad stock indexes returned more than 15% for the one-year
period, the market hit a couple of speed bumps over the last six months.
Stocks stumbled in late February, mirroring a drop in the Chinese stock
market, but rebounded quickly in early March. The market grew choppy in the
last two months and ended the period with a sharp decline as higher energy
prices and deteriorating credit conditions -- sparked by problems in the
subprime lending industry -- weighed on investor confidence.

Mid-cap stocks led the market's advance, followed by large-cap shares, while
small-cap issues lagged. After trailing value stocks for six consecutive
years, growth-oriented issues outperformed by a wide margin over the past 12
months.

International stocks outperformed the domestic market as improving global
economic conditions and a declining U.S. dollar boosted foreign markets. The
top performers were emerging markets, with Latin America generating the
largest gains. Among developed markets, European bourses posted the best
returns, while Japanese shares lagged as a burgeoning economic recovery in the
country appeared to stall.

Market Index Total Returns
For the 12 months ended July 31, 2007

U.S. STOCKS
Russell 1000 (Large-Cap)(1)                     16.45%
Russell Midcap(1)                               18.93%
Russell 2000 (Small-Cap)(1)                     12.12%

INTERNATIONAL STOCKS
MSCI EAFE                                       23.91%
MSCI EM                                         50.94%

U.S. FIXED INCOME
Lehman Brothers U.S. Aggregate(1)                5.58%
10-Year U.S. Treasury Note                       5.87%
90-Day U.S. Treasury Bill(1)                     5.21%

INTERNATIONAL BONDS
Citigroup Non-U.S. World Government Bond         4.86%

(1) Data provided by Lipper Inc. -- A Reuters Company. © 2007 Reuters. All
rights reserved. Any copying, republication or redistribution of Lipper
content, including by caching, framing or similar means, is expressly
prohibited without the prior written consent of Lipper. Lipper shall not be
liable for any errors or delays in the content, or for any actions taken in
reliance thereon.
  The data contained herein has been obtained from company reports, financial
reporting services, periodicals and other resources believed to be reliable.
Although carefully verified, data on compilations is not guaranteed by Lipper
and may be incomplete. No offer or solicitations to buy or sell any of the
securities herein is being made by Lipper.


------
6


One Choice Portfolios

BOND MARKET REVIEW

The U.S. bond market delivered solid gains during the period as interest rates
declined overall. The Federal Reserve (the Fed) held short-term interest rates
steady throughout the one-year period as economic activity decelerated while
inflation remained above the Fed's comfort level, largely because of
stubbornly high energy prices.

Although bond yields fluctuated in response to economic data, energy price
volatility, and subprime lending woes, yields were little changed overall
between July 2006 and June 2007. In July 2007, however, a "flight to quality"
resulting from a worsening credit environment led to a sizable decline in
yields, producing higher bond prices.

High-yield corporate bonds were the best performers for the one-year period,
though they underperformed in the flight to quality late in the period. In
contrast, Treasury bonds benefited the most from the flight to quality, and as
a result they generated the best returns among investment-grade bond sectors.

Foreign bonds also produced positive results as the U.S. dollar fell against
most major currencies (with the notable exception of the Japanese yen).
Overseas bond returns were positive despite stronger economic growth that led
central banks in many countries to raise interest rates.

Underlying Fund Allocations as a % of net assets as of July 31, 2007(1)
                      Very                                                  Very
                  Conservative   Conservative   Moderate   Aggressive    Aggressive

Equity Growth
Fund                  4.4%           8.3%         15.1%       13.7%        16.9%

Growth Fund           3.0%           5.3%         8.5%        15.1%        18.4%

Large Company
Value Fund            7.7%           10.6%        9.2%        8.2%         10.2%

Real Estate Fund      1.8%           1.9%         1.9%        1.9%          1.9%

Small Company
Fund                  0.9%           1.4%         1.9%        2.1%          2.4%

Value Fund            4.0%           5.7%         4.3%        3.6%          4.8%

Vista Fund            1.5%           4.0%         7.1%        13.8%        16.9%

Emerging
Markets Fund           --             --          4.2%        6.8%          7.9%

International
Growth Fund            --            6.0%         10.0%       12.5%        15.6%

Diversified
Bond Fund             40.4%          37.5%        25.5%       15.3%         2.0%

High-Yield Fund        --             --          1.9%        3.9%           --

International
Bond Fund             11.3%          9.3%         4.2%        1.0%          1.0%

Prime Money
Market Fund           24.8%          9.8%         6.1%        2.0%          2.0%

Other Assets
and Liabilities       0.2%           0.2%         0.1%        0.1%         --(2)

(1) Underlying fund investments represent Investor Class.

(2) Category is less than 0.05% of total net assets.


------
7


One Choice Portfolios

PORTFOLIO PERFORMANCE

Each One Choice Portfolio is a "fund of funds" that invests in other American
Century mutual funds to achieve its investment objective and target asset
allocation. (See page 7 for the specific underlying fund allocations for each
One Choice Portfolio.)

With one exception, the equity funds in the One Choice Portfolios registered
double-digit gains for the one-year period. Emerging Markets was the top
performer, advancing sharply thanks to surging markets in developing
countries. International Growth also produced a healthy gain for the period.
Among domestic holdings, Vista was the best performer, reflecting the
outperformance of mid-cap stocks. The Portfolios' large-cap growth component,
which includes Growth and Equity Growth, also fared well. The exception was
Real Estate, which posted a fractionally positive return overall in the wake
of a double-digit decline in the last few months of the period. Real Estate
stocks fell as the worsening environment for debt financing reduced the
likelihood of private equity buyouts in the sector.

The performance of the Portfolios' fixed-income funds were in line with the
broad returns of the bond market. International Bond was the best performer,
followed by Diversified Bond and High-Yield. Prime Money Market provided
principal protection and a return that outpaced the three-month U.S. Treasury
bill.

Types of Investments in Portfolios as a % of net assets as of July 31, 2007
                         Very                                                 Very
                     Conservative   Conservative   Moderate   Aggressive   Aggressive

EQUITY

 Large Cap
 Value                  11.7%           16.3%        13.5%       11.8%        15.0%

 Large Cap
 Blend                   4.4%           8.3%         15.1%       13.7%        16.9%

 Large Cap
 Blend --
 International            --            6.0%         10.0%       12.5%        15.6%

 Large Cap
 Growth                  3.0%           5.3%         8.5%        15.1%        18.4%

 Large Cap
 Growth --
 International            --             --          4.2%        6.8%         7.9%

 Mid Cap
 Growth                  1.5%           4.0%         7.1%        13.8%        16.9%

 Small Cap
 Value                   0.9%           1.4%         1.9%        2.1%         2.4%

 Real Estate             1.8%           1.9%         1.9%        1.9%         1.9%

TOTAL EQUITY            23.3%           43.2%        62.2%       77.7%        95.0%

FIXED INCOME

 Investment
 Grade                  40.4%           37.5%        25.5%       15.3%        2.0%

 High-Yield               --             --          1.9%        3.9%          --

 International          11.3%           9.3%         4.2%        1.0%         1.0%

TOTAL FIXED-INCOME      51.7%           46.8%        31.6%       20.2%        3.0%

MONEY MARKET            24.8%           9.8%         6.1%        2.0%         2.0%

OTHER ASSETS AND
LIABILITIES              0.2%           0.2%         0.1%        0.1%         --(1)

(1) Category is less than 0.05% of total net assets.


------
8


One Choice Portfolios

PORTFOLIO STRATEGY

Each Portfolio has a "neutral" asset mix that remains constant, but we
typically make modest adjustments to each Portfolio's actual asset mix to add
value and improve the Portfolios' ability to meet their investment objectives.
Over the past year, we shifted to a slight overweight position in bonds and a
matching underweight position in stocks. This defensive posture reflected our
expectations for a softer economy, weaker corporate earnings, and a declining
U.S. dollar. In general, this positioning detracted modestly from overall
performance as stocks continued to outperform.

Within the equity component of the Portfolios, we remained overweight in
large-cap stocks, which tend to hold up better in a weaker economic
environment because of their relatively consistent cash flows, and underweight
in mid- and smaller-company issues. Results from this positioning were
generally positive -- our large-cap overweight helped as large-cap stocks
posted strong gains, and although our mid-cap underweight hurt as mid-cap
shares outperformed, we benefited from strong stock selection in this segment
of the market. We also moved back to a neutral position in mid-cap issues
toward the end of the period.

The overweight in fixed-income securities consisted entirely of a modest
position in international bonds, which was based on our expectations for a
declining dollar given weaker economic activity in the U.S. and expanding
economies overseas. Domestically, we held an underweight in corporate bonds, a
defensive position designed to protect against "event risk"-- the risk of a
leveraged buyout, share buyback, or special dividend that benefits
stockholders at the expense of bondholders. For the Portfolios that have
exposure to High-Yield, we moved to an underweight position in the last half
of the period as the yield gap between Treasury and high-yield bonds reached
historically narrow levels.

STARTING POINT FOR NEXT REPORTING PERIOD

Although corporate earnings have held up better than expected, the dollar's
decline has played a key role -- 49% of the sales for the companies in the S&P
500 come from foreign operations, and a weaker dollar makes those overseas
revenues worth more at home. Going forward, however, we expect the economic
slowdown of the past year to take its toll on corporate profits as consumer
spending succumbs to higher gas prices and declining mortgage equity
withdrawals.

Market volatility has increased considerably in recent months, and we expect
that to continue going forward. This environment reinforces our conservative
tactical positioning for the Portfolios -- slightly underweight in stocks and
a modest overweight in bonds.


------
9


SHAREHOLDER FEE EXAMPLES (UNAUDITED)

Fund shareholders may incur two types of costs: (1) transaction costs,
including sales charges (loads) on purchase payments and redemption/exchange
fees; and (2) ongoing costs, including management fees; distribution and
service (12b-1) fees; and other fund expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in your fund
and to compare these costs with the ongoing cost of investing in other mutual
funds. As a shareholder in the underlying American Century funds, your fund
will indirectly bear its pro rata share of the expenses incurred by the
underlying funds. These expenses are not included in the fund's annualized
expense ratio or the expenses paid during the period. These expenses are,
however, included in the effective expenses paid during the period.

The example is based on an investment of $1,000 made at the beginning of the
period and held for the entire period from February 1, 2007 to July 31, 2007.

ACTUAL EXPENSES

The table provides information about actual account values and actual expenses
for each class. You may use the information, together with the amount you
invested, to estimate the expenses that you paid over the period. First,
identify the share class you own. Then simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then
multiply the result by the number under the heading "Expenses Paid During
Period" to estimate the expenses you paid on your account during this period.

If you hold Investor Class shares of any American Century fund, or
Institutional Class shares of the American Century Diversified Bond Fund, in
an American Century account (i.e., not a financial intermediary or retirement
plan account), American Century may charge you a $12.50 semiannual account
maintenance fee if the value of those shares is less than $10,000. We will
redeem shares automatically in one of your accounts to pay the $12.50 fee. In
determining your total eligible investment amount, we will include your
investments in all PERSONAL ACCOUNTS (including American Century Brokerage
accounts) registered under your Social Security number. PERSONAL ACCOUNTS
include individual accounts, joint accounts, UGMA/UTMA accounts, personal
trusts, Coverdell Education Savings Accounts and IRAs (including traditional,
Roth, Rollover, SEP-, SARSEP- and SIMPLE-IRAs), and certain other retirement
accounts. If you have only business, business retirement, employer-sponsored
or American Century Brokerage accounts, you are currently not subject to this
fee. We will not charge the fee as long as you choose to manage your accounts
exclusively online. If you are subject to the Account Maintenance Fee, your
account value could be reduced by the fee amount.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The table also provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio of each class of your
fund and an assumed rate of return of 5% per year before expenses, which is
not the actual return of a fund's share class. The hypothetical account values
and expenses may not be used to estimate the actual ending account balance or
expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in your fund and other funds. To do so, compare
this 5% hypothetical example with the 5% hypothetical examples that appear in
the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or redemption/exchange fees. Therefore, the table is useful in
comparing ongoing costs only, and will not help you determine the relative
total costs of owning different funds. In addition, if these transactional
costs were included, your costs would have been higher.


------
10


                                                                  Effective
                                         Expenses                 Expenses
                                         Paid                     Paid
                 Beginning   Ending      During                   During       Effective
                 Account     Account     Period(1)   Annualized   Period(2)   Annualized
                   Value       Value     2/1/07 -      Expense    2/1/07 -      Expense
                   2/1/07     7/31/07     7/31/07     Ratio(1)     7/31/07     Ratio(2)

One Choice Portfolio: Very Conservative
Actual             $1,000    $1,017.30     $0.00      0.00%(3)      $3.45        0.69%
Hypothetical       $1,000    $1,024.79     $0.00      0.00%(3)      $3.46        0.69%

One Choice Portfolio: Conservative
Actual             $1,000    $1,024.80     $0.00      0.00%(3)      $3.87        0.77%
Hypothetical       $1,000    $1,024.79     $0.00      0.00%(3)      $3.86        0.77%

One Choice Portfolio: Moderate
Actual             $1,000    $1,038.70     $0.00      0.00%(3)      $4.35        0.86%
Hypothetical       $1,000    $1,024.79     $0.00      0.00%(3)      $4.31        0.86%

One Choice Portfolio: Aggressive
Actual             $1,000    $1,056.30     $0.00      0.00%(3)      $4.79        0.94%
Hypothetical       $1,000    $1,024.79     $0.00      0.00%(3)      $4.71        0.94%

One Choice Portfolio: Very Aggressive
Actual             $1,000    $1,067.30     $0.00      0.00%(3)      $5.13        1.00%
Hypothetical       $1,000    $1,024.79     $0.00      0.00%(3)      $5.01        1.00%

(1) Expenses are equal to the fund's annualized expense ratio listed in the
table above, multiplied by the average account value over the period,
multiplied by 181, the number of days in the most recent fiscal half-year,
divided by 365, to reflect the one-half year period. The fees and expenses of
the underlying American Century funds in which the fund invests are not
included in the fund's annualized expense ratio.

(2) Effective expenses reflect the sum of expenses borne directly by the fund
plus the fund's pro rata share of the weighted average expense ratio of the
underlying funds in which it invests. The effective annualized expense ratio
combines the fund's annualized expense ratio and the annualized weighted
average expense ratio of the underlying funds. The annualized weighted average
expense ratio of the underlying funds for the one-half year period reflects
the actual expense ratio of each underlying fund from its most recent
shareholder report, annualized and weighted for the fund's relative average
investment therein during the period.

(3) Other expenses, which include the fees and expenses of the fund's
independent directors and its legal counsel, as well as interest, did not
exceed 0.005%.


------
11


SCHEDULE OF INVESTMENT
One Choice Portfolios

JULY 31, 2007

Shares                                                                      Value

One Choice Portfolio: Very Conservative

Mutual Funds(1) -- 99.8%

DOMESTIC FIXED INCOME FUNDS -- 40.4%
    1,672,271  Diversified Bond Fund Investor Class                   $16,538,761
                                                                     ------------
MONEY MARKET FUNDS -- 24.8%
   10,152,022  Prime Money Market Fund Investor Class                  10,152,022
                                                                     ------------
DOMESTIC EQUITY FUNDS -- 23.3%
       68,751  Equity Growth Fund Investor Class                        1,784,088
       51,420  Growth Fund Investor Class                               1,225,339
      412,204  Large Company Value Fund Investor Class                  3,136,872
       28,932  Real Estate Fund Investor Class                            756,572
       38,129  Small Company Fund Investor Class                          385,103
      217,015  Value Fund Investor Class                                1,653,654
       29,213  Vista Fund Investor Class                                  615,226
                                                                     ------------
                                                                        9,556,854
                                                                     ------------
INTERNATIONAL FIXED INCOME FUNDS -- 11.3%
      329,535  International Bond Fund Investor Class                   4,636,557
                                                                     ------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Cost $40,160,543)                                                     40,884,194
                                                                     ------------
OTHER ASSETS AND LIABILITIES -- 0.2%                                       98,621
                                                                     ------------
TOTAL NET ASSETS -- 100.0%                                            $40,982,815
                                                                     ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

Shares                                                                      Value

One Choice Portfolio: Conservative

Mutual Funds(1) -- 99.8%

DOMESTIC FIXED INCOME FUNDS -- 37.5%
    8,653,564  Diversified Bond Fund Investor Class                  $ 85,583,748
                                                                     ------------
DOMESTIC EQUITY FUNDS -- 37.2%
      725,342  Equity Growth Fund Investor Class                       18,822,625
      502,880  Growth Fund Investor Class                              11,983,630
    3,167,995  Large Company Value Fund Investor Class                 24,108,442
      161,780  Real Estate Fund Investor Class                          4,230,547
      319,768  Small Company Fund Investor Class                        3,229,657
    1,713,124  Value Fund Investor Class                               13,054,005
      438,398  Vista Fund Investor Class                                9,232,662
                                                                     ------------
                                                                       84,661,568
                                                                     ------------
MONEY MARKET FUNDS -- 9.8%
   22,372,011  Prime Money Market Fund Investor Class                  22,372,011
                                                                     ------------
INTERNATIONAL FIXED INCOME FUNDS -- 9.3%
    1,507,491  International Bond Fund Investor Class                  21,210,398
                                                                     ------------
INTERNATIONAL EQUITY FUNDS -- 6.0%
      988,506  International Growth Fund Investor Class                13,611,728
                                                                     ------------
TOTAL INVESTMENT SECURITIES -- 99.8%
(Cost $217,686,311)                                                   227,439,453
                                                                     ------------
OTHER ASSETS AND LIABILITIES -- 0.2%                                      390,104
                                                                     ------------
TOTAL NET ASSETS -- 100.0%                                           $227,829,557
                                                                     ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

See Notes to Financial Statements.


------
12


One Choice Portfolios

Shares                                                                      Value

One Choice Portfolio: Moderate

Mutual Funds(1) -- 99.9%

DOMESTIC EQUITY FUNDS -- 48.0%
    3,413,200  Equity Growth Fund Investor Class                     $ 88,572,541
    2,102,736  Growth Fund Investor Class                              50,108,199
    7,069,404  Large Company Value Fund Investor Class                 53,798,165
      417,609  Real Estate Fund Investor Class                         10,920,475
    1,100,773  Small Company Fund Investor Class                       11,117,807
    3,318,289  Value Fund Investor Class                               25,285,362
    1,982,955  Vista Fund Investor Class                               41,761,032
                                                                     ------------
                                                                      281,563,581
                                                                     ------------
DOMESTIC FIXED INCOME FUNDS -- 27.4%
   15,108,434  Diversified Bond Fund Investor Class                   149,422,412
    1,870,879  High-Yield Fund Investor Class                          11,487,197
                                                                     ------------
                                                                      160,909,609
                                                                     ------------
INTERNATIONAL EQUITY FUNDS -- 14.2%
    2,195,578  Emerging Markets Fund Investor Class                    24,656,341
    4,254,581  International Growth Fund Investor Class                58,585,580
                                                                     ------------
                                                                       83,241,921
                                                                     ------------
MONEY MARKET FUNDS -- 6.1%
   35,573,044  Prime Money Market Fund Investor Class                  35,573,044
                                                                     ------------
INTERNATIONAL FIXED INCOME FUNDS -- 4.2%
    1,731,065  International Bond Fund Investor Class                  24,356,085
                                                                     ------------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Cost $544,532,357)                                                   585,644,240
                                                                     ------------
OTHER ASSETS AND LIABILITIES -- 0.1%                                      732,312
                                                                     ------------
TOTAL NET ASSETS -- 100.0%                                           $586,376,552
                                                                     ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

Shares                                                                      Value

One Choice Portfolio: Aggressive

Mutual Funds(1) -- 99.9%

DOMESTIC EQUITY FUNDS -- 58.4%
   2,088,338  Equity Growth Fund Investor Class                      $ 54,192,371
   2,513,849  Growth Fund Investor Class                               59,905,023
   4,284,730  Large Company Value Fund Investor Class                  32,606,795
     282,762  Real Estate Fund Investor Class                           7,394,226
     838,718  Small Company Fund Investor Class                         8,471,052
   1,872,957  Value Fund Investor Class                                14,271,932
   2,594,601  Vista Fund Investor Class                                54,642,297
                                                                     ------------
                                                                      231,483,696
                                                                     ------------
INTERNATIONAL EQUITY FUNDS -- 19.3%
   2,417,645  Emerging Markets Fund Investor Class                     27,150,153
   3,602,665  International Growth Fund Investor Class                 49,608,697
                                                                     ------------
                                                                       76,758,850
                                                                     ------------
DOMESTIC FIXED INCOME FUNDS -- 19.2%
   6,140,346  Diversified Bond Fund Investor Class                     60,728,022
   2,534,166  High-Yield Fund Investor Class                           15,559,779
                                                                     ------------
                                                                       76,287,801
                                                                     ------------
MONEY MARKET FUNDS -- 2.0%
   8,031,973  Prime Money Market Fund Investor Class                    8,031,973
                                                                     ------------
INTERNATIONAL FIXED INCOME FUNDS -- 1.0%
     293,166  International Bond Fund Investor Class                    4,124,846
                                                                     ------------
TOTAL INVESTMENT SECURITIES -- 99.9%
(Cost $355,050,359)                                                   396,687,166
                                                                     ------------
OTHER ASSETS AND LIABILITIES -- 0.1%                                      334,715
                                                                     ------------
TOTAL NET ASSETS -- 100.0%                                           $397,021,881
                                                                     ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

See Notes to Financial Statements.


------
13


One Choice Portfolios

Shares                                                                      Value

One Choice Portfolio: Very Aggressive

Mutual Funds(1) -- 100.0%

DOMESTIC EQUITY FUNDS -- 71.5%
   1,097,999  Equity Growth Fund Investor Class                      $ 28,493,074
   1,304,700  Growth Fund Investor Class                               31,091,001
   2,258,544  Large Company Value Fund Investor Class                  17,187,520
     120,735  Real Estate Fund Investor Class                           3,157,220
     397,812  Small Company Fund Investor Class                         4,017,901
   1,065,877  Value Fund Investor Class                                 8,121,983
   1,352,983  Vista Fund Investor Class                                28,493,822
                                                                     ------------
                                                                      120,562,521
                                                                     ------------
INTERNATIONAL EQUITY FUNDS -- 23.5%
   1,189,434  Emerging Markets Fund Investor Class                     13,357,344
   1,906,138  International Growth Fund Investor Class                 26,247,520
                                                                     ------------
                                                                       39,604,864
                                                                     ------------
DOMESTIC FIXED INCOME FUNDS -- 2.0%
     349,452  Diversified Bond Fund Investor Class                      3,456,080
                                                                     ------------
MONEY MARKET FUNDS -- 2.0%
   3,427,061  Prime Money Market Fund Investor Class                    3,427,061
                                                                     ------------
INTERNATIONAL FIXED INCOME FUNDS -- 1.0%
     125,026  International Bond Fund Investor Class                    1,759,116
                                                                     ------------
TOTAL INVESTMENT SECURITIES -- 100.0%
(Cost $147,542,914)                                                   168,809,642
                                                                     ------------
OTHER ASSETS AND LIABILITIES(2)                                            34,197
                                                                     ------------
TOTAL NET ASSETS -- 100.0%                                           $168,843,839
                                                                     ============

Notes to Schedule of Investments

(1) Investments are funds within the American Century family of funds, of
which certain funds may be deemed to be under common control because of the
same board of directors.

(2) Category is less than 0.05% of total net assets..

See Notes to Financial Statements.


------
14


STATEMENT OF ASSETS AND LIABILITIES

JULY 31, 2007
                                             Very
                                     Conservative    Conservative        Moderate
ASSETS

Investment securities in
affiliates, at value (cost of
$40,160,543, $217,686,311 and
$544,532,357, respectively)           $40,884,194    $227,439,453    $585,644,240

Cash                                           91              55              74

Distributions receivable from
affiliates                                 98,530         390,049         732,238
                                     ------------    ------------    ------------

NET ASSETS                            $40,982,815    $227,829,557    $586,376,552
                                     ============    ============    ============

INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE

Outstanding                             3,883,145      20,023,945      46,598,206
                                     ============    ============    ============

NET ASSET VALUE PER SHARE                  $10.55          $11.38          $12.58
                                     ============    ============    ============

NET ASSETS CONSIST OF:

Capital (par value and
paid-in surplus)                      $40,154,369    $216,515,565    $539,453,770

Undistributed net investment
income                                    146,702         574,402       1,076,463

Accumulated undistributed net
realized gain (loss) on
investment transactions                  (41,907)         986,448       4,734,436

Net unrealized appreciation on
investments                               723,651       9,753,142      41,111,883
                                     ------------    ------------    ------------
                                      $40,982,815    $227,829,557    $586,376,552
                                     ============    ============    ============

See Notes to Financial Statements.


------
15


JULY 31, 2007
                                                                             Very
                                                       Aggressive      Aggressive
ASSETS

Investment securities in affiliates, at value
(cost of $355,050,359 and $147,542,914,
respectively)                                        $396,687,166    $168,809,642

Cash                                                           99              83

Receivable for capital shares sold                             --           8,870

Distributions receivable from affiliates                  334,616          25,244
                                                     ------------    ------------

NET ASSETS                                           $397,021,881    $168,843,839
                                                     ============    ============

INVESTOR CLASS CAPITAL SHARES, $0.01 PAR VALUE

Outstanding                                            28,991,841      11,583,439
                                                     ============    ============

NET ASSET VALUE PER SHARE                                  $13.69          $14.58
                                                     ============    ============

NET ASSETS CONSIST OF:

Capital (par value and paid-in surplus)              $349,127,264    $145,360,312

Undistributed net investment income                     2,560,142         542,638

Undistributed net realized gain on investment
transactions                                            3,697,668       1,674,161

Net unrealized appreciation on investments             41,636,807      21,266,728
                                                     ------------    ------------
                                                     $397,021,881    $168,843,839
                                                     ============    ============

See Notes to Financial Statements.


------
16


STATEMENT OF OPERATIONS

YEAR ENDED JULY 31, 2007
                                             Very
                                     Conservative    Conservative        Moderate
INVESTMENT INCOME (LOSS)

INCOME:

Income distributions from
underlying funds - affiliates          $1,238,354     $ 5,554,626     $12,596,277
                                      -----------     -----------     -----------

EXPENSES:

Directors' fees and expenses                  517           2,830           7,013
                                      -----------     -----------     -----------

NET INVESTMENT INCOME (LOSS)            1,237,837       5,551,796      12,589,264
                                      -----------     -----------     -----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES

NET REALIZED GAIN (LOSS) ON:

Sale of investments in
underlying funds                         (57,829)          15,943         183,753

Capital gain distributions
received from underlying funds            151,465       1,248,851       5,068,675
                                      -----------     -----------     -----------
                                           93,636       1,264,794       5,252,428
                                      -----------     -----------     -----------

CHANGE IN NET UNREALIZED
APPRECIATION (DEPRECIATION) ON
INVESTMENTS                               599,099       8,245,024      34,772,872
                                      -----------     -----------     -----------

NET REALIZED AND UNREALIZED GAIN
(LOSS)                                    692,735       9,509,818      40,025,300
                                      -----------     -----------     -----------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS       $1,930,572     $15,061,614     $52,614,564
                                      ===========     ===========     ===========

See Notes to Financial Statements.


------
17


YEAR ENDED JULY 31, 2007
                                                                             Very
                                                       Aggressive      Aggressive
INVESTMENT INCOME (LOSS)

INCOME:

Income distributions from
underlying funds - affiliates                         $ 7,527,567     $ 2,338,902
                                                      -----------     -----------

EXPENSES:

Directors' fees and expenses                                4,887           2,038
                                                      -----------     -----------

NET INVESTMENT INCOME (LOSS)                            7,522,680       2,336,864
                                                      -----------     -----------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON AFFILIATES

NET REALIZED GAIN (LOSS) ON:

Sale of investments in underlying funds                   248,953         107,976

Capital gain distributions received
from underlying funds                                   3,786,253       1,835,083
                                                      -----------     -----------
                                                        4,035,206       1,943,059
                                                      -----------     -----------

CHANGE IN NET UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS                          36,566,103      18,579,766
                                                      -----------     -----------

NET REALIZED AND UNREALIZED GAIN (LOSS)                40,601,309      20,522,825
                                                      -----------     -----------

NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS                                       $48,123,989     $22,859,689
                                                      ===========     ===========

See Notes to Financial Statements.


------
18


STATEMENT OF CHANGES IN NET ASSETS

YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                                 Very Conservative                    Conservative
Increase
(Decrease) in Net
Assets                        2007            2006            2007            2006

OPERATIONS

Net investment
income (loss)           $1,237,837       $ 482,566     $ 5,551,796     $ 2,293,357

Net realized gain
(loss)                      93,636        (32,553)       1,264,794         241,594

Change in net
unrealized
appreciation
(depreciation)             599,099          10,991       8,245,024         639,449
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in net
assets resulting
from operations          1,930,572         461,004      15,061,614       3,174,400
                      ------------    ------------    ------------    ------------

DISTRIBUTIONS TO SHAREHOLDERS

From net
investment income      (1,153,304)       (445,170)     (5,231,274)     (2,121,359)

From net realized
gains                     (69,135)        (12,349)       (467,169)        (54,085)
                      ------------    ------------    ------------    ------------
Decrease in net
assets from
distributions          (1,222,439)       (457,519)     (5,698,443)     (2,175,444)
                      ------------    ------------    ------------    ------------

CAPITAL SHARE TRANSACTIONS

Proceeds from
shares sold             29,687,745      15,527,335     138,628,869      85,607,594

Proceeds from
reinvestment of
distributions            1,174,189         438,945       5,503,221       2,099,406

Payments for
shares redeemed       (10,439,388)     (6,249,815)    (36,050,020)    (21,504,844)
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in net
assets from
capital share
transactions            20,422,546       9,716,465     108,082,070      66,202,156
                      ------------    ------------    ------------    ------------

NET INCREASE
(DECREASE) IN NET
ASSETS                  21,130,679       9,719,950     117,445,241      67,201,112

NET ASSETS

Beginning of
period                  19,852,136      10,132,186     110,384,316      43,183,204
                      ------------    ------------    ------------    ------------
End of period          $40,982,815     $19,852,136    $227,829,557    $110,384,316
                      ============    ============    ============    ============

Undistributed net
investment income         $146,702         $62,169        $574,402        $253,880
                      ============    ============    ============    ============

TRANSACTIONS IN SHARES OF THE FUND

Sold                     2,818,872       1,524,331      12,377,036       8,083,889

Issued in
reinvestment of
distributions              112,054          43,390         491,552         200,128

Redeemed                 (988,497)       (613,143)     (3,195,492)     (2,030,348)
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in
shares of the fund       1,942,429         954,578       9,673,096       6,253,669
                      ============    ============    ============    ============

See Notes to Financial Statements.


------
19


YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                                          Moderate                      Aggressive
Increase
(Decrease) in Net
Assets                        2007            2006            2007            2006

OPERATIONS

Net investment
income (loss)         $ 12,589,264     $ 4,955,123     $ 7,522,680     $ 3,222,238

Net realized gain
(loss)                   5,252,428       1,015,983       4,035,206         821,545

Change in net
unrealized
appreciation
(depreciation)          34,772,872       3,109,672      36,566,103       2,197,038
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in net
assets resulting
from operations         52,614,564       9,080,778      48,123,989       6,240,821
                      ------------    ------------    ------------    ------------

DISTRIBUTIONS TO SHAREHOLDERS

From net
investment income     (11,946,777)     (4,656,349)     (6,046,156)     (2,399,441)

From net realized
gains                  (1,486,925)        (85,464)     (1,127,285)        (60,490)
                      ------------    ------------    ------------    ------------
Decrease in net
assets from
distributions         (13,433,702)     (4,741,813)     (7,173,441)     (2,459,931)
                      ------------    ------------    ------------    ------------

CAPITAL SHARE TRANSACTIONS

Proceeds from
shares sold            350,149,847     184,059,502     206,152,389     145,803,669

Proceeds from
reinvestment of
distributions           12,997,995       4,577,903       7,051,677       2,416,686

Payments for
shares redeemed       (69,562,395)    (36,678,759)    (48,482,618)    (25,274,500)
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in net
assets from
capital share
transactions           293,585,447     151,958,646     164,721,448     122,945,855
                      ------------    ------------    ------------    ------------

NET INCREASE
(DECREASE) IN NET
ASSETS                 332,766,309     156,297,611     205,671,996     126,726,745

NET ASSETS

Beginning of
period                 253,610,243      97,312,632     191,349,885      64,623,140
                      ------------    ------------    ------------    ------------
End of period         $586,376,552    $253,610,243    $397,021,881    $191,349,885
                      ============    ============    ============    ============

Undistributed net
investment income       $1,076,463        $433,976      $2,560,142      $1,083,618
                      ============    ============    ============    ============

TRANSACTIONS IN SHARES OF THE FUND

Sold                    28,824,439      16,339,558      15,967,469      12,363,087

Issued in
reinvestment of
distributions            1,067,879         413,171         552,206         210,696

Redeemed               (5,659,266)     (3,261,353)     (3,696,019)     (2,147,138)
                      ------------    ------------    ------------    ------------
Net increase
(decrease) in
shares of the fund      24,233,052      13,491,376      12,823,656      10,426,645
                      ============    ============    ============    ============

See Notes to Financial Statements.


------
20


YEARS ENDED JULY 31, 2007 AND JULY 31, 2006
                                                                   Very Aggressive
Increase (Decrease) in Net Assets                             2007            2006

OPERATIONS

Net investment income (loss)                           $ 2,336,864     $ 1,031,204

Net realized gain (loss)                                 1,943,059         253,117
Change in net unrealized appreciation
(depreciation)                                          18,579,766       1,333,630
                                                      ------------    ------------
Net increase (decrease) in net assets resulting
from operations                                         22,859,689       2,617,951
                                                      ------------    ------------

DISTRIBUTIONS TO SHAREHOLDERS

From net investment income                             (1,998,188)       (877,225)

From net realized gains                                  (491,017)        (26,412)
                                                      ------------    ------------
Decrease in net assets from distributions              (2,489,205)       (903,637)

CAPITAL SHARE TRANSACTIONS

Proceeds from shares sold                               94,590,521      62,885,135

Proceeds from reinvestment of distributions              2,423,425         882,423

Payments for shares redeemed                          (25,802,240)    (13,869,437)
                                                      ------------    ------------
Net increase (decrease) in net assets from
capital share transactions                              71,211,706      49,898,121
                                                      ------------    ------------

NET INCREASE (DECREASE) IN NET ASSETS                   91,582,190      51,612,435

NET ASSETS

Beginning of period                                     77,261,649      25,649,214
                                                      ------------    ------------
End of period                                         $168,843,839     $77,261,649
                                                      ============    ============

Undistributed net investment income                       $542,638        $203,962
                                                      ============    ============

TRANSACTIONS IN SHARES OF THE FUND

Sold                                                     6,950,789       5,154,430

Issued in reinvestment of distributions                    180,583          74,592

Redeemed                                               (1,866,727)     (1,143,694)
                                                      ------------    ------------
Net increase (decrease) in shares of the fund            5,264,645       4,085,328
                                                      ============    ============

See Notes to Financial Statements.


------
21


NOTES TO FINANCIAL STATEMENTS

JULY 31, 2007

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION -- American Century Asset Allocation Portfolios, Inc. (the
corporation) is registered under the Investment Company Act of 1940 (the 1940
Act), as amended, as an open-end management investment company. One Choice
Portfolio: Very Conservative (Very Conservative), One Choice Portfolio:
Conservative (Conservative), One Choice Portfolio: Moderate (Moderate), One
Choice Portfolio: Aggressive (Aggressive), and One Choice Portfolio: Very
Aggressive (Very Aggressive) (collectively, the funds) are five funds in a
series issued by the corporation. The funds operate as "fund of funds,"
meaning that substantially all of the funds' assets will be invested in other
funds in the American Century family of funds (the underlying funds). Because
the funds directly invest in a relatively small number of underlying funds,
they are not diversified as defined by the 1940 Act. However, the underlying
funds are generally diversified and so indirectly provide broad exposure to a
large number of securities. The funds' investment objectives are to seek the
highest total return consistent with their respective asset mix. The funds
pursue their objectives by investing in underlying funds that represent a
variety of asset classes and investment styles. Generally, more conservative
funds emphasize investments in bonds and cash equivalents while more
aggressive funds emphasize investments in stocks. The corporation is
authorized to issue 3,000,000,000 shares. The following is a summary of the
funds' significant accounting policies.

UNDERLYING FUNDS -- Each fund's assets are allocated among underlying funds
that represent major asset classes, including equity securities (stocks),
fixed-income securities (bonds) and cash-equivalent instruments (money
markets). A brief description of each of the underlying funds follows.

DOMESTIC EQUITY FUNDS

EQUITY GROWTH seeks long-term capital growth. It uses a quantitative
investment strategy to construct an optimized portfolio drawn primarily from
the 1,500 largest publicly traded U.S. companies without regard to dividend
yield.

GROWTH seeks long-term capital growth. It uses a growth investment strategy
and generally invests in larger U.S. companies.

LARGE COMPANY VALUE seeks long-term capital growth with income as a secondary
objective. It uses a value investment strategy and invests primarily in larger
U.S. companies.

REAL ESTATE seeks high total investment return through a combination of
capital appreciation and current income. It invests primarily in equity
securities issued by real estate investment trusts and companies engaged in
the real estate industry.

SMALL COMPANY seeks long-term capital growth. It uses a quantitative
investment strategy and invests primarily in smaller U.S. companies.

VALUE seeks long-term capital growth with income as a secondary objective. It
uses a value investment strategy and invests primarily in U.S. companies of
all sizes.

VISTA seeks long-term capital growth. It uses a growth investment strategy and
generally invests in medium-sized and smaller U.S. companies.

INTERNATIONAL EQUITY FUNDS

EMERGING MARKETS seeks capital growth. It uses a growth investment strategy
and invests primarily in securities of companies located in emerging market
countries and companies that derive a significant portion of their business
from emerging market countries.

INTERNATIONAL GROWTH seeks capital growth. It uses a growth investment
strategy and invests primarily in securities of companies located in developed
countries other than the United States.


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22


DOMESTIC FIXED INCOME FUNDS

DIVERSIFIED BOND seeks a high level of income by investing primarily in high-
and medium-grade, non-money market debt securities. These securities, which
may be payable in U.S. or foreign currencies, may include corporate bonds and
notes, government securities and securities backed by mortgages or other
assets.

HIGH-YIELD seeks high current income by investing in a diversified portfolio
of high-yield corporate bonds and other debt securities. As a second
objective, the fund seeks capital appreciation, but only when consistent with
its primary objective of maximizing current income.

INTERNATIONAL FIXED INCOME FUNDS

INTERNATIONAL BOND seeks high total return by investing in high-quality,
non-dollar-denominated government and corporate debt securities outside the
United States.

MONEY MARKET FUNDS

PRIME MONEY MARKET seeks to earn the highest level of current income while
preserving the value of shareholder investments by investing in high-quality,
cash-equivalent securities.

SECURITY VALUATIONS -- Investments in the underlying funds are valued at their
reported net asset value. The underlying funds have specific valuation
policies. If an event occurs after the value of a security was established but
before the net asset value per share of an underlying fund was determined that
was likely to materially change the net asset value of the underlying fund,
that security would be valued as determined in accordance with procedures
adopted by the Board of Directors/ Trustees. If the underlying fund determines
that the market price of a portfolio security is not readily available, or
that the valuation methods mentioned above do not reflect the security's fair
value, such security is valued as determined by, or in accordance with
procedures adopted by, the Board of Directors/ Trustees or its designee if
such determination would materially impact an underlying fund's net asset
value. Certain other circumstances may cause the underlying fund to use
alternative procedures to value a security such as: a security has been
declared in default; trading in a security has been halted during the trading
day; or there is a foreign market holiday and no trading will commence.

SECURITY TRANSACTIONS -- Security transactions are accounted for as of the
trade date. Net realized gains and losses are determined on the identified
cost basis, which is also used for federal income tax purposes.

INVESTMENT INCOME -- Income and capital gain distributions, if any, from the
underlying funds are recorded as of the ex-dividend date. Long-term capital
gain distributions, if any, from the underlying funds are a component of net
realized gain (loss).

INCOME TAX STATUS -- It is each fund's policy to distribute substantially all
net investment income and net realized gains to shareholders and to otherwise
qualify as a regulated investment company under provisions of the Internal
Revenue Code. At this time, management has not identified any uncertain tax
positions that would materially impact the financial statements. Accordingly,
no provision has been made for federal or state income taxes. Interest and
penalties associated with any federal or state income tax obligations, if any,
are recorded as interest expense.

DISTRIBUTIONS TO SHAREHOLDERS -- Distributions to shareholders are recorded on
the ex-dividend date. Distributions from net investment income, if any, are
generally declared and paid quarterly for Very Conservative, Conservative, and
Moderate. Distributions from net investment income, if any, are generally
declared and paid annually for Aggressive and Very Aggressive. Distributions
from net realized gains, if any, are generally declared and paid annually for
all funds.

INDEMNIFICATIONS -- Under the corporation's organizational documents, its
officers and directors are indemnified against certain liabilities arising out
of the performance of their duties to the funds. In addition, in the normal
course of business, the funds enter into contracts that provide general
indemnifications. The funds' maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the
funds. The risk of material loss from such claims is considered by management
to be remote.


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23


USE OF ESTIMATES -- The financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America,
which may require management to make certain estimates and assumptions at the
date of the financial statements. Actual results could differ from these
estimates.

2. FEES AND TRANSACTIONS WITH RELATED PARTIES

MANAGEMENT FEES -- The corporation's investment advisor, American Century
Investment Management, Inc. (ACIM), does not receive an administrative fee for
services provided to the funds. Each fund will indirectly realize its pro rata
share of the fees and expenses of the underlying funds in which it invests.
These fees and expenses are already reflected in the valuation of the
underlying funds.

RELATED PARTIES -- Certain officers and directors of the corporation are also
officers and/or directors, and, as a group, controlling stockholders of
American Century Companies, Inc. (ACC), the parent of the corporation's
investment advisor, ACIM, the distributor of the corporation, American Century
Investment Services, Inc., and the corporation's transfer agent, American
Century Services, LLC. The directors of the corporation are also directors of
some underlying funds and therefore those underlying funds may be deemed to be
under common control with the corporation. The officers of the corporation are
also officers of all the underlying funds. ACIM or American Century Global
Investment Management, Inc., a wholly-owned subsidiary of ACIM, serves as the
investment advisor for the underlying funds.

3. INVESTMENT TRANSACTIONS

Investment transactions for the year ended July 31, 2007, were as follows:

                  Very                                                        Very
              Conservative   Conservative     Moderate      Aggressive     Aggressive

Purchases      $26,086,261   $121,090,175   $327,127,614   $189,036,615   $82,406,603

Proceeds
from sales     $5,553,104     $12,123,808    $29,766,496    $20,371,918    $9,537,699


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24


4. AFFILIATED COMPANY TRANSACTIONS

Investments are funds within the American Century family of funds, of which
certain funds may be deemed to be under common control because of the same
board of directors. A summary of transactions for each underlying fund during
the year ended July 31, 2007 follows:

                                                                                                    July 31, 2007
                     July 31,
                       2006
Fund/                  Share        Purchase         Sales       Realized    Distributions      Share         Market
Underlying Fund       Balance         Cost           Cost       Gain (Loss)   Received(1)      Balance        Value

One Choice Portfolio: Very Conservative

Diversified Bond
Fund Investor
Class                   788,890     $10,520,301     $1,737,175    $(42,353)        $584,034    1,672,271     $16,538,761

Prime Money
Market Fund
Investor Class        4,928,595       6,500,158      1,276,731           --         386,737   10,152,022      10,152,022

Equity Growth
Fund Investor
Class                    40,991       1,199,620        499,145        5,136          79,855       68,751       1,784,088

Growth Fund
Investor Class           28,952         722,110        227,698          799             630       51,420       1,225,339

Large Company
Value Fund
Investor Class          218,520       1,988,897        556,402        (524)          68,008      412,204       3,136,872

Real Estate Fund
Investor Class           13,617         578,768        110,990      (8,621)          74,301       28,932         756,572

Small Company
Fund Investor
Class                    19,521         256,004         71,878      (1,209)          15,311       38,129         385,103

Value Fund
Investor Class          124,597       1,031,218        322,048      (3,075)         104,439      217,015       1,653,654

Vista Fund
Investor Class           23,366         503,001        328,301        5,632           1,874       29,213         615,226

International
Bond Fund
Investor Class          161,605       2,786,184        480,565     (13,614)          74,630      329,535       4,636,557
                     ----------     -----------     ----------    ---------      ----------   ----------     -----------
                                    $26,086,261     $5,610,933    $(57,829)      $1,389,819                  $40,884,194
                                    ===========     ==========    =========      ==========                  ===========

One Choice Portfolio: Conservative

Diversified Bond
Fund Investor
Class                 4,061,092     $46,757,800       $990,740    $(30,066)      $2,939,165    8,653,564     $85,583,748

Equity Growth
Fund Investor
Class                   410,926       9,921,317      1,900,554       10,362         773,352      725,342      18,822,625

Growth Fund
Investor Class          268,644       5,995,213        801,783        1,821           5,858      502,880      11,983,630

Large Company
Value Fund
Investor Class        1,703,728      12,415,389      1,483,203        5,038         501,413    3,167,995      24,108,442

Real Estate Fund
Investor Class           75,911       2,805,749        150,757      (6,369)         393,460      161,780       4,230,547

Small Company
Fund Investor
Class                   162,944       1,788,558        223,556      (6,637)         122,055      319,768       3,229,657

Value Fund
Investor Class          963,764       6,663,914        878,871      (1,320)         780,676    1,713,124      13,054,005

Vista Fund
Investor Class          276,338       4,902,103      1,872,679        8,316          43,202      438,398       9,232,662

Prime Money
Market Fund
Investor Class       10,993,126      12,296,751        917,866           --         840,813   22,372,011      22,372,011

International
Bond Fund
Investor Class          737,059      10,854,566        243,806      (9,766)         326,052    1,507,491      21,210,398

International
Growth Fund
Investor Class          653,301       6,688,815      2,644,050       44,564          77,431      988,506      13,611,728
                     ----------    ------------    -----------    ---------      ----------                 ------------
                                   $121,090,175    $12,107,865      $15,943      $6,803,477                 $227,439,453
                                   ============    ===========    =========      ==========                 ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.


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25


                                                                                                    July 31, 2007
                     July 31,
                       2006
Fund/                  Share        Purchase         Sales       Realized    Distributions      Share         Market
Underlying Fund       Balance         Cost           Cost       Gain (Loss)   Received(1)      Balance        Value

One Choice Portfolio: Moderate

Equity Growth
Fund Investor
Class                 1,687,245     $46,486,294     $1,919,162    $(10,837)      $3,290,591    3,413,200     $88,572,541

Growth Fund
Investor Class        1,055,431      24,998,873      1,598,752        1,711          23,003    2,102,736      50,108,199

Large Company
Value Fund
Investor Class        3,373,572      31,417,430      3,939,075        8,103       1,112,905    7,069,404      53,798,165

Real Estate Fund
Investor Class          175,411       7,738,792        235,791      (5,085)         955,780      417,609      10,920,475

Small Company
Fund Investor
Class                   501,537       6,368,612        341,240     (13,656)         394,676    1,100,773      11,117,807

Value Fund
Investor Class        1,781,053      13,924,259      1,996,704        8,890       1,425,127    3,318,289      25,285,362

Vista Fund
Investor Class        1,126,585      21,957,885      6,521,587     (70,571)         193,399    1,982,955      41,761,032

Diversified Bond
Fund Investor
Class                 6,125,114      89,921,177        400,691     (13,072)       4,891,362   15,108,434     149,422,412

High-Yield Fund
Investor Class        1,015,623       7,971,651      2,521,151     (59,502)         696,971    1,870,879      11,487,197

Emerging Markets
Fund Investor
Class                 1,068,723      12,851,277      2,499,158      191,766       2,757,809    2,195,578      24,656,341

International
Growth Fund
Investor Class        2,434,874      29,580,572      7,450,022      149,977         313,049    4,254,581      58,585,580

Prime Money
Market Fund
Investor Class       15,237,051      20,429,216         93,223           --       1,254,119   35,573,044      35,573,044

International
Bond Fund
Investor Class          757,510      13,481,576         66,187      (3,971)         356,161    1,731,065      24,356,085
                     ----------    ------------    -----------    ---------     -----------   ----------    ------------
                                   $327,127,614    $29,582,743     $183,753     $17,664,952                 $585,644,240
                                   ============    ===========    =========     ===========                 ============

One Choice Portfolio: Aggressive

Equity Growth
Fund Investor
Class                 1,161,627     $25,484,516     $1,479,756     $(3,189)      $2,017,657    2,088,338     $54,192,371

Growth Fund
Investor Class        1,414,558      25,545,884        911,898      (5,824)          27,614    2,513,849      59,905,023

Large Company
Value Fund
Investor Class        2,279,282      16,618,052      1,691,137        7,681         685,887    4,284,730      32,606,795

Real Estate Fund
Investor Class          133,370       4,840,352        229,254      (5,031)         652,677      282,762       7,394,226

Small Company
Fund Investor
Class                   428,074       4,243,130        101,869      (5,104)         302,248      838,718       8,471,052

Value Fund
Investor Class        1,150,600       7,118,337      1,497,262        6,928         812,450    1,872,957      14,271,932

Vista Fund
Investor Class        1,594,954      22,741,987      5,316,620       64,442         274,257    2,594,601      54,642,297

Emerging Markets
Fund Investor
Class                 1,391,260      11,536,962      2,116,430      182,623       3,048,020    2,417,645      27,150,153

International
Growth Fund
Investor Class        2,288,519      21,107,117      5,050,839       54,101         266,288    3,602,665      49,608,697

Diversified Bond
Fund Investor
Class                 2,675,997      34,832,489        303,316     (10,755)       2,007,060    6,140,346      60,728,022

High-Yield Fund
Investor Class        1,390,222       8,685,909      1,362,195     (36,131)         871,320    2,534,166      15,559,779

Prime Money
Market Fund
Investor Class        3,862,210       4,209,474         39,711           --         287,391    8,031,973       8,031,973

International
Bond Fund
Investor Class          144,708       2,072,406         22,678        (788)          60,951      293,166       4,124,846
                      ---------    ------------    -----------    ---------     -----------    ---------
                                   $189,036,615    $20,122,965     $248,953     $11,313,820                 $396,687,166
                                   ============    ===========    =========     ===========                 ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.


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26


                                                                                                    July 31, 2007
                     July 31,
                       2006
Fund/                Share         Purchase          Sales       Realized    Distributions      Share         Market
Underlying Fund       Balance        Cost            Cost       Gain (Loss)   Received(1)      Balance        Value

One Choice Portfolio: Very Aggressive

Equity Growth Fund
Investor Class         576,860      $14,443,643       $910,060     $(4,786)      $1,011,821    1,097,999     $28,493,074

Growth Fund
Investor Class         697,982       14,402,002        733,606      (5,309)          13,608    1,304,700      31,091,001

Large Company
Value Fund
Investor Class       1,156,008        8,958,285        696,845      (5,922)         343,768    2,258,544      17,187,520

Real Estate Fund
Investor Class          54,124        2,171,260        127,135      (4,567)         264,466      120,735       3,157,220

Small Company Fund
Investor Class         192,812        2,131,066         56,390      (2,610)         136,012      397,812       4,017,901

Value Fund
Investor Class         604,033        4,331,845        743,806      (1,521)         438,219    1,065,877       8,121,983

Vista Fund
Investor Class         784,706       12,234,021      2,231,748       65,858         137,735    1,352,983      28,493,822

Emerging Markets
Fund Investor
Class                  658,305        5,905,698        996,831       64,290       1,425,257    1,189,434      13,357,344

International
Growth Fund
Investor Class       1,142,021       11,574,245      2,136,392       18,050         133,743    1,906,138      26,247,520

Diversified Bond
Fund Investor
Class                   80,339        3,411,010        728,368     (14,591)         126,307      349,452       3,456,080

Prime Money Market
Fund Investor
Class                1,567,786        1,902,215         42,940           --         118,238    3,427,061       3,427,061

International Bond
Fund Investor
Class                   58,738          941,313         25,602        (916)          24,811      125,026       1,759,116
                     ---------      -----------     ----------    ---------      ----------    ---------    ------------
                                    $82,406,603     $9,429,723     $107,976      $4,173,985                 $168,809,642
                                    ===========     ==========    =========      ==========                 ============

(1) Distributions received includes distributions from net investment income
and from capital gains from the underlying funds.

5. INVESTMENTS IN UNDERLYING FUNDS

The funds do not invest in the underlying funds for the purpose of exercising
management or control; however, investments by the funds within their
investment strategies may represent a significant portion of the underlying
funds' net assets. As of July 31, 2007, Moderate owned 25% of the total
outstanding shares of Diversified Bond Fund. As of July 31, 2007, the funds,
in aggregate, owned 53% of Diversified Bond Fund.

6. RISK FACTORS

Some of the underlying funds invest in foreign securities, which are generally
riskier than U.S. securities. As a result, the funds are subject to foreign
risk, meaning that political events (such as civil unrest, national elections
and imposition of exchange controls), social and economic events (such as
labor strikes and rising inflation), and natural disasters occurring in a
country where the funds invest could cause the funds' investments in that
country to experience gain or losses. Investing in emerging markets may
accentuate these risks.


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27


7. FEDERAL TAX INFORMATION

The tax character of distributions paid during the years ended July 31, 2007
and July 31, 2006 were as follows:

                                Very Conservative            Conservative
                                 2007         2006        2007         2006
DISTRIBUTIONS PAID FROM

Ordinary income               $1,168,860    $445,170   $5,250,076   $2,121,359

Long-term capital gains        $53,579      $12,349     $448,367      $54,085

                                     Moderate                 Aggressive
                                 2007         2006        2007         2006
DISTRIBUTIONS PAID FROM

Ordinary income              $12,120,744   $4,656,349  $6,150,181   $2,399,441

Long-term capital gains       $1,312,958    $85,464    $1,023,260     $60,490

                                 Very Aggressive
                                 2007         2006
DISTRIBUTIONS PAID FROM

Ordinary income               $2,023,155    $877,225

Long-term capital gains        $466,050     $26,412

The book-basis character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. These differences reflect
the differing character of certain income items and net realized gains and
losses for financial statement and tax purposes, and may result in
reclassification among certain capital accounts on the financial statements.

As of July 31, 2007, the components of distributable earnings on a tax-basis
and the federal tax cost of investments were as follows:

                              Very                                                            Very
                      Conservative    Conservative        Moderate      Aggressive      Aggressive
Federal tax cost
of investments         $40,370,908    $218,091,741    $545,463,577    $355,615,643    $147,887,184
                       ===========    ============    ============    ============    ============
Gross tax
appreciation of
investments               $816,427     $10,749,292     $43,500,683     $43,240,872     $21,325,617

Gross tax
depreciation of
investments              (303,141)     (1,401,580)     (3,320,020)     (2,169,349)       (403,159)
                       -----------    ------------    ------------    ------------    ------------
Net tax
appreciation
(depreciation) of
investments               $513,286      $9,347,712     $40,180,663     $41,071,523     $20,922,458
                       ===========    ============    ============    ============    ============
Undistributed
ordinary income           $168,405        $706,426      $1,472,882      $2,779,922        $645,148

Accumulated
long-term gains           $146,755      $1,259,854      $5,269,237      $4,043,172      $1,915,921

The difference between book-basis and tax-basis cost and unrealized
appreciation (depreciation) is attributable primarily to the tax deferral of
losses on wash sales.


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28


8. RECENTLY ISSUED ACCOUNTING STANDARDS

In June 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109" (FIN 48). FIN 48 establishes a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether an entity is taxable
in a particular jurisdiction), and requires certain expanded tax disclosures.
FIN 48 is effective for fiscal years beginning after December 15, 2006, and is
to be applied to all open tax years as of the date of effectiveness.
Management has concluded that the adoption of FIN 48 will not materially
impact the financial statements.

The FASB issued Statement of Financial Accounting Standards No. 157, "Fair
Value Measurements" (FAS 157), in September 2006, which is effective for
fiscal years beginning after November 15, 2007. FAS 157 defines fair value,
establishes a framework for measuring fair value and expands the required
financial statement disclosures about fair value measurements. Management is
currently evaluating the impact that adopting FAS 157 will have on the
financial statement disclosures.

9. OTHER TAX INFORMATION (UNAUDITED)

The following information is provided pursuant to provisions of the Internal
Revenue Code.

The funds hereby designate capital gain distributions for the fiscal year
ended July 31, 2007, as follows:

  Very Conservative    Conservative   Moderate    Aggressive    Very Aggressive

       $53,579           $448,367    $1,312,958   $1,023,260        $466,050

The funds hereby designate qualified dividend income for the year ended July
31, 2007, as follows:

  Very Conservative    Conservative   Moderate    Aggressive    Very Aggressive

       $95,129           $825,960    $2,454,240   $1,708,239        $855,122

For corporate taxpayers, the following ordinary income distributions paid
during the fiscal year ended July 31, 2007, qualify for the corporate
dividends received deduction.

  Very Conservative    Conservative   Moderate    Aggressive    Very Aggressive

       $96,392           $759,944    $1,926,014   $1,191,914        $608,412

The funds hereby designate qualified short-term capital gain distributions for
purposes of Internal Revenue Code 871 for the fiscal year ended July 31, 2007,
as follows:

  Very Conservative    Conservative   Moderate    Aggressive    Very Aggressive

       $15,556           $18,802      $173,967     $104,025         $24,967


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29


FINANCIAL HIGHLIGHTS
One Choice Portfolio: Very Conservative

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                        2007       2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                  $10.23     $10.27     $10.00
                                                     -------    -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                        0.40       0.37       0.25

 Net Realized and Unrealized Gain (Loss)                0.33     (0.04)       0.29
                                                     -------    -------    -------
 Total From Investment Operations                       0.73       0.33       0.54
                                                     -------    -------    -------
Distributions

 From Net Investment Income                           (0.39)     (0.36)     (0.27)

 From Net Realized Gains                              (0.02)     (0.01)         --
                                                     -------    -------    -------
 Total Distributions                                  (0.41)     (0.37)     (0.27)
                                                     -------    -------    -------
Net Asset Value, End of Period                        $10.55     $10.23     $10.27
                                                     =======    =======    =======

TOTAL RETURN(3)                                        7.23%      3.27%      5.43%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                               0.00%      0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                  3.83%      3.67%   3.00%(5)

Portfolio Turnover Rate                                  17%        34%        38%

Net Assets, End of Period (in thousands)             $40,983    $19,852    $10,132

(1) September 30, 2004 (fund inception) through July 31, 2005.

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

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

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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30


One Choice Portfolio: Conservative

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                      2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                $10.66      $10.54     $10.00
                                                   -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                      0.35        0.34       0.22

 Net Realized and Unrealized Gain (Loss)              0.75        0.12       0.58
                                                   -------     -------    -------
 Total From Investment Operations                     1.10        0.46       0.80
                                                   -------     -------    -------
Distributions

 From Net Investment Income                         (0.35)      (0.33)     (0.26)

 From Net Realized Gains                            (0.03)      (0.01)         --
                                                   -------     -------    -------
 Total Distributions                                (0.38)      (0.34)     (0.26)
                                                   -------     -------    -------
Net Asset Value, End of Period                      $11.38      $10.66     $10.54
                                                   =======     =======    =======

TOTAL RETURN(3)                                     10.41%       4.45%      8.08%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                             0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                3.14%       3.23%   2.63%(5)

Portfolio Turnover Rate                                 7%          8%        12%

Net Assets, End of Period (in thousands)          $227,830    $110,384    $43,183

(1) September 30, 2004 (fund inception) through July 31, 2005.

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

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

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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31


One Choice Portfolio: Moderate

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.34      $10.97     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.35        0.34       0.17

 Net Realized and Unrealized Gain (Loss)               1.29        0.38       0.99
                                                    -------     -------    -------
 Total From Investment Operations                      1.64        0.72       1.16
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.35)      (0.34)     (0.19)

 From Net Realized Gains                             (0.05)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.40)      (0.35)     (0.19)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $12.58      $11.34     $10.97
                                                    =======     =======    =======

TOTAL RETURN(3)                                      14.56%       6.68%     11.71%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.85%       3.02%   1.98%(5)

Portfolio Turnover Rate                                  7%          7%         3%

Net Assets, End of Period (in thousands)           $586,377    $253,610    $97,313

(1) September 30, 2004 (fund inception) through July 31, 2005.

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

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

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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32


One Choice Portfolio: Aggressive

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $11.83      $11.26     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.32        0.31       0.14

 Net Realized and Unrealized Gain (Loss)               1.87        0.56       1.22
                                                    -------     -------    -------
 Total From Investment Operations                      2.19        0.87       1.36
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.28)      (0.29)     (0.10)

 From Net Realized Gains                             (0.05)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.33)      (0.30)     (0.10)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $13.69      $11.83     $11.26
                                                    =======     =======    =======

TOTAL RETURN(3)                                      18.78%       7.84%     13.61%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 2.46%       2.68%   1.52%(5)

Portfolio Turnover Rate                                  7%          6%         3%

Net Assets, End of Period (in thousands)           $397,022    $191,350    $64,623

(1) September 30, 2004 (fund inception) through July 31, 2005.

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

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

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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33


One Choice Portfolio: Very Aggressive

Investor Class
For a Share Outstanding Throughout the Years Ended July 31 (except as noted)
                                                       2007        2006    2005(1)
PER-SHARE DATA

Net Asset Value, Beginning of Period                 $12.23      $11.48     $10.00
                                                    -------     -------    -------
Income From Investment Operations

 Net Investment Income (Loss)(2)                       0.25        0.25       0.08

 Net Realized and Unrealized Gain (Loss)               2.40        0.78       1.49
                                                    -------     -------    -------
 Total From Investment Operations                      2.65        1.03       1.57
                                                    -------     -------    -------
Distributions

 From Net Investment Income                          (0.24)      (0.27)     (0.09)

 From Net Realized Gains                             (0.06)      (0.01)         --
                                                    -------     -------    -------
 Total Distributions                                 (0.30)      (0.28)     (0.09)
                                                    -------     -------    -------
Net Asset Value, End of Period                       $14.58      $12.23     $11.48
                                                    =======     =======    =======

TOTAL RETURN(3)                                      21.87%       9.00%     15.81%

RATIOS/SUPPLEMENTAL DATA

Ratio of Operating Expenses
to Average Net Assets(4)                              0.00%       0.00%   0.00%(5)

Ratio of Net Investment Income (Loss)
to Average Net Assets                                 1.85%       2.08%   0.84%(5)

Portfolio Turnover Rate                                  8%          9%         8%

Net Assets, End of Period (in thousands)           $168,844     $77,262    $25,649

(1) September 30, 2004 (fund inception) through July 31, 2005.

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

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

(4) Ratio of operating expenses to average net assets does not include any
expenses of the underlying funds.

(5) Annualized.

See Notes to Financial Statements.


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34


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders,
American Century Asset Allocation Portfolios, Inc.:

We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of One Choice Portfolio: Very
Conservative, One Choice Portfolio: Conservative, One Choice Portfolio:
Moderate, One Choice Portfolio: Aggressive, and One Choice Portfolio: Very
Aggressive (collectively the "Funds"), five of the mutual funds comprising
American Century Asset Allocation Portfolios, Inc. as of July 31, 2007, and
the related statements of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended,
and the financial highlights for the periods presented. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Funds are not required to have, nor were we engaged to
perform, an audit of their internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as
a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. Our procedures included confirmation of securities owned as of
July 31, 2007, by correspondence with the transfer agent. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Funds comprising American Century Asset Allocation Portfolios, Inc. as
of July 31, 2007, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then
ended, and the financial highlights for the periods presented, in conformity
with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
Kansas City, Missouri
September 14, 2007


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35


PROXY VOTING RESULTS

A special meeting of shareholders was held on July 27, 2007, to vote on the
following proposal. The proposal received the required number of votes of the
American Century Asset Allocation Portfolios, Inc., and was adopted. A summary
of voting results is listed below the proposal.

PROPOSAL:

To elect nine Directors to the Board of Directors of American Century Asset
Allocation Portfolios, Inc. (the proposal was voted on by all shareholders of
funds issued by American Century Asset Allocation Portfolios, Inc.):


James E. Stowers, Jr.       For:                 1,416,441,649
                            Withhold:               10,836,309
                            Abstain:                         0
                            Broker Non-Vote:                 0

Jonathan S. Thomas          For:                 1,417,375,725
                            Withhold:                9,902,233
                            Abstain:                         0
                            Broker Non-Vote:                 0

Thomas A. Brown             For:                 1,417,853,110
                            Withhold:                9,424,849
                            Abstain:                         0
                            Broker Non-Vote:                 0

Andrea C. Hall              For:                 1,417,179,388
                            Withhold:               10,098,571
                            Abstain:                         0
                            Broker Non-Vote:                 0

James A. Olson              For:                 1,417,931,210
                            Withhold:                9,346,748
                            Abstain:                         0
                            Broker Non-Vote:                 0

Donald H. Pratt             For:                 1,417,345,399
                            Withhold:                9,932,560
                            Abstain:                         0
                            Broker Non-Vote:                 0

Gale E. Sayers              For:                 1,417,193,268
                            Withhold:               10,084,690
                            Abstain:                         0
                            Broker Non-Vote:                 0

M. Jeannine Strandjord      For:                 1,416,594,224
                            Withhold:               10,683,724
                            Abstain:                         0
                            Broker Non-Vote:                 0

Timothy S. Webster          For:                 1,417,239,775
                            Withhold:               10,038,183
                            Abstain:                         0
                            Broker Non-Vote:                 0


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36


MANAGEMENT

The individuals listed below serve as directors or officers of the funds. Each
director serves until his or her successor is duly elected and qualified or
until he or she retires. Mandatory retirement age for independent directors is
72. Those listed as interested directors are "interested" primarily by virtue
of their engagement as directors and/or officers of, or ownership interest in,
American Century Companies, Inc. (ACC) or its wholly owned, direct or
indirect, subsidiaries, including the funds' investment advisor, American
Century Investment Management, Inc. (ACIM); the funds' principal underwriter,
American Century Investment Services, Inc. (ACIS); and the funds' transfer
agent, American Century Services, LLC (ACS).

The other directors (more than three-fourths of the total number) are
independent; that is, they have never been employees, directors or officers
of, and have no financial interest in, ACC or any of its wholly owned, direct
or indirect, subsidiaries, including ACIM, ACIS, and ACS. The directors serve
in this capacity for seven registered investment companies in the American
Century family of funds.

All persons named as officers of the funds also serve in similar capacities
for the other 14 investment companies advised by ACIM or American Century
Global Investment Management, Inc. (ACGIM), a wholly owned subsidiary of ACIM,
unless otherwise noted. Only officers with policy-making functions are listed.
No officer is compensated for his or her service as an officer of the funds.
The listed officers are interested persons of the funds and are appointed or
re-appointed on an annual basis.

INTERESTED DIRECTORS

JAMES E. STOWERS, JR.
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1924
POSITION(S) HELD WITH FUNDS: Director (since 1958) and Vice Chairman (since
2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Founder, Co-Chairman, Director
and Controlling Shareholder, ACC; Co-Vice Chairman, ACC (January 2005 to
February 2007); Chairman, ACC (January 1995 to December 2004); Director, ACIM,
ACGIM, ACS, ACIS and other ACC subsidiaries
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

JONATHAN S. THOMAS
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1963
POSITION(S) HELD WITH FUNDS: Director and President (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President and Chief Executive
Officer, ACC (March 2007 to present); Chief Administrative Officer, ACC
(February 2006 to February 2007); Executive Vice President, ACC (November 2005
to February 2007). Also serves as: President, Chief Executive Officer and
Director, ACS; Executive Vice President, ACIM and ACGIM; Director, ACIM,
ACGIM, ACIS and other ACC subsidiaries; Managing Director, Morgan Stanley
(March 2000 to November 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 109
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None


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37



INDEPENDENT DIRECTORS

THOMAS A. BROWN
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1940
POSITION(S) HELD WITH FUNDS: Director (since 1980)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Member, Associated
Investments, LLC (real estate investment company); Managing Member, Brown
Cascade Properties, LLC (real estate investment company); Retired, Area Vice
President, Applied Industrial Technologies
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

ANDREA C. HALL, PH.D.
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1997)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, Advisor to the
President, Midwest Research Institute
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

JAMES A. OLSON
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1942
POSITION(S) HELD WITH FUNDS: Director (since 2007)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Member, Plaza Belmont LLC; Chief
Financial Officer, Plaza Belmont LLC (September 1999 to September 2006)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, Saia, Inc. and Entertainment
Properties Trust

DONALD H. PRATT
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1937
POSITION(S) HELD WITH FUNDS: Director (since 1995) and Chairman of the Board
(since 2005)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chairman and Chief Executive
Officer, Western Investments, Inc.; Retired Chairman of the Board, Butler
Manufacturing Company
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

GALE E. SAYERS
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1943
POSITION(S) HELD WITH FUNDS: Director (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: President, Chief Executive
Officer and Founder, Sayers40, Inc., a technology products and service provider
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

M. JEANNINE STRANDJORD
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1945
POSITION(S) HELD WITH FUNDS: Director (since 1994)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Retired, formerly Senior Vice
President, Sprint Corporation
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: Director, DST Systems, Inc.; Director,
Euronet Worldwide, Inc.; Director, Charming Shoppes, Inc.


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38


TIMOTHY S. WEBSTER
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1961
POSITION(S) HELD WITH FUNDS: Director (since 2001)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Managing Director, TDB
Acquisition Group LLC (September 2006 to present); President and Chief
Executive Officer, American Italian Pasta Company (2001 to December 2005)
NUMBER OF PORTFOLIOS IN FUND COMPLEX OVERSEEN BY DIRECTOR: 66
OTHER DIRECTORSHIPS HELD BY DIRECTOR: None

OFFICERS

MARYANNE ROEPKE
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1956
POSITION(S) HELD WITH FUNDS: Chief Compliance Officer (since 2006) and Senior
Vice President (since 2000)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Compliance Officer, ACIM,
ACGIM and ACS (August 2006 to present); Assistant Treasurer, ACC (January 1995
to August 2006); and Treasurer and Chief Financial Officer, various American
Century funds (July 2000 to August 2006). Also serves as: Senior Vice
President, ACS

CHARLES A. ETHERINGTON
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1957
POSITION(S) HELD WITH FUNDS: General Counsel (since 2007) and Senior Vice
President (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACC (November
2005 to present); General Counsel, ACC (March 2007 to present). Also serves
as: General Counsel, ACIM, ACGIM, ACS, ACIS and other ACC subsidiaries; and
Senior Vice President, ACIM, ACGIM and ACS

ROBERT LEACH
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1966
POSITION(S) HELD WITH FUNDS: Vice President, Treasurer and Chief Financial
Officer (all since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present); and Controller, various American Century funds (1997 to
September 2006)

C. JEAN WADE
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1964
POSITION(S) HELD WITH FUNDS: Controller (since 2006)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Vice President, ACS (February
2000 to present)

JON ZINDEL
4500 Main Street, Kansas City, MO 64111
YEAR OF BIRTH: 1967
POSITION(S) HELD WITH FUNDS: Tax Officer (since 1998)
PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS: Chief Financial Officer and Chief
Accounting Officer, ACC (March 2007 to present); Vice President, ACC (October
2001 to present); Vice President, certain ACC subsidiaries (October 2001 to
August 2006); Vice President, Corporate Tax, ACS (April 1998 to August 2006).
Also serves as: Chief Financial Officer, Chief Accounting Officer and Senior
Vice President, ACIM, ACGIM, ACS and other ACC subsidiaries; and Chief
Accounting Officer and Senior Vice President, ACIS

The SAI has additional information about the funds' directors and is available
without charge, upon request, by calling 1-800-345-2021.


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39


APPROVAL OF MANAGEMENT AGREEMENT
One Choice Portfolios

Under Section 15(c) of the Investment Company Act, contracts for investment
advisory services are required to be reviewed, evaluated and approved by a
majority of a fund's independent directors or trustees (the "Directors") each
year. At American Century, this process is referred to as the "15(c) Process."
As a part of this process, the board reviews fund performance, shareholder
services, audit and compliance information, and a variety of other reports
from the advisor concerning fund operations. In addition to this annual
review, the board of directors oversees and evaluates on a continuous basis at
its quarterly meetings the nature and quality of significant services
performed by the advisor, fund performance, audit and compliance information,
and a variety of other reports relating to fund operations. The board, or
committees of the board, also holds special meetings as needed.

Under a Securities and Exchange Commission rule, each fund is required to
disclose in its annual or semiannual report, as appropriate, the material
factors and conclusions that formed the basis for the board's approval or
renewal of any advisory agreements within the fund's most recently completed
fiscal half-year period.

ANNUAL CONTRACT REVIEW PROCESS

As part of the annual 15(c) Process undertaken during the most recent fiscal
half-year period, the Directors reviewed extensive data and information
compiled by the advisor and certain independent providers of evaluative data
(the "15(c) Providers") concerning One Choice Portfolio: Very Aggressive, One
Choice Portfolio: Aggressive, One Choice Portfolio: Moderate, One Choice
Portfolio: Conservative and One Choice Portfolio: Very Conservative (the
"funds") and the services provided to the funds under the management
agreement. The information considered and the discussions held at the meetings
included, but were not limited to:

* the nature, extent and quality of investment management, shareholder
services and other services provided to the funds under the management
agreement;

* reports on the advisor's activities relating to the wide range of programs
and services the advisor provides to the funds and its shareholders on a
routine and non-routine basis;

* data comparing the cost of owning the fund to the cost of owning similar
funds;

* data comparing the funds' performance to appropriate benchmarks and/or a
peer group of other mutual funds with similar investment objectives and
strategies;

* financial data showing the profitability of the fund to the advisor and the
overall profitability of the advisor; and

* data comparing services provided and charges to other investment management
clients of the advisor.

In keeping with its practice, the funds' board of directors held two regularly
scheduled meetings and one special meeting to review and discuss the
information provided by the advisor and to complete its negotiations with the
advisor regarding the renewal of the management agreement. The board also had
the benefit of the advice of its independent counsel throughout the period.


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40


FACTORS CONSIDERED

The Directors considered all of the information provided by the advisor, the
15(c) Providers, and the board's independent counsel, and evaluated such
information for each fund for which the board has responsibility. The
Directors did not identify any single factor as being all-important or
controlling, and each Director may have attributed different levels of
importance to different factors. In deciding to renew the agreement under the
terms ultimately determined by the board to be appropriate, the Directors'
decision was based on the following factors.

NATURE, EXTENT AND QUALITY OF SERVICES - GENERALLY. Under the management
agreement, the advisor is responsible for providing or arranging for all
services necessary for the operation of the funds. The board noted that under
the management agreement, the advisor provides or arranges at its own expense
a wide variety of services including:

* fund construction and design

* portfolio security selection

* initial capitalization/funding

* securities trading

* custody of fund assets

* daily valuation of the funds' portfolio

* shareholder servicing and transfer agency, including shareholder
confirmations, recordkeeping and communications

* legal services

* regulatory and portfolio compliance

* financial reporting

* marketing and distribution

The Directors noted that many of these services have expanded over time both
in terms of quantity and complexity in response to shareholder demands,
competition in the industry and the changing regulatory environment. In
performing their evaluation, the Directors considered information received in
connection with the annual review, as well as information provided on an
ongoing basis at their regularly scheduled board and committee meetings.

INVESTMENT MANAGEMENT SERVICES. The nature of the investment management
services provided is quite complex and allows fund shareholders access to
professional money management, instant diversification of their investments
within an asset class, the opportunity to easily diversify among asset
classes, and liquidity. In evaluating investment performance, the board
expects the advisor to manage the funds in accordance with its investment
objectives and approved strategies. In providing these services, the advisor
utilizes teams of investment professionals (portfolio managers, analysts,
research assistants, and securities traders) who require extensive information
technology, research, training, compliance and other systems to conduct their
business. At each quarterly meeting the Directors review investment
performance information


------
41


for the funds, together with comparative information for appropriate
benchmarks and peer groups of funds managed similarly to the funds. The
Directors also review detailed performance information during the 15(c)
Process comparing the funds' performance with that of similar funds not
managed by the advisor. If performance concerns are identified, the Directors
discuss with the advisor the reasons for such results (e.g., market
conditions, security selection) and any efforts being undertaken to improve
performance. One Choice Portfolio: Very Conservative's performance fell below
the median for both the one and three year periods during part of the past
year. The board discussed the fund's performance with the advisor and was
satisfied with the efforts being undertaken by the advisor. Each other funds'
performance for both the one and three year periods was above the median for
its respective peer groups.

SHAREHOLDER AND OTHER SERVICES. The advisor provides the funds with a
comprehensive package of transfer agency, shareholder, and other services. The
Directors review reports and evaluations of such services at their regular
quarterly meetings, including the annual meeting concerning contract review,
and reports to the board. These reports include, but are not limited to,
information regarding the operational efficiency and accuracy of the
shareholder and transfer agency services provided, staffing levels,
shareholder satisfaction (as measured by external as well as internal
sources), technology support, new products and services offered to fund
shareholders, securities trading activities, portfolio valuation services,
auditing services, and legal and operational compliance activities. Certain
aspects of shareholder and transfer agency service level efficiency and the
quality of securities trading activities are measured by independent third
party providers and are presented in comparison to other fund groups not
managed by the advisor.

COSTS OF SERVICES PROVIDED AND PROFITABILITY TO THE ADVISOR. The advisor
provides detailed information concerning its cost of providing various
services to the funds, its profitability in managing the funds, its overall
profitability, and its financial condition. The Directors have reviewed with
the advisor the methodology used to prepare this financial information. This
financial information regarding the advisor is considered in order to evaluate
the advisor's financial condition, its ability to continue to provide services
under the management agreement, and the reasonableness of the current
management fee.

ETHICS OF THE ADVISOR. The Directors generally consider the advisor's
commitment to providing quality services to shareholders and to conducting its
business ethically. They noted that the advisor's practices generally meet or
exceed industry best practices.

ECONOMIES OF SCALE. The Directors review reports provided by the advisor on
economies of scale for the complex as a whole and the year-over-year changes
in revenue, costs, and profitability. The Directors concluded that economies
of scale are difficult to measure and predict with precision, especially on a
fund-by-fund basis. This analysis is also complicated by the additional
services and content provided by the advisor and its reinvestment in its
ability to provide and expand those services. Accordingly, the Directors also
seek to evaluate economies of scale by reviewing other information, such as
year-over-year profitability of the advisor generally, the profitability of
its management of the funds specifically, the expenses incurred by the advisor
in providing various functions to the funds, and the breakpoint fees of
competitive funds not managed by the advisor. The Directors believe the
advisor is appropriately sharing economies of scale through its competitive
fee structure, fee breakpoints as the fund increases in size, and through
reinvestment in its business to provide shareholders additional content and
services.


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42


COMPARISON TO OTHER FUNDS' FEES. The funds invest their non-cash assets
entirely in other American Century funds. The funds do not pay an investment
advisor fee to the advisor. Rather, each fund indirectly bears its pro rata
share of the expenses incurred by the underlying funds. Each of the underlying
funds pay the advisor a single, all-inclusive (or unified) management fee for
providing all services necessary for the management and operation of the
funds, other than brokerage expenses, taxes, interest, extraordinary expenses,
and the fees and expenses of the funds' independent directors (including their
independent legal counsel). Under the unified fee structure, the advisor is
responsible for providing all investment advisory, custody, audit,
administrative, compliance, recordkeeping, marketing and shareholder services,
or arranging and supervising third parties to provide such services. By
contrast, most other funds are charged a variety of fees, including an
investment advisory fee, a transfer agency fee, an administrative fee,
distribution charges and other expenses. Other than their investment advisory
fees and Rule 12b-1 distribution fees, all other components of the total fees
charged by these other funds may be increased without shareholder approval.
The board believes the unified fee structure is a benefit to fund shareholders
because it clearly discloses to shareholders the cost of owning fund shares,
and, since the unified fee cannot be increased without a vote of fund
shareholders, it shifts to the advisor the risk of increased costs of
operating the funds and provides a direct incentive to minimize administrative
inefficiencies. Part of the Directors' analysis of fee levels involves
reviewing certain evaluative data compiled by a 15(c) Provider comparing the
portion of the expenses incurred by the underlying funds to the total expense
ratio of other funds in the funds' peer group. The expenses of One Choice
Portfolio: Very Aggressive, One Choice Portfolio: Conservative and One Choice
Portfolio: Very Conservative were in the lowest quartile of the total expense
ratios of their peer groups. The expenses of One Choice Portfolio: Aggressive
and One Choice Portfolio: Moderate were below the median of the total expense
ratios of their peer groups.

COMPARISON TO FEES AND SERVICES PROVIDED TO OTHER CLIENTS OF THE ADVISOR. The
Directors also requested and received information from the advisor concerning
the nature of the services, fees, and profitability of its advisory services
to advisory clients other than the funds. They observed that these varying
types of client accounts require different services and involve different
regulatory and entrepreneurial risks than the management of the funds. The
Directors analyzed this information and concluded that the fees charged and
services provided to the funds were reasonable by comparison.

COLLATERAL BENEFITS DERIVED BY THE ADVISOR. The Directors reviewed information
from the advisor concerning collateral benefits it receives as a result of its
relationship with the funds. They concluded that the advisor's primary
business is managing mutual funds and it generally does not use the fund or
shareholder information to generate profits in other lines of business, and
therefore does not derive any significant collateral benefits from them. The
Directors noted that the advisor receives proprietary research from broker
dealers that execute fund portfolio transactions and concluded that this
research is likely to benefit fund shareholders. The Directors also determined
that the advisor is able to provide investment management services to certain
clients other than the funds, at least in part, due to its existing
infrastructure built to serve the fund complex. The Directors concluded,
however, that the assets of those other clients are not material to the
analysis and, in any event, are included with the assets of the funds to
determine breakpoints in the funds' fee schedule, provided they are managed
using the same investment team and strategy.


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43


CONCLUSIONS OF THE DIRECTORS

As a result of this process, the independent directors, in the absence of
particular circumstances and assisted by the advice of legal counsel that is
independent of the advisor, taking into account all of the factors discussed
above and the information provided by the advisor concluded that the
investment management agreement between the funds and the advisor is fair and
reasonable in light of the services provided and should be renewed.


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ADDITIONAL INFORMATION

RETIREMENT ACCOUNT INFORMATION

As required by law, any distributions you receive from an IRA or certain
403(b), 457 and qualified plans [those not eligible for rollover to an IRA or
to another qualified plan] are subject to federal income tax withholding,
unless you elect not to have withholding apply. Tax will be withheld on the
total amount withdrawn even though you may be receiving amounts that are not
subject to withholding, such as nondeductible contributions. In such case,
excess amounts of withholding could occur. You may adjust your withholding
election so that a greater or lesser amount will be withheld.

If you don't want us to withhold on this amount, you must notify us to not
withhold the federal income tax. Even if you plan to roll over the amount you
withdraw to another tax-deferred account, the withholding rate still applies
to the withdrawn amount unless we have received notice not to withhold federal
income tax prior to the withdrawal. You may notify us in writing or in certain
situations by telephone or through other electronic means. You have the right
to revoke your withholding election at any time and any election you make may
remain in effect until revoked by filing a new election.

Remember, even if you elect not to have income tax withheld, you are liable
for paying income tax on the taxable portion of your withdrawal. If you elect
not to have income tax withheld or you don't have enough income tax withheld,
you may be responsible for payment of estimated tax. You may incur penalties
under the estimated tax rules if your withholding and estimated tax payments
are not sufficient.

State tax will be withheld if, at the time of your distribution, your address
is within one of the mandatory withholding states and you have federal income
tax withheld. State taxes will be withheld from your distribution in
accordance with the respective state rules.

PROXY VOTING GUIDELINES

American Century Investment Management, Inc., the funds' investment advisor,
is responsible for exercising the voting rights associated with the securities
purchased and/or held by the funds. A description of the policies and
procedures the advisor uses in fulfilling this responsibility is available
without charge, upon request, by calling 1-800-345-2021. It is also available
on American Century's website at americancentury.com and on the Securities and
Exchange Commission's website at sec.gov. Information regarding how the
investment advisor voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is available on the "About Us" page
at americancentury.com. It is also available at sec.gov.

QUARTERLY PORTFOLIO DISCLOSURE

The funds file their complete schedule of portfolio holdings with the
Securities and Exchange Commission (SEC) for the first and third quarters of
each fiscal year on Form N-Q. The funds' Forms N-Q are available on the SEC's
website at sec.gov, and may be reviewed and copied at the SEC's Public
Reference Room in Washington, DC. Information on the operation of the Public
Reference Room may be obtained by calling 1-800-SEC-0330. The funds also make
their complete schedule of portfolio holdings for the most recent quarter of
their fiscal year available on their website at americancentury.com and, upon
request, by calling 1-800-345-2021.


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45


INDEX DEFINITIONS

The following indices are used to illustrate investment market, sector, or
style performance or to serve as fund performance comparisons. They are not
investment products available for purchase.

The CITIGROUP US BROAD INVESTMENT-GRADE (BIG) BOND INDEX is a
market-capitalization-weighted index that includes fixed-rate Treasury,
government-sponsored, mortgage, asset-backed, and investment-grade issues with
a maturity of one year or longer.

The CITIGROUP NON-U.S. WORLD GOVERNMENT BOND INDEX is based on the Citigroup
World Bond Index, and excludes issues denominated in U.S. dollars. The index
measures the total return of government securities in major sectors of the
international bond market.

The LEHMAN BROTHERS U.S. AGGREGATE INDEX represents securities that are
taxable, registered with the Securities and Exchange Commission, and U.S.
dollar-denominated. The index covers the U.S. investment-grade fixed-rate bond
market, with index components for government and corporate securities,
mortgage pass-through securities, and asset-backed securities.

Morgan Stanley Capital International (MSCI) has developed several indices that
measure the performance of foreign stock markets.

The MSCI EAFE® (EUROPE, AUSTRALASIA, FAR EAST) INDEX is designed to measure
developed market equity performance, excluding the U.S. and Canada.

The MSCI EM (EMERGING MARKETS) INDEX represents the performance of stocks in
global emerging market countries.

The RUSSELL 1000® INDEX is a market-capitalization weighted, large-cap index
created by Frank Russell Company to measure the performance of the 1,000
largest companies in the Russell 3000 Index (the 3,000 largest publicly traded
U.S. companies, based on total market capitalization).

The RUSSELL 2000® INDEX is a market-capitalization weighted index created by
Frank Russell Company to measure the performance of the 2,000 smallest of the
3,000 largest publicly traded U.S. companies, based on total market
capitalization.

The RUSSELL 3000® INDEX measures the performance of the 3,000 largest U.S.
companies based on total market capitalization, which represents approximately
98% of the investable U.S. equity market.

The RUSSELL MIDCAP® INDEX measures the performance of the 800 smallest of the
1,000 largest publicly traded U.S. companies, based on total market
capitalization.

The S&P 500 INDEX is a market value-weighted index of the stocks of 500
publicly traded U.S. companies chosen for market size, liquidity, and industry
group representation that are considered to be leading firms in dominant
industries. Each stock's weight in the index is proportionate to its market
value. Created by Standard & Poor's, it is considered to be a broad measure of
U.S. stock market performance.


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46


NOTES


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47


NOTES


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48




[back cover]

CONTACT US

AMERICANCENTURY.COM

AUTOMATED INFORMATION LINE:
1-800-345-8765

INVESTOR SERVICES REPRESENTATIVE:
1-800-345-2021 or 816-531-5575

BUSINESS, NOT-FOR-PROFIT,
EMPLOYER-SPONSORED RETIREMENT PLANS:
1-800-345-3533

BANKS AND TRUST COMPANIES, BROKER-DEALERS,
FINANCIAL PROFESSIONALS, INSURANCE COMPANIES:
1-800-345-6488

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

AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.

INVESTMENT ADVISOR:
American Century Investment Management, Inc.
Kansas City, Missouri

THIS REPORT AND THE STATEMENTS IT CONTAINS ARE SUBMITTED FOR THE GENERAL
INFORMATION OF OUR SHAREHOLDERS. THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.

American Century Investment Services, Inc., Distributor

©2007 American Century Proprietary Holdings, Inc. All rights reserved.

The American Century Investments logo, American Century and American Century
Investments are service marks of American Century Proprietary Holdings, Inc.

0709
SH-ANN-56323N






ITEM 2.  CODE OF ETHICS.

a.   The registrant has adopted a Code of Ethics for Senior  Financial  Officers
     that applies to the registrant's  principal  executive  officer,  principal
     financial officer,  principal  accounting  officer,  and persons performing
     similar functions.

b.   No response required.

c.   None.

d.   None.

e.   Not applicable.

f.   The registrant's Code of Ethics for Senior Financial  Officers was filed as
     Exhibit 12 (a)(1) to American Century Asset Allocation  Portfolios,  Inc.'s
     Annual Certified  Shareholder Report on Form N-CSR, File No. 811-21591,  on
     September 29, 2005, and is incorporated herein by reference.



ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

(a)(1)   The registrant's  board has determined that the registrant has at least
         one audit committee financial expert serving on its audit committee.

(a)(2)   Donald  H.  Pratt,   Thomas  A.  Brown  and  Gale  E.  Sayers  are  the
         registrant's  designated audit committee  financial  experts.  They are
         "independent" as defined in Item 3 of Form N-CSR.

(a)(3)   Not applicable.

(b)      No response required.

(c)      No response required.

(d)      No response required.



ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a)      Audit Fees.

The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal  accountant for the audit of the registrant's
annual  financial  statements  or  services  that are  normally  provided by the
accountant in connection  with statutory and  regulatory  filings or engagements
for those fiscal years were as follows:

         FY 2006:  $69,670
         FY 2007:  $67,340

(b)      Audit-Related Fees.

The aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal  accountant that are reasonably related to the
performance of the audit of the  registrant's  financial  statements and are not
reported under paragraph (a) of this Item were as follows:

         For services rendered to the registrant:

         FY 2006:  $0
         FY 2007:  $0

         Fees required to be approved  pursuant to paragraph  (c)(7)(ii) of Rule
         2-01 of Regulation S-X (relating to certain  engagements  for non-audit
         services with the registrant's investment adviser and its affiliates):

         FY 2006:  $0
         FY 2007:  $0

(c)      Tax Fees.

The aggregate fees billed in each of the last two fiscal years for  professional
services  rendered by the principal  accountant for tax compliance,  tax advice,
and tax planning were as follows:

         For services rendered to the registrant:

         FY 2006:  $15,000
         FY 2007:  $11,451

         For the fiscal  year ended  2006,  these  services  included  review of
         federal,  state, and excise income tax forms that were completed during
         that same  period.  For the fiscal  year  ended  2007,  these  services
         included review of excise tax forms.

         Fees required to be approved  pursuant to paragraph  (c)(7)(ii) of Rule
         2-01 of Regulation S-X (relating to certain  engagements  for non-audit
         services with the registrant's investment adviser and its affiliates):

         FY 2006:  $0
         FY 2007:  $0

(d)      All Other Fees.

The aggregate  fees billed in each of the last two fiscal years for products and
services provided by the principal accountant,  other than the services reported
in paragraphs (a) through (c) of this Item were as follows:

         For services rendered to the registrant:

         FY 2006:  $0
         FY 2007:  $0

         Fees required to be approved  pursuant to paragraph  (c)(7)(ii) of Rule
         2-01 of Regulation S-X (relating to certain  engagements  for non-audit
         services with the registrant's investment adviser and its affiliates):

         FY 2006:  $0
         FY 2007:  $0

(e)(1)   In accordance  with paragraph  (c)(7)(i)(A)  of Rule 2-01 of Regulation
         S-X, before the accountant is engaged by the registrant to render audit
         or non-audit  services,  the engagement is approved by the registrant's
         audit  committee.  Pursuant  to  paragraph  (c)(7)(ii)  of Rule 2-01 of
         Regulation S-X, the registrant's  audit committee also pre-approves its
         accountant's  engagements for non-audit  services with the registrant's
         investment adviser,  its parent company,  and any entity controlled by,
         or under common  control  with the  investment  adviser  that  provides
         ongoing services to the registrant,  if the engagement relates directly
         to the operations and financial reporting of the registrant.

(e)(2)   All services  described in each of  paragraphs  (b) through (d) of this
         Item were pre-approved  before the engagement by the registrant's audit
         committee pursuant to paragraph (c)(7)(i)(A) of Rule 2-01 of Regulation
         S-X.  Consequently,  none of such services were required to be approved
         by the audit committee pursuant to paragraph (c)(7)(i)(C).

(f)      The  percentage  of  hours  expended  on  the  principal   accountant's
         engagement to audit the registrant's  financial statements for the most
         recent fiscal year that were  attributed  to work  performed by persons
         other than the principal  accountant's  full-time,  permanent employees
         was less than 50%.

(g)      The aggregate non-audit fees billed by the registrant's  accountant for
         services  rendered to the registrant,  and rendered to the registrant's
         investment  adviser  (not  including  any  sub-adviser  whose  role  is
         primarily portfolio management and is subcontracted with or overseen by
         another investment adviser), and any entity controlling, controlled by,
         or under common control with the adviser that provides ongoing services
         to the  registrant  for  each  of the  last  two  fiscal  years  of the
         registrant were as follows:

         FY 2006:  $179,156
         FY 2007:  $174,483

(h)      The  registrant's  investment  adviser and accountant have notified the
         registrant's  audit  committee  of all  non-audit  services  that  were
         rendered by the registrant's  accountant to the registrant's investment
         adviser,  its parent  company,  and any entity  controlled by, or under
         common  control with the investment  adviser that provides  services to
         the  registrant,  which  services were not required to be  pre-approved
         pursuant to paragraph  (c)(7)(ii) of Rule 2-01 of  Regulation  S-X. The
         notification  provided to the  registrant's  audit  committee  included
         sufficient  details  regarding such services to allow the  registrant's
         audit  committee  to  consider  the  continuing   independence  of  its
         principal accountant.


ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.



ITEM 6. SCHEDULE OF INVESTMENTS.

The schedule of  investments  is included as part of the report to  stockholders
filed under Item 1 of this Form.



ITEM 7.  DISCLOSURE  OF PROXY VOTING  POLICIES  AND  PROCEDURES  FOR  CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

Not applicable.



ITEM 8.  PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.



ITEM 9.  PURCHASES OF EQUITY  SECURITIES  BY  CLOSED-END  MANAGEMENT  INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.



ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

During the reporting period, there were no material changes to the procedures by
which shareholders may recommend nominees to the registrant's board.



ITEM 11.  CONTROLS AND PROCEDURES.

(a)  The  registrant's  principal  executive  officer  and  principal  financial
     officer  have  concluded  that the  registrant's  disclosure  controls  and
     procedures (as defined in Rule 30a-3(c) under the Investment Company Act of
     1940)  are  effective  based on their  evaluation  of  these  controls  and
     procedures as of a date within 90 days of the filing date of this report.

(b)  There were no changes in the  registrant's  internal control over financial
     reporting (as defined in Rule 30a-3(d) under the Investment  Company Act of
     1940) that occurred  during the  registrant's  second fiscal quarter of the
     period  covered  by this  report  that  have  materially  affected,  or are
     reasonably likely to materially affect,  the registrant's  internal control
     over financial reporting.

ITEM 12.  EXHIBITS.

(a)(1)   Registrant's Code of Ethics for Senior Financial Officers, which is the
         subject of the disclosure  required by Item 2 of Form N-CSR,  was filed
         as Exhibit 12(a)(1) to American  Century Asset  Allocation  Portfolios,
         Inc.'s Certified  Shareholder Report on Form N-CSR, File No. 811-21591,
         on September 29, 2005.

(a)(2)   Separate certifications by the registrant's principal executive officer
         and  principal  financial  officer,  pursuant  to  Section  302  of the
         Sarbanes-Oxley  Act of 2002  and Rule  30a-2(a)  under  the  Investment
         Company  Act  of  1940,  are  filed  and  attached  hereto  as  Exhibit
         99.302CERT.

(a)(3)   Not applicable.

(b)      A certification by the registrant's  chief executive  officer and chief
         financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of
         2002, is furnished and attached hereto as Exhibit 99.906CERT.






                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.


Registrant:   AMERICAN CENTURY ASSET ALLOCATION PORTFOLIOS, INC.



By:      /s/  Jonathan S. Thomas
         ---------------------------------------------
         Name:   Jonathan S. Thomas
         Title:  President


Date:    November 9, 2007



     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment  Company  Act of  1940,  this  report  has been  signed  below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



By:      /s/  Jonathan S. Thomas
         ---------------------------------------------
         Name:   Jonathan S. Thomas
         Title:  President
                 (principal executive officer)


Date:    November  9, 2007




By:      /s/  Robert J. Leach
         ---------------------------------------------
         Name:   Robert J. Leach
         Title:  Vice President, Treasurer, and
                 Chief Financial Officer
                 (principal financial officer)


Date:    November 9, 2007