AXPSM
Tax-Free
Money Fund
2000 SEMIANNUAL REPORT
(icon of) padlock
American
Express
Funds
AXP Tax-Free Money Fund seeks to provide shareholders with as high a level of
current income exempt from federal income tax as is consistent with liquidity
and stability of principal.
<PAGE>
Stability Without Taxes
Everyone needs to have a cash reserve to cover unexpected expenses. But where to
keep it? It's easy to find an investment that provides stability and ready
access to your money, but there's usually a drawback: You have to pay taxes on
the interest the money earns.But there is an alternative -- AXP Tax-Free Money
Fund. The interest it pays is generally free from federal taxes. The result: A
cash reserve that can let you keep the tax-exempt income it earns.
CONTENTS
From the Chairman 3
From the Portfolio Manager 3
Fund Facts 5
Financial Statements 6
Notes to Financial Statements 9
Investments in Securities 13
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
The financial markets have always had their ups and downs, but in recent months
volatility has become more frequent and intense. While no one can say with
certainty what the markets will do, American Express Financial Corporation, the
Fund's investment manager, expects economic growth to continue this year,
accompanied by a modest rise in long-term interest rates. But no matter what
transpires, this is a great time to take a close look at your goals and
investments. We encourage you to:
o Consult a professional investment advisor who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable through retirement
plans of your employer.
o Learn as much as you can about your current investments.
The portfolio manager's letter that follows provides a review of the Fund's
investment strategies and performance. The semiannual report contains other
valuable information as well. The Fund's prospectus describes its investment
objectives and how it intends to achieve those objectives. As experienced
investors know, information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
On behalf of the Board,
Arne H. Carlson
(picture of) Terry Fettig
Terry Fettig
Portfolio manager
From the Portfolio Manager
Short-term interest rates rose during the past six months, ultimately resulting
in an increase in AXP Tax-Free Money Fund's yield over the first half of the
fiscal year -- January through June 2000. The Fund's net asset value remained at
$1 during the period, providing shareholders with continued stability of
principal in addition to a tax-free return.
For the seven-day period ended June 30, 2000, the Fund provided an annualized
simple yield of 3.83% and an annualized compound yield of 3.89%. These are equal
to 5.32% simple and 5.40% compound yields for an investor in the 28% federal
income-tax bracket.
(Investors should keep in mind that an investment in the Fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the Fund seeks to preserve the value of your investment at $1
share, it is possible to lose money by investing in the Fund. Investors also
should keep in mind that, under federal law, some notes issued in the tax-free
securities market are subject to the alternative minimum tax, or AMT. To
eliminate any federal income-tax liabilities for investors who may be subject to
the AMT requirement, the Fund does not invest in such issues.)
FED ON ALERT
With the economy continuing to grow at a rapid rate and higher prices popping up
in some business sectors, the possibility of a sustained upturn in inflation was
foremost on investors' minds throughout the six months. The Federal Reserve
evidently shared that concern, as it raised short-term interest rates three
times -- in February, March and May -- in an effort to cool down the economy and
thereby head off an inflation spike. As a result, yields on the securities this
Fund invests in rose as well.
To take advantage of the higher yields that became available, I kept the
portfolio's average maturity relatively short. I also changed the portfolio's
asset mix somewhat by reducing holdings among daily-reset variable rate
securities and fixed-rate notes and increasing holdings among weekly-reset
variable rate securities and tax-exempt commercial paper. In addition, I
emphasized securities with higher yields, while still maintaining minimal credit
risk. This strategy enabled the Fund to reap the benefit of a rising-rate
environment while reducing the erratic rate fluctuations associated with
daily-reset securities.
Looking toward the second half of the fiscal year, I think we'll see short-term
interest rates rise a bit more, as the Federal Reserve remains vigilant about
keeping inflation under control. Therefore, at least for the near term, I plan
to stay with the investment approach I employed in recent months.
Terry Fettig
<PAGE>
Fund Facts
6-month performance
(All figures per share)
Net asset value (NAV)
June 30, 2000 $1.00
Dec. 31, 1999 $1.00
Increase $ --
Distributions -- Jan. 1, 2000 - June 30, 2000
From income $0.02
From capital gains $ --
Total distributions $0.02
Total return* +1.64%
7-day yield +3.83%**
* The total return is a hypothetical investment in the Fund with all
distributions reinvested.
**The yield quotation more closely reflects the current earnings of the money
market fund than the total return quotation.
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Tax-Free Money Fund, Inc.
June 30, 2000 (Unaudited)
Assets
Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $207,858,392) $207,858,392
Cash in bank on demand deposit 499,427
Accrued interest receivable 1,021,620
---------
Total assets 209,379,439
-----------
Liabilities
Dividends payable to shareholders 195,579
Payable for investment securities purchased 4,023,002
Accrued investment management services fee 2,048
Accrued transfer agency fee 520
Accrued administrative services fee 171
Other accrued expenses 7,922
-----
Total liabilities 4,229,242
---------
Net assets applicable to outstanding capital stock $205,150,197
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 2,051,553
Additional paid-in capital 203,102,522
Accumulated net realized gain (loss) (3,878)
------
Total -- representing net assets applicable to outstanding capital stock $205,150,197
============
Shares outstanding 205,155,263
-----------
Net asset value per share of outstanding capital stock $ 1.00
------------
See accompanying notes to financial statements.
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<CAPTION>
Statement of operations
AXP Tax-Free Money Fund, Inc.
Six months ended June 30, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Interest $3,977,552
----------
Expenses (Note 2):
Investment management services fee 374,852
Transfer agency fee 95,082
Administrative services fees and expenses 33,203
Compensation of board members 3,700
Custodian fees 13,108
Printing and postage 14,671
Registration fees 58,708
Audit fees 10,750
Other 1,076
-----
Total expenses 605,150
Earnings credits on cash balances (Note 2) (32,647)
-------
Total net expenses 572,503
-------
Investment income (loss)-- net 3,405,049
---------
Net increase (decrease) in net assets resulting from operations $3,405,049
==========
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
Statements of changes in net assets
AXP Tax-Free Money Fund, Inc.
June 30, 2000 Dec. 31, 1999
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 3,405,049 $ 4,736,474
Net realized gain (loss) on security
transactions (Note 3) -- 2,841
------- -----
Net increase (decrease) in net assets resulting
from operations 3,405,049 4,739,315
Distributions to shareholders from:
Net investment income (3,405,049) (4,736,474)
Capital share transactions at constant $1 net asset value
Proceeds from sales of shares 256,605,006 404,531,201
Net asset value of shares issued in reinvestment
of distributions 3,250,725 4,522,093
Payments for redemptions of shares (261,133,547) (375,868,340)
------------ ------------
Increase (decrease) in net assets from capital
share transactions (1,277,816) 33,184,954
---------- ----------
Total increase (decrease) in net assets (1,277,816) 33,187,795
Net assets at beginning of period 206,428,013 173,240,218
----------- -----------
Net assets at end of period $205,150,197 $206,428,013
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP Tax-Free Money Fund, Inc.
(Unaudited as to June 30, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 (as amended), as
a diversified, open-end management investment company. The Fund has 10 billion
authorized shares of capital stock. The Fund invests primarily in short-term
bonds and notes issued by or on behalf of state or local governmental units.
The Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to accounting principles generally
accepted in the United States of America requires management to make estimates
(e.g., on assets and liabilities) that could differ from actual results.
Valuation of securities
Pursuant to Rule 2a-7 of the 1940 Act, all securities are valued daily at
amortized cost, which approximates market value, in order to maintain a constant
net asset value of $1 per share.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to shareholders. No provision for income or excise taxes
is thus required.
Dividends to shareholders
Dividends from net investment income, declared daily and payable monthly, are
reinvested in additional shares of the Fund at net asset value or payable in
cash.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Interest income, including level-yield amortization of premium and
discount, is accrued daily.
2. EXPENSES
The Fund has agreements with American Express Financial Corporation (AEFC) to
manage its portfolio and provide administrative services. Under an Investment
Management Services Agreement, AEFC determines which securities will be
purchased, held or sold. The management fee is a percentage of the Fund's
average daily net assets in reducing percentages from 0.36% to 0.25% annually.
Under an Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.03% to 0.02% annually. A minor
portion of additional administrative service expenses paid by the Fund are
consultants' fees and fund office expenses. Under this agreement, the Fund also
pays taxes, audit and certain legal fees, registration fees for shares,
compensation of board members, corporate filing fees and any other expenses
properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee of $24 per shareholder account for this service.
During the six months ended June 30, 2000, the Fund's custodian and transfer
agency fees were reduced by $32,647 as a result of earnings credits from
overnight cash balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities aggregated $486,826,024
and $484,595,000 respectively, for the six months ended June 30, 2000. Realized
gains and losses, if any, are determined on an identified cost basis.
4. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express mutual funds, permits
borrowings up to $200 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or
the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to
90 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.05%
per annum. The Fund had no borrowings outstanding during the six months ended
June 30, 2000.
<PAGE>
<TABLE>
<CAPTION>
5. FINANCIAL HIGHLIGHTS
The table below shows certain important financial information for evaluating the
Fund's results.
Fiscal period ended Dec. 31,
Per share income and capital changesa
2000c 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income (loss) .02 .03 .03 .03 .03
Less distributions:
Dividends from net investment income (.02) (.03) (.03) (.03) (.03)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Ratios/supplemental data
Net assets, end of period (in millions) $205 $206 $173 $152 $157
Ratio of expenses to average daily
net assetsb .58%d .59% .54% .55% .55%
Ratio of net investment income(loss)
to average daily net assets 3.26%d 2.64% 2.93% 3.13% 2.94%
Total return 1.64% 2.68% 2.94% 3.18% 2.95%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
c Six months ended June 30, 2000 (Unaudited).
d Adjusted to an annual basis.
</TABLE>
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<TABLE>
<CAPTION>
Investments in Securities
AXP Tax-Free Money Fund, Inc.
June 30, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal notes
Issuer(b) Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Alaska (4.7%) Anchorage T.R.A.N.
<S> <C> <C> <C> <C> <C>
02-02-01 4.73% $2,000,000 $2,007,362
Valdez Marine Terminal Refunding Revenue Bonds
(Mobil Alaskan Pipeline) V.R. Series 1993A
11-01-03 4.80 5,000,000(c) 5,000,000
Valdez Marine Terminal Revenue Bonds
(Exxon Pipeline) V.R. Series 1993A
12-01-33 4.50 2,600,000(c) 2,600,000
Total 9,607,362
Arizona (9.6%)
Maricopa County Pollution Control Revenue Bonds
(Arizona Public Service) V.R. Series 1994A
05-01-29 4.55 700,000(c) 700,000
Maricopa County Pollution Control Revenue Bonds
(Southern California Edison) C.P. Series 1985D
09-01-00 4.10 1,300,000 1,300,000
09-06-00 4.10 1,000,000 1,000,000
Maricopa County Pollution Control Revenue Bonds
(Southern California Edison) C.P. Series 1985F
09-11-00 4.20 1,000,000 1,000,000
Maricopa County Pollution Control Revenue Bonds
(Southern California Edison) C.P. Series 1999E
08-09-00 4.20 2,500,000 2,500,000
09-08-00 4.20 1,000,000 1,000,000
Maricopa County Pollution Control Revenue Bonds
V.R. Series 1994C
05-01-29 4.50 2,100,000(c) 2,100,000
Salt River Agricultural Improvement & Power District C.P.
Series 2000A
10-05-00 4.15 1,000,000 1,000,000
Salt River Agricultural Improvement & Power District C.P.
Series 2000B
07-12-00 3.95 2,000,000 2,000,000
07-14-00 4.00 2,000,000 2,000,000
09-01-00 4.10 1,000,000 1,000,000
09-08-00 4.20 2,000,000 2,000,000
10-03-00 4.20 2,000,000 2,000,000
Total 19,600,000
District of Columbia (0.5%)
American Red Cross Revenue Bonds
(Banc One) C.P. Series 2000
07-11-00 4.40 1,100,000 1,100,000
Florida (2.4%)
Jacksonville Electric Authority Revenue Bonds
V.R. Series 2000B
10-01-10 4.55 1,800,000(c) 1,800,000
Jacksonville Electric Authority Tax Exempt
C.P. Series 1999C
07-10-00 4.00 2,000,000 2,000,000
Municipal Power Agency C.P.
08-16-00 4.20 1,155,000 1,155,000
Total 4,955,000
Illinois (6.9%)
Chicago General Obligation Tender Notes
Series 1999
10-26-00 4.00 2,000,000 2,000,000
Chicago General Obligation Tender Notes
V.R.
01-01-12 4.60 3,500,000(c) 3,500,000
Chicago Water Revenue Bonds
2nd Lien V.R.
11-01-30 4.65 2,000,000(c) 2,000,000
Health Facilities (University of Chicago Hospitals)
V.R. (MBIA Insured)
08-01-26 4.55 4,700,000(c,d) 4,700,000
Health Facilities Authority Revenue Bonds
(University of Chicago Hospitals) V.R.
11-15-23 4.80 1,900,000(c) 1,900,000
Total 14,100,000
Indiana (4.4%)
Bond Bank Advanced Funding Notes
Series 2000A-1
07-26-00 4.75 2,000,000 2,001,150
Bond Bank Advanced Funding Notes
Series 2000A-2
01-18-01 4.73 1,000,000 1,003,175
Mount Vernon Pollution Control & Solid Waste Disposal
Refunding Revenue Bonds (General Electric) C.P.
07-06-00 4.10 2,000,000 2,000,000
07-19-00 4.40 2,000,000 2,000,000
07-21-00 4.55 2,000,000 2,000,000
Total 9,004,325
Iowa (1.8%)
School Cash Anticipation Program
Iowa School Corporation
Warrant Certificate Series 2000A
06-22-01 5.45 2,000,000 2,018,843
School Cash Anticipation Program
Iowa School Corporation
Warrant Certificate Series 2000B
02-01-01 4.73 1,700,000 1,706,711
Total 3,725,554
Kentucky (2.0%)
State Association of Counties T.R.A.N.
Series 2000A
06-29-01 4.98 2,000,000 2,009,460
State Interlocal School T.A.N.
06-29-01 4.97 2,000,000 2,012,431
Total 4,021,891
Maryland (0.6%)
Montgomery County C.P. B.A.N.
08-04-00 4.15 1,300,000 1,300,000
Michigan (6.3%)
Regents of the University Hospital Refunding Revenue Bonds
V.R. Series 1992A
12-01-19 4.55 1,000,000(c) 1,000,000
Regents of the University Hospital Revenue Bonds
V.R. Series 1995A
12-01-27 4.55 7,300,000(c) 7,300,000
Regents of the University of Michigan
C.P. Series B
07-03-00 4.35 3,450,000 3,450,000
University Hospital Refunding Revenue Bonds
V.R. Series 1989A
12-01-19 4.55 800,000(c) 800,000
University Hospital Refunding Revenue Bonds
V.R. Series 1992A
12-01-19 4.55 400,000(c) 400,000
Total 12,950,000
Minnesota (16.3%)
Becker Pollution Control Revenue Bonds
(Northern States Power) C.P. Series 1999A
07-07-00 4.00 1,000,000 1,000,000
07-11-00 4.00 2,000,000 2,000,000
07-12-00 4.40 2,500,000 2,500,000
08-02-00 4.60 2,000,000 2,000,000
Cohasset Revenue Bonds (Minnesota Power & Light)
V.R.D.N. Series 1997A
06-01-20 4.60 1,400,000(c) 1,400,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) C.P.
07-19-00 4.20 1,000,000 1,000,000
08-01-00 4.25 1,000,000 1,000,000
09-06-00 4.15 1,000,000 1,000,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) C.P. Series 1992B
07-17-00 4.10 2,000,000 2,000,000
07-18-00 4.20 1,000,000 1,000,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) C.P. Series 1992C
07-06-00 4.60 1,000,000 1,000,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) C.P. Series 2000B
07-06-00 4.40 1,000,000 1,000,000
09-12-00 4.15 2,000,000 2,000,000
09-13-00 4.15 2,000,000 2,000,000
Rochester Health Care Facility Revenue Bonds
(Mayo Clinic) C.P. Series 2000C
07-07-00 4.40 3,000,000 3,000,000
Southern Minnesota Municipal Power C.P.
07-05-00 4.20 3,000,000 3,000,001
09-05-00 4.20 3,000,000 3,000,000
09-07-00 4.10 1,500,000 1,500,000
10-04-00 4.20 2,000,000 2,000,000
Total 33,400,001
Missouri (4.4%)
State Health & Educational Facilities Authority
Revenue Bonds (St. Louis University) V.R.
10-01-09 4.65 1,000,000(c) 1,000,000
10-01-24 4.65 8,000,000(c) 8,000,000
Total 9,000,000
Nevada (5.4%)
Clark County Airport Revenue Bonds V.R. Series 1995A
07-01-25 4.70 5,000,000(c) 5,000,000
Las Vegas Valley Water District
General Obligation Bonds
(Lt Water) C.P.
08-03-00 4.15 2,000,000 2,000,000
08-08-00 4.15 4,000,000 4,000,000
Total 11,000,000
New Mexico (0.9%)
Farmington Pollution Control Revenue Bonds
(Arizona Public Service) V.R. Series 1994B
05-01-24 4.45 1,500,000(c) 1,500,000
09-01-24 4.45 400,000(c) 400,000
Total 1,900,000
New York (5.4%)
City of Buffalo R.A.N. Series 1999A
07-25-00 4.65 1,000,000 1,000,546
Long Island Power Authority Electric Revenue Bonds
Variable 5th Series 1998
05-01-33 4.40 4,040,000(c) 4,039,999
Long Island Power Authority Electric Revenue Bonds
Variable 6th Series 1998
05-01-33 4.45 100,000(c) 100,000
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds V.R.
06-15-23 4.45 3,900,000(c) 3,900,000
Suffolk County T.A.N. Series 1999I
08-10-00 4.50 2,000,000 2,001,170
Total 11,041,715
Pennsylvania (0.9%)
Allegheny County Higher Education Building Authority
Revenue Bonds (Carnegie Mellon University) V.R.
12-01-33 4.50 1,800,000(c) 1,800,000
Tennessee (2.2%)
Shelby County B.A.N. C.P. Series 1998A
07-05-00 4.40 2,000,000 2,000,000
07-10-00 4.10 2,500,000 2,500,000
Total 4,500,000
Texas (8.0%)
Dallas Area Rapid Transit Notes
(North Central Light Rail) V.R. Series 2000
01-05-05 4.75 4,400,000(c) 4,400,000
Gulf Coast Waste Disposal Authority
Pollution Control Refunding Revenue Bonds
(Amoco) V.R. Series 1992
10-01-17 4.50 2,400,000(c) 2,400,000
Harris County General Obligation
C.P.
08-01-00 4.10 3,000,000 3,000,000
Port Arthur Naval District of Jefferson
Pollution Control Revenue Bonds (Texaco) V.R.
10-01-24 4.60 4,600,000(c) 4,600,000
State T.R.A.N. Series 1999A
08-31-00 4.49 2,000,000 2,002,544
Total 16,402,544
Utah (3.9%)
Intermountain Power Agency
(Power Supply Service) C.P. Series 1985F
(AMBAC Insured)
07-03-00 4.15 2,000,000(d) 2,000,000
07-13-00 3.95 1,000,000(d) 1,000,000
07-13-00 4.00 2,000,000(d) 2,000,000
State General Obligation Highway
Series 1999C V.R.
07-01-16 4.55 3,000,000(c) 3,000,000
Total 8,000,000
Virginia (1.9%)
Roanoke Hospital Revenue Bonds
(Carilion Health System) V.R. Series 1997A
07-01-27 4.55 4,000,000(c) 4,000,000
Washington (7.3%)
Port of Seattle Revenue Bonds V.R. Series 1999A
09-01-24 4.85 6,000,000(c) 6,000,000
State Adjustable V.R. Series 1996B
06-15-20 4.75 3,000,000(c) 3,000,000
State General Obligation Bonds V.R. Series 1996B
06-15-20 4.75 1,000,000(c) 1,000,000
State Public (Power Supply System) V.R.
07-01-17 4.90 5,000,000(c) 5,000,000
Total 15,000,000
Wyoming (5.6%)
Kemmerer Pollution Control Revenue Bonds
(Exxon) V.R.
11-01-14 4.50 2,400,000(c) 2,400,000
Uinta County Pollution Control Revenue Bonds
(Amoco) V.R.
07-01-26 4.50 9,050,000(c) 9,050,000
Total 11,450,000
Total investments in securities
(Cost: $207,858,392)(e) $207,858,392
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in the portfolio descriptions:
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(c) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. However, for purposes of
Rule 2a-7, maturity is the later of the next put or interest rate reset date.
Interest rate varies to reflect current market conditions; rate shown is the
effective rate on June 30, 2000.
(d) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
MBIA -- Municipal Bond Investors Assurance
(e) Also represents the cost of securities for federal income tax purposes at
June 30, 2000.
<PAGE>
American
Express
Funds
Tax-Free Money Fund
200 AXP Financial Center
Minneapolis, MN 55474
TICKER SYMBOL
Class A: ITFXX
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.AXP
S-6428 N(8/00)
