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Previous: PRINCIPAL INTERNATIONAL FUND INC, 485BPOS, 2000-04-27 |
Next: SCIENCE APPLICATIONS INTERNATIONAL CORP, 10-K405, 2000-04-27 |
American Express(R) Variable Portfolio Funds
References to "Fund" throughout this semiannual report refer to the following
individual funds, singularly or collectively as the context requires:
AXP(SM) VP - Blue Chip Advantage Fund
AXP(SM) VP - Bond Fund
AXP(SM) VP - Capital Resource Fund
AXP(SM) VP - Cash Management Fund
AXP(SM) VP - Diversified Equity Income Fund
AXP(SM) VP - Extra Income Fund
AXP(SM) VP - Federal Income Fund
AXP(SM) VP - Global Bond Fund
AXP(SM) VP - Growth Fund
AXP(SM) VP - International Fund
AXP(SM) VP - Managed Fund
AXP(SM) VP - New Dimensions Fund(R)
AXP(SM) VP - Small Cap Advantage Fund
AXP(SM) VP - Strategy Aggressive Fund
2000 SEMIANNUAL REPORT
This report may contain information on funds that are not available under your
product.
Managed by IDS Life Insurance Company
<PAGE>
CONTENTS
From the Chairman 3
AXP Variable Portfolio - Blue Chip Advantage Fund
From the Portfolio Managers 4
The 10 Largest Holdings 5
AXP Variable Portfolio - Bond Fund
From the Portfolio Managers 6
The 10 Largest Holdings 7
AXP Variable Portfolio - Capital Resource Fund
From the Portfolio Manager 8
The 10 Largest Holdings 9
AXP Variable Portfolio - Cash Management Fund
From the Portfolio Manager 10
AXP Variable Portfolio - Diversified Equity Income Fund
From the Portfolio Manager 11
The 10 Largest Holdings 12
AXP Variable Portfolio - Extra Income Fund
From the Portfolio Managers 13
The 10 Largest Holdings 14
AXP Variable Portfolio - Federal Income Fund
From the Portfolio Manager 15
AXP Variable Portfolio - Global Bond Fund
From the Portfolio Manager 16
The 10 Largest Holdings 17
AXP Variable Portfolio - Growth Fund
From the Portfolio Manager 18
The 10 Largest Holdings 19
AXP Variable Portfolio - International Fund
From the Portfolio Managers 20
The 10 Largest Holdings 21
AXP Variable Portfolio - Managed Fund
From the Portfolio Managers 22
The 10 Largest Holdings 23
AXP Variable Portfolio - New Dimensions Fund
From the Portfolio Manager 24
The 10 Largest Holdings 25
AXP Variable Portfolio - Small Cap Advantage Fund
From the Portfolio Managers 26
The 10 Largest Holdings 27
AXP Variable Portfolio - Strategy Aggressive Fund
From the Portfolio Managers 28
The 10 Largest Holdings 29
All Funds
Financial Statements 30
Notes to Financial Statements 47
Investments in Securities 73
<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 adviser 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 managers' letters that follow provide a review of the Fund's
investment strategies and performance. This 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.
Arne H. Carlson
<PAGE>
(picture of) Keith Tufte
Keith Tufte
Portfolio manager
(picture of) James M. Johnson, Jr.
James M. Johnson, Jr.
Portfolio manager
From the Portfolio Managers
AXP VP - Blue Chip Advantage Fund
The Fund had a productive first half of the fiscal year, as it benefited from a
mid-period stock market surge. For the initial reporting period -- Sept. 15,
1999 (the Fund's commencement of operations) through February 2000 -- the Fund
generated a total return of 4.44%. (This figure does not reflect expenses that
apply to the variable accounts, subaccounts, the variable annuity or the life
insurance contracts.)
The stock market was in a slump when the period began, as investors worried that
long-term interest rates might continue the upward trend they had been on since
the beginning of 1999. But by mid-October, fresh reports of still-tame inflation
and generally good corporate profits had arrived to put investors in a
much-improved mood.
The result was a resounding rally that continued through the end of 1999 and
into the early days of the new year. Reflecting the strength of the advance, the
Fund gained approximately 15% from October through December. Renewed concerns
about interest rates caused the stock market to retreat over the ensuing weeks,
however, resulting in the Fund giving back some of its gains.
For the most part, technology/telecommunications stocks led the charge for the
market during the six months. That worked to the Fund's advantage, as those
issues comprised its largest area of investment (up to about a third of the
portfolio at times). Looking at specific holdings, IBM, Cisco Systems, EMC,
Intel, Oracle and Microsoft were among the biggest and most productive names. As
the period progressed, we reduced the tech/telecom exposure a bit by taking
profits in some stocks that had experienced especially sharp run-ups.
Other substantial investment sectors were consumer cyclicals (including
retailing), financial services and utilities. While there were some good
performers in those areas, on the whole their results were mixed. As for changes
to the portfolio, late in the period we shifted more money into health care
stocks, which were attractively priced, and basic-materials stocks such as paper
and chemicals, which stand to benefit from ongoing strength in the economy.
Looking toward the second half of the fiscal year, we expect an unsettled
market, especially over the near term. The chances for a sustained advance
should improve as the year progresses, assuming the economy stays on the growth
track and corporate profits remain reasonably strong.
Keith Tufte
James M. Johnson, Jr.
<PAGE>
The 10 Largest Holdings
AXP VP - Blue Chip Advantage Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Standard & Poor's Depositary Receipts 8.28% $2,427,666
Microsoft 4.08 1,197,624
Cisco Systems 3.24 950,427
Intel 3.22 943,550
General Electric 2.87 842,034
Oracle 2.11 619,244
Exxon Mobil 1.90 557,236
Lucent Technologies 1.82 534,012
Hewlett-Packard 1.58 464,025
AT&T 1.54 450,375
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 30.64% of net assets
<PAGE>
(picture of) Frederick Quirsfeld
Frederick Quirsfeld
Portfolio manager
(picture of) Steven C. Merrell
Steven Merrell
Portfolio manager
From the Portfolio Managers
AXP VP - Bond Fund
Concerns about higher interest rates and potentially higher inflation made for
an often-difficult environment for bonds during the past six months. Still, the
Fund did produce a positive total return of 2.50% for the first half of the
fiscal year -- September 1999 through February 2000. (This figure does not
reflect expenses that apply to the variable accounts, subaccounts, the variable
annuity or the life insurance contracts.)
Although the data had yet to show it, higher inflation was on the minds of
investors throughout the period. But even before that, the Federal Reserve Board
(the Fed) had already given notice that it was concerned that the red-hot
economy could cause an inflation spike when it raised short-term interest rates
twice in the summer of 1999. The Fed then reinforced its intentions by an
additional rate hike in November and another in February. The ultimate result
was that long-term interest rates drifted higher from the outset of the period
in September until late January.
The Fund was somewhat shielded from the negative effect of the interest-rate
rise by its relatively defensive portfolio structure, which centered on a
shorter-than-average duration. (Duration, a function of the average maturity of
the portfolio's holdings, influences the sensitivity of the Fund's net asset
value to interest-rate swings. In general the longer the duration, the greater
the sensitivity.) However, when long-term Treasury yields came down in February,
the benefit to the Fund was muted because of its duration. Nevertheless, it was
encouraging to end the period on a solidly positive note.
Looking at the major areas of investments, for the six months as a whole,
mortgage-backed securities performed best for the Fund, followed by U.S.
Treasury bonds and corporate bonds, including investment-grade and high-yield
issues. (Investment-grade bonds comprised about 30% of portfolio assets, while
high-yield bonds made up between 20% and 25%.) Although they accounted for less
than 10% of the portfolio, convertible and emerging-market bonds enjoyed the
greatest gains and clearly enhanced Fund performance.
As for changes to the portfolio, late in the period we increased the overall
credit quality by reducing corporate bond holdings in favor of U.S. Treasury
issues. Also, in anticipation of an improving bond environment, we slightly
increased the duration.
Given that the economy has yet to show little sign of losing steam, we think
it's likely that the Fed will push short-term interest rates somewhat higher in
the months ahead. However, in our view, longer-term rates may well have seen
their peak and, as the year progresses, could eventually undergo a gradual
decline. If that proves true, the bond market and the Fund would likely enjoy
improving performance.
Frederick Quirsfeld
Steven C. Merrell
<PAGE>
The 10 Largest Holdings
AXP VP - Bond Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Hydro-Quebec 1.35% $21,484,305
8.50% 2029
Petroleos Mexicanos .93 14,862,656
9.50% 2027
BellSouth Capital Funding .75 11,964,995
7.88% 2030
Countrywide Home Loan .73 11,643,719
6.85% 2004
Cleveland Electric Illuminating .71 11,286,721
9.50% 2005
Nationwide CSN Trust .70 11,149,047
9.88% 2025
CSC Holdings .69 11,049,999
10.50% 2016
News America Holdings .68 10,862,582
10.13% 2012
Wal-Mart CRAVE Trust .66 10,493,030
7.00% 2006
Republic of Colombia .61 9,725,000
12.47% 2005
Excludes U.S. Treasury and government agency holdings.
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 7.81% of net assets
<PAGE>
(picture of) Betty J. Tebault
Betty J. Tebault
Portfolio manager
From the Portfolio Manager
AXP VP - Capital Resource Fund
Although the large-capitalization stocks the Fund focuses on cooled off a bit,
the Fund generated a double-digit gain during the first half of the fiscal year.
For the six months -- September 1999 through February 2000 -- the Fund's total
return was 10.92%. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, the variable annuity or the life insurance
contracts.)
In the face of an upturn in long-term interest rates, the stock market lost some
ground at the outset of the period. The setback proved to be temporary, though,
as stocks soon gained support from reports of still-tame inflation, healthy
economic growth and generally good corporate profits. The result was a powerful
rally that carried the market to an all-time high in early January. At that
point, inflation and interest-rate concerns resurfaced, causing the market to
struggle for much of the final weeks of the period.
The Fund's performance largely tracked that of the broad market -- gaining
strongly during the fall and early winter before tailing off. Making the biggest
contribution to performance were technology and telecommunications stocks, which
comprised about a third of the portfolio at times. Prominent winners included
Jabil, Comcast, JDS Uniphase and IBM.
Looking at other sectors, health care was mixed as drug stocks were sluggish but
biotechnology was extremely strong. Our economically cyclical holdings such as
paper and aluminum stocks were weak overall, but energy-related issues performed
fairly well. Consumer-stable stocks, including food and household products,
turned out to be laggards.
In sum, the period came down to a tale of two markets: the technology-driven
"new economy" market and the traditional "old economy" market, with the former
trouncing the latter. Though to a smaller degree, there also was division in
terms of market capitalization, with large-cap stocks giving way to small- and
mid-cap issues. For a well-diversified large-cap fund such as this one, those
factors made for a frustrating environment at times.
As for changes to the holdings, upon becoming the sole manager of the Fund in
February, I began lowering the exposure to cyclical stocks and adding to
traditional growth names in technology and media, plus biotech and generic
drugs. I've also increased holdings in oil services, which stands to benefit
from higher oil prices. Beyond those shifts, I plan to reduce the overall number
of holdings from about 80 to 60-65, as I think a more focused portfolio offers
greater opportunity to enhance performance.
Betty J. Tebault
<PAGE>
The 10 Largest Holdings
AXP VP - Capital Resource Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Corning 4.14% $244,400,000
Microsoft 3.64 214,499,999
General Electric 3.59 211,500,000
Cisco Systems 3.14 185,062,500
Intel 3.07 180,800,000
Texas Instruments 2.82 166,500,000
Motorola 2.31 136,400,000
Exxon Mobil 2.17 128,031,250
Enron 2.16 127,650,000
Morgan Stanley, Dean Witter, Discover & Co 2.15 126,787,500
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 29.19% of net assets
<PAGE>
(picture of) Terry Fettig
Terry Fettig
Portfolio manager
From the Portfolio Manager
AXP VP - Cash Management Fund
The Fund's yield increased during the first half of the fiscal year, reflecting
a rise in short-term interest rates. For the six months -- September 1999
through February 2000 -- the Fund generated a total return of 2.55%. (This
figure does not reflect expenses that apply to the variable accounts,
subaccounts, the variable annuity or the life insurance contracts.) The
seven-day yield was 5.27%. (The yield more closely reflects the current earnings
of the money market fund than does total return.) In keeping with its objective,
the Fund maintained a $1 per share price throughout the period. (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 per share, it is possible to lose money by
investing in the Fund.)
Despite strong economic growth, higher oil prices and generally rising wages in
several business sectors, inflation remained remarkably low during the six
months. Nevertheless, the Federal Reserve Board (the Fed), evidently concerned
that the potential for a run-up in inflation had risen to an uncomfortable
level, chose to increase short-term interest rates twice over the period -- a
quarter point in November and a quarter-point in February.
(By way of background, the Fed adjusts short-term interest rates based largely
on the condition of the economy and the inflation outlook. When the economy
appears weak and inflation is low, the Fed usually reduces rates to stimulate
economic growth. Conversely, when the economy is especially strong and inflation
threatens to pick up, the Fed usually raises rates to rein in economic growth
and thereby keep inflation in check.)
In response to the Fed's rate hikes, issuers of commercial paper -- the core of
the Fund's investment portfolio -- increased the interest rates on their
securities. As these new securities were added to the portfolio, the result was
a gradual increase in the Fund's yield over the six months. To more readily take
advantage of the higher yields that became available, I kept the average
maturity of the portfolio relatively short. This allowed me to add new
securities sooner than would have been possible with a longer average maturity.
As the second half of the fiscal years begins, the data have yet to indicate
that inflation is clearly on the upswing. But, given the ongoing strength of the
economy, I think it's likely that the Fed will decide to push short-term
interest rates somewhat higher to guard against a spike in inflation as the year
progresses. Therefore, I plan to keep the portfolio's maturity relatively short
to take quicker advantage of the higher-yielding securities that may come to
market.
Terry Fettig
<PAGE>
(picture of) Kurt Winters
Kurt Winters
Portfolio manager
From the Portfolio Manager
AXP VP - Diversified Equity Income Fund
The value stocks the Fund focuses on remained out of favor during the first half
of the fiscal year, resulting in a loss of 9.38% for the initial reporting
period -- Sept. 15, 1999 (the Fund's commencement of operations) through
February 2000. (This figure does not reflect expenses that apply to the variable
accounts, subaccounts, the variable annuity or the life insurance contracts.)
The period got off to a shaky start, as the stock market struggled against
higher interest rates, the possibility of rising inflation and concerns
regarding the potential impact of the Y2K computer bug. The situation improved
in the following months, though, as investors, encouraged by reports of
still-tame inflation and generally good corporate profits, steadily moved back
into stocks.
The positive momentum continued through December and into early January, taking
the market to an all-time high. At that point, worries about inflation and
interest rates resurfaced, causing the market to retreat through the end of the
period.
While the Fund did participate in the market's upturns during the six months, it
was hampered by investors' increasing preference for a relatively small group of
momentum-driven, Internet-related technology stocks -- quite the opposite of the
value-oriented emphasis of the Fund. As a result, the Fund staged only modest,
periodic advances.
Looking at the Fund's holdings, the biggest areas of investment were in
financial services, which includes banks and insurance companies, utilities,
consumer cyclicals, energy and technology. The trend toward higher interest
rates put pressure on the financial and utility stocks, while the consumer
cyclicals generated mixed results. The brightest spots were energy, which
benefited from rising oil prices, and technology. Most notable among the few
changes made to the portfolio was a reduction in the exposure to financial
service stocks and an increase in technology holdings.
As the second half of the fiscal year begins, I continue to search for
indications that the nature of the market is about to change. Thus far,
investors still appear comfortable focusing almost exclusively on a narrow band
of what I see as high-risk stocks while virtually ignoring the rest of the
market. History shows that's likely to change at some point, but it's impossible
to say with confidence when such a shift might occur.
Kurt Winters
<PAGE>
The 10 Largest Holdings
AXP VP - Diversified Equity Income Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Citigroup 4.40% $450,662
Exxon Mobil 3.08 315,408
American Intl Group 2.81 288,395
CBS 2.75 281,731
Morgan Stanley, Dean Witter, Discover & Co 2.72 278,862
AT&T 2.47 252,724
Chevron 2.43 249,456
SBC Communications 2.15 219,868
Motorola 2.11 216,365
Bank of America 1.93 197,423
For further detail about these holdings, lease refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 26.85% of net assets
<PAGE>
(picture of) Jack Utter
Jack Utter
Portfolio manager
(picture of) Scott Schroepfer
Scott Schroepfer
Portfolio manager
From the Portfolio Managers
AXP VP - Extra Income Fund
It was a difficult environment for high-yield bonds during the past six months,
but the Fund held up relatively well as it generated a positive total return of
1.26% for the first half of the fiscal year -- September 1999 through February
2000. (This figure does not reflect expenses that apply to the variable
accounts, subaccounts, the variable annuity or the life insurance contracts.)
Two powerful opposing factors were at work throughout the period: strong
economic growth and the threat of higher inflation/higher interest rates.
Generally speaking, a robust economy is especially good for high-yield bonds,
because of the potentially positive effect on the financial health of their
issuers, which in turn makes it easier for them to make their interest and
principal payments.
Inflation and interest rates are, of course, another matter. When they rise,
bond values suffer. Over the past six months, the inflation data remained tame.
But that didn't stop the Federal Reserve from raising short-term interest rates
to cool off the economy and reduce the likelihood of a future run-up in
inflation. Longer-term interest rates responded by drifting higher through the
fall and early winter, before eventually retreating late in the period.
Looking specifically at the high-yield market, a shortage of buyers throughout
the six months and an ample supply of new issues early in 2000 helped hold down
prices. Still, the Fund did enjoy some strong months, particularly December and
January, when its telecommunications and media holdings -- two substantial areas
of investment -- experienced good gains. The period also ended on a positive
note when longer-term interest rates came down during February, allowing the
Fund to notch a gain for the month.
As for the rest of the fiscal year, the bond market will most likely remain
unsettled over the near term as investors try to get a handle on the direction
of long-term interest rates. On the plus side for the high-yield sector, the
economy, while it may slow down a bit, should be able to maintain a solid rate
of growth. In addition, the relatively high level of income offered by
high-yield bonds could well attract more buyers in the months ahead, which would
be good for prices and, ultimately, the Fund.
Jack Utter
Scott Schroepfer
<PAGE>
The 10 Largest Holdings
AXP VP - Extra Income Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
CSC Holdings 1.60% $10,059,169
11.13% Pay-in-kind Series M Preferred
Level 3 Communications 1.20 7,518,750
11.00% 2008
EchoStar DBS 1.12 7,038,000
9.38% 2009
Nextel Partners 1.08 6,766,999
13.60% 2004
Outsourcing Solutions .96 6,021,000
11.00% 2006
Globix .95 5,970,000
12.50% 2010
Trump Atlantic City Assn/Funding .94 5,899,500
11.25% 2006
Outdoor Systems .84 5,268,299
8.88% 2007
Motor & Gears .82 5,171,250
10.75% 2006
Repap New Brunswick .81 5,072,812
9.00% 2004
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 10.32% of net assets
<PAGE>
(picture of) James W. Snyder
James W. Snyder
Portfolio manager
From the Portfolio Manager
AXP VP - Federal Income Fund
Rising interest rates kept the bond market off balance for much of the past five
and one-half months. Still, the Fund did finish in positive territory for the
first half of the fiscal year, with a total return of 1.19% for the initial
reporting period -- Sept. 15, 1999 (the Fund's commencement of operations)
through February 2000. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, the variable annuity, or the life insurance
contracts.)
With robust economic growth, soaring oil prices and an ever-tightening labor
market, the environment seemed ripe for an upturn in inflation during the past
six months. As it turned out, inflation remained quite subdued. But that didn't
keep fixed-income investors, not to mention the Federal Reserve Board (the Fed),
from worrying about it just the same.
The Fed evidenced its concern by raising short-term interest rates twice over
the six months -- once in November and again in February. Those actions served
to reinforce an upturn in bond market yields, a trend that had been in place
well before the period began in September and had dragged down bond prices in
the process. A flood of new corporate bonds also served to hold back prices,
especially early in the period.
Fortunately for the Fund, the short- to intermediate-term segment of the market
- -- where it concentrates its investments -- wasn't as affected by the rate rise
as the long-term segment. Also to the Fund's benefit, I concentrated the largest
portion of investments (between 60% and 70%) in mortgage-backed securities,
which fared better than holdings in Treasury issues for the period as a whole.
Beyond that, I maintained a somewhat defensive portfolio structure that centered
on a relatively short duration. (Duration, a function of the average maturity of
the securities in the portfolio affects its price sensitivity to interest-rate
swings. In general, the longer the duration, the greater the sensitivity.)
Therefore, when interest rates rose, the effect on the Fund's value was muted a
bit.
Perhaps the best development over the six months was that the period ended with
the Fund recording a gain in February, as short- and intermediate-term interest
rates were relatively stable. While that's no guarantee of a better bond
environment in the months ahead, I think the toughest months may be behind us.
Assuming that proves to be the case and inflation does not show signs of a
substantial run-up in the months ahead, I think we can look forward to improving
performance over the rest of the fiscal year.
James W. Snyder
<PAGE>
(picture of) Ray Goodner
Ray Goodner
Portfolio manager
From the Portfolio Manager
AXP VP - Global Bond Fund
The environment for global fixed-income investing was unrewarding over the past
six months, as bond prices fell in the major industrial economies in the face of
credit- tightening by central banks in the U.S. and Europe. Reflecting the
conditions, the Fund experienced a loss of 1.85% over the first half of the
fiscal year -- September 1999 through February 2000. (This figure does not
reflect expenses that apply to the variable accounts, subaccounts, the variable
annuity, or the life insurance contracts.)
The credit-tightening was prompted by concerns that accelerating economic
activity would push inflation rates higher. Contributing to global economic
growth was a rise in global equity markets, which in turn influenced currency
valuations. International trade and investment flows raised the yen's value in
comparison to the dollar, which enhanced returns from investments in Japan,
while the euro lost value against the dollar, which penalized returns from
European holdings. The Fund's best overall performance came from the emerging
markets, primarily Latin America and East Asia, which benefited from increased
investor confidence in these regions.
During the first four months of the period, I maintained a defensive maturity
structure by emphasizing short-to-intermediate bonds, as well as higher-yielding
corporate and emerging market bonds, both of which benefit from economic
expansion. But at the outset of 2000, believing the worst of bonds' price
decline was over, I lengthened the maturity of U.S. and Japanese holdings and
increased the exposure to the U.S. as well.
By period-end, my view of the U.S. market was rewarded as the Treasury lent
support to the market by introducing a program to retire federal debt from the
fiscal surplus. This development also had a spillover effect in other markets.
Improved economic conditions in Europe also portends a reduction in borrowing
requirements by the government sector.
As for the rest of the fiscal year, the prospect for recovery of the euro
appears good. And a sustainable growth expectation has taken hold for the major
European economies. And, as Europe becomes a relatively better recipient of
trade and investment flows than the U.S., the demand for the euro compared with
the dollar should improve.
Still, a favorable turnabout of fortunes in bonds must be considered in an
environment where the threat of higher inflation persists. Tight labor markets
in the U.S. and some parts of Europe, along with higher commodity prices, may
very well deflate my optimistic view of interest rates and force a more
defensive posture. Overall, though, the outlook for a largely weaker dollar and
more buoyant bond markets than in the past several months should lead to better
investment performance for the Fund.
Ray Goodner
<PAGE>
The 10 Largest Holdings
AXP VP - Global Bond Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Federal Republic of Germany 4.08% $7,495,687
7.50% 2004
Govt of Italy 3.95 7,257,543
8.50% 2004
Allgemeine Hypo Bank 3.19 5,859,225
5.00% 2009
Govt of Norway 3.10 5,689,837
7.00% 2001
Federal Republic of Germany 2.92 5,355,351
8.00% 2002
United Kingdom Treasury 2.78 5,112,935
8.00% 2003
United Kingdom Treasury 2.61 4,801,488
8.50% 2005
Development Bank of Japan 2.24 4,106,793
6.50% 2001
Republic of Austria 2.07 3,796,653
5.00% 2001
Republic of Italy 2.04 3,752,308
3.50% 2001
Excludes U.S. Treasury and government agency holdings.
Note: Certain foreign investment risks include: changes in currency exchange
rates, adverse political or economic order, and lack of similar regulatory
requirements followed by U.S. companies.
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 28.98% of net assets
<PAGE>
(picture of) Lisa A. Costa
Lisa A. Costa
Portfolio manager
From the Portfolio Manager
AXP VP - Growth Fund
The Fund took good advantage of a stock-market surge to post a substantial gain
during the first half of the fiscal year. For the Fund's initial reporting
period -- Sept. 15, 1999 (the Fund's commencement of operations) through
February 2000 -- the Fund's total return was 23.34%. (This figure does not
reflect expenses that apply to the variable accounts, subaccounts, the variable
annuity or the life insurance contracts.)
The period got off to a shaky start, as the stock market struggled in the face
of higher interest rates, concerns that the robust economy might soon spawn a
run-up in the inflation rate, and uncertainty regarding the potential effect of
the Y2K computer bug. Although the Fund held up relatively well in that
environment, it lost ground in September.
The mood in the stock market quickly changed, though, thanks to reports
indicating still-tame inflation and generally good corporate profits, as well as
growing excitement regarding the Internet. By November, the market's moderate
advance had turned into a roaring rally that gathered strength through December
and into early January. Reflecting the strength of the move, the Fund gained
more than 20% from October through December. While renewed concerns about the
possibility of higher interest rates sent the market into retreat over the
ensuing weeks, an advance by technology-related growth stocks helped the Fund to
end the period with a sharp gain in February.
While stocks of virtually all stripes benefited from the generally positive
environment, it was clearly the technology stocks that were the big winners,
especially those related to the growth of the Internet. The tech trend worked to
the particular advantage of the Fund, as about half of the portfolio's assets
was invested in that sector. Among the largest and most productive holdings for
the Fund were technology names such as Cisco Systems, Microsoft, EMC
Corporation, Texas Instruments, Yahoo and Tellabs. Most of the rest of the
portfolio was spread among the health care, financial services, retailing and
energy sectors. While there were some positive performers within these groups,
on the whole their results were mixed.
Before closing, I want to note that credit for the Fund's excellent performance
during the six months and, in fact, the past several years, belongs to Mitzi
Malevich, who managed the Fund during that time and whom I succeeded upon her
retirement in January 2000.
While no two portfolio managers do their jobs in identical fashion, I think it's
important to point out that I intend to follow the same investment techniques
that Mitzi employed so successfully: hold a relatively small number of stocks
(an average of 50-60 for this Fund in recent years) representing companies with
strong growth prospects, and keep trading and cash levels to a minimum. I look
forward to putting that approach to work for you in the years ahead.
Lisa A. Costa
<PAGE>
The 10 Largest Holdings
AXP VP - Growth Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Cisco Systems 7.11% $4,701,644
Texas Instruments 6.70 4,432,729
EMC 5.80 3,832,632
Applied Materials 5.45 3,607,345
Microsoft 3.73 2,467,912
Yahoo! 3.49 2,306,846
Maxim Integrated Products 3.19 2,109,538
Tellabs 2.96 1,955,520
Citigroup 2.85 1,884,423
Nokia ADR CI A 2.81 1,856,403
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 44.09% of net assets
<PAGE>
(picture of) Peter Lamaison
Peter Lamaison
Portfolio manager
(picture of) Ian J. King
Ian J. King
Portfolio manager
From the Portfolio Managers
AXP VP - International Fund
Mostly favorable investment environments in major foreign stock markets set the
stage for a strong gain by the Fund during the first half of the fiscal year.
For the six months -- September 1999 through February 2000 -- the Fund generated
a total return of 25.48%. (This figure does not reflect expenses that apply to
the variable accounts, subaccounts, the variable annuity or the life insurance
contracts.)
The period got off to a sluggish start, as a sagging U.S. stock market led to a
bit of a slump in Europe during September. But the next three months were a
completely different story as Europe and, to a somewhat lesser degree, Japan
followed the U.S. market's lead by embarking on a remarkable rally through the
end of 1999. Concerns about rising interest rates resulted in a setback for the
major foreign markets in January, but a nice rebound the following month allowed
the period to end on a positive note.
The Fund's performance took a similar path -- slipping at the outset, surging
during the fall and early winter, retreating in January and coming back in
February. While we were, on the whole, satisfied with the performance of our
stock selections, overall weakness in the yen and, to a greater degree, the euro
versus the dollar did detract somewhat from the Fund's return.
Looking at the asset allocation, the largest area of new investment was Japan,
where we increased the exposure to about 30% of the portfolio to take advantage
of the positive effect of a trend toward corporate restructuring and the
prospect of an improving economy. The rest of the portfolio was largely invested
in Europe, principally France, Germany, the United Kingdom and Italy. Given the
relatively weak performance of the U.K. market, we reduced holdings there as the
period progressed.
As for specific business sectors, we emphasized technology, media and
telecommunications stocks in Europe, while in Japan our choices were more
stock-specific and, thus, quite varied. Overall, we avoided stocks in the food
and, for the most part, financial services sectors. Late in the period, we added
to "defensive" stocks, especially pharmaceuticals, in Europe.
Although uncertainty about the direction of interest rates in the U.S. is likely
to keep the major foreign markets unsettled over the near term, we think the
investment fundamentals overseas remain good. Europe should be able to sustain
steady economic growth, and Japan, while its economy lost momentum late in 1999,
appears to be in position to resume recovery this year. In addition, we expect
the euro and the yen to fare better against the dollar in the months ahead,
which would also benefit U.S. investors.
Peter Lamaison
Ian J. King
<PAGE>
<TABLE>
<CAPTION>
The 10 Largest Holdings
AXP VP - International Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
<S> <C> <C>
Ericsson (LM) Cl B (Sweden) 4.73% $127,384,629
Vodafone AirTouch (United Kingdom) 3.71 99,810,758
Cap Gemini (France) 3.31 89,269,229
Glaxo Wellcome ADR (United Kingdom) 3.26 87,919,027
Telecom Italia Mobile (Italy) 3.16 85,066,067
NTT Mobile Communication Network (Japan) 3.11 83,862,571
Nokia (Finland) 2.81 75,645,763
Nippon Telegraph & Telephone (Japan) 2.56 68,962,002
United Pan-Europe Communications (Netherlands) 2.53 68,223,771
Fujitsu (Japan) 2.49 66,937,429
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 31.67% of net assets
</TABLE>
<PAGE>
(picture of) Alfred Henderson
Alfred Henderson
Portfolio manager
(picture of) David M. Kuplic
David M. Kuplic
Portfolio manager
From the Portfolio Managers
AXP VP - Managed Fund
Solid gains from the stock portion of the portfolio propelled the Fund to a
total return of 8.26% during the first half of the fiscal year -- September 1999
through February 2000. (This figure does not reflect expenses that apply to the
variable accounts, subaccounts, the variable annuity or the life insurance
contracts.)
Higher interest rates and a potential pick-up in inflation weighed on the minds
of investors at the outset of the period, causing stocks to struggle during
September. But, supported by still-tame inflation data and generally good
corporate profits, the market got back on track in October, and followed that up
with sharp gains in the next two months. Inflation and interest-rate fears
resurfaced early in the new year, leading to a market pullback during January
and February. Overall, though, it was a good six months for stocks.
The bond market found the going more difficult, as an upturn in long-term
interest from fall through early winter kept pressure on most sectors of the
market. U.S. Treasury bonds suffered the most, while corporate and
mortgage-backed issues fared somewhat better. Encouragingly, the period ended on
a positive note, as interest rates declined, lending some support to bond
prices.
The Fund's stock holdings responded well in the market's October-December rally,
thanks largely to its substantial exposure to the technology sector, which led
the advance. Most of the investments were in semiconductor, telecommunications,
wireless and telephone stocks, many of which are tied to the development of the
Internet infrastructure. Prominent performers included Cisco Systems, Nokia and
MCI WorldCom. Much of the rest of the stock portfolio was invested in
consumer-related issues, followed by financial services and industrial stocks.
The consumer group was positive overall, while industrial was mixed and
financial services was weak.
Bond investments were spread among U.S. Treasury, corporate, mortgage-backed
and, to a small degree, emerging market issues. The latter provided the best
performance, followed by mortgage-backeds, Treasurys and corporates. All told,
bonds comprised about a third of the entire portfolio, with stocks accounting
for most of the rest.
Looking toward the second half of the fiscal year, the biggest question stocks
and bonds face is the direction of interest rates. Because the answer is
unlikely to come quickly, the markets probably will remain unsettled over the
near term. As the year progresses, though, we expect interest rates to become
more stable and, perhaps, decline somewhat. If so, we would expect the markets
and the Fund to respond positively.
Alfred Henderson
David M. Kuplic
<PAGE>
The 10 Largest Holdings
AXP VP - Managed Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Cisco Systems 4.51% $231,328,124
Nokia ADR Cl A 2.90 148,734,375
Microsoft 2.79 142,999,999
General Electric 2.55 130,865,625
Home Depot 2.53 130,078,125
Amgen 2.52 129,556,249
Intel 2.20 113,000,000
Morgan Stanley, Dean Witter, Discover & Co 1.99 102,134,375
American Power Conversion 1.98 101,812,500
Citigroup 1.86 95,621,875
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 25.83% of net assets
<PAGE>
(picture of) Gordon M. Fines
Gordon M. Fines
Portfolio manager
From the Portfolio Manager
AXP VP - New Dimensions Fund
A mid-period surge by the stock market set the stage for a strong gain by the
Fund during the first half of the fiscal year. For the six months -- September
1999 through February 2000 -- the total return was 22.87%. (This figure does not
reflect expenses that apply to the variable accounts, subaccounts, the variable
annuity or the life insurance contracts.)
The stock market was in a mild slump at the outset of the period, as concerns
about higher interest rates, potentially higher inflation and the possible
impact of the Y2K computer bug weighed on investors' minds. But by mid-October,
the situation quickly turned positive. Buoyed by fresh reports of still-tame
inflation, generally healthy corporate profits and increasing excitement about
the burgeoning Internet, stocks began moving forward.
Within weeks, the advance turned into a remarkable rally that kept gathering
momentum through December and into the first few days of the new year.
Illustrating the strength of the surge, the Fund gained more than 10% in
December alone. The Fund gave back some of its gain in January, as inflation
worries resurfaced and sent stocks into retreat. But, thanks to the resilience
of technology-related growth stocks, the Fund rebounded nicely in February.
Clearly driving the Fund's performance during the six months were technology and
telecommunications stocks, which made up nearly half of the portfolio at times.
The main areas of investment were semiconductors, software, networking and
wireless communications, with IBM, Cisco Systems, Microsoft and JDS Uniphase
among the largest and most productive holdings. Among other sectors, retailing
also made a good contribution.
I made only minor changes to the portfolio during the period. Late in 1999, I
reduced the technology exposure somewhat, given the rapid and substantial run-up
in stock prices in that sector. Concurrently, I added a small amount of
commodity-related stocks, specifically in the paper and chemical areas, which I
believe could benefit from the ongoing strength of the economy.
As the second half of the fiscal year begins, it's clear that investors are
keeping a close eye on inflation and the Federal Reserve Board. Should the Fed
decide in the months ahead to raise short-term interest rates substantially to
keep inflation at bay, I think stocks will find it difficult to maintain a
sustained advance. Still, assuming the economy and corporate profits remain
healthy, I think the longer-term outlook for the market and the Fund continues
to be positive.
Gordon M. Fines
<PAGE>
The 10 Largest Holdings
AXP VP - New Dimensions Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
JDS Uniphase 6.73% $321,985,999
Cisco Systems 6.57 314,315,437
Texas Instruments 4.09 195,570,900
General Electric 3.38 161,704,968
Wal-Mart Stores 3.02 144,519,105
Intel 2.70 129,012,100
Exxon Mobil 2.56 122,638,724
Motorola 2.44 116,639,049
Microsoft 2.44 116,607,562
EMC 2.43 116,453,399
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 36.36% of net assets
<PAGE>
(picture of) Jake Hurwitz
Jake Hurwitz
Portfolio manager
(picture of) Kent A. Kelley
Kent A. Kelley
Portfolio manager
From the Portfolio Managers
AXP VP - Small Cap Advantage Fund
A strong rally by small-capitalization stocks helped make the first half of the
fiscal year a productive period for the Fund. For its initial reporting period
- -- Sept. 15, 1999 (the Fund's commencement of operations) through February 2000
- -- the Fund generated a total return of 24.09%. This compares with a 20.72%
return for the Standard & Poor's SmallCap 600 Index, an unmanaged group of
small-cap stocks commonly used to measure the performance of that segment of the
stock market. (The Fund's return figure does not reflect expenses that apply to
the variable accounts, subaccounts, the variable annuity or the life insurance
contracts.)
The surge in small-caps began in October and gathered momentum through February,
culminating in the best one-month relative performance for the group in more
than 20 years. Leading the charge were small-cap technology stocks, whose strong
earnings growth attracted considerable interest from investors.
Good stock selection enhanced Fund performance, as we emphasized issues in the
telecommunications, semiconductor and enterprise software segments. We increased
the exposure to wireless communications and Internet-related software groups
within the tech sector, while cutting back on retailing and utility stocks.
Consistent with our balanced investment style, we maintained about a 65%
growth/35% value asset mix in the portfolio, keeping it broadly diversified
across several economic sectors. Clearly, it paid to have the greatest exposure
to the growth area, as small-cap growth outpaced small-cap value by almost 50%
during the six months.
As the second half of the fiscal year begins, we continue to be optimistic about
the outlook for small-cap stocks. Over the 12 months from March 1999 through
February 2000, the Standard & Poor's SmallCap 600 Index gained 36%, compared
with a 10% rise in the Standard & Poor's 500 Index (an unmanaged group of common
stocks frequently used as a general measure of market performance). Yet, we
believe that small-cap stocks remain relatively inexpensive given that prospects
for earnings growth this year that are twice that of the Standard & Poor's 500.
We think it's also important to note that recent small-cap gains have been
concentrated in Internet-related and biotechnology companies, which investors
expect to enjoy rapid growth and which they seemingly believe are immune from
upward pressure on interest rates. When concerns about inflation and interest
rates subside, we expect that a more normal investment environment will unfold,
allowing for a broader advance by the small-cap sector.
Jake Hurwitz
Kent A. Kelley
<PAGE>
The 10 Largest Holdings AXP VP - Small
Cap Advantage Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
Mercury Interactive 1.86% $240,937
Incyte Pharmaceuticals 1.49 192,893
Coherent 1.31 169,599
IDEC Pharmaceuticals 1.19 154,962
Macromedia 1.17 151,265
Dycom Inds 1.06 137,499
Protein Design Labs .98 127,595
Powerwave Technologies .92 119,905
Alpha Inds .92 119,053
Micrel .89 115,249
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 11.79% of net assets
<PAGE>
(picture of) Louis Giglio
Louis Giglio
Portfolio manager
(picture of) Jake Hurwitz
Jake Hurwitz
Portfolio manager
(picture of) Kent A. Kelley
Kent A. Kelley
Portfolio manager
From the Portfolio Managers
AXP VP - Strategy Aggressive Fund
The Fund generated an exceptionally strong gain during the past six months as it
was well positioned for a powerful rally in technology-related stocks. For the
first half of the fiscal year -- September 1999 through February 2000 -- the
Fund's total return was 103.18%. (This figure does not reflect expenses that
apply to the variable accounts, subaccounts, the variable annuity or the life
insurance contracts.)
With worries about higher interest rates, potentially higher inflation and the
possible impact of the Y2K computer bug clouding the environment, the stock
market retreated early in the period. But as encouraging reports on inflation
and corporate profits began coming in, investors quickly cast their concerns
aside and piled back into stocks, sparking a spectacular rally that continued
into the early days of January. From that point, the market mostly struggled, as
the outlook for interest rates and inflation again took a negative turn.
Overall, though, it was a productive six months for the market.
The magic word for the market -- and even more so for the Fund -- during the
period was technology. Thanks to its heavy exposure to that sector (nearly 60%
of assets at the highest point), the Fund not only outperformed the market
during the upturns but it also did better during the downturns. Illustrating the
strength of the technology rally, the Fund recorded double-digit gains in three
of the six months, topping off the period with a gain of approximately 29% in
February.
Particularly strong were stocks related to the growth of the Internet. Among the
Fund's top performers were: Verisign, InfoSpace, Knight-Trimark, Juniper, Covad,
PMC Sierra, Peregrine Systems, Mercury Interactive and Allegiance. (Other big
winners included Yahoo!, JDS Uniphase, Cisco Systems and America Online, but
because their market values outgrew the mid-capitalization category, we sold
them before period-end.) Aside from technology, IDEC Pharmaceuticals and
Alkermes, both in the biotechnology sector, experienced sharp gains, while
Kansas City Southern, with a strong presence in financial services, did quite
well, and Univison, a media company, was up strongly.
There was considerable initial public offering (IPO) activity during the period,
and the Fund took part in a number of them. In some cases, we sold the stocks
quickly for a profit; in others, we held the shares based on our positive
long-term outlook for the company. In still other cases, we didn't take part in
the IPOs, but did buy the stocks later via secondary offerings in order to build
a larger position than would have been possible by buying the IPOs. On the
whole, participation in new stock issues clearly benefited performance.
As the second half of the fiscal year begins, while we don't expect a repeat of
the uncommonly strong gain of the past six months, we think the outlook for the
Fund remains very bright, based mainly on our positive view of the technology
sector. Patience will be essential, though, as there almost surely will be
considerable volatility along the way.
Louis Giglio
Jake Hurwitz
Kent A. Kelley
<PAGE>
The 10 Largest Holdings
AXP VP - Strategy Aggressive Fund
Percent Value
(of net assets) (as of Feb. 29, 2000)
InfoSpace.com 3.21% $147,559,999
VeriSign 3.09 142,185,999
PMC-Sierra 2.64 121,629,374
Alkermes 2.50 115,124,999
Allegiance Telecom 2.47 113,459,062
Mercury Interactive 2.30 105,746,890
IDEC Pharmaceuticals 2.19 100,829,591
SDL 2.14 98,399,999
Vitesse Semiconductor 2.04 94,054,124
Finisar 1.72 79,099,999
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
(icon of) pie chart
The 10 holdings listed here
make up 24.30% of net assets
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statements of assets and liabilities
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Blue Chip Bond Capital
Advantage Fund Resource
Feb. 29, 2000 (Unaudited) Fund Fund
Assets
Investments in securities, at value (Note 1):
<S> <C> <C> <C>
(identified cost $30,100,292, $1,667,416,312 and $4,051,693,496) $29,804,512 $1,593,021,408 $5,869,752,816
Cash in bank on demand deposit 65,242 146,204 2,042
Receivable for investment securities sold -- 13,046,937 79,133,085
Dividends and accrued interest receivable 25,581 25,329,834 4,809,134
U.S. government securities held as collateral (Note 5) -- 53,570,003 --
------- ---------- --------
Total assets 29,895,335 1,685,114,386 5,953,697,077
---------- ------------- -------------
Liabilities
Dividends payable to shareholders (Note 1) 8,167 9,655,538 --
Payable for investment securities purchased 539,964 24,060,358 39,361,065
Accrued investment management services fee 11,492 773,575 2,855,699
Accrued distribution fee 2,565 160,019 595,100
Accrued administrative services fee 821 61,569 190,171
Payable upon return of securities loaned (Note 5) -- 53,570,003 12,674,000
Other accrued expenses 13,219 129,080 342,064
------ ------- -------
Total liabilities 576,228 88,410,142 56,018,099
------- ---------- ----------
Net assets applicable to outstanding capital stock $29,319,107 $1,596,704,244 $5,897,678,978
=========== ============== ==============
Represented by
Capital stock-- $.01 par value (Note 1) $ 28,209 $ 1,528,431 $ 1,704,015
Additional paid-in capital 29,434,438 1,756,239,079 3,721,764,347
Undistributed (excess of distributions over) net investment income -- 2,663,995 (325,771)
Accumulated net realized gain (loss) (Note 9) 152,240 (89,317,964) 356,477,067
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies (Note 7) (295,780) (74,409,297) 1,818,059,320
-------- ----------- -------------
Total-- representing net assets applicable to outstanding capital stock $29,319,107 $1,596,704,244 $5,897,678,978
=========== ============== ==============
Shares outstanding 2,820,867 152,843,081 170,401,518
--------- ----------- -----------
Net asset value per share of outstanding capital stock $ 10.39 $ 10.45 $ 34.61
----------- -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of assets and liabilities (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Cash Diversified Extra
Management Equity Income Income
Feb. 29, 2000 (Unaudited) Fund Fund Fund
Assets
Investments in securities, at value (Note 1):
<S> <C> <C> <C>
(identified cost $761,221,298, $10,748,044 and $687,676,554) $761,221,298 $ 9,873,251 $621,821,904
Cash in bank on demand deposit 134,032 499,320 --
Receivable for investment securities sold -- -- 1,473,235
Dividends and accrued interest receivable 783,611 17,581 14,824,127
------- ------ ----------
Total assets 762,138,941 10,390,152 638,119,266
----------- ---------- -----------
Liabilities
Disbursements in excess of cash on demand deposit -- -- 394,249
Dividends payable to shareholders (Note 1) 3,258,276 20,881 4,785,676
Payable for investment securities purchased -- 111,904 4,738,818
Accrued investment management services fee 314,598 4,106 310,537
Accrued distribution fee 77,107 916 62,608
Accrued administrative services fee 18,506 293 25,043
Other accrued expenses 25,030 5,384 25,652
------ ----- ------
Total liabilities 3,693,517 143,484 10,342,583
--------- ------- ----------
Net assets applicable to outstanding capital stock $758,445,424 $10,246,668 $627,776,683
============ =========== ============
Represented by
Capital stock-- $.01 par value (Note 1) $ 7,585,189 $ 11,438 $ 743,306
Additional paid-in capital 750,869,820 11,157,564 742,012,768
Undistributed (excess of distributions over) net investment income 62 (224) (333,486)
Accumulated net realized gain (loss) (Note 9) (9,647) (47,317) (48,791,084)
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies -- (874,793) (65,854,821)
------- -------- -----------
Total-- representing net assets applicable to outstanding capital stock $758,445,424 $10,246,668 $627,776,683
============ =========== ============
Shares outstanding 758,518,923 1,143,834 74,330,586
----------- --------- ----------
Net asset value per share of outstanding capital stock $ 1.00 $ 8.96 $ 8.45
------------ ----------- ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of assets and liabilities (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Federal Global Growth
Income Bond Fund
Feb. 29, 2000 (Unaudited) Fund Fund
Assets
Investments in securities, at value (Note 1):
<S> <C> <C> <C>
(identified cost $31,187,512, $193,292,146 and $60,895,827) $30,902,569 $180,956,303 $67,015,670
Cash in bank on demand deposit 34 140,030 83,452
Receivable for investment securities sold 16,563 26,775 --
Dividends and accrued interest receivable 94,939 3,618,176 13,247
Unrealized appreciation on foreign currency contracts held,
at value (Notes 1 and 4) -- 45,069 --
------ ------ -----
Total assets 31,014,105 184,786,353 67,112,369
---------- ----------- ----------
Liabilities
Dividends payable to shareholders (Note 1) 117,759 933,852 --
Payable for investment securities purchased 3,975,371 -- 928,852
Unrealized depreciation on foreign currency contracts held,
at value (Notes 1 and 4) -- 20,283 --
Accrued investment management services fee 12,758 124,152 28,862
Accrued distribution fee 2,614 18,475 5,726
Accrued administrative services fee 1,046 8,868 2,291
Other accrued expenses 8,315 24,317 17,163
----- ------ ------
Total liabilities 4,117,863 1,129,947 982,894
--------- --------- -------
Net assets applicable to outstanding capital stock $26,896,242 $183,656,406 $66,129,475
=========== ============ ===========
Represented by
Capital stock-- $.01 par value (Note 1) $ 27,235 $ 194,483 $ 54,301
Additional paid-in capital 27,123,795 201,272,908 60,135,596
Undistributed (excess of distributions over) net investment income -- 38,040 (16,302)
Accumulated net realized gain (loss) (Note 9) 55,940 (5,360,574) (163,963)
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies (Notes 4 and 7) (310,728) (12,488,451) 6,119,843
-------- ----------- ---------
Total-- representing net assets applicable to outstanding capital stock $26,896,242 $183,656,406 $66,129,475
=========== ============ ===========
Shares outstanding 2,723,487 19,448,277 5,430,121
--------- ---------- ---------
Net asset value per share of outstanding capital stock $ 9.88 $ 9.44 $ 12.18
----------- ------------ -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of assets and liabilities (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
International Managed New
Fund Fund Dimensions
Feb. 29, 2000 (Unaudited) Fund
Assets
Investments in securities, at value (Note 1):
<S> <C> <C> <C>
(identified cost $2,155,258,411, $3,925,429,171 and $3,039,800,813) $2,720,617,354 $5,296,396,666 $4,798,771,329
Cash in bank on demand deposit (including foreign currency
holdings of $1,229,512 for AXP VP - International Fund) 1,833,712 333,193 --
Receivable for investment securities sold 26,782,726 31,404,785 12,717,598
Dividends and accrued interest receivable 5,311,455 25,580,356 2,265,134
Unrealized appreciation on foreign currency contracts held,
at value (Notes 1 and 4) 180,863 -- --
U.S. government securities held as collateral (Note 5) -- 163,448,869 21,491,404
-------- ----------- ----------
Total assets 2,754,726,110 5,517,163,869 4,835,245,465
------------- ------------- -------------
Liabilities
Disbursements in excess of cash on demand deposit -- -- 5,404
Dividends payable to shareholders (Note 1) -- 26,755,008 1,259,831
Payable for investment securities purchased 19,182,958 159,692,160 24,729,310
Unrealized depreciation on foreign currency contracts held,
at value (Notes 1 and 4) 64,969 -- --
Accrued investment management services fee 1,736,972 2,431,462 2,249,654
Accrued distribution fee 264,699 516,274 465,458
Accrued administrative services fee 91,944 108,355 154,099
Payable upon return of securities loaned (Note 5) 39,625,200 192,728,869 21,491,404
Other accrued expenses 539,051 438,607 62,977
Option contracts written at value (premium received,
$1,600,021 for AXP VP - Managed Fund) (Note 8) -- 1,739,062 --
------- --------- ------
Total liabilities 61,505,793 384,409,797 50,418,137
---------- ----------- ----------
Net assets applicable to outstanding capital stock $2,693,220,317 $5,132,754,072 $4,784,827,328
============== ============== ==============
Represented by
Capital stock-- $.01 par value ($.001 for AXP VP - Managed Fund)
(Note 1) $ 1,449,786 $ 266,431 $ 2,084,011
Additional paid-in capital 1,784,568,370 3,685,954,561 2,956,321,100
Undistributed (excess of distributions over) net investment income (2,517,403) (8,141,932) 42,095
Accumulated net realized gain (loss) 344,378,855 83,870,394 67,409,606
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies (Note 4) 565,340,709 1,370,804,618 1,758,970,516
----------- ------------- -------------
Total-- representing net assets applicable to outstanding capital stock $2,693,220,317 $5,132,754,072 $4,784,827,328
============== ============== ==============
Shares outstanding 144,978,591 266,431,065 208,401,134
----------- ----------- -----------
Net asset value per share of outstanding capital stock $ 18.58 $ 19.26 $ 22.96
-------------- -------------- --------------
See accompanying notes to financial statements.
<PAGE>
Statements of assets and liabilities (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP -
Small Cap Strategy
Advantage Aggressive
Feb. 29, 2000 (Unaudited) Fund Fund
Assets
Investments in securities, at value (Note 1):
(identified cost $11,360,286 and $2,943,978,093) $12,426,617 $4,766,608,091
Cash in bank on demand deposit 495,263 --
Receivable for investment securities sold 167,243 25,587,113
Dividends and accrued interest receivable 3,631 927,630
U.S. government securities held as collateral (Note 5) -- 34,811,116
------ ----------
Total assets 13,092,754 4,827,933,950
---------- -------------
Liabilities
Disbursements in excess of cash on demand deposit -- 4,681
Dividends payable to shareholders (Note 1) -- 403,257
Payable for investment securities purchased 96,748 26,989,200
Accrued investment management and services fee 6,744 1,895,729
Accrued distribution fee 1,067 --
Accrued administrative services fee 512 126,495
Payable upon return of securities loaned (Note 5) -- 194,965,516
Other accrued expenses 7,088 30,906
Option contracts written at value (premium received, $1,630,895 for AXP VP -
Strategy Aggressive Fund) (Note 8) -- 1,457,500
------ ---------
Total liabilities 112,159 225,873,284
------- -----------
Net assets applicable to outstanding capital stock $12,980,595 $4,602,060,666
=========== ==============
Represented by
Capital stock-- $.01 par value $ 10,597 $ 1,506,175
Additional paid-in capital 11,164,190 1,961,613,022
Excess of distributions over net investment income (15,601) (350,784)
Accumulated net realized gain (loss) 755,078 816,488,860
Unrealized appreciation (depreciation) on investments and on translation of
assets and liabilities in foreign currencies 1,066,331 1,822,803,393
--------- -------------
Total-- representing net assets applicable to outstanding capital stock $12,980,595 $4,602,060,666
=========== ==============
Shares outstanding 1,059,684 150,617,496
--------- -----------
Net asset value per share of outstanding capital stock $ 12.25 $ 30.55
----------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Blue Chip Bond Capital
Advantage Fund Resource
Six months ended Feb. 29, 2000 (Unaudited) Fund* Fund
Investment income
Income:
<S> <C> <C> <C>
Dividends $ 62,721 $ 1,313,702 $ 20,987,158
Interest 16,134 66,816,025 3,204,688
Less foreign taxes witheld (3) -- (30,539)
-- ----- -------
Total income 78,852 68,129,727 24,161,307
------ ---------- ----------
Expenses (Note 2):
Investment management services fee 33,274 5,069,931 17,455,679
Distribution fee 7,390 930,021 3,244,445
Administrative services fees and expenses 2,378 430,658 1,206,150
Custodian fees 37,048 82,049 217,056
Compensation of board members -- 6,278 12,439
Printing and postage -- 20,813 1,512
Audit fees 6,000 11,625 11,250
Other -- 1,083 2,901
---- ----- -----
Total expenses 86,090 6,552,458 22,151,432
Less expenses reimbursed by AEFC (Note 2) (29,242) -- --
------- ----- -----
56,848 6,552,458 22,151,432
Earnings credits on cash balances (Note 2) (8) (60) (772)
-- --- ----
Total net expenses 56,840 6,552,398 22,150,660
------ --------- ----------
Investment income (loss)-- net 22,012 61,577,329 2,010,647
------ ---------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 152,136 (31,064,361) 356,996,334
Financial futures contracts -- 2,949,024 --
Foreign currency transactions -- 136,333 --
Options contracts written (Note 8) -- -- 334,814
- ----- ------- -------
Net realized gain (loss) on investments 152,136 (27,979,004) 357,331,148
Net change in unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies (276,964) 8,331,776 243,687,415
-------- --------- -----------
Net gain (loss) on investments and foreign currencies (124,828) (19,647,228) 601,018,563
-------- ----------- -----------
Net increase (decrease) in net assets resulting from operations $(102,816) $ 41,930,101 $603,029,210
========= ============ ============
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29, 2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Cash Diversified Extra
Management Equity Income Income
Six months ended Feb. 29, 2000 (Unaudited) Fund Fund* Fund
Investment income
Income:
<S> <C> <C> <C>
Dividends $ -- $ 50,730 $ 3,058,747
Interest 21,784,490 14,321 29,570,242
Less foreign taxes withheld -- -- (4,213)
------- ---- ------
Total income 21,784,490 65,051 32,624,776
---------- ------ ----------
Expenses (Note 2):
Investment management services fee 1,653,768 14,407 1,941,242
Distribution fee 426,556 3,179 347,905
Administrative services fees and expenses 398,221 1,030 171,830
Custodian fees 33,700 31,607 29,104
Compensation of board members 4,477 -- 4,360
Printing and postage -- -- 4,214
Audit fees 4,180 6,000 9,250
Other 200 -- 320
--- ---- ---
Total expenses 2,521,102 56,223 2,508,225
Less expenses reimbursed by AEFC (Note 2) -- (31,523) --
------ ------- ------
2,521,102 24,700 2,508,225
Earnings credits on cash balances (Note 2) (19) (84) (52)
--- --- ---
Total net expenses 2,521,083 24,616 2,508,173
--------- ------ ---------
Investment income (loss)-- net 19,263,407 40,435 30,116,603
---------- ------ ----------
Realized and unrealized gain (loss) -- net Net realized gain (loss) on:
Security transactions (Note 3) (436) (47,541) (19,489,557)
Foreign currency transactions -- 224 857
--- --- ---
Net realized gain (loss) on investments (436) (47,317) (19,488,700)
Net change in unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies -- (840,980) (2,832,646)
--- -------- ----------
Net gain (loss) on investments and foreign currencies (436) (888,297) (22,321,346)
---- -------- -----------
Net increase (decrease) in net assets resulting from operations $19,262,971 $(847,862) $ 7,795,257
=========== ========= =============
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29, 2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
Federal Global Growth
Income Bond Fund*
Six months ended Feb. 29, 2000 (Unaudited) Fund* Fund
Investment income
Income:
<S> <C> <C> <C>
Dividends $ -- $ -- $ 42,801
Interest 576,614 5,727,985 74,099
Less foreign taxes withheld -- (33,356) --
----- ------- -----
Total income 576,614 5,694,629 116,900
------- --------- -------
Expenses (Note 2):
Investment management services fee 56,847 810,887 74,693
Distribution fee 11,443 107,164 14,780
Administrative services fees and expenses 3,643 58,928 4,911
Custodian fees 1,911 30,207 46,458
Compensation of board members 1,017 3,759 1,017
Printing and postage -- 1,230 --
Audit fees 6,500 8,250 6,500
Other 546 2,285 --
--- ----- ----
Total expenses 81,907 1,022,710 148,359
Less expenses reimbursed by AEFC (Note 2) -- -- (34,927)
---- ------ -------
81,907 1,022,710 113,432
Earnings credits on cash balances (Note 2) (202) (654) (268)
---- ---- ----
Total net expenses 81,705 1,022,056 113,164
------ --------- -------
Investment income (loss)-- net 494,909 4,672,573 3,736
------- --------- -----
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) (27,726) (706,844) (163,963)
Financial futures contracts 83,666 -- --
Foreign currency transactions -- 36,963 --
----- ------ -----
Net realized gain (loss) on investments 55,940 (669,881) (163,963)
Net change in unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies (297,731) (7,502,302) 6,130,715
-------- ---------- ---------
Net gain (loss) on investments and foreign currencies (241,791) (8,172,183) 5,966,752
-------- ---------- ---------
Net increase (decrease) in net assets resulting from operations $ 253,118 $(3,499,610) $5,970,488
========= =========== ==========
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29, 2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP - AXP VP -
International Managed New
Fund Fund Dimensions
Six months ended Feb. 29, 2000 (Unaudited) Fund
Investment income
Income:
<S> <C> <C> <C>
Dividends $ 7,644,800 $ 11,749,968 $ 11,727,114
Interest 3,072,198 66,536,575 9,386,064
Less foreign taxes withheld (678,451) (17,090) --
-------- ------- ------
Total income 10,038,547 78,269,453 21,113,178
---------- ---------- ----------
Expenses (Note 2):
Investment management services fee 10,149,840 15,126,924 12,522,053
Distribution fee 1,389,302 2,862,814 2,332,907
Administrative services fees and expenses 555,576 708,174 898,134
Custodian fees 433,721 162,546 149,863
Compensation of board members 6,990 11,602 8,834
Printing and postage 16,800 20,000 15,727
Audit fees 10,000 10,500 11,000
Other 1,429 39 2,429
----- -- -----
Total expenses 12,563,658 18,902,599 15,940,947
Earnings credits on cash balances (Note 2) (1,990) (39) (23)
------ --- ---
Total net expenses 12,561,668 18,902,560 15,940,924
---------- ---------- ----------
Investment income (loss)-- net (2,523,121) 59,366,893 5,172,254
---------- ---------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 348,599,631 94,452,476 69,017,579
Foreign currency transactions (3,307,805) 20,900 (42,102)
Options contracts written (Note 8) -- 1,148,705 --
- ------- --------- ------
Net realized gain (loss) on investments 345,291,826 95,622,081 68,975,477
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 213,686,756 254,322,460 775,849,598
----------- ----------- -----------
Net gain (loss) on investments and foreign currencies 558,978,582 349,944,541 844,825,075
----------- ----------- -----------
Net increase (decrease) in net assets resulting from operations $556,455,461 $409,311,434 $849,997,329
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations (continued)
American Express Variable Portfolio Funds
AXP VP - AXP VP -
Small Cap Strategy
Advantage Aggressive
Six months ended Feb. 29, 2000 (Unaudited) Fund* Fund
Investment income
Income:
<S> <C> <C>
Dividends $ 16,096 $ 1,439,994
Interest 2,127 9,913,660
Less foreign taxes withheld -- (29,659)
----- -------
Total income 18,223 11,323,995
------ ----------
Expenses (Note 2):
Investment management services fee 22,997 9,035,301
Distribution fee 3,640 1,752,381
Administrative services fees and expenses 1,776 744,730
Custodian fees 20,593 90,667
Compensation of board members -- 7,168
Printing and postage -- 7,714
Audit fees 6,500 8,500
Other -- 1,863
---- -----
Total expenses 55,506 11,648,324
Less expenses reimbursed by AEFC (Note 2) (19,352) --
------- --------
36,154 11,648,324
Earnings credits on cash balances (Note 2) (132) (645)
---- ----
Total net expenses 36,022 11,647,679
------ ----------
Investment income (loss)-- net (17,799) (323,684)
------- --------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 806,578 822,228,078
Financial futures contracts -- (1,974)
Foreign currency transactions -- 12,889
Options contracts written (Note 8) -- 263,364
- ----- -------
Net realized gain (loss) on investments 806,578 822,502,357
Net change in unrealized appreciation (depreciation) on investments and on
translation of assets and liabilities in foreign currencies 1,092,910 1,527,603,815
--------- -------------
Net gain (loss) on investments and foreign currencies 1,899,488 2,350,106,172
--------- -------------
Net increase (decrease) in net assets resulting from operations $1,881,689 $2,349,782,488
========== ==============
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29, 2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
American Express Variable Portfolio Funds
AXP VP - Blue Chip Advantage Fund AXP VP - Bond Fund
Feb. 29, 2000 Feb. 29, 2000 Aug. 31, 1999
Period ended * Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C>
Investment income (loss)-- net $ 22,012 $ 61,577,329 $ 133,946,467
Net realized gain (loss) on investments 152,136 (27,979,004) (59,672,912)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (276,964) 8,331,776 (28,854,381)
-------- --------- -----------
Net increase (decrease) in net assets resulting from operations (102,816) 41,930,101 45,419,174
-------- ---------- ----------
Distributions to shareholders from:
Net investment income (23,542) (60,386,399) (129,854,610)
Net realized gain -- -- (4,108,552)
------ ------- ----------
Total distributions (23,542) (60,386,399) (133,963,162)
------- ----------- ------------
Capital share transactions (Note 6)
Proceeds from sales 29,762,418 64,317,707 106,635,029
Reinvestment of distributions at net asset value 15,375 50,730,862 133,963,162
Payments for redemptions (2,315,146) (250,175,686) (254,262,401)
---------- ------------ ------------
Increase (decrease) in net assets from capital share transactions 27,462,647 (135,127,117) (13,664,210)
---------- ------------ -----------
Total increase (decrease) in net assets 27,336,289 (153,583,415) (102,208,198)
Net assets at beginning of period 1,982,818 1,750,287,659 1,852,495,857
--------- ------------- -------------
Net assets at end of period $29,319,107 $1,596,704,244 $1,750,287,659
=========== ============== ==============
Undistributed net investment income $ -- $ 2,663,995 $ 1,473,065
--------- -------------- --------------
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Capital Resource Fund AXP VP - Cash Management Fund
Feb. 29, 2000 Aug. 31, 1999 Feb. 29, 2000 Aug. 31, 1999
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 2,010,647 $ 9,103,562 $ 19,263,407 $ 25,541,730
Net realized gain (loss) on investments 357,331,148 572,334,253 (436) (6,680)
Net change in unrealized appreciation
(depreciation) on investments and on translation
of assets and liabilities in foreign currencies 243,687,415 1,167,038,381 -- --
----------- ------------- ------- -------
Net increase (decrease) in net assets resulting
from operations 603,029,210 1,748,476,196 19,262,971 25,535,050
Distributions to shareholders from:
Net investment income (2,274,939) (9,103,562) (19,263,425) (25,541,732)
Net realized gain (570,916,154) (401,677,258) -- --
------------ ------------
Total distributions (573,191,093) (410,780,820) (19,263,425) (25,541,732)
------------ ------------ ----------- -----------
Capital share transactions (Note 6)
Proceeds from sales 86,075,626 84,199,124 520,896,057 603,358,465
Reinvestment of distributions at net asset value 573,191,093 410,780,820 16,006,150 25,541,732
Payments for redemptions (411,992,401) (665,014,906) (468,075,947) (367,134,897)
------------ ------------ ------------ ------------
Increase (decrease) in net assets from capital
share transactions 247,274,318 (170,034,962) 68,826,260 261,765,300
----------- ------------ ---------- -----------
Total increase (decrease) in net assets 277,112,435 1,167,660,414 68,825,806 261,758,618
Net assets at beginning of period 5,620,566,543 4,452,906,129 689,619,618 427,861,000
------------- ------------- ----------- -----------
Net assets at end of period $5,897,678,978 $5,620,566,543 $758,445,424 $689,619,618
============== ============== ============ ============
Undistributed (excess of distributions over)
net investment income $ (325,771) $ (61,479) $ 62 $ 80
-------------- -------------- ------------ ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Diversified Equity Income Fund AXP VP - Extra Income Fund
Feb. 29, 2000 Feb. 29, 2000 Aug. 31, 1999
Period ended* Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C>
Investment income (loss)-- net $ 40,435 $ 30,116,603 $ 61,117,522
Net realized gain (loss) on investments (47,317) (19,488,700) (29,699,969)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (840,980) (2,832,646) (14,674,862)
-------- ---------- -----------
Net increase (decrease) in net assets resulting from operations (847,862) 7,795,257 16,742,691
-------- --------- ----------
Distributions to shareholders from:
Net investment income (42,063) (29,775,174) (61,060,060)
Net realized gain -- -- (6,531,786)
----- ----- ----------
Total distributions (42,063) (29,775,174) (67,591,846)
------- ----------- -----------
Capital share transactions (Note 6)
Proceeds from sales 11,253,308 50,937,531 88,193,720
Reinvestment of distributions at net asset value 21,182 24,989,498 67,591,846
Payments for redemptions (2,105,488) (64,208,305) (31,179,532)
---------- ----------- -----------
Increase (decrease) in net assets from capital share transactions 9,169,002 11,718,724 124,606,034
--------- ---------- -----------
Total increase (decrease) in net assets 8,279,077 (10,261,193) 73,756,879
Net assets at beginning of period 1,967,591 638,037,876 564,280,997
--------- ----------- -----------
Net assets at end of period $10,246,668 $627,776,683 $638,037,876
=========== ============ ============
Excess of distributions over net investment income $ (224) $ (333,486) $ (674,915)
----------- ------------ ------------
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Federal Income Fund AXP VP - Global Bond Fund
Feb. 29, 2000 Feb. 29, 2000 Aug. 31, 1999
Period ended* Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C>
Investment income (loss)-- net $ 494,909 $ 4,672,573 $ 10,780,290
Net realized gain (loss) on investments 55,940 (669,881) (5,258,630)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies (297,731) (7,502,302) (1,292,387)
-------- ---------- ----------
Net increase (decrease) in net assets resulting from operations 253,118 (3,499,610) 4,229,273
------- ---------- ---------
Distributions to shareholders from:
Net investment income (494,909) (4,268,356) (10,036,136)
Net realized gain -- -- (60,153)
----- ------ -------
Total distributions (494,909) (4,268,356) (10,096,289)
-------- ---------- -----------
Capital share transactions (Note 6)
Proceeds from sales 30,976,361 13,205,199 26,082,577
Reinvestment of distributions at net asset value 383,737 3,334,505 10,096,289
Payments for redemptions (14,209,068) (22,541,563) (16,223,051)
----------- ----------- -----------
Increase (decrease) in net assets from capital share transactions 17,151,030 (6,001,859) 19,955,815
---------- ---------- ----------
Total increase (decrease) in net assets 16,909,239 (13,769,825) 14,088,799
Net assets at beginning of period 9,987,003 197,426,231 183,337,432
--------- ----------- -----------
Net assets at end of period $26,896,242 $183,656,406 $197,426,231
=========== ============ ============
Undistributed (excess of distributions over) net investment income $ -- $ 38,040 $ (366,177)
----------- ------------ ------------
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Growth Fund AXP VP - International Fund
Feb. 29, 2000 Feb. 29, 2000 Aug. 31, 1999
Period ended * Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C>
Investment income (loss)-- net $ 3,736 $ (2,523,121) $ 14,983,400
Net realized gain (loss) on investments (163,963) 345,291,826 350,164,528
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 6,130,715 213,686,756 64,235,687
--------- ----------- ----------
Net increase (decrease) in net assets resulting from operations 5,970,488 556,455,461 429,383,615
--------- ----------- -----------
Distributions to shareholders from:
Net investment income (21,500) (208,593) (8,959,567)
Net realized gain -- (357,101,333) (10,584,503)
----- ------------ -----------
Total distributions (21,500) (357,309,926) (19,544,070)
------- ------------ -----------
Capital share transactions (Note 6)
Proceeds from sales 60,869,830 147,464,051 189,648,648
Reinvestment of distributions at net asset value 21,500 357,309,926 19,544,070
Payments for redemptions (2,701,433) (231,729,988) (420,734,802)
---------- ------------ ------------
Increase (decrease) in net assets from capital share transactions 58,189,897 273,043,989 (211,542,084)
---------- ----------- ------------
Total increase (decrease) in net assets 64,138,885 472,189,524 198,297,461
Net assets at beginning of period 1,990,590 2,221,030,793 2,022,733,332
--------- ------------- -------------
Net assets at end of period $66,129,475 $2,693,220,317 $2,221,030,793
=========== ============== ==============
Undistributed (excess of distributions over) net investment income $ (16,302) $ (2,517,403) $ 214,311
----------- -------------- --------------
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Managed Fund AXP VP - New Dimensions Fund
Feb. 29, 2000 Aug. 31, 1999 Feb. 29, 2000 Aug. 31, 1999
Six months ended Year ended Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C> <C>
Investment income (loss)-- net $ 59,366,893 $ 131,674,116 $ 5,172,254 $ 9,929,837
Net realized gain (loss) on investments 95,622,081 212,352,905 68,975,477 32,818,556
Net change in unrealized appreciation
(depreciation) on investments and on translation
of assets and liabilities in foreign currencies 254,322,460 655,721,269 775,849,598 838,085,236
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations 409,311,434 999,748,290 849,997,329 880,833,629
----------- ----------- ----------- -----------
Distributions to shareholders from:
Net investment income (59,252,135) (131,267,722) (5,130,152) (9,929,837)
Net realized gain (227,051,206) (431,748,610) (34,324,741) (2,459,211)
------------ ------------ ----------- ----------
Total distributions (286,303,341) (563,016,332) (39,454,893) (12,389,048)
------------ ------------ ----------- -----------
Capital share transactions (Note 6)
Proceeds from sales 98,558,997 130,228,291 442,094,439 744,395,091
Reinvestment of distributions at net asset value 259,548,332 563,016,332 38,195,062 12,389,048
Payments for redemptions (394,092,186) (497,199,202) (44,229,255) (46,528,713)
------------ ------------ ----------- -----------
Increase (decrease) in net assets from capital
share transactions (35,984,857) 196,045,421 436,060,246 710,255,426
----------- ----------- ----------- -----------
Total increase (decrease) in net assets 87,023,236 632,777,379 1,246,602,682 1,578,700,007
Net assets at beginning of period 5,045,730,836 4,412,953,457 3,538,224,646 1,959,524,639
------------- ------------- ------------- -------------
Net assets at end of period $5,132,754,072 $5,045,730,836 $4,784,827,328 $3,538,224,646
============== ============== ============== ==============
Undistributed (excess of distributions over)
net investment income $ (8,141,932) $ (8,256,690) $ 42,095 $ (7)
-------------- -------------- -------------- --------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets (continued)
American Express Variable Portfolio Funds
AXP VP - Small Cap Advantage Fund AXP VP - Strategy Aggressive Fund
Feb. 29, 2000 Feb. 29, 2000 Aug. 31, 1999
Period ended* Six months ended Year ended
(Unaudited) (Unaudited)
Operations and distributions
<S> <C> <C> <C>
Investment income (loss)-- net $ (17,799) $ (323,684) $ 7,129,382
Net realized gain (loss) on investments 806,578 822,502,357 260,100,632
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 1,092,910 1,527,603,815 400,514,769
--------- ------------- -----------
Net increase (decrease) in net assets resulting from operations 1,881,689 2,349,782,488 667,744,783
--------- ------------- -----------
Distributions to shareholders from:
Net investment income -- -- (7,142,316)
Net realized gain (51,500) (252,883,137) (148,760,451)
------- ------------ ------------
Total distributions (51,500) (252,883,137) (155,902,767)
------- ------------ ------------
Capital share transactions (Note 6)
Proceeds from sales 14,403,320 143,102,788 69,869,156
Reinvestment of distributions at net asset value 51,500 254,972,408 155,902,767
Payments for redemptions (6,280,033) (220,235,861) (385,883,333)
---------- ------------ ------------
Increase (decrease) in net assets from capital share transactions 8,174,787 177,839,335 (160,111,410)
--------- ----------- ------------
Total increase (decrease) in net assets 10,004,976 2,274,738,686 351,730,606
Net assets at beginning of period 2,975,619 2,327,321,980 1,975,591,374
--------- ------------- -------------
Net assets at end of period $12,980,595 $4,602,060,666 $2,327,321,980
=========== ============== ==============
Excess of distributions over net investment income $ (15,601) $ (350,784) $ (27,100)
----------- -------------- --------------
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
American Express Variable Portfolio Funds
(Unaudited as to Feb. 29, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, (non-diversified for AXP VP - Global Bond Fund) open-end
management investment company. Each Fund has 10 billion authorized shares of
capital stock.
The primary investments of each Fund are as follows:
AXP VP - Blue Chip Advantage Fund invests primarily in common stocks of
companies that are included in the S&P 500;
AXP VP - Bond Fund invests primarily in bonds and other debt obligations;
AXP VP - Capital Resource Fund invests primarily in U.S. common stocks and
other securities convertible into common stock;
AXP VP - Cash Management Fund invests primarily in money market securities;
AXP VP - Diversified Equity Income Fund invests primarily in equity
securities;
AXP VP - Extra Income Fund invests primarily in high-yielding, high risk
corporate bonds (junk bonds) issued by U.S. and foreign companies and
governments;
AXP VP - Federal Income Fund invests primarily in debt obligations;
AXP VP - Global Bond Fund invests primarily in debt securities of U.S. and
foreign issuers;
AXP VP - Growth Fund invest primarily in common stocks and securities
convertible into common stocks that appear to offer growth opportunities;
AXP VP - International Fund invests primarily in equity securities of
foreign issuers that offer strong growth potential;
AXP VP - Managed Fund invests primarily in a combination of common and
preferred stocks, convertible securities, bonds and other debt securities;
AXP VP - New Dimensions Fund invests primarily in common stocks showing
potential for significant growth;
AXP VP - Small Cap Advantage Fund invests primarily in equity securities;
and
AXP VP - Strategy Aggressive Fund invests primarily in securities of growth
companies.
Shares of each Fund are sold through the purchase of a variable annuity contract
or life insurance policy.
The Fund's significant accounting policies are summarized as follows:
Use of estimates
Preparing financial statements that conform to generally accepted accounting
principles requires management to make estimates (e.g., on assets and
liabilities) that could differ from actual results.
Valuation of securities
All securities are valued at the close of each business day. Securities traded
on national securities exchanges or included in national market systems are
valued at the last quoted sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities in all Funds, except AXP VP - Cash Management Fund, maturing in more
than 60 days from the valuation date are valued at the market price or
approximate market value based on the current interest rates; those maturing in
60 days or less are valued at amortized cost. Pursuant to Rule 2a-7 of the 1940
Act, all securities in AXP VP - Cash Management Fund are valued at amortized
cost which approximates market value in order to maintain a constant net asset
value of $1 per share.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Funds, except AXP VP - Cash Management Fund,
may buy and sell put and call options and write covered call options on
portfolio securities and write cash-secured puts. The risk in writing a call
option is that the Funds give up the opportunity for profit if the market price
of the security increases. The risk in writing a put option is that the Funds
may incur a loss if the market price of the security decreases and the option is
exercised. The risk in buying an option is that the Funds pay a premium whether
or not the option is exercised. The Funds also have the additional risk of being
unable to enter into a closing transaction if a liquid secondary market does not
exist. The Funds may buy and write options traded on any U.S. or foreign
exchange or in the over-the-counter market where completing the obligation
depends upon the credit standing of the other party.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Funds
will realize a gain or loss when the option transaction expires or closes. When
an option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Funds, except AXP
VP - Cash Management Fund, may buy and sell financial futures contracts traded
on any U.S. or foreign exchange. The Funds also may buy or write put and call
options on these futures contracts. Risks of entering into futures contracts and
related options include the possibility of an illiquid market and that a change
in the value of the contract or option may not correlate with changes in the
value of the underlying securities.
Upon entering into a futures contract, the Funds are required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Funds each day. The variation margin payments are equal to the
daily changes in the contract value and recorded as unrealized gains and losses.
The Funds recognize a realized gain or loss when the contract is closed or
expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars. Foreign currency amounts related to the
purchase or sale of securities and income and expenses are translated at the
exchange rate on the transaction date. In the statement of operations, net
realized gains or losses from foreign currency transactions, if any, may arise
from sales of foreign currency, closed forward contracts, exchange gains or
losses realized between the trade date and settlement date on securities
transactions, and other translation gains or losses on dividends, interest
income and foreign withholding taxes.
The Funds, except AXP VP - Cash Management Fund, may enter into forward foreign
currency exchange contracts for operational purposes. The net U.S. dollar value
of foreign currency underlying all contractual commitments held by the Funds and
the resulting unrealized appreciation and/or depreciation are determined using
foreign currency exchange rates from an independent pricing service. The Funds
are subject to the credit risk that the other party will not complete its
contract obligations.
Illiquid securities
As of Feb. 29, 2000, investments in securities for AXP VP - Bond Fund, AXP VP -
Extra Income Fund, AXP VP Managed Fund and AXP VP - Strategy Aggressive Fund
included issues that are illiquid which these Funds currently limit to 10% of
net assets, at market value, at the time of purchase. The aggregate value of
such securities as of Feb. 29, 2000, was $17,118,352, $16,926,576, $4,052,363
and $34,001,776 representing 1.06%, 1.38%, 0.08% and 0.74% of net assets for AXP
VP - Bond Fund, AXP VP - Extra Income Fund, AXP VP - Managed Fund and AXP VP
Strategy Aggressive Fund, respectively. According to the board guidelines
certain unregistered securities are determined to be liquid and are not included
within the 10% limitation specified above.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by AXP VP - Bond
Fund, AXP VP - Federal Income Fund and AXP VP - Managed Fund on a
forward-commitment or when-issued basis can take place one month or more after
the transaction date. During this period, such securities are subject to market
fluctuations and they may affect the Fund's net assets the same as owned
securities. The Funds designate cash or liquid high-grade debt securities at
least equal to the amount of its commitment. As of Feb. 29, 2000, AXP VP - Bond
Fund, AXP VP - Federal Income Fund and AXP VP - Managed Fund had entered into
outstanding when-issued or forward commitments of $20,113,542, $3,975,372 and
$146,904,253, respectively.
Federal taxes
Each 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 the Variable Accounts. No provision for income or
excise taxes is thus required. Each Fund is treated as a separate entity for
federal income tax purposes.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, the timing and amount of
market discount recognized as ordinary income, foreign tax credits and losses
deferred due to "wash sale" transactions. The 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. The effect on
dividend distributions of certain book-to-tax differences is presented as
"excess distributions" in the statement of changes in net assets. Also, due to
the timing of dividend distributions, the fiscal year in which amounts are
distributed may differ from the year that the income or realized gains (losses)
are recorded by the Funds.
Dividends
As of Feb. 29, 2000, dividends declared for each Fund payable March 1, 2000 are
as follows:
Fund Amount per share
AXP VP - Blue Chip Advantage Fund $0.003
AXP VP - Bond Fund 0.062
AXP VP - Capital Resource Fund 0.000
AXP VP - Cash Management Fund 0.004
AXP VP - Diversified Equity Income Fund 0.018
AXP VP - Extra Income Fund 0.064
AXP VP - Federal Income Fund 0.044
AXP VP - Global Bond Fund 0.048
AXP VP - Growth Fund 0.000
AXP VP - International Fund 0.000
AXP VP - Managed Fund 0.100
AXP VP - New Dimensions Fund 0.006
AXP VP - Small Cap Advantage Fund 0.000
AXP VP - Strategy Aggressive Fund 0.000
Distributions to the Variable Accounts are recorded as of the close of business
on the record date and are payable on the first business day following the
record date. Dividends from net investment income are declared daily and
distributed monthly for AXP VP - Bond, AXP VP - Cash Management, AXP VP - Extra
Income, AXP VP Federal Income and AXP VP - Global Bond Funds and declared and
distributed quarterly, when available, for AXP VP - Blue Chip Advantage, AXP VP
- - Capital Resource, AXP VP - Diversified Equity Income, AXP VP - Growth, AXP VP
International, AXP VP - Managed, AXP VP - New Dimensions, AXP VP- Small Cap
Advantage and AXP VP - Strategy Aggressive Funds. Capital gain distributions,
when available, will be made annually. However, an additional capital gain
distribution may be made during the fiscal year in order to comply with the
Internal Revenue Code, as applicable to regulated investment companies.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. Interest
income, including level-yield amortization of premium and discount, is accrued
daily.
2. EXPENSES
The Funds have an Investment Management Agreement with IDS Life for managing
investments, record keeping and other services that are based solely on the
assets of each Fund. The management fee is a percentage of each Fund's average
daily net assets in reducing percentages annually as follows:
Fund Percentage Range
AXP VP - Blue Chip Advantage Fund 0.560% to 0.470%
AXP VP - Bond Fund 0.610% to 0.535%
AXP VP - Capital Resource Fund 0.630% to 0.570%
AXP VP - Cash Management Fund 0.510% to 0.440%
AXP VP - Diversified Equity Income Fund 0.560% to 0.470%
AXP VP - Extra Income Fund 0.620% to 0.545%
AXP VP - Federal Income Fund 0.610% to 0.535%
AXP VP - Global Bond Fund 0.840% to 0.780%
AXP VP - Growth Fund 0.630% to 0.570%
AXP VP - International Fund 0.870% to 0.795%
AXP VP - Managed Fund 0.630% to 0.550%
AXP VP - New Dimensions Fund 0.630% to 0.570%
AXP VP - Small Cap Advantage Fund 0.790% to 0.650%
AXP VP - Strategy Aggressive Fund 0.650% to 0.575%
For AXP VP - Blue Chip Advantage Fund, AXP VP - Diversified Equity Income Fund,
AXP VP - Growth Fund and AXP VP Small Cap Advantage Fund the fee will be
adjusted upward or downward by a performance incentive adjustment based on a
comparison of the performance of the Fund to the Lipper Growth and Income Fund
Index for AXP VP - Blue Chip Advantage Fund, the Lipper Equity Income Fund Index
for AXP VP - Diversified Equity Income Fund, the Lipper Growth and Income Fund
Index for AXP VP - Growth Fund and the Lipper Small Cap Fund Index for AXP VP -
Small Cap Advantage Fund. The maximum adjustment is 0.08% (0.12% for AXP VP -
Small Cap Advantage Fund) of the Fund's average daily net assets after deducting
1% from the performance difference. If the performance difference is less than
1%, the adjustment will be zero. The first adjustment will be made in February
2000 and will cover the four-month period beginning Oct. 1, 1999. The adjustment
decreased the fee by $14 and $388 for AXP VP - Blue Chip Advantage Fund and AXP
VP - Small Cap Advantage Fund, respectively, for the six months ended Feb. 29,
2000. The adjustment increased the fee by $21 for AXP VP - Diversified Equity
Income Fund for the six months ended Feb. 29, 2000.
IDS Life, in turn, pays to American Express Financial Corporation (AEFC) a fee
based on a percentage of each Fund's average daily net assets for the year. This
fee is equal to 0.35% for AXP VP - International Fund and 0.25% for each
remaining Fund. In addition to paying its own management fee, brokerage
commissions, taxes and costs of certain legal services, each Fund will reimburse
IDS Life an amount equal to the cost of certain expenses incurred and paid by
IDS Life in connection with each Fund's operations. The reimbursement paid by
AXP VP - Cash Management Fund will be limited to 0.25% of the Fund's average
daily net assets. The Funds also pay custodian fees to American Express Trust
Company, an affiliate of IDS Life. AEFC has a Sub-investment Advisory Agreement
with American Express Asset Management International Inc. (International), a
wholly-owned subsidiary of AEFC.
The Funds have an Administrative Services Agreement with AEFC. Under this
agreement, each Fund pays AEFC a fee for administration and accounting services
at a percentage of each Fund's average daily net assets in reducing percentages
annually as follows:
Fund Percentage Range
AXP VP - Blue Chip Advantage Fund 0.040% to 0.020%
AXP VP - Bond Fund 0.050% to 0.025%
AXP VP - Capital Resource Fund 0.050% to 0.030%
AXP VP - Cash Management Fund 0.030% to 0.020%
AXP VP - Diversified Equity Income Fund 0.040% to 0.020%
AXP VP - Extra Income Fund 0.050% to 0.025%
AXP VP - Federal Income Fund 0.050% to 0.025%
AXP VP - Global Bond Fund 0.060% to 0.040%
AXP VP - Growth Fund 0.050% to 0.030%
AXP VP - International Fund 0.060% to 0.035%
AXP VP - Managed Fund 0.040% to 0.020%
AXP VP - New Dimensions Fund 0.050% to 0.030%
AXP VP - Small Cap Advantage Fund 0.060% to 0.035%
AXP VP - Strategy Aggressive Fund 0.060% to 0.035%
A minor portion of additional administrative service expenses paid by the Funds
are consultants' fees and fund office expenses. Under this agreement, the Funds
also pay 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 Funds and approved by the board.
Effective Sept. 21, 1999, the Funds have an agreement with IDS Life for
distribution services. Under a Plan and Agreement of Distribution, each Fund
pays a distribution fee at an annual rate up to 0.125% of each Fund's average
daily net assets.
Through Aug. 31, 2000, IDS Life and AEFC have agreed to waive certain fees and
reimburse expenses to the extent that total expenses exceed the following
percentage of the Fund's average daily net assets as follows:
Fund Percentage
AXP VP - Blue Chip Advantage Fund 0.950%
AXP VP - Diversified Equity Income Fund 0.950%
AXP VP - Federal Income Fund 0.875%
AXP VP - Growth Fund 0.950%
AXP VP - Small Cap Advantage Fund 1.225%
During the six months ended Feb. 29, 2000, the Funds' custodian fees were
reduced as a result of earnings credits from overnight cash balances as follows:
Fund Reduction
AXP VP - Blue Chip Advantage Fund* $8
AXP VP - Bond Fund 60
AXP VP - Capital Resource Fund 772
AXP VP - Cash Management Fund 19
AXP VP - Diversified Equity Income Fund* 84
AXP VP - Extra Income Fund 52
AXP VP - Federal Income Fund* 202
AXP VP - Global Bond Fund 654
AXP VP - Growth Fund* 268
AXP VP - International Fund 1,990
AXP VP - Managed Fund 39
AXP VP - New Dimensions Fund 23
AXP VP - Small Cap Advantage Fund* 132
AXP VP - Strategy Aggressive Fund 645
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
3. SECURITIES TRANSACTIONS
For the six months ended Feb. 29, 2000, cost of purchases and proceeds from
sales of securities aggregated, respectively, $2,282,320,594 and $2,210,660,800
for AXP VP - Cash Management Fund. Cost of purchases and proceeds from sales of
securities (other than short-term obligations) aggregated for each Fund are as
follows:
Fund Purchases Proceeds
AXP VP - Blue Chip Advantage Fund* $49,354,592 $22,412,506
AXP VP - Bond Fund 758,592,648 837,541,308
AXP VP - Capital Resource Fund 1,195,615,772 1,767,501,421
AXP VP - Diversified Equity Income Fund* 9,044,033 493,696
AXP VP - Extra Income Fund 175,717,438 151,642,531
AXP VP - Federal Income Fund* 15,693,432 1,365,619
AXP VP - Global Bond Fund 45,566,114 55,816,367
AXP VP - Growth Fund* 55,002,049 1,718,061
AXP VP - International Fund 1,485,519,045 1,538,387,587
AXP VP - Managed Fund 1,109,064,241 1,207,354,401
AXP VP - New Dimensions Fund 841,881,623 431,446,502
AXP VP - Small Cap Advantage* 11,852,861 4,226,449
AXP VP - Strategy Aggressive Fund 2,026,060,729 2,088,869,629
Net realized gains and losses on investment sales are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with IDS Life for the six
months ended Feb. 29, 2000 are as follows:
Fund Amount paid
AXP VP - Blue Chip Advantage Fund* $11
AXP VP - Capital Resource Fund 338,403
AXP VP - Diversified Equity Income Fund* 2
AXP VP - Growth Fund* 132
AXP VP - Managed Fund 85,083
AXP VP - New Dimensions Fund 26,658
AXP VP - Strategy Aggressive Fund 81,906
*For the period from Sept. 15, 1999 (commencement of operations) through Feb.
29, 2000.
<TABLE>
<CAPTION>
4. FOREIGN CURRENCY CONTRACTS
As of Feb. 29, 2000, AXP VP - Global Bond Fund and AXP VP - International Fund
had entered into foreign currency exchange contracts that obligate the Fund's to
deliver currencies at specified future dates. The unrealized appreciation and/or
depreciation on these contracts is included in the accompanying financial
statements. See "Summary of significant accounting policies." The terms of the
open contracts are as follows:
AXP VP - Global Bond Fund
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
<S> <C> <C> <C> <C>
March 7, 2000 300,000,000 2,777,778 $45,069 $--
Japanese Yen U.S. Dollar
March 31, 2000 210,000,000 1,900,452 -- 20,283
Japanese Yen U.S. Dollar
----- -----
$45,069 $20,283
AXP VP - International Fund
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
March 1, 2000 4,377,933 2,550,530 $10,389 $--
Singaporan Dollar U.S. Dollar
March 1, 2000 279,605 174,622 -- 3,711
U.S. Dollar British Pound
March 2, 2000 9,779,624 9,598,016 167,037 --
European Monetary Unit U.S. Dollar
March 2, 2000 279,949 163,541 1,110 --
Singaporan Dollar U.S. Dollar
March 2, 2000 1,067,108 116,800,284 -- 4,079
U.S. Dollar Japanese Yen
March 2, 2000 2,636,025 1,653,520 -- 23,544
U.S. Dollar British Pound
March 3, 2000 4,979,265 3,130,254 -- 33,635
U.S. Dollar British Pound
March 31, 2000 691,058 670,119 2,327 --
European Monetary Unit U.S. Dollar
------ ------
$180,863 $64,969
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
5. LENDING OF PORTFOLIO SECURITIES
Presented below is information regarding securities on loan as of Feb. 29, 2000.
AXP VP - AXP VP - AXP VP -
Bond Capital International
Fund Resource Fund
Fund
<S> <C> <C> <C>
Value of securities on loan to brokers $50,852,244 $12,278,750 $40,825,110
Collateral received for securities loaned:
Cash $-- $12,674,000 $39,625,200
U.S. government securities, at value 53,570,003 -- --
---------- ------- ------
Total collateral received for securities loaned $53,570,003 $12,674,000 $39,625,200
AXP VP - AXP VP - AXP VP -
Managed New Strategy
Fund Dimensions Aggressive
Fund Fund
Value of securities on loan to brokers $182,131,950 $20,709,633 $202,254,567
Collateral received for securities loaned:
Cash $29,280,000 $-- $160,154,400
U.S. government securities, at value 163,448,869 21,491,404 34,811,116
----------- ---------- ----------
Total collateral received for securities loaned $192,728,869 $21,491,404 $194,965,516
Income from securities lending amounted to $33,635, $159,136, $51, $363,158,
$383,012, $13,502 and $866,722 for AXP VP - Bond Fund, AXP VP - Capital Resource
Fund, AXP VP - Global Bond Fund, AXP VP - International Fund, AXP VP - Managed
Fund, AXP VP - New Dimensions Fund and AXP VP - Strategy Aggressive Fund,
respectively, for the six months ended Feb. 29, 2000.
The risks to each Fund of securities lending are that the borrower may not
provide additional collateral when required or return the securities when due.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
6. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended Feb. 29, 2000
AXP VP - AXP VP - AXP VP -
Blue Chip Bond Capital
Advantage Fund Resource
Fund* Fund
<S> <C> <C> <C>
Sold 2,837,165 6,109,858 2,458,231
Issued for reinvested distributions 1,475 4,818,605 17,347,021
Redeemed (217,773) (23,791,332) (11,759,314)
-------- ----------- -----------
Net increase (decrease) 2,620,867 (12,862,869) 8,045,938
Six months ended Feb. 29, 2000
AXP VP - AXP VP - AXP VP -
Cash Diversified Extra
Management Equity Income* Income
Fund Fund Fund
Sold 520,946,594 1,151,714 5,970,849
Issued for reinvested distributions 16,006,883 2,110 2,934,281
Redeemed (468,121,408) (209,990) (7,532,473)
------------ -------- ----------
Net increase (decrease) 68,832,069 943,834 1,372,657
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
Six months ended Feb. 29, 2000
AXP VP - AXP VP - AXP VP -
Federal Global Growth
Income Bond Fund*
Fund* Fund
Sold 3,113,935 1,353,370 5,471,915
Issued for reinvested distributions 38,664 342,890 2,031
Redeemed (1,429,112) (2,317,229) (243,825)
---------- ---------- --------
Net increase (decrease) 1,723,487 (620,969) 5,230,121
Six months ended Feb. 29, 2000
AXP VP - AXP VP - AXP VP -
International Managed New
Fund Fund Dimensions
Fund
Sold 8,136,555 5,127,093 21,120,989
Issued for reinvested distributions 20,862,437 13,937,940 1,854,426
Redeemed (12,735,253) (20,456,603) (2,096,056)
----------- ----------- ----------
Net increase (decrease) 16,263,739 (1,391,570) 20,879,359
Six months ended Feb. 29, 2000
AXP VP - AXP VP -
Small Cap Strategy
Advantage* Aggressive
Fund Fund
Sold 1,357,035 6,439,686
Issued for reinvested distributions 5,023 13,299,832
Redeemed (602,374) (10,527,005)
-------- -----------
Net increase (decrease) 759,684 9,212,513
Year ended Aug. 31, 1999
AXP VP - AXP VP - AXP VP -
Bond Capital Cash
Fund Resource Management
Fund Fund
Sold 9,705,292 2,571,389 603,415,090
Issued for reinvested distributions 12,224,882 14,021,994 25,544,144
Redeemed (23,348,532) (20,385,941) (367,169,580)
----------- ----------- ------------
Net increase (decrease) (1,418,358) (3,792,558) 261,789,654
*For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000.
Year ended Aug. 31, 1999
AXP VP - AXP VP - AXP VP -
Extra Global International
Income Bond Fund
Fund Fund
Sold 9,758,757 2,510,601 12,212,960
Issued for reinvested distributions 7,511,830 981,534 1,096,574
Redeemed (3,462,581) (1,593,306) (26,524,212)
---------- ---------- -----------
Net increase (decrease) 13,808,006 1,898,829 (13,214,678)
Year ended Aug. 31, 1999
AXP VP - AXP VP - AXP VP -
Managed New Strategy
Fund Dimensions Aggressive
Fund Fund
Sold 6,954,626 42,053,242 4,611,926
Issued for reinvested distributions 31,767,507 669,065 11,423,262
Redeemed (26,684,346) (2,661,999) (25,418,985)
----------- ---------- -----------
Net increase (decrease) 12,037,787 40,060,308 (9,383,797)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
7. FUTURES CONTRACTS
As of Feb. 29, 2000, AXP VP - Bond Fund's investments in securities included
securities valued at $6,136,693 that were pledged as collateral to cover initial
margin deposits on 1,150 open sale interest rate contracts. The market value of
the open sale contracts as of Feb. 29, 2000 was $111,411,721 with a net
unrealized loss of $13,512. See "Summary of significant accounting policies."
As of Feb. 29, 2000, AXP VP - Federal Income Fund's investments in securities
included securities valued at $50,482 that were pledged as collateral to cover
initial margin deposits on 40 open sale interest rate contracts. The market
value of the open sale contracts as of Feb. 29, 2000 was $3,865,938 with a net
unrealized loss of $25,785. See "Summary of significant accounting policies."
8. OPTIONS CONTRACTS WRITTEN
Contracts and premium amounts associated with options contracts written by AXP
VP - Capital Resource Fund during the six months ended Feb. 29, 2000 are as
follows:
Calls
Contracts Premium
Balance Aug. 31, 1999 -- $--
Opened 1,375 1,064,277
Closed or expired (1,100) (334,814)
Exercised (275) (729,463)
---- --------
Balance Feb. 29, 2000 -- $--
See "Summary of significant accounting policies."
Contracts and premium amounts associated with options contracts written by AXP
VP - Managed Fund during the six months ended Feb. 29, 2000 are as follows:
Calls Puts
Contracts Premium Contracts Premium
<S> <C> <C> <C> <C>
Balance Aug. 31, 1999 -- $-- 2,500 $1,198,710
Opened 9,000 1,728,267 -- --
Closed or expired (1,000) (128,246) (2,500) (1,198,710)
------ -------- ------ ----------
Balance Feb. 29, 2000 8,000 $1,600,021 -- $--
See "Summary of significant accounting policies."
Contracts and premium amounts associated with options contracts written by AXP
VP - Strategy Aggressive Fund during the six months ended Feb. 29, 2000 are as
follows:
Calls Puts
Contracts Premium Contracts Premium
Balance Aug. 31, 1999 -- $-- 4,450 $1,299,571
Opened 12,690 4,479,589 12,050 5,275,757
Closed or expired (7,000) (2,569,709) (14,084) (4,710,856)
Exercised (3,790) (1,449,346) (1,716) (694,111)
------ ---------- ------ --------
Balance Feb. 29, 2000 1,900 $460,534 700 $1,170,361
See "Summary of significant accounting policies."
9. CAPITAL LOSS CARRYOVER
For federal income tax purposes, AXP VP - Bond Fund, AXP VP - Extra Income Fund
and AXP VP - Global Bond Fund had capital loss carryovers as of Aug. 31, 1999 of
$57,229,041, $29,248,847 and $4,559,469, respectively, which, if not offset by
subsequent capital gains, will expire in 2007 and 2008. It is unlikely the board
will authorize a distribution of any net realized gain for a Fund until its
capital loss carryover has been offset or expires.
</TABLE>
<PAGE>
10. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluting each
Fund's results.
AXP VP - Blue Chip Advantage Fund
For the period ended Feb. 29,
Per share income and capital changesa
2000b
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) .02
Net gains (losses) (both realized and unrealized) .39
Total from investment operations .41
Less distributions:
Dividends from net investment income (.02)
Net asset value, end of period $10.39
Ratios/supplemental data
Net assets, end of period (in millions) $29
Ratio of expenses to average daily net assetsc .95%d,e
Ratio of net investment income (loss) to average daily net assets .37%d
Portfolio turnover rate (excluding short-term securities) 154%
Total returnf 4.44%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 1.44% for the period ended Feb. 29,
2000.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Bond Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.56 $11.08 $11.99 $11.54 $11.58
Income from investment operations:
Net investment income (loss) .39 .79 .88 .85 .88
Net gains (losses) (both realized and unrealized) (.12) (.52) (.68) .52 (.07)
Total from investment operations .27 .27 .20 1.37 .81
Less distributions:
Dividends from net investment income (.38) (.77) (.85) (.84) (.85)
Distributions from realized gains -- (.02) (.26) (.07) --
Excess distributions from realized gains -- -- -- (.01) --
Total distributions (.38) (.79) (1.11) (.92) (.85)
Net asset value, end of period $10.45 $10.56 $11.08 $11.99 $11.54
Ratios/supplemental data
Net assets, end of period (in millions) $1,597 $1,750 $1,852 $1,923 $1,912
Ratio of expenses to average daily net assetsc .78%d .68% .67% .68% .68%
Ratio of net investment income (loss) to average
daily net assets 7.33%d 7.22% 7.39% 7.18% 7.47%
Portfolio turnover rate (excluding short-term securities) 47% 68% 48% 73% 56%
Total returne 2.50% 2.40% 1.54% 12.24% 5.82%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Capital Resource Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $34.62 $26.80 $27.97 $25.57 $24.42
Income from investment operations:
Net investment income (loss) .01 .06 .11 .16 .30
Net gains (losses) (both realized and unrealized) 3.60 10.28 (.54) 6.45 1.22
Total from investment operations 3.61 10.34 (.43) 6.61 1.52
Less distributions:
Dividends from net investment income (.01) (.06) (.11) (.15) (.29)
Distributions from realized gains (3.61) (2.46) (.63) (4.05) (.07)
Excess distributions from realized gains -- -- -- (.01) (.01)
Total distributions (3.62) (2.52) (.74) (4.21) (.37)
Net asset value, end of period $34.61 $34.62 $26.80 $27.97 $25.57
Ratios/supplemental data
Net assets, end of period (in millions) $5,898 $5,621 $4,453 $4,867 $4,372
Ratio of expenses to average daily net assetsc .76%d .66% .66% .67% .68%
Ratio of net investment income (loss) to average daily
net assets .07%d .17% .34% .61% 1.15%
Portfolio turnover rate (excluding short-term securities) 21% 56% 68% 110% 131%
Total returne 10.92% 40.12% (1.67%) 28.47% 6.15%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Cash Management Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 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) .03 .05 .05 .05 .05
Less distributions:
Dividends from net investment income (.03) (.05) (.05) (.05) (.05)
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) $758 $690 $428 $421 $288
Ratio of expenses to average daily net assetsc .66%d .56% .57% .57% .56%
Ratio of net investment income (loss) to average
daily net assets 5.07%d 4.60% 5.13% 4.97% 5.02%
Total returne 2.55% 4.72% 5.25% 5.05% 5.15%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
AXP VP - Diversified Equity Income Fund
For the period ended Feb. 29,
Per share income and capital changesa
2000b
Net asset value, beginning of period $9.84
Income from investment operations:
Net investment income (loss) .04
Net gains (losses) (both realized and unrealized) (.87)
Total from investment operations (.83)
Less distributions:
Dividends from net investment income (.05)
Net asset value, end of period $8.96
Ratios/supplemental data
Net assets, end of period (in millions) $10
Ratio of expenses to average daily net assetsc .95%d,e
Ratio of net investment income (loss) to average daily
net assets 1.56%d
Portfolio turnover rate (excluding short-term securities) 9%
Total returnf (9.38%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 2.18% for the period ended Feb. 29,
2000.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Extra Income Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996c
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.75 $9.54 $10.39 $9.77 $10.00
Income from investment operations:
Net investment income (loss) .41 .92 .95 .88 .18
Net gains (losses) (both realized and unrealized) (.31) (.69) (.80) .62 (.23)
Total from investment operations .10 .23 .15 1.50 (.05)
Less distributions:
Dividends from net investment income (.40) (.92) (.95) (.88) (.18)
Distributions from realized gains -- (.10) (.05) -- --
Total distributions (.40) (1.02) (1.00) (.88) (.18)
Net asset value, end of period $8.45 $8.75 $9.54 $10.39 $9.77
Ratios/supplemental data
Net assets, end of period (in millions) $628 $638 $564 $320 $49
Ratio of expenses to average daily net assetsd .80%e .70% .69% .69% 1.53%e
Ratio of net investment income (loss) to average
daily net assets 9.61%e 10.17% 9.21% 8.88% 8.14%e
Portfolio turnover rate (excluding short-term
securities) 26% 50% 66% 104% 22%
Total returnf 1.26% 2.61% 1.03% 16.80% (.50%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c Inception date was May 1, 1996.
d For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
AXP VP - Federal Income Fund
For the period ended Feb. 29,
Per share income and capital changesa
2000b
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income (loss) .24
Net gains (losses) (both realized and unrealized) (.12)
Total from investment operations .12
Less distributions:
Dividends from net investment income (.24)
Net asset value, end of period $9.88
Ratios/supplemental data
Net assets, end of period (in millions) $27
Ratio of expenses to average daily net assetsc .88%d
Ratio of net investment income (loss) to average
daily net assets 5.29%d
Portfolio turnover rate (excluding short-term
securities) 10%
Total returne 1.19%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Global Bond Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000c 1999 1998 1997 1996b
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.84 $10.09 $10.32 $10.08 $10.00
Income from investment operations:
Net investment income (loss) .23 .55 .60 .51 .12
Net gains (losses) (both realized and unrealized) (.42) (.29) (.21) .14 .07
Total from investment operations (.19) .26 .39 .65 .19
Less distributions:
Dividends from net investment income (.21) (.51) (.58) (.41) (.11)
Distributions from realized gains -- -- (.04) -- --
Total distributions (.21) (.51) (.62) (.41) (.11)
Net asset value, end of period $9.44 $9.84 $10.09 $10.32 $10.08
Ratios/supplemental data
Net assets, end of period (in millions) $184 $197 $183 $119 $21
Ratio of expenses to average daily net assetsd 1.06%e .96% .95% .97% 1.77%e
Ratio of net investment income (loss) to average
daily net assets 4.84%e 5.36% 5.81% 5.66% 4.96%e
Portfolio turnover rate (excluding short-term
securities) 29% 56% 14% 36% 4%
Total returnf (1.85%) 2.50% 3.82% 6.47% 2.00%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Inception date was May 1, 1996.
c Six months ended Feb. 29, 2000 (Unaudited).
d For the period ended Feb, 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
AXP VP - Growth Fund
For the period ended Feb. 29,
Per share income and capital changesa
2000b
Net asset value, beginning of period $9.95
Income from investment operations:
Net investment income (loss) --
Net gains (losses) (both realized and unrealized) 2.24
Total from investment operations 2.24
Less distributions:
Dividends from net investment income (.01)
Net asset value, end of period $12.18
Ratios/supplemental data
Net assets, end of period (in millions) $66
Ratio of expenses to average daily net assetsc .95%d,e
Ratio of net investment income (loss) to average
daily net assets .03%d
Portfolio turnover rate (excluding short-term
securities) 6%
Total returnf 23.34%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 1.25% for the period ended Feb. 29,
2000.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
<TABLE>
<CAPTION>
AXP VP - International Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $17.26 $14.25 $14.09 $13.30 $12.55
Income from investment operations:
Net investment income (loss) (.02) .12 .14 .18 .20
Net gains (losses) (both realized and unrealized) 4.17 3.04 .42 1.06 1.01
Total from investment operations 4.15 3.16 .56 1.24 1.21
Less distributions:
Dividends from net investment income -- (.07) (.15) (.17) (.44)
Distributions from realized gains (2.83) (.08) (.19) (.28) (.02)
Excess distributions from realized gains -- -- (.06) -- --
Total distributions (2.83) (.15) (.40) (.45) (.46)
Net asset value, end of period $18.58 $17.26 $14.25 $14.09 $13.30
Ratios/supplemental data
Net assets, end of period (in millions) $2,693 $2,221 $2,023 $2,105 $1,874
Ratio of expenses to average daily net assetsc 1.02%d .94% .94% .97% .96%
Ratio of net investment income (loss) to average
daily net assets .20%d .70% .94% 1.30% 1.28%
Portfolio turnover rate (excluding short-term
securities) 63% 102% 86% 91% 58%
Total returne 25.48% 22.18% 4.09% 9.34% 9.64%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Managed Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.84 $17.25 $18.87 $16.00 $14.85
Income from investment operations:
Net investment income (loss) .23 .50 .49 .46 .46
Net gains (losses) (both realized and unrealized) 1.28 3.29 (.12) 3.93 1.15
Total from investment operations 1.51 3.79 .37 4.39 1.61
Less distributions:
Dividends from net investment income (.22) (.49) (.48) (.45) (.46)
Distributions from realized gains (.87) (1.71) (1.50) (1.06) --
Excess distributions from net investment income -- -- (.01) (.01) --
Total distributions (1.09) (2.20) (1.99) (1.52) (.46)
Net asset value, end of period $19.26 $18.84 $17.25 $18.87 $16.00
Ratios/supplemental data
Net assets, end of period (in millions) $5,133 $5,046 $4,413 $4,445 $3,482
Ratio of expenses to average daily net assetsc .74%d .63% .64% .64% .65%
Ratio of net investment income (loss) to average
daily net assets 2.31%d 2.62% 2.56% 2.65% 2.94%
Portfolio turnover rate (excluding short-term
securities) 22% 44% 50% 72% 85%
Total returne 8.26% 22.98% 1.74% 27.50% 11.01%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP VP - New Dimensions Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996c
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $18.87 $13.29 $12.95 $9.94 $10.00
Income from investment operations:
Net investment income (loss) .03 .06 .08 .10 .03
Net gains (losses) (both realized and unrealized) 4.26 5.60 .34 3.01 (.06)
Total from investment operations 4.29 5.66 .42 3.11 (.03)
Less distributions:
Dividends from net investment income (.03) (.06) (.08) (.10) (.03)
Distributions from realized gains (.17) (.02) -- -- --
Total distributions (.20) (.08) (.08) (.10) (.03)
Net asset value, end of period $22.96 $18.87 $13.29 $12.95 $9.94
Ratios/supplemental data
Net assets, end of period (in millions) $4,785 $3,538 $1,960 $1,307 $171
Ratio of expenses to average daily net assetsd .77%e .68% .69% .72% 1.04%e
Ratio of net investment income (loss) to average
daily net assets .25%e .34% .59% 1.04% 1.69%e
Portfolio turnover rate (excluding short-term
securities) 11% 27% 34% 29% 4%
Total returnf 22.87% 42.61% 3.19% 31.40% (.22%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c Inception date was May 1, 1996.
d For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
e Adjusted to an annual basis.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
AXP VP - Small Cap Advantage Fund
For the period ended Feb. 29,
Per share income and capital changesa
2000b
Net asset value, beginning of period $9.92
Income from investment operations:
Net investment income (loss) (.02)
Net gains (losses) (both realized and unrealized) 2.43
Total from investment operations 2.41
Less distributions:
Distributions from realized gains (.08)
Net asset value, end of period $12.25
Ratios/supplemental data
Net assets, end of period (in millions) $13
Ratio of expenses to average daily net assetsc 1.22%d,e
Ratio of net investment income (loss) to average
daily net assets (.60%)d
Portfolio turnover rate (excluding short-term
securities) 61%
Total returnf 24.09%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b For the period from Sept. 15, 1999 (commencement of operations) to Feb. 29,
2000 (Unaudited).
c Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
d Adjusted to an annual basis.
e AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annual ratios of expenses would have been 1.87% for the period ended Feb. 29,
2000.
f Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Strategy Aggressive Fund
Fiscal period ended Aug. 31,
Per share income and capital changesa
2000b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.46 $13.10 $17.17 $16.04 $14.44
Income from investment operations:
Net investment income (loss) -- .05 .01 .08 .10
Net gains (losses) (both realized and unrealized) 15.91 4.36 (2.57) 2.84 1.60
Total from investment operations 15.91 4.41 (2.56) 2.92 1.70
Less distributions:
Dividends from net investment income -- (.05) (.01) (.08) (.10)
Distributions from realized gains (1.82) (1.00) (1.49) (1.71) --
Excess distributions from realized gains -- -- (.01) -- --
Total distributions (1.82) (1.05) (1.51) (1.79) (.10)
Net asset value, end of period $30.55 $16.46 $13.10 $17.17 $16.04
Ratios/supplemental data
Net assets, end of period (in millions) $4,602 $2,327 $1,976 $2,427 $1,941
Ratio of expenses to average daily net assetsc .76%d .67% .66% .68% .69%
Ratio of net investment income (loss) to average
daily net assets (.02%)d .31% .08% .47% .65%
Portfolio turnover rate (excluding short-term
securities) 71% 207% 176% 218% 189%
Total returne 103.18% 35.27% (16.40%) 18.60% 11.82%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Feb. 29, 2000 (Unaudited).
c For the period ended Feb. 29, 2000, expense ratio is based on total expenses
of the Fund before reduction of earnings credits on cash balances.
d Adjusted to an annual basis.
e Total return does not reflect payment of the expenses that apply to the
variable accounts or any annuity charges.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Blue Chip Advantage Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (98.2%)
Issuer Shares Value(a)
Aerospace & defense (1.2%)
<S> <C> <C>
Goodrich (BF) 3,620 $86,654
Honeywell Intl 4,935 237,497
United Technologies 690 35,147
Total 359,298
Airlines (0.6%)
AMR 1,170(b) 61,864
Southwest Airlines 5,985 110,348
Total 172,212
Automotive & related (1.2%)
Delphi Automotive Systems 5,150 85,941
Ford Motor 6,680 278,055
Total 363,996
Banks and savings & loans (5.3%)
Bank of America 5,745 264,629
Bank of New York 9,855 328,294
Firstar 1,880 33,488
FleetBoston Financial 4,436 120,881
Mellon Financial 3,590 108,149
SLM Holding 1,190 37,262
Wachovia 3,605 206,161
Wells Fargo 13,530 447,335
Total 1,546,199
Beverages & tobacco (1.4%)
Coca-Cola 8,435 408,570
Building materials & construction (0.6%)
Fluor 770 21,897
Vulcan Materials 970 38,800
Weyerhaeuser 2,375 121,867
Total 182,564
Chemicals (0.3%)
Du Pont (EI) de Nemours 1,545 78,023
Communications equipment & services (4.4%)
Lucent Technologies 8,975 534,012
Motorola 2,325 396,413
Nortel Networks 2,475(c) 275,963
Tellabs 2,010(b) 96,480
Total 1,302,868
Computers & office equipment (19.8%)
3Com 2,435(b) 238,630
America Online 3,280(b) 193,520
BMC Software 2,105(b) 96,830
Cisco Systems 7,190(b) 950,427
Citrix Systems 1,550(b) 163,428
Compaq Computer 2,150 53,481
Computer Associates Intl 630 40,517
Computer Sciences 1,450(b) 114,278
Dell Computer 5,485(b) 223,857
Electronic Data Systems 3,125 202,344
EMC 2,050(b) 243,950
First Data 3,935 177,075
Hewlett-Packard 3,450 464,025
Intl Business Machines 1,320 134,640
Lexmark Intl Group Cl A 1,110(b) 132,368
Microsoft 13,400(b) 1,197,624
Novell 2,605(b) 86,128
Oracle 8,340(b) 619,244
Parametric Technology 3,160(b) 95,788
Solectron 1,735(b) 113,643
Sun Microsystems 1,546(b) 147,257
Yahoo! 896(b) 143,080
Total 5,832,134
Electronics (8.5%)
Applied Materials 1,200(b) 219,525
Corning 1,650 310,200
Intel 8,350 943,550
KLA-Tencor 1,610(b) 125,479
LSI Logic 2,050(b) 131,328
Micron Technology 1,240(b) 121,598
Natl Semiconductor 1,435(b) 107,804
Teradyne 1,390(b) 120,930
Texas Instruments 2,505 417,083
Total 2,497,497
Energy (4.2%)
Chevron 4,350 324,891
Conoco Cl B 5,760 113,400
Exxon Mobil 7,399 557,236
Texaco 4,870 231,021
Total 1,226,548
Energy equipment & services (0.5%)
Halliburton 3,610 137,857
Financial services (4.5%)
Capital One Financial 3,510 129,212
Citigroup 3,500 180,906
Fannie Mae 3,340 177,020
Kansas City Southern Inds 2,180 171,675
MBNA 10,470 238,193
Morgan Stanley, Dean Witter, Discover & Co 3,828 269,634
Providian Financial 2,245 145,504
Total 1,312,144
Food (1.7%)
Bestfoods 3,625 152,023
General Mills 5,210 171,605
Sara Lee 7,550 113,250
SUPERVALU 3,025 51,992
Total 488,870
Health care (8.4%)
Amgen 4,142(b) 282,433
Baxter Intl 2,733 148,949
Biomet 990 32,670
Bristol-Myers Squibb 7,675 436,035
Guidant 2,700(b) 181,913
Johnson & Johnson 1,600 114,800
Medtronic 6,130 296,922
Pfizer 12,410 398,670
Schering-Plough 6,715 234,186
Warner-Lambert 3,800 325,138
Total 2,451,716
Health care services (0.4%)
Cardinal Health 2,720 112,200
Household products (1.8%)
Colgate-Palmolive 3,505 182,917
Kimberly-Clark 4,265 220,447
Procter & Gamble 1,320 116,160
Total 519,524
Industrial equipment & services (0.8%)
Caterpillar 830 29,102
Illinois Tool Works 933 48,224
Ingersoll-Rand 770 29,501
Parker-Hannifin 3,595 130,319
Total 237,146
Insurance (1.3%)
American Intl Group 4,235 374,533
Leisure time & entertainment (1.3%)
Disney (Walt) 4,550 152,425
Viacom Cl B 4,020(b) 224,115
Total 376,540
Media (2.7%)
CBS 4,915(b) 292,750
Comcast Special Cl A 4,715 200,388
MediaOne Group 3,825(b) 300,262
Total 793,400
Metals (0.2%)
Nucor 900 44,719
Miscellaneous (8.3%)
Standard & Poor's Depositary Receipts 17,700 2,427,666
Multi-industry conglomerates (4.2%)
Danaher 1,930 78,768
Emerson Electric 1,320 60,143
General Electric 6,370 842,034
Grainger (WW) 784 33,565
Tyco Intl 5,830(c) 221,176
Total 1,235,686
Paper & packaging (0.7%)
Fort James 1,390 26,149
Intl Paper 5,200 191,425
Total 217,574
Restaurants & lodging (0.3%)
Marriott Intl Cl A 770 21,223
Wendy's Intl 4,475 70,481
Total 91,704
Retail (5.4%)
Bed Bath & Beyond 1,706(b) 48,408
Best Buy 1,530(b) 83,194
Circuit City Stores-Circuit City Group 1,810 73,079
Costco Wholesale 2,880(b) 142,920
CVS 3,140 109,900
Gap 830 40,099
Home Depot 3,867 223,561
Kroger 5,885(b) 87,539
Safeway 4,245(b) 163,698
Target 2,543 150,037
TJX Companies 2,460 39,206
Wal-Mart Stores 8,780 427,476
Total 1,589,117
Transportation (0.2%)
Burlington Northern Santa Fe 3,010 59,259
Utilities -- electric (1.0%)
AES 630(b) 52,802
CMS Energy 4,440 74,369
DTE Energy 835 25,207
Edison Intl 1,380 36,311
FPL Group 870 33,604
PG&E 1,880 38,775
Texas Utilities 700 22,838
Total 283,906
Utilities -- gas (0.2%)
Enron 870 60,030
Utilities -- telephone (6.9%)
AT&T 9,110 450,375
Bell Atlantic 6,330 309,774
BellSouth 1,120 45,640
MCI WorldCom 9,845(b) 439,333
SBC Communications 11,315 429,970
Sprint 560 34,160
Sprint PCS 1,270(b) 65,723
U S WEST Communications Group 3,390 246,199
Total 2,021,174
Total common stocks
(Cost: $29,100,292) $28,804,674
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term security (3.4%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Commercial paper
Associates Corp North America
<S> <C> <C> <C>
03-01-00 5.85% $1,000,000 $999,838
Total short-term security
(Cost: $1,000,000) $999,838
Total investments in securities
(Cost: $30,100,292)(d) $29,804,512
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000, the
value of foreign securities represented 1.70% of net assets.
(d) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $30,100,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $2,299,000
Unrealized depreciation (2,594,000)
----------
Net unrealized depreciation $(295,000)
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Bond Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Bonds (94.6%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (13.1%)
Govt of Algeria
(U.S. Dollar)
<S> <C> <C> <C>
03-04-00 7.06% $545,455(c) $544,829
Govt of Russia
(Russian Ruble)
06-16-99 -- 1,639,000(b,c) 57,098
12-15-01 -- 7,793,000(b,c) 144,973
02-06-02 -- 2,273,000(b,c) 59,816
05-22-02 -- 2,273,000(b,c) 57,005
06-05-02 -- 2,273,000(b,c) 56,799
09-18-02 -- 2,273,000(b,c) 54,242
10-09-02 -- 2,273,000(b,c) 52,650
01-22-03 -- 2,273,000(b,c) 50,362
02-05-03 -- 2,273,000(b,c) 50,362
05-21-03 -- 2,273,000(b,c) 48,817
06-04-03 -- 2,273,000(b,c) 48,817
09-17-03 -- 2,273,000(b,c) 47,258
10-08-03 -- 2,273,000(b,c) 45,610
01-21-04 -- 2,273,000(b,c) 44,502
Republic of Colombia
(U.S. Dollar)
08-13-05 11.22 10,000,000(c,q) 9,725,000
U.S. Treasury
11-15-00 5.75 5,000,000 4,982,795
05-15-02 7.50 6,170,000 6,285,170
06-30-02 6.25 17,000,000 16,889,422
03-31-03 5.50 7,500,000 7,272,824
05-15-04 5.25 10,000,000 9,506,250
05-15-04 7.25 11,000,000 11,241,187
08-15-04 7.25 8,200,000(j) 8,386,814
11-15-05 5.88 5,475,000 5,270,571
05-15-08 5.63 59,250,000(l) 55,592,195
11-15-16 7.50 24,750,000(l) 27,299,757
02-15-19 8.88 1,750,000 2,203,647
08-15-27 6.38 38,500,000 38,692,500
United Mexican States
(U.S. Dollar)
09-15-16 11.38 2,750,000(c) 3,255,313
Total 207,966,585
Mortgage-backed securities (25.6%)
Federal Home Loan Mtge Corp
05-01-07 9.00 2,675,391 2,752,944
03-01-13 5.50 4,112,814 3,780,212
03-01-15 7.50 20,000,000(p) 20,006,250
08-01-24 8.00 2,595,318 2,602,611
01-01-25 9.00 661,083 684,426
07-01-28 6.00 9,198,023 8,352,909
09-01-28 6.00 28,147,314 25,563,795
10-01-29 7.00 24,795,264 23,764,772
12-01-29 7.00 49,788,833 47,758,466
Collateralized Mtge Obligation
03-15-22 7.00 10,455,000 10,014,117
07-15-22 7.00 12,940,000 12,199,314
Federal Natl Mtge Assn
09-01-07 8.50 3,368,160 3,447,616
06-15-09 6.38 10,000,000 9,393,500
12-01-13 5.50 14,221,493 13,049,535
02-01-14 5.50 22,736,234 20,853,452
04-01-14 5.50 204,859 187,977
12-01-14 6.00 29,632,068 27,817,687
11-01-21 8.00 280,526 282,372
04-01-22 8.00 1,761,851 1,771,753
04-01-23 8.50 3,534,689 3,632,279
06-01-24 9.00 3,468,086 3,600,018
02-01-27 7.50 8,129,460 7,982,155
09-01-28 6.50 13,778,726 12,878,837
10-01-28 6.00 19,230,409 17,445,635
11-01-28 6.00 8,720,925 7,911,536
11-01-28 6.50 18,807,057 17,595,945
12-01-28 6.50 23,825,746 22,269,686
01-01-29 6.50 18,615,980 17,400,170
02-01-29 6.00 9,759,270 8,862,366
03-01-29 6.50 24,027,041 22,459,387
09-01-29 7.00 19,642,836 18,829,534
Collateralized Mtge Obligation
05-18-26 5.00 10,000,000 8,232,229
Govt Natl Mtge Assn
06-20-24 6.38 3,036,782(m) 3,058,163
Total 406,441,648
Aerospace & defense (0.1%)
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 1,710,000 1,735,650
Airlines (0.3%)
AMR
05-15-01 9.50 4,500,000 4,598,980
Automotive & related (1.9%)
Arvin Capital
Company Guaranty
02-01-27 9.50 5,000,000 4,855,015
Exide
Cv Sr Sub Nts
12-15-05 2.90 1,800,000(d) 932,076
Ford Motor Credit
01-15-03 7.50 5,000,000 5,019,689
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.13 2,500,000 2,325,000
Lear
Company Guaranty Series B
05-15-09 8.11 7,500,000 6,977,249
Mascotech
Cv Sub Deb
12-15-03 4.50 1,225,000 917,219
MSX Intl
Company Guaranty
01-15-08 11.38 2,450,000 2,278,500
Venture Holdings Trust
Sr Nts Series B
07-01-05 9.50 7,500,000 6,825,000
Total 30,129,748
Banks and savings & loans (2.3%)
Cullen/Frost Capital
Series A
02-01-27 8.42 5,000,000 4,796,780
FleetBoston Financial
Sr Nts
12-01-01 9.00 5,000,000 5,131,784
Sub Nts
06-15-01 9.90 5,000,000 5,158,545
Newcourt Credit Group
(U.S. Dollar) Company Guaranty Series B
02-16-05 6.88 10,000,000(c) 9,627,480
Provident Trust
Company Guaranty
04-15-28 8.29 5,500,000 5,302,592
Union Planters Bank
Sub Nts
03-15-18 6.50 5,000,000 4,423,440
Washington Mutual Capital
Company Guaranty
06-01-27 8.38 3,000,000 2,883,226
Total 37,323,847
Building materials & construction (0.6%)
Masco
10-01-01 9.00 5,000,000 5,132,223
Tyco Intl Group
(U.S. Dollar) Company Guaranty
01-15-29 6.88 4,300,000(c) 3,736,104
Total 8,868,327
Chemicals (0.4%)
Allied Waste North America
Company Guaranty Series B
01-01-09 7.88 5,950,000 5,012,875
Dow Chemical
11-01-29 7.38 2,200,000 2,103,706
Total 7,116,581
Communications equipment & services (3.2%)
American Tower
Cv
02-15-10 5.00 765,000(d) 825,244
Aspect Communications
Zero Coupon Cv Sub Deb
08-10-18 6.00 1,850,000(e) 1,110,000
Caprock Communications
Sr Nts
05-01-09 11.50 4,000,000 4,080,000
Celcaribe
Sr Nts
03-15-04 13.50 3,150,000 2,716,875
Commscope
Cv Sub Nts
12-15-06 4.00 700,000(d) 761,250
Corning
Cv Sub Nts
03-01-08 4.88 184,000 741,750
Dobson/Sygnet Communications
Sr Nts
12-15-08 12.25 1,500,000 1,605,000
EchoStar Communications
Cv Sub Nts
01-01-07 4.88 755,000(d) 1,046,619
EchoStar DBS
Sr Nts
02-01-09 9.38 4,050,000 3,958,875
GT Group Telecom
(U.S. Dollar) Zero Coupon
02-01-05 13.25 3,400,000(c,d,f) 2,040,000
NTL
Cv Sub Nts
12-15-09 5.75 720,000(d) 734,400
Zero Coupon Sr Nts Series B
02-01-01 11.50 5,000,000(f) 4,650,000
NTL Communications
Zero Coupon Sr Nts Series B
10-01-03 12.38 9,625,000(f) $6,593,125
Price Communications Wireless
Company Guaranty Series B
12-15-06 9.13 4,500,000 4,500,000
Telehub Communications
Zero Coupon Company Guaranty
07-31-01 13.88 2,500,000(f) 250,000
Versatel Telecom
(European Monetary Unit)
12-17-04 4.00 1,540,000(c,d) 2,287,052
(U.S. Dollar) Sr Nts
05-15-08 13.25 1,250,000(c) 1,325,000
07-15-09 11.88 3,000,000(c) 3,105,000
Voicestream Wireless
Sr Nts
09-15-09 11.50 3,500,000(d) 3,815,000
11-15-09 10.38 6,200,000(d,g) 6,409,250
Williams Communication Group
Sr Nts
10-01-09 10.88 3,750,000 3,825,000
Total 56,379,440
Computers & office equipment (0.8%)
ASM Lithography Holdings
(U.S. Dollar) Cv
11-30-04 4.25 790,000(c,d) 1,026,526
Globix
Sr Nts
02-01-10 12.50 4,500,000(d) 4,477,500
Hewlett-Packard
Zero Coupon Sub Nts
10-14-17 3.13 1,180,000(e) 927,775
Internet Capital Group
Cv Sub Nts
12-21-04 5.50 190,000 188,100
PSINet
Sr Nts Series B
02-15-05 10.00 3,255,000 3,157,350
Silicon Graphics
Cv Sr Nts
09-01-04 5.25 930,000 692,850
Solectron
Zero Coupon Cv
01-27-19 4.00 600,000(e) 346,500
Verio
Sr Nts
12-01-08 11.25 2,250,000 2,328,750
Total 13,145,351
Electronics (0.8%)
Conexant Systems
Cv Sub Nts
02-01-07 4.00 320,000(d) 352,800
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 8,500,000(c,d) 7,604,142
Intel
Cv Sub Nts
09-01-04 4.00 210,000 765,713
Photronics
Cv Sub Nts
06-04-04 6.00 330,000 509,025
Thomas & Betts
01-15-06 6.50 4,500,000 4,218,890
Total 13,450,570
Energy (2.5%)
Devon Energy
Cv Deb
08-15-08 4.90 666,000 594,405
Lodestar Holdings
Company Guaranty
05-15-05 11.50 1,500,000 450,000
Occidental Petroleum
Medium-term Nts
06-01-00 10.98 5,000,000 5,046,338
Oryx Energy
04-01-01 10.00 5,000,000 5,115,140
PDV America
Sr Nts
08-01-03 7.88 7,500,000 7,000,890
Petroleos Mexicanos
(U.S. Dollar) Series P
09-15-27 9.50 14,625,000(c) 14,862,656
Roil
(U.S. Dollar)
12-05-02 12.78 1,632,000(c,d) 1,436,160
USX
03-01-08 6.85 6,500,000 6,068,291
Total 40,573,880
Energy equipment & services (--%)
Seacor Holdings
Cv Sub Nts
11-15-06 5.38 440,000 408,100
Financial services (3.4%)
Airplanes GPA Cl D
(U.S. Dollar) Series 1
03-15-19 10.88 2,723,050(c) 2,336,540
American General Finance
Sr Nts
11-01-03 5.75 5,000,000 4,731,377
California Infrastructure-
Southern California Edison
03-25-02 6.14 1,832,016 1,831,980
Countrywide Home Loan
Company Guaranty
06-15-04 6.85 12,000,000 11,643,719
CSC Holdings
Sr Sub Deb
04-01-23 9.88 5,000,000 5,225,000
Ford Capital
(U.S. Dollar)
05-15-02 9.88 5,000,000(c) 5,256,308
Household Finance
04-01-00 9.55 6,500,000 6,512,959
LaBranche
03-01-07 12.00 4,000,000(d) 3,980,000
Ohio Savings Capital
Company Guaranty
06-03-27 9.50 5,000,000(d) 4,998,622
Osprey Trust/Osprey 1
01-15-03 8.31 8,100,000(d) 8,092,576
Total 54,609,081
Furniture & appliances (0.3%)
Interface
Sr Sub Nts Series B
11-15-05 9.50 5,000,000 4,525,000
Health care (0.2%)
Alkermes
Cv Sub Nts
02-15-07 3.75 360,000(d) 523,350
Alpharma
Cv Sr Sub Nts
06-01-06 3.00 835,000(g) 1,008,263
06-01-06 3.00 160,000 191,776
Centocor
Cv Sub Deb
02-15-05 4.75 620,000 689,750
Inhale Theraptic Systems
Cv Sub Nts
02-08-07 5.00 710,000(d) 995,775
Total 3,408,914
Health care services (0.9%)
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 2,500,000 2,037,500
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 5,275,000 2,373,750
Sunrise Assisted Living
Cv Sub Nts
06-15-02 5.50 1,450,000 1,100,188
Tenet Healthcare
Sr Sub Nts Series B
12-01-08 8.13 10,500,000 9,607,500
Total 15,118,938
Industrial equipment & services (0.8%)
Clark Equipment
03-01-01 9.75 5,000,000 5,110,642
Laidlaw
(U.S. Dollar)
05-15-06 7.65 10,000,000(c) 7,975,390
Total 13,086,032
Insurance (1.5%)
Americo Life
Sr Sub Nts
06-01-05 9.25 4,500,000 4,483,125
Executive Risk Capital
Company Guaranty Series B
02-01-27 8.68 3,500,000 3,470,376
Nationwide CSN Trust
02-15-25 9.88 10,500,000(d) 11,149,047
New England Mutual
02-15-24 7.88 5,000,000(d) 4,933,466
Total 24,036,014
Leisure time & entertainment (3.1%)
Activision
Cv Sub Nts
01-01-05 6.75 370,000 328,838
AMC Entertainment
Sr Sub Nts
02-01-11 9.50 5,000,000 3,775,000
Horseshoe Gaming Holding
Company Guaranty
05-15-09 8.63 4,500,000 4,140,000
Regal Cinemas
Sr Sub Nts
12-15-10 8.88 10,000,000 6,200,000
Time Warner
08-15-04 7.98 1,500,000 1,516,315
08-15-06 8.11 3,000,000 3,047,750
08-15-07 8.18 3,000,000 3,088,831
02-01-24 7.57 10,000,000 9,513,254
Sr Nts
01-15-28 6.95 5,000,000 4,426,887
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 2,000,000 1,380,000
Trump Holdings & Funding
Sr Nts
06-15-05 15.50 2,500,000 2,000,000
United Artists Theatres
Series 1995A
07-01-15 9.30 4,611,691 3,235,240
Vail Resorts
Company Guaranty
05-15-09 8.75 7,000,000 6,265,000
Total 48,917,115
Media (4.9%)
Australis Media
(U.S. Dollar)
11-01-00 14.00 292,984(b,c) 270,805
(U.S. Dollar) Zero Coupon
05-15-03 15.75 10,081,770(b,c,f) 1,818
Charter Communications Holdings/Charter Capital
Sr Nts
01-15-10 10.25 5,000,000(d) 4,975,000
Comcast Cable Communications
11-15-08 6.20 6,100,000 5,469,583
Cox Enterprises
06-15-09 7.38 10,000,000(d) 9,671,500
CSC Holdings
Sr Nts Series B
07-15-09 8.13 6,600,000 6,496,783
Sr Sub Debs
05-15-16 10.50 10,000,000 11,049,999
Interpublic Group
Cv Sub Nts
06-01-06 1.87 910,000 834,925
Lamar Media
Company Guaranty
09-15-07 8.63 3,000,000 2,872,500
Lenfest Communications
Sr Nts
02-15-08 7.63 5,500,000 5,358,705
News America Holdings
10-15-12 10.13 10,000,000 10,862,582
Outdoor Systems
Company Guaranty
06-15-07 8.88 3,245,000 3,309,900
Rogers Cablesystems
(Canadian Dollar)
01-15-14 9.65 2,700,000(c) 1,964,686
Telewest Communication
(British Pound) Cv
02-19-07 5.25 420,000(c,d) 955,554
(U.S. Dollar) Zero Coupon Sr Disc Nts
04-15-04 9.25 4,275,000(c,d,f) 2,565,000
Time Warner Entertainment
Sr Nts
07-15-33 8.38 2,500,000 2,596,258
Veninfotel
(U.S. Dollar) Cv Pay-in-kind
03-01-02 10.00 6,339,375(c,g,n) 9,509,063
Total 78,764,661
Metals (1.4%)
Alcan Aluminum
(U.S. Dollar)
01-15-22 8.88 6,750,000(c) 7,018,934
EnviroSource
Sr Nts
06-15-03 9.75 575,000 391,000
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 3,752,643(c,d) 3,602,537
Inco
(U.S. Dollar) Cv
03-15-16 7.75 3,010,000(c) 2,468,200
WMC Finance USA
(U.S. Dollar)
11-15-13 7.25 10,000,000(c) 9,285,350
Total 22,766,021
Miscellaneous (2.9%)
Bistro Trust
Sub Nts
12-31-02 9.50 10,000,000(d) 9,318,000
Colonial Capital
Company Guaranty Series A
01-15-27 8.92 3,000,000 2,702,475
Continucare
Cv Sr Sub Nts
10-31-02 7.00 1,000,000(d) 125,000
Delphes 2
(U.S. Dollar)
05-05-09 7.75 3,200,000(c,d) 2,986,016
Equinix
12-01-07 13.00 2,000,000 2,060,000
FCB/NC Capital
Company Guaranty
03-01-28 8.05 4,625,000 4,188,668
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 7,500,000(c) 6,787,500
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 3,600,000(c,d) 1,566,000
ISG Resources
04-15-08 10.00 2,150,000 1,918,875
Network Associates
Zero Coupon Cv Sub Deb
02-13-18 3.24 3,250,000(e) 1,210,625
NSM Steel
Company Guaranty
02-01-06 12.00 1,585,165(b,d) 95,110
02-01-08 12.25 5,300,000(b,d) 106,000
Omega Cabinets
Sr Sub Nts
06-15-07 10.50 3,310,000 3,310,000
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 1,775,000 1,597,500
Talton Holdings
Company Guaranty Sr Nts Series B
06-30-07 11.00 3,255,000 2,896,950
Teleglobe
(U.S. Dollar) Company Guaranty
07-20-29 7.70 6,000,000(c) 5,815,200
Total 46,683,919
Multi-industry conglomerates (2.0%)
Jordan Inds
Sr Nts Series D
08-01-07 10.38 3,500,000 3,465,000
Metromedia Intl Group
Sr Disc Nts Series B
09-30-07 10.50 7,282,500 3,568,425
Packaged Ice
Company Guaranty Series B
02-01-05 9.75 6,375,000 5,673,750
USI America Holdings
Company Guaranty
10-15-03 7.13 10,000,000 9,662,330
Sr Nts Series B
12-01-06 7.25 5,000,000 4,694,380
Westinghouse Electric
06-01-01 8.88 5,000,000 5,059,764
Total 32,123,649
Paper & packaging (2.7%)
Chesapeake
05-01-03 9.88 5,000,000 5,099,950
Crown Cork & Seal
04-15-23 8.00 5,000,000 4,419,936
Crown Paper
Sr Sub Nts
09-01-05 11.00 3,450,000 1,621,500
Doman Inds
(U.S. Dollar)
03-15-04 8.75 3,000,000(c) 2,613,750
Gaylord Container
Sr Nts
06-15-07 9.75 2,200,000 1,991,000
Sr Nts Series B
06-15-07 9.38 3,000,000 2,692,500
Graham Packaging/GPC Capital
Company Guaranty Series B
01-15-08 8.75 2,500,000 2,237,500
Owens-Illinois
Sr Nts
05-15-04 7.85 5,000,000 4,798,138
Packaging Corp of America
Company Guaranty
04-01-09 9.63 3,220,000 3,228,050
Pactiv
06-15-17 8.13 6,000,000 5,696,879
Repap New Brunswick
(U.S. Dollar) Sr Nts
06-01-04 9.00 4,500,000(c) 4,348,125
Silgan Holdings
06-01-09 9.00 4,125,000 3,990,938
Total 42,738,266
Restaurants & lodging (0.2%)
Domino's
Company Guaranty Series B
01-15-09 10.38 3,275,000 3,078,500
Retail (1.8%)
Costco Companies
Zero Coupon Cv Sub Nts
08-19-17 3.50 437,000(e) 496,541
Dayton Hudson
12-01-22 8.50 3,000,000 3,047,004
Eye Care Centers of America
Company Guaranty
05-01-08 9.13 4,000,000 2,240,000
Kroger
Sr Nts
07-15-06 8.15 3,000,000 3,046,961
09-15-29 8.00 9,000,000 8,758,980
Wal-Mart CRAVE Trust
07-17-06 7.00 10,946,773(d) 10,493,030
Total 28,082,516
Textiles & apparel (0.3%)
VF Corp
05-01-01 9.50 5,000,000 5,126,137
Transportation (0.3%)
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-07 9.50 2,290,000(c) 732,800
Hermes Europe RailTel
(U.S. Dollar) Sr Nts
01-15-09 10.38 3,500,000(c) 3,272,500
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 11.50 4,140,000(c,d) 1,573,200
Total 5,578,500
Utilities -- electric (7.0%)
Boston Edison
06-01-20 9.88 5,000,000 5,248,781
Calpine
Sr Nts
04-15-06 7.63 9,400,000 8,930,000
Cleveland Electric Illuminating
07-01-00 7.19 5,000,000 5,001,655
07-01-04 7.67 2,000,000 1,972,544
1st Mtge Series B
05-15-05 9.50 11,000,000 11,286,721
CMS Energy
Sr Nts
05-15-02 8.13 5,000,000 4,952,273
Connecticut Light & Power
1st Mtge Series C
06-01-02 7.75 5,000,000 4,977,857
Edison Mission Energy
Sr Nts
06-15-09 7.73 8,600,000(d) 8,476,659
Hydro-Quebec
(U.S. Dollar) Local Govt Guaranty Series 1989HH
12-01-29 8.50 20,000,000(c) 21,484,305
Midland Cogeneration
Series 1991-C
07-23-02 10.33 949,991 985,996
Midland Funding
Series 1994-C
07-23-02 10.33 818,348 849,363
Series A
07-23-05 11.75 5,000,000 5,471,915
NRG Northeast Generating
12-15-04 8.06 2,000,000(d) 2,008,620
06-15-15 8.84 2,000,000(d) 2,017,940
Sithe Independence Funding
Series A
12-30-13 9.00 7,500,000 7,635,916
Texas Utilities Electric
Medium-term Nts 1st Mtge Series B
03-01-02 9.70 6,000,000 6,250,411
Texas-New Mexico Power
1st Mtge Series U
09-15-00 9.25 3,500,000 3,530,170
TXU Electric Capital
Company Guaranty
01-30-37 8.18 10,000,000 9,634,112
Total 110,715,238
Utilities -- gas (0.9%)
El Paso Energy
Sr Nts
05-16-09 6.75 5,500,000 5,121,565
Sr Nts Series B
07-15-01 6.63 8,675,000 8,549,299
Total 13,670,864
Utilities -- telephone (8.0%)
AT&T Canada
(U.S. Dollar) Sr Nts
11-01-08 10.63 4,000,000(c) 4,480,000
Bell Atlantic
08-01-31 9.00 7,500,000 7,865,252
Bell Atlantic Financial Services
Cv
09-15-05 4.25 626,000(d) 916,082
Bell Telephone of Pennsylvania
03-15-33 7.38 10,000,000 9,222,875
BellSouth Capital Funding
02-15-30 7.88 12,000,000 11,964,995
COLT Telecom Group
(European Monetary Unit)
03-29-06 2.00 275,000(c,d) 735,257
France Telecom
(European Monetary Unit) Cv
11-29-04 4.13 1,130,000(c) 1,299,486
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 4,135,000(b) 5,169
Global Crossing Holdings
Sr Nts
11-15-09 9.50 1,650,000(d) 1,596,375
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 5,600,000 5,236,000
06-01-08 8.60 2,500,000 2,300,000
03-01-09 9.50 5,850,000 5,586,750
Zero Coupon Sr Disc Nts
05-15-01 8.97 1,000,000(f) 942,500
Level 3 Communications
03-15-08 11.00 2,600,000(d) 2,606,500
03-15-10 6.00 720,000 741,600
McLeod USA
Sr Nts
02-15-09 8.13 3,000,000 2,692,500
MetroNet Communications
(U.S. Dollar) Zero Coupon Sr Disc Nts
06-15-03 9.95 3,800,000(c,f) 3,002,000
Nextel Communications
11-15-09 9.38 4,500,000 4,336,875
Cv Sr Nts
01-15-10 5.25 700,000(d) 778,750
Primus Telecomm Group
02-15-07 5.75 1,150,000(d) 1,196,000
Sr Nts
01-15-09 11.25 3,000,000 2,850,000
Qwest Communications Intl
Sr Nts Series B
11-01-08 7.25 1,750,000 1,663,800
11-01-08 7.50 6,250,000 6,063,948
Zero Coupon Sr Disc Nts Series B
02-01-03 8.29 7,000,000(f) 5,355,000
Rhythms NetConnections
Sr Nts
02-15-10 14.00 2,250,000(d) 2,227,500
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 2,150,000(c) 2,085,500
Sprint Capital
Company Guaranty
11-15-08 6.13 10,000,000 8,973,499
05-01-09 6.38 7,000,000 6,368,320
U S WEST Capital Funding
Company Guaranty
07-15-28 6.88 9,250,000 8,060,892
U S WEST Communications
11-10-26 7.20 6,000,000 5,323,637
United Pan-Europe Communications
(U.S. Dollar) Sr Nts
02-01-10 11.25 3,225,000(c,d) 3,249,188
02-01-10 11.50 1,925,000(c,d) 1,934,625
Vodafone AirTouch
(U.S. Dollar)
02-15-10 7.75 5,900,000(c,d) 5,868,022
Total 127,528,897
Municipal bond (0.4%)
New Jersey Economic Development
Authority State Pension Funding
Revenue Bond (MBIA Insured)
02-15-29 7.43 7,000,000(h) 6,850,970
Total bonds
(Cost: $1,584,258,432) $1,515,547,939
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP VP - Bond Fund
Common stocks (0.4%)
Issuer Shares Value(a)
BayCorp Holdings 28(b) $529
<S> <C> <C>
Celcaribe 512,190(b,d) 1,024,380
Intermedia Communications 3,453(b) 218,618
PhoneTel Technologies 646,000(b) 1,090,125
Price Communications 148,076(b) 3,535,314
Specialty Foods 15,000(b) 3,750
Wilshire Financial Services Group 617,590(b) 733,388
Total common stocks
(Cost: $15,132,264) $6,606,104
Preferred stocks & other (1.9%)
Issuer Shares Value(a)
Adelphia Communications
5.50% Cv Series D 3,775 $626,650
Bar Technologies
Warrants 4,500 4,500
Bell Technology
Warrants 5,410 3,895,200
Calpine Capital Trust
5.75% Cv 9,800 842,800
Coastal
6.63% Cv PRIDES 30,800(o) 785,400
Coltec Capital
5.25% Cv 10,800 357,750
Cox Communications
7.00% Cm Cv PRIDES 11,400(o) 706,088
CVS
6.00% Cv ACES 10,800(i) 702,000
Dairy Mart
Warrants 10,000 3,500
Dobson Communications
13.00% Pay-in-kind 3,304(b,n) 3,585,202
Emmis Communications
6.25% Series A 12,400 683,550
Enron
7.50% Cv 18,200 298,025
Georgia-Pacific Group
7.50% Cv 12,750 494,859
Geotek Communications
Warrants 250,000(k) --
Global Crossing
6.38% Cv 6,400(d) 755,200
Global TeleSystems Group
7.25% Cm Cv 5,600(d) 243,600
7.25% Cm Cv 9,460 411,510
Ingersoll-Rand
6.75% Cv PRIDES 28,300(o) 544,775
Intermedia Communications
7.00% Cm Cv Series F 21,592 858,284
7.00% Cv Series F 18,956(d) 753,517
13.50% Pay-in-kind Series B 3,000 2,985,000
Kerr-McGee
5.50% Cv 9,900 355,163
KMC Telecom Holdings
Warrants 3,000 9,000
Lincoln Natl
7.75% Cm Cv 28,600 471,900
McKesson Financing Trust
5.00% Cv 17,600(b) 605,000
Nakornthai Strip Mill
Warrants 3,355,391 3
Nextel Communications
13.00% Pay-in-kind Series D 2,102(b,n) 2,249,140
Paxson Communications
12.50% Pay-in-kind Exchangeable 48,746(b,n) 5,093,904
PLD Telekom
Warrants 10,000 450
PSINet
Cv Series C 7,200 576,450
Sovereign Bancorp
7.50% Cv 15,700(b) 753,600
Suiza Capital
5.50% Cv 20,900 744,563
Telehub Communications
Warrants 2,500 1,250
Unifi Communications
Warrants 7,000 70
Wendys Financing
5.00% Cm Cv Series A 11,600 471,250
Total preferred stocks & other
(Cost: $28,018,150) $30,869,153
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (2.5%)
Issuer Annualized Amount
Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (2.4%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C>
03-10-00 5.64% $12,600,000 $12,580,294
03-22-00 5.81 400,000 398,577
03-29-00 5.66 5,200,000 5,175,201
04-14-00 5.73 10,200,000 10,127,452
04-24-00 5.78 1,300,000 1,288,222
Federal Home Loan Mtge Corp Disc Nts
03-07-00 5.66 1,200,000 1,198,682
03-15-00 5.66 2,000,000 1,995,292
05-11-00 5.90 5,200,000 5,138,120
Total 37,901,840
Commercial paper (0.1%)
Delaware Funding
03-24-00 5.77% $900,000 $896,550
Toyota Motor Credit
03-01-00 5.35 1,200,000 1,199,822
Total 2,096,372
Total short-term securities
(Cost: $40,007,466) $39,998,212
Total investments in securities
(Cost: $1,667,416,312)(r) $1,593,021,408
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 29,
2000, the value of foreign securities represented 11.60% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(g) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 29, 2000, is as follows:
Security Acquisition Cost
dates
Alpharma*
<S> <C> <C>
3.00% Cv Sr Sub Nts 2006 10-14-99 thru 02-24-00 $919,980
Veninfotel
(U.S. Dollar) 10.00% Cv Pay-in-kind 2002 03-05-97 thru 03-01-99 7,441,875
Voicestream Wireless*
10.38% Sr Nts 2009 11-04-99 thru 01-20-00 6,252,500
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(h) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue:
MBIA -- Municipal Bond Investors Assurance
(i) ACES (Automatically Convertible Equity Securities) are structured as
convertible preferred securities. Investors receive an enhanced yield but based
upon a specific formula, potential appreciation is limited. ACES pay dividends,
have voting rights, are noncallable for at least three years and upon maturity,
convert into shares of common stock.
(j) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 7 to the financial statements):
Type of security Notional amount
Sales contracts U.S. Treasury Notes, March 2000, 5-year notes $80,000,000
U.S. Treasury Notes, June 2000, 10-year notes 35,000,000
(k) Negligible market value.
(l) Security is partially or fully on loan. See Note 5 to the financial
statements.
(m) Adjustable rate mortgage; interest rate varies to reflect current market
conditions; rate shown is the effective rate on Feb. 29, 2000.
(n) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(o) PRIDES (Preferred Redeemable Increased Dividend Equity Securities) are
structured as convertible preferred securities. Investors receive an enhanced
yield but based upon a specific formula, potential appreciation is limited.
PRIDES pay dividends, have voting rights, are noncallable for three years and
upon maturity, convert into shares of common stock.
(p) At Feb. 29, 2000, the cost of securities purchased, including interest
purchased, on a when-issued basis was $20,113,542.
(q) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 29, 2000.
(r) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $1,667,416,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $31,961,000
Unrealized depreciation (106,356,000)
Net unrealized depreciation $(74,395,000)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Capital Resource Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (94.2%)
Issuer Shares Value(a)
Aerospace & defense (0.6%)
<S> <C> <C>
Honeywell Intl 750,000 $36,093,750
Banks and savings & loans (0.8%)
State Street 660,000 48,097,500
Beverages & tobacco (1.1%)
Coca-Cola 1,400,000 67,812,500
Building materials & construction (1.1%)
Weyerhaeuser 1,250,000 64,140,625
Communications equipment & services (2.9%)
Covad Communications Group 400,000(b) 36,100,000
Motorola 800,000 136,400,000
Total 172,500,000
Computers & office equipment (18.4%)
America Online 500,000(b) 29,500,000
BMC Software 900,000(b) 41,400,000
Cisco Systems 1,400,000(b) 185,062,500
Computer Sciences 1,000,000(b) 78,812,500
Electronic Data Systems 1,000,000 64,750,000
EMC 600,000(b) 71,400,000
EQUANT 500,000(b,c) 55,875,000
Exodus Communications 300,000(b) 42,712,500
First Data 1,500,000 67,500,000
Hewlett-Packard 100,000 13,450,000
Microsoft 2,400,000(b) 214,499,999
Novell 2,000,000(b) 66,125,000
Solectron 1,421,000(b) 93,075,500
Yahoo! 350,000(b) 55,890,625
Total 1,080,053,624
Electronics (14.7%)
Corning 1,300,000 244,400,000
Intel 1,600,000 180,800,000
Jabil Circuit 1,000,000(b) 69,437,500
JDS Uniphase 300,000(b) 79,125,000
Teradyne 1,400,000(b) 121,800,000
Texas Instruments 1,000,000 166,500,000
Total 862,062,500
Energy (4.7%)
Anadarko Petroleum 1,000,000 30,750,000
Chevron 750,000 56,015,625
Exxon Mobil 1,700,000 128,031,250
Texaco 1,350,000 64,040,625
Total 278,837,500
Financial services (4.3%)
Citigroup 1,875,000 96,914,063
Kansas City Southern Inds 400,000 31,500,000
Morgan Stanley, Dean Witter, Discover & Co 1,800,000 126,787,500
Total 255,201,563
Health care (10.0%)
American Home Products 850,000 36,975,000
Bristol-Myers Squibb 1,000,000 56,812,500
Guidant 800,000(b) 53,900,000
Immunex 470,000(b) 92,795,625
Medtronic 1,500,000 72,656,250
Merck & Co 1,200,000 73,875,000
Mylan Laboratories 1,250,000 28,750,000
Pfizer 1,750,000 56,218,750
Schering-Plough 520,000 18,135,000
Teva Pharmaceutical Inds ADR 730,000(c) 31,481,250
Warner-Lambert 750,000 64,171,875
Total 585,771,250
Household products (2.6%)
Colgate-Palmolive 1,900,000 99,156,250
Kimberly-Clark 1,100,000 56,856,250
Total 156,012,500
Industrial equipment & services (2.3%)
Caterpillar 351,300 12,317,456
Illinois Tool Works 1,500,000 77,531,250
Ingersoll-Rand 1,200,000 45,975,000
Total 135,823,706
Insurance (1.7%)
ACE 621,000(c) 11,100,375
American Intl Group 1,000,000 88,437,500
Total 99,537,875
Leisure time & entertainment (0.9%)
Disney (Walt) 1,500,000 50,250,000
Media (3.7%)
Clear Channel Communications 1,000,000(b) 66,625,000
Comcast Special Cl A 1,500,000 63,750,000
Infinity Broadcasting Cl A 2,800,000(b) 89,425,000
Total 219,800,000
Metals (0.5%)
Alcoa 400,000 27,400,000
Miscellaneous (0.3%)
Akamai Technologies 75,000(b,e) 19,593,750
Multi-industry conglomerates (5.6%)
General Electric 1,600,000 211,500,000
Minnesota Mining & Mfg 400,000 35,250,000
Tyco Intl 2,200,000(c) 83,462,500
Total 330,212,500
Paper & packaging (1.6%)
Intl Paper 1,550,000 57,059,375
Willamette Inds 1,149,800 39,021,338
Total 96,080,713
Restaurants & lodging (0.9%)
Wendy's Intl 3,500,000 55,125,000
Retail (9.8%)
Circuit City Stores-Circuit City Group 1,900,000 76,712,500
Costco Wholesale 1,200,000(b) 59,550,000
CVS 1,250,000 43,750,000
Gap 1,600,000 77,300,000
Home Depot 1,500,000 86,718,750
Kohl's 1,000,000(b) 75,812,500
Safeway 1,000,000(b) 38,562,500
Target 1,000,000 59,000,000
Wal-Mart Stores 1,300,000 63,293,750
Total 580,700,000
Utilities -- gas (2.2%)
Enron 1,850,000 127,650,000
Utilities -- telephone (3.5%)
Allegiance Telecom 450,000(b) 44,493,750
AT&T 1,800,000 88,987,500
Level 3 Communications 145,200(b) 16,534,650
MCI WorldCom 1,300,000(b) 58,012,500
Total 208,028,400
Total common stocks
(Cost: $3,738,639,168) $5,556,785,256
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (5.3%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (4.1%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C>
03-10-00 5.64% $2,700,000 $2,695,777
03-17-00 5.63 17,500,000 17,453,557
04-24-00 5.78 12,500,000 12,386,753
04-28-00 5.80 50,000,000 49,513,793
Federal Home Loan Mtge Corp Disc Nts
03-02-00 5.77 300,000 299,903
03-03-00 5.71 4,500,000 4,497,859
03-07-00 5.66 28,300,000 28,268,908
03-07-00 5.68 600,000 599,329
03-21-00 5.82 400,000 398,647
03-29-00 5.71 700,000 696,662
04-04-00 5.77 25,300,000 25,158,810
Federal Natl Mtge Assn Disc Nts
03-30-00 5.73 4,000,000 3,979,943
04-03-00 5.76 7,300,000 7,260,529
04-10-00 5.73 10,000,000 9,935,196
04-11-00 5.72 28,600,000 28,410,474
04-20-00 5.80 2,100,000 2,082,008
05-25-00 5.92 50,000,000 49,289,305
Total 242,927,453
Commercial paper (1.2%)
AEGON Funding
05-26-00 6.01 12,200,000(d) 12,024,574
BBV Finance (Delaware)
04-18-00 5.89 7,600,000 7,539,588
Bell Atlantic Finance Services
04-26-00 5.93 2,100,000 2,080,482
Cargill Global Funding
04-27-00 5.92 1,400,000(d) 1,386,566
Ford Motor Credit
03-07-00 5.59 4,600,000 4,594,857
GTE Funding
03-22-00 5.82 6,200,000 6,178,025
Paccar Financial
05-25-00 6.01 2,000,000 1,971,572
Sheffield Receivables
03-27-00 5.82 6,000,000(d) 5,973,945
03-27-00 5.82 19,100,000(d) 19,017,059
Variable Funding Capital
03-16-00 5.77 7,200,000(d) 7,181,200
Windmill Funding
03-10-00 5.77 1,100,000(d) 1,098,179
04-05-00 5.90 1,000,000(d) 994,060
Total 70,040,107
Total short-term securities
(Cost: $313,054,328) $312,967,560
Total investments in securities
(Cost: $4,051,693,496)(f) $5,869,752,816
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000, the
value of foreign securities represented 3.08% of net assets.
(d) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(e) Security is partially or fully on loan. See Note 5 to the financial
statements.
(f) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $4,051,694,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $2,024,678,000
Unrealized depreciation (206,619,000)
------------
Net unrealized appreciation $1,818,059,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Cash Management Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
U.S. government agencies (3.3%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Federal Home Loan Mtge Corp Disc Nts
<S> <C> <C> <C>
03-07-00 5.61% $10,900,000 $10,889,826
03-21-00 5.82 6,000,000 5,980,667
Federal Natl Mtge Corp Disc Nt
03-02-00 5.60 8,000,000 7,998,756
Total U.S. government agencies
(Cost: $24,869,249) $24,869,249
Certificates of deposit (13.4%)
Canadian Imperial Bank Yankee
03-09-00 5.82% $5,500,000 $5,500,000
03-10-00 5.82 6,600,000 6,600,000
03-21-00 5.80 5,000,000 5,000,000
03-23-00 5.80 5,000,000 5,000,000
03-23-00 5.81 5,000,000 5,000,000
03-27-00 5.82 5,000,000 5,000,000
03-30-00 5.81 3,000,000 3,000,000
Societe Generale North America
03-08-00 5.78 1,600,000 1,600,000
03-16-00 6.06 5,000,000 5,000,000
04-04-00 5.90 5,000,000 5,000,000
04-06-00 5.88 5,000,000 5,000,000
04-07-00 5.91 5,000,000 5,000,000
06-30-00 6.00 5,000,000 5,000,000
Westdeutsche Landesbank Yankee
03-22-00 6.15 5,000,000 5,000,000
03-28-00 5.81 5,000,000 5,000,000
03-30-00 6.18 5,000,000 5,000,000
04-13-00 5.90 2,000,000 2,000,000
04-20-00 5.91 5,000,000 5,000,000
05-16-00 6.03 4,000,000 4,000,000
05-23-00 6.02 2,000,000 2,000,000
05-26-00 6.03 4,000,000 4,000,000
07-12-00 6.08 5,000,000 5,000,000
Total certificates of deposit
(Cost: $98,700,000) $98,700,000
Commercial paper (78.8%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
Automotive & related (7.0%)
DaimlerChrysler North America
03-13-00 6.07% $5,000,000 $4,989,900
03-15-00 5.98 5,100,000 5,088,160
04-10-00 5.86 5,000,000 4,967,667
04-12-00 5.88 6,200,000 6,157,757
04-17-00 5.88 5,000,000 4,961,878
04-27-00 5.89 4,000,000 3,963,013
Ford Motor Credit
03-03-00 5.53 4,700,000 4,698,556
03-07-00 5.59 9,400,000 9,391,257
04-28-00 5.92 9,300,000 9,212,198
Total 53,430,386
Banks and savings & loans (18.8%)
Abbey Natl North America
04-10-00 5.87 8,400,000 8,345,587
04-18-00 5.89 5,000,000 4,961,067
ABN Amro Canada
04-07-00 5.90 5,500,000 5,466,875
04-12-00 5.90 5,000,000 4,965,817
04-25-00 5.89 5,000,000 4,955,389
04-27-00 5.91 3,000,000 2,972,165
05-24-00 6.01 5,000,000 4,930,817
07-17-00 6.10 5,000,000 4,885,843
ANZ (Delaware)
04-13-00 5.87 5,000,000 4,965,182
Bank One Canada
03-07-00 5.78 5,500,000 5,494,711
03-14-00 5.80 8,500,000 8,482,227
03-15-00 5.80 5,000,000 4,988,742
03-20-00 5.78 4,000,000 3,987,840
04-19-00 5.89 4,400,000 4,365,025
05-25-00 6.01 5,000,000 4,929,993
BBV Finance (Delaware)
03-01-00 5.80 4,500,000 4,500,000
03-06-00 5.79 4,100,000 4,096,703
Deutsche Bank Financial
03-31-00 5.74 9,500,000 9,454,795
04-03-00 5.73 10,000,000 9,947,749
04-05-00 5.80 5,000,000 4,971,951
04-12-00 5.85 5,000,000 4,966,079
Dresdner US Finance
03-14-00 5.76 4,400,000 4,390,872
03-28-00 5.77 5,600,000 5,575,871
04-13-00 5.86 5,000,000 4,965,272
04-27-00 5.88 5,000,000 4,953,846
First Union Natl Bank
05-19-00 5.35 1,000,000 1,000,000
Societe Generale North America
04-20-00 5.88 2,900,000 2,876,518
Westpac Capital
07-18-00 6.05 2,000,000 1,954,362
Total 142,351,298
Broker dealers (18.1%)
Bear Stearns
03-20-00 5.78 2,000,000 1,993,920
04-13-00 5.51 2,000,000 1,986,933
04-19-00 5.85 3,100,000 3,075,527
04-21-00 5.58 1,000,000 992,152
04-21-00 5.91 5,000,000 4,958,492
05-16-00 6.01 5,000,000 4,937,406
05-18-00 6.01 5,000,000 4,935,758
06-01-00 6.05 3,000,000 2,954,307
02-26-01 5.93 5,000,000(c) 5,000,000
Goldman Sachs Group
03-17-00 5.76 4,000,000 3,989,778
03-23-00 5.77 3,000,000 2,989,458
03-28-00 5.77 5,000,000 4,978,438
05-15-00 5.99 2,000,000 1,975,333
Merrill Lynch
04-05-00 5.86 5,000,000 4,971,660
04-06-00 5.89 6,000,000 5,964,840
04-17-00 5.92 5,000,000 4,961,682
04-20-00 5.91 5,000,000 4,959,306
04-26-00 5.91 3,000,000 2,972,653
05-12-00 6.00 2,700,000 2,667,978
05-22-00 6.01 5,000,000 4,932,464
Morgan Stanley, Dean Witter, Discover & Co
03-21-00 5.80 4,100,000 4,086,834
03-28-00 5.75 5,400,000 5,376,794
03-29-00 5.77 5,000,000 4,977,678
04-12-00 5.88 5,000,000 4,965,933
04-19-00 5.89 1,700,000 1,686,487
04-24-00 5.89 4,000,000 3,964,960
04-25-00 5.88 3,000,000 2,973,279
Salomon Smith Barney
03-03-00 5.80 5,000,000 4,998,389
03-13-00 5.82 3,100,000 3,093,996
04-18-00 5.92 4,000,000 3,968,693
04-20-00 5.90 4,200,000 4,165,875
04-26-00 5.92 5,000,000 4,954,344
04-28-00 5.91 2,000,000 1,981,150
05-17-00 6.00 4,900,000 4,837,955
05-22-00 6.01 5,000,000 4,932,464
Total 137,162,916
Communications equipment & services (0.6%)
BellSouth Capital Funding
04-05-00 5.77 4,200,000(b) 4,176,562
Energy (0.7%)
Chevron Transport
04-17-00 5.86 5,000,000(b) 4,962,008
Financial services (15.0%)
AEGON Funding
04-24-00 5.92 5,000,000(b) 4,955,975
06-01-00 6.01 4,800,000 4,727,381
Associates Corp North America
03-30-00 5.85 5,000,000 4,976,558
04-03-00 5.78 5,000,000 4,973,646
Associates First Capital
03-27-00 5.73 5,000,000 4,979,381
05-31-00 6.02 4,000,000 3,940,041
CIT Group Holdings
03-01-00 5.74 4,300,000 4,300,000
03-09-00 5.74 4,200,000 4,194,652
03-22-00 5.82 5,500,000 5,481,392
04-04-00 5.88 5,000,000 4,972,375
04-11-00 5.90 4,000,000 3,973,304
04-12-00 5.86 5,000,000 4,966,050
Falcon Asset
04-17-00 5.92 2,900,000(b) 2,877,776
GMAC
03-14-00 5.99 5,900,000 5,887,259
04-18-00 5.89 4,000,000 3,968,853
04-24-00 5.87 6,100,000 6,046,747
04-26-00 5.88 7,600,000 7,531,076
04-28-00 5.88 5,000,000 4,953,117
Household Finance
03-06-00 5.72 4,200,000 4,196,663
03-31-00 5.80 5,600,000 5,573,073
Intl Lease Finance
04-07-00 5.83 6,000,000 5,964,233
04-28-00 5.90 4,300,000 4,259,542
Paccar Financial
05-24-00 6.00 6,000,000 5,917,120
Total 113,616,214
Food (0.1%)
Cargill Global
03-10-00 5.29 1,000,000(b) 998,680
Household products (0.7%)
Procter & Gamble
03-24-00 5.82 5,000,000 4,981,472
Insurance (3.6%)
American General
04-19-00 5.88 5,900,000 5,853,182
American General Finance
03-31-00 5.80 6,900,000 6,866,823
04-12-00 5.87 9,200,000 9,137,424
04-24-00 5.92 5,600,000 5,550,692
Total 27,408,121
Metals (0.7%)
Alcoa
04-25-00 5.88 5,000,000 4,955,465
Multi-industry conglomerates (4.3%)
GE Capital Intl Funding
03-22-00 5.79 2,000,000(b) 1,993,268
03-31-00 5.78 5,000,000(b) 4,976,042
04-11-00 5.89 5,000,000(b) 4,966,688
04-26-00 5.89 5,000,000(b) 4,954,578
04-27-00 5.88 2,300,000(b) 2,278,769
05-05-00 5.99 3,000,000 2,967,879
05-19-00 6.02 4,000,000(b) 3,947,860
General Electric Capital
03-01-00 5.88 2,000,000 2,000,000
03-17-00 5.75 4,300,000 4,289,030
Total 32,374,114
Utilities -- electric (7.4%)
Natl Rural Utilities
03-08-00 6.06 4,000,000 3,995,294
03-24-00 5.94 10,000,000 9,962,178
03-27-00 6.02 5,000,000 4,978,369
03-28-00 6.04 5,000,000 4,977,463
03-29-00 6.03 6,200,000 6,171,067
Northern States Power
05-19-00 6.00 11,800,000 11,646,705
UBS Finance (Delaware)
03-06-00 5.72 5,000,000 4,996,028
03-10-00 5.73 4,800,000 4,793,136
04-06-00 5.85 5,000,000 4,970,900
Total 56,491,140
Utilities -- telephone (1.9%)
AT&T
03-16-00 5.71 5,000,000 4,988,125
03-20-00 5.73 4,800,000 4,785,535
GTE Funding
03-06-00 5.97 5,000,000 4,995,854
Total 14,769,514
Total commercial paper
(Cost: $597,677,890) $597,677,890
Letters of credit (5.6%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
ABN Amro-
Louis Dreyfus
03-20-00 5.82% $3,000,000 $2,990,817
Bank of America-
AES Hawaii
03-03-00 6.01 5,000,000 4,998,331
03-24-00 5.76 4,400,000 4,383,864
04-14-00 5.86 9,300,000 9,233,846
Dresdner Bank-
Louis Dreyfus
03-02-00 5.82 5,000,000 4,999,191
Toronto Dominion Bank-
Presbyterian Healthcare Services
03-08-00 5.75 4,000,000 3,995,536
United Bank Switzerland-
River Fuel Trust
03-02-00 5.77 4,400,000(b) 4,399,295
04-03-00 5.86 5,000,000(b) 4,973,279
Total letters of credit
(Cost: $39,974,159) $39,974,159
Total investments in securities
(Cost: $761,221,298)(d) $761,221,298
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements
(b) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(c) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 29, 2000.
(d) Also represents the cost of securities for federal income tax purposes at
Feb. 29, 2000.
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Diversified Equity Income Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (91.5%)
Issuer Shares
Value(a)
Aerospace & defense (2.0%)
<S> <C> <C>
Goodrich (BF) 2,695 $64,512
Honeywell Intl 534 25,699
Rockwell Intl 2,522 114,120
Total 204,331
Automotive & related (1.9%)
Ford Motor 2,448 101,898
General Motors 1,214 92,340
Total 194,238
Banks and savings & loans (8.9%)
Allied Capital 4,044 70,265
Bank of America 4,286 197,423
Bank of New York 3,105 103,435
Chase Manhattan 971 77,316
First Union 2,588 76,346
FleetBoston Financial 4,338 118,211
Mellon Financial 3,335 100,467
SLM Holding 1,393 43,618
Wells Fargo 3,819 126,266
Total 913,347
Building materials & construction (1.7%)
Fluor 2,730 77,634
Martin Marietta Materials 2,687 95,389
Total 173,023
Chemicals (2.1%)
Dow Chemical 411 44,594
Du Pont (EI) de Nemours 1,902 96,050
Imperial Chemical Inds 1,502(c) 46,562
Lyondell Petrochemical 3,864 33,086
Total 220,292
Communications equipment & services (2.1%)
Motorola 1,269 216,365
Computers & office equipment (6.9%)
BMC Software 1,030(b) 47,380
Compaq Computer 2,050 50,994
Electronic Data Systems 799 51,735
Equant 731(b,c) 81,689
First Data 1,131 50,895
Hewlett-Packard 681 91,595
NOVA 3,817(b) 88,030
Solectron 1,336(b) 87,508
Unisys 5,386(b) 161,243
Total 711,069
Energy (10.4%)
Chevron 3,340 249,456
Conoco Cl A 5,394 103,497
Conoco Cl B 1,543 30,378
ENI 14,700(b,c) 68,470
Exxon Mobil 4,188 315,408
FirstEnergy 1,843 34,441
Sunoco 3,825 94,430
Texaco 3,533 167,597
Total 1,063,677
Energy equipment & services (0.6%)
Halliburton 1,618 61,787
Financial services (13.1%)
Alliance Capital Management Holding LP 4,194 157,013
Citigroup 8,719 450,662
Kansas City Southern Inds 1,901 149,704
MBNA 7,259 165,142
Morgan Stanley, Dean Witter, Discover & Co 3,959 278,862
Providian Financial 1,949 126,320
Total 1,327,703
Food (1.8%)
Bestfoods 1,657 69,490
General Mills 2,018 66,468
Sara Lee 3,296 49,440
Total 185,398
Health care (4.2%)
American Home Products 1,961 85,304
Baxter Intl 1,315 71,668
Mylan Laboratories 4,957 114,010
Pharmacia & Upjohn 1,500 71,438
Warner-Lambert 1,044 89,327
Total 431,747
Household products (1.3%)
Colgate-Palmolive 2,516 131,304
Industrial equipment & services (2.3%)
Caterpillar 827 28,997
Illinois Tool Works 1,900 98,206
Parker-Hannifin 3,084 111,795
Total 238,998
Insurance (4.5%)
American Intl Group 3,261 288,395
Aon 2,878 60,258
Marsh & McLennan 1,440 111,420
Total 460,073
Media (4.1%)
Adelphia Communications Cl A 719(b) 39,500
CBS 4,730(b) 281,731
MediaOne Group 1,252(b) 98,282
Total 419,513
Multi-industry conglomerates (0.4%)
Emerson Electric 925 42,145
Paper & packaging (2.0%)
American Natl Can Group 5,866 58,660
Intl Paper 4,110 151,299
Total 209,959
Retail (4.8%)
Circuit City Stores-Circuit City Group 4,646 187,582
CVS 3,410 119,350
Target 3,218 189,862
Total 496,794
Transportation (0.7%)
Teekay Shipping 3,182(c) 68,413
Utilities -- electric (3.3%)
Carolina Power & Light 509 15,143
CMS Energy 1,853 31,038
Duke Energy 1,443 69,986
Edison Intl 2,711 71,332
New Century Energies 1,110 30,039
NiSource 2,068 26,755
Northern States Power 2,711 47,612
Texas Utilities 1,462 47,698
Total 339,603
Utilities -- gas (0.6%)
El Paso Energy 1,628 60,338
Utilities -- telephone (11.8%)
ALLTEL 410 23,780
AT&T 5,112 252,724
Bell Atlantic 3,026 148,085
BellSouth 3,132 127,629
Cable & Wireless 950(b,c) 19,738
Deutsche Telekom 300(c) 25,141
GTE 1,455 85,845
MCI WorldCom 3,406(b) 151,970
SBC Communications 5,786 219,868
Sprint 374 22,814
Sprint PCS 304(b) 15,732
Telefonica de Espana ADR 342(b,c) 29,647
U S WEST Communications Group 1,106 80,323
Total 1,203,296
Total common stocks
(Cost: $10,248,125) $9,373,413
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term security (4.9%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agency
Federal Natl Mtge Assn Disc Nt
<S> <C> <C> <C> <C> <C>
03-02-00 5.80% $500,000 $499,838
Total short-term security
(Cost: $499,919) $499,838
Total investments in securities
(Cost: $10,748,044)(d) $9,873,251
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000, the
value of foreign securities represented 3.31% of net assets.
(d) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $10,748,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $273,000
Unrealized depreciation (1,148,000)
----------
Net unrealized depreciation $(875,000)
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Extra Income Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Bonds (82.2%)
Issuer Coupon Principal Value(a)
rate amount
Aerospace & defense (1.5%)
BE Aerospace
Sr Sub Nts Series B
<S> <C> <C> <C> <C> <C>
03-01-08 8.00% $1,800,000 $1,530,000
Compass Aerospace
Company Guaranty Series B
04-15-05 10.13 1,720,000 774,000
Fairchild
Company Guaranty
04-15-09 10.75 4,950,000 2,722,500
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 1,060,000 1,075,900
Sequa
Sr Nts
08-01-09 9.00 3,500,000 3,237,500
Total 9,339,900
Automotive & related (3.4%)
EV Intl
Company Guaranty Series A
03-15-07 11.00 2,500,000 1,575,000
French (JL) Auto Casting
Company Guaranty Series B
06-01-09 11.50 2,600,000 2,626,000
Hayes Lemmerz Intl
Company Guaranty Series B
07-15-07 9.13 2,000,000 1,860,000
Lear
Company Guaranty Series B
05-15-09 8.11 4,000,000 3,721,200
MSX Intl
Company Guaranty
01-15-08 11.38 2,725,000 2,534,250
Oxford Automotive
Company Guaranty Series D
06-15-07 10.13 4,250,000 3,995,000
Penda
Sr Nts Series B
03-01-04 10.75 1,200,000 1,131,000
Venture Holdings Trust
Sr Nts Series B
07-01-05 9.50 4,250,000 3,867,500
Total 21,309,950
Banks and savings & loans (0.4%)
Sovereign Bancorp
Sr Nts
11-15-06 10.50 2,750,000 2,750,000
Beverages & tobacco (0.4%)
Canandaigua Brands
Company Guaranty
03-01-09 8.50 2,500,000 2,337,500
Chemicals (1.6%)
Allied Waste North America
Company Guaranty Series B
01-01-06 7.63 750,000 648,750
01-01-09 7.88 2,175,000 1,832,438
08-01-09 10.00 3,750,000 3,093,750
Lyondell Chemical
Series B
05-01-07 9.88 2,500,000 2,387,500
Sr Sub Nts
05-01-09 10.88 1,300,000 1,228,500
Sterling Chemicals
Company Guaranty Series B
07-15-06 12.38 1,000,000 1,030,000
Total 10,220,938
Commercial finance (0.2%)
Advance Holding
Zero Coupon Series B
04-15-03 12.88 1,900,000(g) 997,500
Communications equipment & services (13.4%)
AirGate PCS
Zero Coupon
10-01-04 13.50 3,300(g) 2,623,500
Birch Telecom
Sr Nts
06-15-08 14.00 3,000,000 3,030,000
Caprock Communications
Sr Nts Series B
07-15-08 12.00 3,000,000 3,067,500
Covad Communications Group
Sr Nts
02-15-09 12.50 2,000,000 2,010,000
Crown Castle Intl
Zero Coupon Sr Disc Nts
08-01-04 11.30 2,250,000(g) 1,383,750
DLJ Secured Loan Trust
Sr Secured Ctfs
07-07-07 10.13 2,000,000 2,000,000
Dobson/Sygnet Communications
Sr Nts
12-15-08 12.25 3,000,000 3,210,000
EchoStar DBS
Sr Nts
02-01-09 9.38 7,200,000 7,038,000
Esprit Telecom Group
(U.S. Dollar) Sr Nts
12-15-07 11.50 3,850,000(c) 3,715,250
06-15-08 10.88 2,000,000(c) 1,910,000
GST Equipment Funding
Sr Nts
05-01-07 13.25 750,000 753,750
GST Network Funding
Zero Coupon Sr Disc Nts
05-01-03 10.50 3,000,000(g) 1,485,000
GST Telecommunications
Sr Sub Nts
11-15-07 12.75 750,000 712,500
GT Group Telecom
(U.S. Dollar) Zero Coupon
02-01-05 13.25 5,400,000(c,d,g) 3,240,000
KMC Telecom Holdings
Sr Nts
05-15-09 13.50 3,000,000 3,060,000
Zero Coupon Sr Disc Nts
02-15-03 12.68 1,500,000(g) 862,500
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 600,000 570,000
NTL
Sr Nts Series B
02-15-07 10.00 2,000,000 2,005,000
Zero Coupon Sr Nts Series B
02-01-01 8.94 5,000,000(g) 4,650,000
NTL Communications
Zero Coupon Sr Nts Series B
10-01-03 12.38 1,500,000(g) 1,027,500
Orius Capital
Sr Sub Nts
02-01-10 12.75 1,100,000(d) 1,100,000
Price Communications Wireless
Company Guaranty Series B
12-15-06 9.13 4,700,000 4,700,000
Rhythms NetConnections
Sr Nts
04-15-09 12.75 1,750,000 1,688,750
02-15-10 14.00 2,250,000(d) 2,227,500
Spectrasite Holdings
Zero Coupon Sr Disc Nts
04-15-04 11.25 3,725,000(g) 2,179,125
Tele1 Europe
(U.S. Dollar) Sr Nts
05-15-09 13.00 1,000,000(c) 1,050,000
Telehub Communications
Zero Coupon Company Guaranty
07-31-01 13.88 3,000,000(g) 300,000
Triton Communications
Zero Coupon Company Guaranty
05-01-03 10.86 2,000,000(g) 1,445,000
Versatel Telecom
(European Monetary Unit)
12-17-04 4.00 510,000(c,d) 757,400
(U.S. Dollar) Sr Nts
05-15-08 13.25 3,100,000(c) 3,286,000
Vialog
Company Guaranty
11-15-01 12.75 3,720,000 2,883,000
Voicestream Wireless
Sr Nts
08-15-06 11.63 2,450,000 2,621,500
11-15-09 10.38 2,200,000(e) 2,274,250
Sr Nts Series A
08-15-06 11.63 2,000,000 2,140,000
Zero Coupon Sr Disc Nts
11-15-04 11.88 2,900,000(e,g) 1,812,500
Williams Communication Group
Sr Nts
10-01-09 10.88 2,500,000 2,550,000
Worldwide Fiber
Sr Nts
08-01-09 12.00 2,500,000(d) 2,556,250
Total 83,925,525
Computers & office equipment (2.5%)
Concentric Network
Sr Nts
12-15-07 12.75 1,600,000 1,716,000
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 3,250,000 1,239,063
Globix
Sr Nts
02-01-10 12.50 6,000,000(d) 5,970,000
PSINet
Sr Nts Series B
02-15-05 10.00 2,850,000 2,764,500
Verio
Sr Nts
04-01-05 10.38 500,000 495,000
12-01-08 11.25 3,250,000 3,363,750
Total 15,548,313
Electronics (0.4%)
Metromedia Fiber Network
Sr Nts Series B
11-15-08 10.00 2,250,000 2,233,125
Energy (2.6%)
Clark R&M
Sr Sub Nts
11-15-07 8.88 1,400,000 630,000
Energy Corp of America
Sr Sub Nts Series A
05-15-07 9.50 2,550,000 1,810,500
HS Resources
Sr Sub Nts Series B
11-15-06 9.25 1,000,000 962,500
Hurricane Hydrocarbons
(U.S. Dollar) Sr Nts
11-01-04 11.75 2,250,000(b,c,d) 1,690,313
Lodestar Holdings
Company Guaranty
05-15-05 11.50 5,565,000 1,669,500
Michael Petroleum
Sr Nts Series B
04-01-05 11.50 500,000(b) 225,000
Nuevo Energy
Sr Sub Nts Series B
06-01-08 9.50 2,000,000 1,950,000
Ocean Energy
Company Guaranty Series B
07-01-08 8.38 2,250,000 2,148,750
Petroleos Mexicanos
(U.S. Dollar) Series P
09-15-27 9.50 2,000,000(c) 2,032,500
Rayovac
Sr Sub Nts Series B
11-01-06 10.25 2,412,000 2,496,420
Roil
(U.S. Dollar)
12-05-02 12.78 816,000(c,d) 718,080
Total 16,333,563
Energy equipment & services (0.1%)
Seven Seas Petroleum
Sr Nts Series B
05-15-05 12.50 2,000,000 840,000
Financial services (2.4%)
AOA Holdings LLC
Sr Nts
06-01-06 10.38 2,500,000 2,484,375
Arcadia Financial
Sr Nts
03-15-07 11.50 4,830,000 5,041,000
Gemini Inds
12-23-01 13.50 1,507,500(b,e) 150,750
Indah Kiat Finance Mauritius
(U.S. Dollar) Company Guaranty
07-01-07 10.00 1,475,000(c) 1,003,000
LaBranche
03-01-07 12.00 4,000,000(d) 3,980,000
RBF Finance
Company Guaranty
03-15-09 11.38 2,060,000 2,183,600
Total 14,842,725
Food (0.4%)
Aurora Foods
Sr Sub Nts Series D
02-15-07 9.88 2,000,000 1,100,000
RAB Enterprises
Company Guaranty
05-01-05 10.50 2,400,000 1,656,000
Total 2,756,000
Health care (0.9%)
Alaris Medical
Zero Coupon Sr Disc Nts
08-01-03 11.12 4,000,000(g) 1,565,000
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 4,675,000 3,880,250
Total 5,445,250
Health care services (2.3%)
Fountain View
Company Guaranty Series B
04-15-08 11.25 950,000 703,000
Genesis Health Ventures
Sr Sub Nts
10-01-06 9.25 1,700,000 204,000
Hanger Orthopedic Group
Sr Sub Nts
06-15-09 11.25 1,700,000 1,377,000
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 4,500,000 3,667,500
Oxford Health Plans
Sr Nts
05-15-05 11.00 2,275,000 2,252,250
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 4,385,000 1,973,250
Physician Sales & Service
Company Guaranty
10-01-07 8.50 1,400,000 1,288,000
Tenet Healthcare
Sr Sub Nts Series B
12-01-08 8.13 2,950,000 2,699,250
Total 14,164,250
Household products (0.2%)
Scotts
Sr Sub Nts
01-15-09 8.63 1,200,000(d) 1,128,000
Industrial equipment & services (2.1%)
Blount
Company Guaranty
06-15-05 7.00 2,600,000 2,275,000
Fairfield Mfg
Sr Sub Nts
10-15-08 9.63 3,000,000 2,730,000
Grove Holdings/Capital
Zero Coupon
05-01-03 11.63 1,000,000(g) 100,000
Grove Inds LLC
05-01-10 14.50 835,924 50,155
Motor & Gears
Sr Nts Series D
11-15-06 10.75 5,250,000 5,171,250
Thermadyne Holdings
Zero Coupon
06-01-03 12.50 3,000,000(g) 1,290,000
Thermadyne Mfg
Company Guaranty
06-01-08 9.88 2,000,000 1,640,000
Total 13,256,405
Insurance (0.3%)
Americo Life
Sr Sub Nts
06-01-05 9.25 2,000,000 1,992,500
Leisure time & entertainment (6.1%)
Alliance Atlantis Communications
(U.S. Dollar) Sr Sub Nts
12-15-09 13.00 2,500,000(c) 2,453,125
AMC Entertainment
Sr Sub Nts
02-01-11 9.50 1,750,000 1,321,250
Coast Hotels & Casino
Company Guaranty
04-01-09 9.50 2,155,000 2,025,700
Hammons (JQ) Hotels
1st Mtge
02-15-04 8.88 2,500,000 2,243,750
Hollywood Casino Shreveport
1st Mtge
08-01-06 13.00 1,500,000(d) 1,612,500
Horseshoe Gaming Holding
Company Guaranty
05-15-09 8.63 4,000,000 3,680,000
Icon Health & Fitness
Company Guaranty
09-27-05 12.00 444,000(d) 266,400
Isle of Capri Casinos/Capital
1st Mtge Series B
08-31-04 13.00 2,750,000 2,997,500
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 2,000,000 2,000,000
Pinnacle Entertainment
Company Guaranty Series B
02-15-07 9.25 2,000,000 1,935,000
Premier Cruises
Sr Nts
03-15-08 11.00 2,000,000(h) --
Premier Parks
Sr Nts
04-01-06 9.25 2,100,000 1,984,500
06-15-07 9.75 2,300,000 2,208,000
Regal Cinemas
Sr Sub Nts
06-01-08 9.50 4,500,000 3,015,000
12-15-10 8.88 2,250,000 1,395,000
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 8,550,000 5,899,500
Trump Holdings & Funding
Sr Nts
06-15-05 15.50 1,200,000 960,000
United Artists Theatres
Series 1995A
07-01-15 9.30 2,720,905 1,908,796
Sr Sub Nts Series B
04-15-08 9.75 4,730,000 283,800
Total 38,189,821
Media (9.5%)
Adelphia Communications
Sr Nts
05-01-09 7.88 3,000,000 2,610,000
Sr Nts Series B
02-01-08 8.38 2,200,000 1,996,500
Zero Coupon Sr Nts Pay-in-kind Series B
02-15-04 9.50 60,991(f,j) 61,143
AMFM Operating
Pay-in-kind
10-31-06 12.63 1,060,700 1,198,591
Australis Holdings
(U.S. Dollar) Zero Coupon Sr Disc Nts
11-01-00 12.80 2,260,000(b,c,g) 22,600
Australis Media
(U.S. Dollar)
11-01-00 14.00 197,041(c) 182,125
(U.S. Dollar) Zero Coupon
05-15-00 12.25 4,500,000(b,c,g) 450
05-15-00 14.06 47,958(b,c,g) 480
Benedek Communications
Zero Coupon Sr Disc Nts
05-15-01 11.89 2,250,000(g) 2,075,625
Big City Radio
Zero Coupon Company Guaranty
03-15-01 11.25 2,000,000(g) 1,280,000
Bresnan Communications
Sr Nts Series B
02-01-09 8.00 1,450,000 1,457,250
Capstar Broadcasting
Sub Deb Pay-in-kind
07-01-09 12.00 1,123,600(j) 1,275,286
Zero Coupon Sr Disc Nts
02-01-02 7.49 1,000,000(g) 900,000
CBS Radio
Pay-in-kind Sub Deb
01-15-09 11.38 1,052,800(j) 1,158,080
Central Euro Media
(U.S. Dollar) Sr Nts
08-15-04 9.38 2,150,000(c) 886,875
Charter Communications Holdings/Charter Capital
Sr Nts
01-15-10 10.25 2,250,000(d) 2,238,750
Coaxial Communications/Phoenix
Company Guaranty
08-15-06 10.00 1,500,000 1,434,375
Golden Sky Systems
Company Guaranty Series B
08-01-06 12.38 1,500,000 1,657,500
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 3,000,000(c) 2,880,000
Outdoor Systems
Company Guaranty
06-15-07 8.88 5,165,000 5,268,299
Paxson Communications
Sr Sub Nts
10-01-02 11.63 4,550,000 4,692,188
Pegasus Media & Communications
Series B
07-01-05 12.50 1,500,000 1,612,500
Sr Nts Series B
10-15-05 9.63 5,180,000 5,024,600
Price Communications Wireless
Sr Sub Nts
07-15-07 11.75 2,500,000 2,712,500
Radio Unica
Zero Coupon Company Guaranty
08-01-02 11.74 2,000,000(g) 1,260,000
Regional Independent Medical
(U.S. Dollar) Sr Nts
07-01-08 10.50 2,600,000(c) 2,548,000
Sinclair Broadcast Group
Sr Sub Nts
12-15-07 8.75 450,000 399,938
Company Guaranty
07-15-07 9.00 1,700,000 1,547,000
Telemundo Holdings
Zero Coupon Sr Disc Nts Series B
08-15-03 11.50 4,000,000(g) 2,580,000
Telewest Communications
(U.S. Dollar) Sr Nts
11-01-08 11.25 2,000,000(c) 2,100,000
(U.S. Dollar) Zero Coupon Sr Disc Nts
04-15-04 9.25 3,600,000(c,d,g) 2,160,000
Veninfotel
(U.S. Dollar) Cv Pay-in-kind
03-01-02 10.00 1,102,500(c,e,j) 1,653,750
WRC Media/Weekly Read/JLC
11-15-09 12.75 2,500,000(d) 2,475,000
Total 59,349,405
Metals (2.9%)
AK Steel
Company Guaranty
02-15-09 7.88 2,500,000 2,262,500
EnviroSource
Sr Nts
06-15-03 9.75 5,000,000 3,400,000
Great Lakes Acquisition
Zero Coupon Series B
05-15-03 13.13 2,635,000(g) 1,396,550
Great Lakes Carbon
Company Guaranty Pay-in-kind Series B
05-15-08 10.25 1,060,000(j) 985,800
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 750,529(c,d) 720,507
Maxxam Group Holdings
Sr Nts Series B
08-01-03 12.00 2,000,000 1,825,000
Ormet
Company Guaranty
08-15-08 11.00 3,500,000(d) 3,290,000
Pen Holdings
Company Guaranty Series B
06-15-08 9.88 1,875,000 1,706,250
Renco Steel Holdings
Sr Nts Series B
02-01-05 10.88 1,050,000 934,500
Sheffield Steel
1st Mtge Series B
12-01-05 11.50 2,000,000 1,700,000
Total 18,221,107
Miscellaneous (9.5%)
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 1,500,000 1,556,250
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 3,120,000 2,870,400
Argo-Tech
Company Guaranty Series D
10-01-07 8.63 3,000,000 2,460,000
Bistro Trust
Sub Nts
12-31-02 9.50 1,000,000 931,800
Booth Creek Ski Holdings
Sr Nts Series B
03-15-07 12.50 500,000 351,250
Centaur Mining & Exploration
(U.S. Dollar) Company Guaranty
12-01-07 11.00 2,500,000(c) 2,400,000
Charter Communications Holdings LLC
Sr Nts
04-01-09 8.63 2,500,000 2,268,750
Comforce Operating
Sr Nts Series B
12-01-07 12.00 750,000 427,500
Consolidated Container
Sr Sub Nts
07-15-09 10.13 2,850,000(d) 2,878,500
Cybernet Internet Service
Sr Nts
07-01-09 14.00 2,000,000 1,660,000
Dura Operating
Company Guaranty Series B
05-01-09 9.00 1,400,000 1,298,500
Equinix
12-01-07 13.00 2,500,000 2,575,000
Falcon Products
Company Guaranty Series B
06-15-09 11.38 2,750,000 2,571,250
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 1,750,000(c) 1,583,750
ISG Resources
04-15-08 10.00 2,705,000 2,414,213
Knology Holdings
Zero Coupon Sr Disc Nts
10-15-02 12.14 900,000(g) 589,500
Nextel Partners
Zero Coupon Sr Disc Nts
02-01-04 13.60 10,100,000(g) 6,766,999
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 2,475,000 2,645,156
NSM Steel
Company Guaranty
02-01-06 12.00 783,258(b,d) 46,995
02-01-08 12.25 1,200,000(b,d) 24,000
Omega Cabinets
Sr Sub Nts
06-15-07 10.50 860,000 860,000
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 6,690,000 6,021,000
Park-Ohio Inds
Sr Sub Nts
12-01-07 9.25 3,195,000 2,827,575
Pierce Leahy Command
Company Guaranty
05-15-08 8.13 5,125,000 4,471,563
Poland Telecom Finance
(U.S. Dollar) Company Guaranty Series B
12-01-07 14.00 1,775,000(c) 1,158,188
Riviera Black Hawk
1st Mtge
05-01-05 13.00 1,575,000 1,716,750
SC Intl
09-01-07 9.25 3,700,000 3,404,000
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 1,250,000 850,000
Talton Holdings
Company Guaranty Sr Nts Series B
06-30-07 11.00 570,000 507,300
Total 60,136,189
Multi-industry conglomerates (1.1%)
Communications & Power Inds
Sr Sub Nts Series B
08-01-05 12.00 2,000,000 1,620,000
Jordan Inds
Sr Nts Series D
08-01-07 10.38 3,740,000 3,702,600
Zero Coupon Sr Sub Debs Series B
04-01-02 11.75 1,608,386(g) 1,093,702
Metromedia Intl Group
Sr Disc Nts Series B
09-30-07 10.50 145,650 71,369
Prime Succession
Sr Sub Nts
08-15-04 10.75 2,710,000(b) 677,500
Total 7,165,171
Paper & packaging (6.8%)
Berry Plastics
Company Guaranty Series C
04-15-04 12.25 750,000 757,500
Sr Sub Nts
07-15-07 11.00 1,400,000(d) 1,386,000
BPC Holding
Sr Nts Series B
06-15-06 12.50 1,705,000 1,585,650
Crown Paper
Sr Sub Nts
09-01-05 11.00 4,635,000 2,178,450
Doman Inds
(U.S. Dollar)
03-15-04 8.75 3,225,000(c) 2,809,781
(U.S. Dollar) Company Guaranty
07-01-04 12.00 1,750,000(c) 1,833,125
(U.S. Dollar) Sr Nts Series B
11-15-07 9.25 1,175,000(c) 975,250
Gaylord Container
Sr Nts
06-15-07 9.75 4,300,000 3,891,500
02-15-08 9.88 2,500,000 2,037,500
Graham Packaging/GPC Capital
Zero Coupon Sr Disc Nts Series B
01-15-03 10.03 2,100,000(g) 1,375,500
Grupo Industrial Durango
(U.S. Dollar)
08-01-03 12.63 1,000,000(c) 1,025,000
Packaging Corp of America
Company Guaranty
04-01-09 9.63 1,485,000 1,488,713
Repap New Brunswick
(U.S. Dollar)
06-01-04 11.50 550,000(c) 561,000
(U.S. Dollar) Sr Nts
06-01-04 9.00 5,250,000(c) 5,072,812
04-15-05 10.63 1,650,000(c) 1,534,500
Riverwood Intl
Company Guaranty Sr Nts
04-01-06 10.25 4,250,000 4,271,250
Silgan Holdings
06-01-09 9.00 3,325,000 3,216,938
Stone Container
Sr Nts
08-01-16 12.58 2,000,000 2,090,000
Warren (SD)
Pay-in-kind
12-15-06 14.00 4,032,449(j) 4,455,856
Total 42,546,325
Restaurants & lodging (1.2%)
Domino's
Company Guaranty Series B
01-15-09 10.38 2,325,000 2,185,500
Florida Panthers Holdings
Company Guaranty
04-15-09 9.88 1,650,000 1,501,500
Prime Hospitality
Sr Sub Nts Series B
04-01-07 9.75 3,750,000 3,581,250
Total 7,268,250
Retail (1.0%)
Amazon.com
Zero Coupon Sr Disc Nts
05-01-03 10.00 550,000(g) 330,000
Dairy Mart Convenience Stores
Sr Sub Nts
03-15-04 10.25 3,850,000 3,157,000
Eye Care Centers of America
Company Guaranty
05-01-08 9.13 975,000 546,000
Maxim Group
Company Guaranty Series B
10-15-07 9.25 1,500,000 1,196,250
Musicland Group
Company Guaranty Series B
03-15-08 9.88 1,225,000 1,068,813
Total 6,298,063
Textiles & apparel (0.8%)
Anvil Knitwear
Sr Nts Series B
03-15-07 10.88 1,825,000 1,496,500
Galey & Lord
Company Guaranty
03-01-08 9.13 3,100,000 961,000
GFSI
Sr Sub Nts Series B
03-01-07 9.63 2,500,000 1,500,000
GFSI Holdings
Zero Coupon Sr Disc Nts Series B
09-15-04 11.38 2,700,000(g) 540,000
Steel Heddle Group
Zero Coupon Series B
06-01-03 13.74 1,600,000(g) 208,000
Steel Heddle Mfg
Company Guaranty Series B
06-01-08 10.63 1,200,000 600,000
Total 5,305,500
Transportation (1.0%)
American Architectural
Company Guaranty
12-01-07 11.75 1,600,000 324,000
Autopistas Del Sol
(U.S. Dollar) Sr Nts
08-01-09 10.25 1,200,000(c,d) 990,000
Enterprises Shipholding
(U.S. Dollar) Sr Nts
05-01-08 8.88 3,010,000(c) 1,836,100
Global Ocean Carriers
Sr Nts
07-15-07 10.25 2,500,000 1,175,000
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-04 9.25 350,000(c) 119,000
06-15-07 9.50 500,000(c) 160,000
Hermes Europe RailTel
(U.S. Dollar) Sr Nts
01-15-09 10.38 1,600,000(c) 1,496,000
Total 6,100,100
Utilities -- gas (0.2%)
Leviathan Gas
Company Guaranty Series B
06-01-09 10.38 1,250,000 1,281,250
Utilities -- telephone (7.1%)
Allegiance Telecom
Zero Coupon Sr Disc Nts Series B
02-15-03 12.13 4,950,000(g) 3,613,500
COLT Telecom Group
(U.S. Dollar) Zero Coupon Sr Disc Nts
12-15-01 8.86 1,000,000(c,g) 875,000
(U.S. Dollar) Zero Coupon
12-15-01 12.00 1,000,000(c,g) 1,170,000
Energis
(U.S. Dollar)
06-15-09 9.75 1,450,000(c) 1,471,750
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 500,000(b) 625
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 2,975,000 2,781,625
06-01-08 8.60 600,000 552,000
Zero Coupon Sr Disc Nts
05-15-01 12.50 600,000(g) 565,500
Zero Coupon Sr Disc Nts Series B
07-15-02 9.51 4,225,000(g) 3,380,000
ITC Deltacom
Sr Nts
03-01-08 8.88 2,600,000 2,444,000
11-15-08 9.75 1,500,000 1,496,250
Level 3 Communications
03-15-08 11.00 7,500,000(d) 7,518,750
McLeod USA
Sr Nts
03-15-08 8.38 1,345,000 1,234,038
02-15-09 8.13 2,250,000 2,019,375
Nextel Communications
11-15-09 9.38 2,000,000 1,927,500
Primus Telecomm Group
Sr Nts
08-01-04 11.75 1,175,000 1,163,250
01-15-09 11.25 750,000 712,500
Sr Nts Series B
05-15-08 9.88 2,500,000 2,250,000
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 1,225,000(c) 1,188,250
11-15-08 10.50 2,300,000(c) 2,058,500
United Pan-Europe Communications
(European Monetary Unit) Sr Nts
11-01-09 11.25 1,500,000(c,e) 1,500,000
(U.S. Dollar) Sr Nts
02-01-10 11.25 1,600,000(c,d) 1,612,000
02-01-10 11.50 975,000(c,d) 979,875
(U.S. Dollar) Sr Nts Series B
08-01-09 10.88 1,800,000(c) 1,831,500
Total 44,345,788
Total bonds
(Cost: $581,119,389) $515,628,413
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Common stocks (2.2%)
Issuer Shares
Value(a)
<S> <C> <C>
American Mobile Satellite 5,745(b) $166,605
Concentric Network 17,000(b) 911,625
Global TeleSystems Group 21,800(b) 545,000
Intermedia Communications 76,019(b) 4,812,953
Nextel Communications Cl A 2,323(b) 316,654
OpTel 2,250(b) 23
PhoneTel Technologies 161,880(b) 273,173
Premier Holdings 148,117 481,380
Price Communications 85,000(b) 2,029,375
Versatel Telecom Intl ADR 37,500(b,c) 2,259,374
Western Wireless Cl A 30,000(b) 1,455,000
Wilshire Financial Services Group 286,815(b) 340,593
Wilshire Real Estate Investment Trust 30,000 76,875
Total common stocks
(Cost: $12,881,843) $13,668,630
Preferred stocks & other (9.2%)
Issuer Shares
Value(a)
21st Century Telecom Group
13.75% Pay-in-kind 525(j) $451,766
Warrants 400 11,000
Adelphia Business Solutions
12.88% Pay-in-kind 644(j) 640,958
Allegiance Telecom
Warrants 4,950 1,083,431
American Restaurant Group
12.00% Pay-in-kind Series B 592(j) 438,080
Warrants 500 5
Anvil Holdings
13.00% Pay-in-kind Series B 60,929(j) 396,039
APP Finance II Mauritius Cl B
12.00% 2,600(b,c) 1,586,000
Australis Holdings
Warrants 1,760(c) 18
Bell Technology
Warrants 2,350 1,692,000
Benedek Communications
11.50% Pay-in-kind 1,000(j) 820,000
Bestel
Warrants 1,000 120,000
Birch Telecom
Warrants 2,000 11,000
Century Maintenance
13.25% Pay-in-kind Series C 24,184(j) 2,282,365
Clark Materials Handling
13.00% 1,759(b) 466,012
Communications & Power Inds
14.00% Pay-in-kind Series B 34,072(j) 2,725,795
Concentric Network
13.50% Pay-in-kind Series B 3,039(j) 3,119,009
CSC Holdings
11.13% Pay-in-kind Series M 91,447(j) 10,059,169
Cybernet Internet
Warrants 2,000 340,000
Dobson Communications
13.00% Pay-in-kind 2,205(j) 2,392,421
Fairfield Mfg
11.25% Pay-in-kind 600(j) 564,000
Geotek Communications
Warrants 40,000(h) --
HF Holdings
Warrants 4,250(h) --
Intermedia Communications
7.00% Cv Series F 60,000 2,385,000
13.50% Pay-in-kind Series B 4,250(j) 4,228,403
Iridium World Communications
Warrants 1,700 17
Jitney-Jungle Stores of America Cl A
15.00% 20,000 25,000
KMC Telecom Holdings
Warrants 1,500 4,500
Knology
Warrants 1,500 3,000
Lady Luck Gaming
Pay-in-kind 15,000(e,j) 600,000
MetroNet Communications
Warrants 750 154,125
Nakornthai Strip Mill
Warrants 759,711 1
Nextel Communications
11.13% Pay-in-kind Series E 2,335(j) 2,264,950
13.00% Pay-in-kind Series D 2,750(j) 2,942,500
NTL
13.00% Pay-in-kind Series B 4,234(j) 4,657,298
Paxson Communications
12.50% Pay-in-kind Exchangeable 28,973(j) 3,027,710
Pegasus Communications
12.75% Pay-in-kind 7,450(j) 890,275
12.75% Pay-in-kind Series A 263(j) 275,224
PLD Telekom
Warrants 200 9
Poland Telecom
Warrants 1,775(c) 53,250
Primus Telecommunications
Warrants 1,175 74,025
R&B Falcon
13.88% Cm Pay-in-kind 341(j) 356
Warrants 2,000 550,000
RSL Communications
Warrants 1,250 93,750
Rural Cellular
12.25% 3,500(b) 3,482,500
SGW Holding
12.50% Cm Pay-in-kind Series B 13,596(e,j) 231,132
Cv Series A 9,677(b,e) 99,996
Warrants 250 79,125
Sinclair Capital
11.63% 20,000 1,800,000
Tele 1 Europe
Warrants 1,000 300,000
Telehub Communications
Warrants 3,000 1,500
Unifi Communications
Warrants 1,000 10
Unisite
Cl C Warrants 633(e) 352,587
Warrants 500 5
Vialog
Warrants 3,720 137,640
Total preferred stocks & other
(Cost: $59,052,470) $57,912,956
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (5.5%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (4.3%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C> <C> <C>
03-08-00 5.62% $2,700,000 $2,696,538
04-14-00 5.73 2,800,000 2,778,600
Federal Home Loan Mtge Corp Disc Nts
03-14-00 5.69 2,300,000 2,294,919
03-23-00 5.77 1,600,000 1,593,953
03-29-00 5.67 4,200,000 4,179,970
04-04-00 5.77 4,100,000 4,077,119
04-20-00 5.74 1,200,000 1,189,719
Federal Natl Mtge Assn Disc Nts
03-02-00 5.60 1,500,000 1,499,513
03-02-00 5.61 1,000,000 999,675
05-11-00 5.89 6,000,000 5,928,601
Total 27,238,607
Commercial paper (1.2%)
BBV Finance (Delaware)
04-28-00 5.92 800,000 791,957
Cargill Global Funding
03-01-00 5.85 700,000(i) 699,886
Delaware Funding
03-20-00 5.80 2,000,000(i) 1,993,578
Falcon Asset
03-27-00 5.80 800,000(i) 796,538
Ford Motor Credit
03-07-00 5.59 1,500,000 1,498,323
Morgan Stanley, Dean Witter, Discover & Co
03-27-00 5.74 1,600,000 1,593,016
Total 7,373,298
Total short-term securities
(Cost: $34,622,852) $34,611,905
Total investments in securities
(Cost: $687,676,554)(k) $621,821,904
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 29,
2000, the value of foreign securities represented 11.71% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 29, 2000, is as follows:
Security Acquisition Cost
dates
Gemini Inds
<S> <C> <C> <C>
13.50% 2001 12-23-96 thru 10-22-99 $1,506,000
Lady Luck Gaming
Pay-in-kind 11-19-98 525,000
SGW Holding
12.50% Pay-in-kind Series B 08-12-97 thru 08-09-99 218,163
Cv Series A 08-12-97 100,002
Unisite
Cl C Warrants 12-17-97 thru 02-18-00 300,450
United Pan-Europe Communications*
(European Monetary Unit) 11.25% Sr Nts 2009 10-22-99 1,488,930
Veninfotel
(U.S. Dollar) 10.00% Cv Pay-in-kind 2002 03-05-97 thru 03-01-99 1,102,500
Voicestream*
10.38% Sr Nts 2009 11-04-99 thru 01-31-00 2,232,500
11.88% Zero Coupon Sr Disc Nts 2009 11-04-99 1,625,769
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(f) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(g) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(h) Negligible market value.
(i) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(j) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(k) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $687,677,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $22,324,000
Unrealized depreciation (88,179,000)
-----------
Net unrealized depreciation $(65,855,000)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Federal Income Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Bonds (81.3%)
Issuer Coupon Principal Value(a)
rate amount
Mortgage-backed securities (50.2%)
Federal Home Loan Mtge Corp
<S> <C> <C> <C> <C> <C>
06-01-14 6.50% $947,854 $910,077
06-01-29 6.50 977,734 915,375
07-01-29 6.00 986,362 895,735
Federal Natl Mtge Assn
02-01-14 5.50 873,351 801,029
04-01-14 5.50 932,990 856,105
05-01-14 6.00 959,430 900,684
06-01-14 6.50 184,828 177,687
07-01-14 6.00 959,498 900,748
03-01-15 7.00 1,000,000(b) 982,188
01-01-29 6.00 517,994 469,919
03-01-29 6.00 74,449 67,540
08-01-29 7.00 1,382,919 1,324,574
09-01-29 6.50 1,386,600 1,294,307
03-01-30 8.00 3,000,000(b) 3,001,875
Total 13,497,843
U.S. government obligations (31.1%)
U.S. Treasury
07-31-01 5.50 1,500,000 1,479,855
11-30-01 5.88 1,000,000 989,063
02-28-03 5.50 5,000,000 4,852,606
02-15-04 4.75 800,000 749,512
05-15-06 6.88 100,000(c) 100,964
05-15-09 5.50 200,000 185,250
Total 8,357,250
Total bonds
(Cost: $22,137,626) $21,855,093
Short-term securities (33.6%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies
Federal Home Loan Bank Disc Nts
03-22-00 5.71% $700,000 $697,510
04-12-00 5.74 600,000 595,757
04-28-00 5.80 600,000 594,166
Federal Home Loan Mtge Corp Disc Nts
03-07-00 5.67 200,000 199,780
03-14-00 5.69 600,000 598,675
03-29-00 5.67 1,900,000 1,891,232
04-04-00 5.75 600,000 596,663
04-25-00 5.86 500,000 495,481
Federal Natl Mtge Assn Disc Nts
03-02-00 5.80 500,000 499,838
03-09-00 5.78 500,000 499,267
04-05-00 5.75 1,100,000 1,093,708
04-27-00 5.81 400,000 396,109
05-11-00 5.89 900,000 889,290
Total short-term securities
(Cost: $9,049,886) $9,047,476
Total investments in securities
(Cost: $31,187,512)(d) $30,902,569
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) At Feb. 29, 2000, the cost of securities purchased, including interest
purchased, on a when-issued basis was $3,975,372.
(c) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 7 to the financial statements):
Type of security Notional amount
Sale contracts U.S. Treasury Notes, March 2000, 5-year notes $2,000,000
U.S. Treasury Notes, March 2000 2,000,000
(d) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $31,188,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $29,000
Unrealized depreciation (314,000)
--------
Net unrealized depreciation $(285,000)
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Global Bond Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Bonds (94.6%)(b)
Issuer Coupon Principal Value(a)
rate amount
Australia (2.3%)
New South Wales Treasury
(Australian Dollar)
<S> <C> <C> <C> <C> <C>
03-01-08 8.00% 2,700,000(d) $1,756,445
Queensland Treasury
(Australian Dollar) Local Govt Guaranty
05-14-03 8.00 3,825,000 2,439,925
Total 4,196,370
Austria (2.1%)
Republic of Austria
(Japanese Yen)
01-22-01 5.00 400,000,000 3,796,653
Bermuda (0.1%)
Central Euro Media
(European Monetary Unit) Sr Nts Series RG
08-15-04 8.13 750,000 166,409
Brazil (0.6%)
Federal Republic of Brazil
(U.S. Dollar)
10-15-09 14.50 1,000,000 1,073,500
Canada (4.5%)
Abitibi-Consolidated Finance
(U.S. Dollar) Company Guaranty
08-01-09 7.88 1,600,000 1,549,934
Govt of Canada
(Canadian Dollar)
02-01-06 7.00 3,000,000 2,157,099
Laidlaw
(U.S. Dollar)
05-15-06 7.65 1,400,000 1,116,555
Province of British Columbia
(Canadian Dollar)
12-01-06 5.25 2,275,000 1,466,985
Province of Manitoba
(U.S. Dollar) Series CK
12-15-00 9.00 625,000 634,489
Rogers Communication
(Canadian Dollar) Sr Nts
07-15-07 8.75 2,000,000 1,394,972
Total 8,320,034
Cayman Islands (0.3%)
Roil
(U.S. Dollar)
12-05-02 12.78 680,000(d) 598,400
China (0.1%)
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 11.50 500,000(d) 190,000
Colombia (0.5%)
Republic of Colombia
(U.S. Dollar)
04-23-09 9.75 1,000,000 883,750
Denmark (3.6%)
Govt of Denmark
(Danish Krone)
05-15-03 8.00 7,700,000 1,072,299
03-15-06 8.00 12,500,000 1,803,468
11-10-24 7.00 24,850,000 3,645,589
Total 6,521,356
France (0.7%)
France Telecom
(European Monetary Unit) Cv
11-29-04 4.13 710,000 816,491
Govt of France
(European Monetary Unit)
04-25-05 7.50 400,000 425,741
Total 1,242,232
Germany (12.1%)
Allgemeine Hypo Bank
(European Monetary Unit)
09-02-09 5.00 6,510,000(d) 5,859,225
Bayerische Landesbank
(U.S. Dollar) Sub Nts
12-01-08 5.88 800,000 719,503
Federal Republic of Germany
(European Monetary Unit)
07-22-02 8.00 5,180,000 5,355,351
11-11-04 7.50 7,100,000 7,495,687
06-20-16 6.00 2,914,364 2,930,024
Total 22,359,790
Greece (1.5%)
Hellenic Republic
(Greek Drachma)
04-01-03 8.90 875,000,000 2,712,130
Indonesia (0.5%)
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 1,300,000 923,000
Israel (0.5%)
Israel Electric
(U.S. Dollar) Sr Nts
12-15-26 7.88 1,000,000(d) 905,830
Italy (7.6%)
Govt of Italy
(European Monetary Unit)
09-15-01 7.75 1,265,317 1,278,001
01-01-04 8.50 6,757,875 7,257,543
11-01-26 7.25 1,575,191 1,744,308
Republic of Italy
(Japanese Yen)
06-20-01 3.50 395,000,000 3,752,308
Total 14,032,160
Japan (2.2%)
Development Bank of Japan
(Japanese Yen)
09-20-01 6.50 412,000,000 4,106,793
Mexico (2.2%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 3,000,000 2,820,000
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 8.75 750,000 1,189,098
Total 4,009,098
Netherlands (0.5%)
KPNQWest
(European Monetary Unit) Sr Nts
06-01-09 7.13 925,000 850,508
Norway (4.1%)
Govt of Norway
(Norwegian Krone)
05-31-01 7.00 47,270,000 5,689,837
05-15-09 5.50 16,040,000 1,804,626
Total 7,494,463
Slovenia (1.5%)
Republic of Slovenia
(European Monetary Unit)
06-16-04 5.75 5,500,000 2,719,284
Supra-National (2.0%)
Inter-American Development Bank
(Japanese Yen)
07-08-09 1.90 205,000,000 1,883,851
World Bank
(Japanese Yen)
06-20-00 4.50 190,000,000 1,751,761
Total 3,635,612
Sweden (3.2%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00 30,000,000 3,469,103
08-15-07 8.00 11,200,000 1,443,553
Paulson Enterprenad
(Swedish Krona)
12-15-00 4.75 9,000,000 1,016,231
Total 5,928,887
United Kingdom (6.7%)
COLT Telecom Group
(European Monetary Unit)
07-31-08 7.63 1,500,000 711,901
United Kingdom Treasury
(British Pound)
06-07-02 7.00 1,000,000 1,601,473
06-10-03 8.00 3,090,000 5,112,935
12-07-05 8.50 2,715,000 4,801,488
Total 12,227,797
United States (34.4%)
American Standard
(European Monetary Unit) Company Guaranty
06-01-06 7.13 1,700,000 1,613,374
California Infrastructure-
Pacific Gas & Electric
(U.S. Dollar)
06-25-03 6.16 1,050,000 1,046,010
Citicorp
(European Monetary Unit)
09-19-09 6.25 3,000,000 1,439,221
DTE Burns Harbor LLC
(U.S. Dollar) Sr Nts
01-30-03 6.57 882,310(d) 849,841
Federal Natl Mtge Assn
(U.S. Dollar)
02-15-08 5.75 2,000,000 1,819,470
07-01-13 6.00 1,811,601 1,701,210
05-01-14 6.50 1,425,733 1,370,188
02-01-27 7.50 455,242 446,993
03-01-27 7.50 974,039 956,390
03-01-29 6.50 1,919,725 1,794,348
Ford Motor Credit
(Japanese Yen)
02-07-05 1.20 300,000,000 2,674,943
(U.S. Dollar)
09-10-02 6.55 3,000,000 2,951,013
Intl Paper
(European Monetary Unit)
08-11-00 5.38 1,800,000 1,662,268
MGM Grand
(U.S. Dollar)
02-01-05 6.95 1,500,000 1,379,347
Morgan (JP)
(U.S. Dollar) Sr Sub Medium-term Nts Series A
02-15-12 4.00 1,000,000 870,410
Nationwide CSN Trust
(U.S. Dollar)
02-15-25 9.88 1,500,000(d) 1,592,721
New York Life Insurance
(U.S. Dollar)
12-15-23 7.50 1,000,000(d) 893,128
Railcar Leasing
(U.S. Dollar)
01-15-13 7.13 3,000,000(d) 2,914,380
Texas Utilities Electric
(U.S. Dollar)
08-01-07 7.17 2,000,000 1,906,160
TXU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 1,000,000 963,411
U.S. Treasury
(U.S. Dollar)
11-15-00 5.75 1,500,000 1,494,839
11-30-00 4.63 1,000,000 988,275
11-15-01 7.50 1,650,000 1,674,942
02-15-05 7.50 5,600,000 5,795,658
04-30-03 5.75 1,425,000 1,390,365
11-15-16 7.50 13,000,000 14,339,266
TIPS
01-15-07 3.38 3,000,000(c) 3,012,000
USX
(U.S. Dollar)
03-01-08 6.85 2,000,000 1,867,166
Watson Pharmaceuticals
(U.S. Dollar) Sr Nts
05-15-08 7.13 1,200,000 1,067,413
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 1,000,000(d) 958,161
Total 63,432,911
Venezuela (0.8%)
PDVSA Finance
(U.S. Dollar)
02-15-10 9.75 1,500,000(d) 1,448,327
Total bonds
(Cost: $186,109,969) $173,775,294
Short-term securities (3.9%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies
Federal Home Loan Bank Disc Nts
03-08-00 5.62% $1,000,000 $998,718
03-17-00 5.63 2,200,000 2,194,161
Federal Home Loan Mtge Corp Disc Nts
03-14-00 5.69 3,100,000 3,093,153
04-04-00 5.77 900,000 894,977
Total short-term securities
(Cost: $7,182,177) $7,181,009
Total investments in securities
(Cost: $193,292,146)(e) $180,956,303
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars. For debt
securities, principal amounts are denominated in the currency indicated.
(b) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated.
(c) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semiannual interest
payments equal a fixed percentage of the inflation-adjusted principal amount
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $193,292,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $427,000
Unrealized depreciation (12,763,000)
-----------
Net unrealized depreciation $(12,336,000)
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Growth Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (92.5%)
Issuer Shares Value(a)
Airlines (0.8%)
<S> <C> <C>
Southwest Airlines 29,545 $544,736
Automotive & related (0.4%)
Gentex 9,880(b) 288,681
Banks and savings & loans (1.8%)
Bank of America 14,192 653,719
FleetBoston Financial 20,824 567,454
Total 1,221,173
Beverages & tobacco (1.6%)
Coca-Cola 21,574 1,044,991
Communications equipment & services (6.9%)
MasTec 12,558(b) 723,655
Nokia ADR Cl A 9,361(c) 1,856,403
Tellabs 40,740(b) 1,955,520
Total 4,535,578
Computer software & services (4.9%)
America Online 13,179(b) 777,561
Microsoft 27,613(b) 2,467,912
Total 3,245,473
Computers & office equipment (23.9%)
Cisco Systems 35,568(b) 4,701,644
EMC 32,207(b) 3,832,632
Hewlett-Packard 9,901 1,331,685
Intl Business Machines 17,121 1,746,342
Keane 18,379(b) 441,096
Lexmark Intl Group Cl A 7,928(b) 945,414
Solectron 8,090(b) 529,895
Yahoo! 14,446(b) 2,306,846
Total 15,835,554
Electronics (24.1%)
Applied Materials 19,719(b) 3,607,345
ASM Lithography Holding 3,286(b,c) 421,019
Broadcom Cl A 7,923(b) 1,563,802
Foundry Networks 4,287(b) 598,840
Intel 16,409 1,854,217
Maxim Integrated Products 31,574(b) 2,109,538
Quantum Effect Devices 139(b) 13,396
STMicroelectronics 6,575(c) 1,315,000
Texas Instruments 26,623 4,432,729
Total 15,915,886
Energy (0.9%)
Anadarko Petroleum 19,726 606,575
Energy equipment & services (2.4%)
Halliburton 11,837 452,025
Schlumberger 15,778 1,165,600
Total 1,617,625
Financial services (4.9%)
Citigroup 36,458 1,884,423
Merrill Lynch 13,184 1,351,360
Total 3,235,783
Furniture & appliances (0.4%)
Ethan Allen Interiors 12,616 294,111
Health care (6.8%)
Amgen 4,605(b) 314,003
Bausch & Lomb 6,564 346,251
Johnson & Johnson 4,569 327,826
Medtronic 10,523 509,708
Mylan Laboratories 18,890 434,470
Pfizer 35,203 1,130,896
Schering-Plough 7,872 274,536
Warner-Lambert 13,490 1,154,239
Total 4,491,929
Household products (0.3%)
ServiceMaster 17,443 191,873
Industrial equipment & services (0.4%)
Deere & Co 7,924 283,283
Leisure time & entertainment (1.0%)
Harley-Davidson 9,883 673,279
Miscellaneous (0.9%)
Akamai Technologies 2,257(b) 589,641
Multi-industry conglomerates (1.5%)
Tyco Intl 26,267(c) 996,504
Restaurants & lodging (0.7%)
Marriott Intl Cl A 17,128 472,091
Retail (3.3%)
Home Depot 28,959 1,674,192
Tandy 13,166 501,131
Total 2,175,323
Utilities -- telephone (4.4%)
AT&T 23,673 1,170,334
MCI WorldCom 38,414(b) 1,714,247
Total 2,884,581
Total common stocks
(Cost: $55,023,315) $61,144,670
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (8.9%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (6.3%)
Federal Home Loan Bank Disc Nt
<S> <C> <C> <C> <C> <C>
03-08-00 5.62% $1,200,000 $1,198,461
Federal Home Loan Mtge Corp Disc Nt
03-21-00 5.82 1,000,000 996,617
Federal Natl Mtge Assn Disc Nt
05-11-00 5.89 2,000,000 1,976,200
Total 4,171,278
Commercial paper (2.6%)
General Electric Capital
03-01-00 5.88 1,700,000 1,699,722
Total short-term securities
(Cost: $5,872,512) $5,871,000
Total investments in securities
(Cost: $60,895,827)(d) $67,015,670
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000, the
value of foreign securities represented 6.93% of net assets.
(d) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $60,896,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $9,227,000
Unrealized depreciation (3,107,000)
----------
Net unrealized appreciation $6,120,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - International Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (96.2%)
Issuer Shares Value(a)
Australia (2.2%)
Media (0.7%)
<S> <C> <C>
News Corp 1,345,000 $19,648,137
Metals (1.2%)
Broken Hill Proprietary 1,561,000 15,461,125
WMC 3,685,000 13,880,882
Total 29,342,007
Utilities -- telephone (0.3%)
Telstra 1,992,000
9,369,675
Brazil (1.2%)
Banks and savings & loans (0.6%)
Uniao de Bancos Brasileiros GDR 510,100 14,856,663
Utilities -- telephone (0.6%)
Embratel Participacoes ADR 753,000 18,072,000
Canada (2.6%)
Communications equipment & services (1.7%)
Nortel Networks 410,900(d) 45,815,350
Energy (0.4%)
Petro-Canada 796,549 11,207,780
Multi-industry conglomerates (0.5%)
Bombardier Cl B 647,086 12,987,690
Finland (2.8%)
Communications equipment & services
Nokia 378,948 75,645,763
France (10.9%)
Banks and savings & loans (1.6%)
Banque Natl de Paris 551,026 43,573,314
Building materials & construction (1.7%)
Lafarge 618,292 46,209,362
Computers & office equipment (3.3%)
Cap Gemini 323,669 89,269,229
Energy (2.2%)
Total Petroleum Cl B 453,550 60,139,874
Industrial equipment & services (1.4%)
Castorama Dubois 172,304 36,472,416
Metals (0.7%)
Usinor 1,301,168 19,009,936
Germany (5.2%)
Banks and savings & loans (1.7%)
Deutsche Bank 545,853 46,006,773
Computers & office equipment (2.0%)
SAP 65,028 54,400,705
Miscellaneous (1.5%)
Epcos 280,426(b) 39,753,032
Hong Kong (2.1%)
Communications equipment & services (1.1%)
China Telecom 3,116,000(b) 28,626,091
Multi-industry conglomerates (1.0%)
Hutchison Whampoa 1,710,000 26,804,919
Italy (5.1%)
Banks and savings & loans (2.0%)
Instituto Bancario San Paolo di Torino 3,342,179 52,857,691
Utilities -- telephone (3.1%)
Telecom Italia Mobile 6,233,978 85,066,067
Japan (32.4%)
Automotive & related (3.0%)
Bridgestone 1,074,000 23,996,997
Denso 573,000 10,716,860
Toyota Motor 1,141,000 45,588,077
Total 80,301,934
Banks and savings & loans (0.3%)
Tokai Bank 1,720,000 7,874,039
Chemicals (1.1%)
Asahi Chemical Inds 5,108,000 30,171,486
Computers & office equipment (4.7%)
Canon 803,000 33,398,953
Fujitsu 2,015,000 66,937,429
Hitachi Software Engineering 179,000 27,532,196
Total 127,868,578
Electronics (6.6%)
Alps Electric 1,205,000(d) 10,956,041
Hitachi 3,754,000 51,214,980
Kyocera 166,000 28,131,240
Matsushita Communication Industrial 135,000 22,853,242
Nintendo 164,000 35,807,600
Rohm 86,000 27,903,527
Total 176,866,630
Financial services (1.0%)
Nikko Securities 2,100,000 27,082,594
Furniture & appliances (1.3%)
Matsushita Electric Industrial 1,235,000 35,968,146
Health care (0.9%)
Sankyo 1,151,000 23,831,854
Industrial equipment & services (0.7%)
AMADA 2,751,000 18,552,819
Media (2.4%)
Sony 221,000 65,369,738
Metals (0.6%)
Nippon Steel 7,510,000 15,857,292
Multi-industry conglomerates (1.5%)
Mitsubishi Materials 5,064,000 16,822,389
Secom 259,000 23,195,085
Total 40,017,474
Retail (0.9%)
FamilyMart 542,000 23,677,816
Textiles & apparel (0.8%)
Asahi Glass 2,960,000 20,204,778
Utilities -- telephone (6.6%)
Nippon Telegraph & Telephone 4,985 68,962,002
NTT Data 1,489 26,968,009
NTT Mobile Communication Network 2,080 83,862,571
Total 179,792,582
Mexico (1.3%)
Banks and savings & loans (0.3%)
Grupo Financiero Banamex Accival 1,784,779(b) 7,604,131
Beverages & tobacco (0.5%)
Fomento Economico Mexicano ADR 322,000 14,308,875
Utilities -- telephone (0.5%)
Telefonos de Mexico ADR Cl L 191,644 12,600,593
Netherlands (4.5%)
Insurance (2.0%)
Fortis 2,096,986 52,739,713
Miscellaneous (2.5%)
United Pan-Europe Communications 345,692(b,d) 68,223,771
Singapore (0.8%)
Banks and savings & loans
Overseas Union Bank 4,758,599 21,121,719
South Korea (0.8%)
Electronics (0.5%)
Samsung Electronics 62,000 14,032,296
Metals (0.3%)
Pohang Iron & Steel ADR 352,182 8,848,573
Spain (1.4%)
Energy
Repsol-YPF 1,935,806 36,682,509
Sweden (4.7%)
Communications equipment & services
Ericsson (LM) Cl B 1,329,021 127,384,629
United Kingdom (18.2%)
Aerospace & defense (0.9%)
British Aerospace 4,862,323 24,083,798
Communications equipment & services (1.7%)
Marconi 3,671,602 45,798,512
Health care (4.6%)
Glaxo Wellcome ADR 3,665,789 87,919,027
SmithKline Beecham 3,494,435 39,171,752
Total 127,090,779
Insurance (1.5%)
Prudential 2,692,173 39,727,705
Leisure time & entertainment (2.5%)
EMI Group ADR 6,202,939 66,103,293
Retail (1.9%)
Next 1,948,544 16,162,672
Tesco 12,505,645 33,885,496
Total 50,048,168
Utilities -- gas (1.4%)
BG Group 8,645,571 37,734,587
Utilities -- telephone (3.7%)
Vodafone AirTouch 17,782,779 99,810,758
Total common stocks
(Cost: $2,027,139,530) $2,592,516,643
Other (--%)
Issuer Shares Value(a)
Lafarge
Rights 618,292 $17,888
Total other
(Cost: $--) $17,888
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (4.8%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.8%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C> <C> <C>
03-17-00 5.79% $4,900,000 $4,886,187
03-29-00 5.66 30,500,000 30,354,544
Federal Home Loan Mtge Corp Disc Nts
03-03-00 5.71 12,100,000 12,094,242
03-09-00 5.59 11,300,000 11,284,237
04-25-00 5.86 30,200,000 29,927,059
04-27-00 5.85 2,200,000 2,178,601
Federal Natl Mtge Assn Disc Nts
03-16-00 5.78 1,400,000 1,396,345
04-27-00 5.81 9,700,000 9,605,649
Total 101,726,864
Commercial paper (1.0%)
Bayer
04-11-00 5.86 14,900,000(c) 14,797,089
Bell Atlantic Network Funding
03-06-00 5.81 4,000,000 3,996,133
Falcon Asset
03-09-00 5.76 2,100,000(c) 2,096,981
Intl Lease Finance
04-25-00 5.85 3,500,000 3,467,660
Salomon Smith Barney
03-03-00 5.80 1,200,000 1,199,420
Windmill Funding
03-10-00 5.77 800,000(c) 798,676
Total 26,355,959
Total short-term securities
(Cost: $128,118,881) $128,082,823
Total investments in securities
(Cost: $2,155,258,411)(e) $2,720,617,354
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars.
(b) Non-income producing.
(c) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(d) Security is partially or fully on loan. See Note 5 to the financial
statements.
(e) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $2,155,258,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $700,507,000
Unrealized depreciation (135,148,000)
------------
Net unrealized appreciation $565,359,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Managed Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (64.6%)
Issuer Shares Value(a)
Aerospace & defense (1.0%)
<S> <C> <C>
Boeing 315,000 $11,615,625
Goodrich (BF) 521,600 12,485,800
Honeywell Intl 350,000 16,843,750
United Technologies 200,000 10,187,500
Total 51,132,675
Airlines (1.1%)
Southwest Airlines 3,000,000 55,312,500
Automotive & related (0.4%)
Tower Automotive 1,772,600(b) 21,049,625
Banks and savings & loans (1.1%)
Washington Mutual 1,600,000(o) 35,400,000
Wells Fargo 700,000 23,143,750
Wilshire Financial Services Group 154,397(b) 183,346
Total 58,727,096
Beverages & tobacco (0.6%)
Coca-Cola 625,000 30,273,438
Building materials & construction (0.9%)
Martin Marietta Materials 1,080,000 38,340,000
Masco 375,000 6,703,125
Total 45,043,125
Chemicals (0.1%)
Monsanto 150,000 5,821,875
Communications equipment & services (3.9%)
American Mobile Satellite 7,660(b) 222,140
Celcaribe 235,770(b) 471,540
Ericsson (LM) ADR Cl B 105,000(c) 10,080,000
Loral Space & Communications 540,000(b) 8,133,750
Lucent Technologies 200,000 11,900,000
Nokia ADR Cl A 750,000(c) 148,734,375
PhoneTel Technologies 228,000(b) 384,750
Tellabs 425,000(b) 20,400,000
Total 200,326,555
Computers & office equipment (11.7%)
Cisco Systems 1,750,000(b) 231,328,124
CMGI 78,000(b) 10,105,875
Dell Computer 575,000(b) 23,467,188
EMC 472,500(b) 56,227,500
Equant 125,000(b,c) 13,968,750
Intl Business Machines 110,000 11,220,000
Microsoft 1,600,000(b) 142,999,999
Network Solutions Cl A 25,000(b) 8,060,938
Solectron 1,075,000(b) 70,412,500
Sun Microsystems 285,000(b) 27,146,250
Total 594,937,124
Electronics (7.2%)
American Power Conversion 3,000,000(b,o) 101,812,500
Corning 70,000 13,160,000
Intel 1,000,000 113,000,000
Maxim Integrated Products 875,000(b) 58,460,938
Texas Instruments 500,000 83,250,000
Total 369,683,438
Energy (1.6%)
Anadarko Petroleum 840,000 25,830,000
Exxon Mobil 379,642 28,591,788
Royal Dutch Petroleum 550,000(c) 28,875,000
Total 83,296,788
Financial services (5.6%)
Citigroup 1,850,000 95,621,875
Donaldson, Lufkin & Jenrette - DLJ 225,000 9,773,438
Fannie Mae 450,000 23,850,000
MBNA 1,970,000 44,817,500
Merrill Lynch 130,000 13,325,000
Morgan Stanley, Dean Witter, Discover & Co 1,450,000 102,134,375
Total 289,522,188
Food (0.8%)
Bestfoods 235,000 9,855,313
U.S. Foodservice 1,700,000(b) 30,068,750
Total 39,924,063
Furniture & appliances (0.3%)
Leggett & Platt 1,000,000 16,812,500
Health care (7.4%)
American Home Products 350,000 15,225,000
Amgen 1,900,000(b) 129,556,249
Bristol-Myers Squibb 825,000 46,870,313
Elan ADR 1,175,000(b,c,o) 48,321,875
Merck & Co 700,000 43,093,750
Pfizer 1,325,000 42,565,625
Pharmacia & Upjohn 300,000 14,287,500
Schering-Plough 1,025,000 35,746,875
Total 375,667,187
Health care services (0.7%)
AmeriSource Health Cl A 40,000(b) 582,500
Cardinal Health 325,000 13,406,250
McKesson HBOC 1,033,300 20,020,188
Total 34,008,938
Household products (0.7%)
Procter & Gamble 420,000 36,960,000
Industrial equipment & services (0.6%)
Illinois Tool Works 600,000 31,012,500
Insurance (1.2%)
American General 175,000 9,132,813
American Intl Group 400,000 35,375,000
Progressive Corp 100,000 5,950,000
Travelers Property Casualty Cl A 360,000 11,385,000
Total 61,842,813
Leisure time & entertainment (1.2%)
Disney (Walt) 400,000 13,400,000
Time Warner 575,000(o) 49,162,500
Total 62,562,500
Media (2.3%)
AMFM 130,000(b) 7,978,750
Comcast Special Cl A 350,000 14,875,000
Infinity Broadcasting Cl A 450,000(b) 14,371,875
MediaOne Group 525,000(b) 41,212,500
TeleWest Communications 3,840,000(b,c) 26,391,502
USA Networks 700,000(b) 15,706,250
Total 120,535,877
Multi-industry conglomerates (4.1%)
Cendant 1,900,000(b) 33,843,750
Century Business Services 800,000(b) 2,725,000
General Electric 990,000 130,865,625
Tyco Intl 1,200,000(c) 45,525,000
Total 212,959,375
Paper & packaging (0.2%)
Intl Paper 300,000 11,043,750
Restaurants & lodging (0.4%)
Boca Resorts Cl A 558,800(b) 5,029,200
Extended Stay America 2,200,000(b) 14,300,000
Total 19,329,200
Retail (4.7%)
Dollar General 550,000 11,515,625
Gap 350,000 16,909,375
Home Depot 2,250,000 130,078,125
Safeway 500,000(b) 19,281,250
Wal-Mart Stores 1,350,000 65,728,125
Total 243,512,500
Transportation (0.0%)
Burlington Northern Santa Fe 93,600 1,842,750
Utilities -- electric (0.3%)
Carolina Power & Light 500,000 14,875,000
Utilities -- telephone (4.5%)
Allegiance Telecom 97,500(b) 9,640,313
AT&T - Liberty Media Group Cl A 400,000(b) 20,900,000
BCE 325,000(c) 35,729,688
Intermedia Communications 1,069(b) 67,681
Intermedia Communications 2,167(b) 137,198
MCI WorldCom 1,675,000(b) 74,746,874
SBC Communications 200,000 7,600,000
U S WEST Communications Group 400,000 29,050,000
Vodafone AirTouch ADR 900,000(c,k) 51,918,750
Total 229,790,504
Total common stocks
(Cost: $1,864,990,485) $3,317,805,884
Preferred stocks & other (0.8%)
Issuer Shares
Value(a)
Adelphia Communications
5.50% Cv Series D 6,675 $1,108,050
Allegiance Telecom
Warrants 2,450 536,244
Bell Technology
Warrants 5,000 3,600,000
Calpine Capital Trust
5.75% Cv 18,400 1,582,400
Coastal
6.63% Cv PRIDES 57,200(q) 1,458,600
Coltec Capital
5.25% Cv 19,900 659,188
Concentric Network
13.50% Pay-in-kind Series B 1,215(l) 1,246,923
Cox Communications
7.00 Cm Cv PRIDES 21,700(q) 1,344,044
CVS
6.00% Cv ACES 19,600(j) 1,274,000
Emmis Communications
6.25% Series A 22,400 1,234,800
Enron
7.50% Cv 33,000 540,375
Georgia-Pacific Group
7.50% Cv 26,000 1,009,125
Global Crossing
6.38% Cv 11,800(d) 1,392,400
Global TeleSystems Group
7.25% Cm Cv 27,600 1,200,600
Ingersoll-Rand
6.75% Cv 51,500 991,375
Intermedia Communications
7.00% Cm Cv Series F 39,300 1,562,174
7.00% Cv Series F 38,700 1,538,325
Kerr-McGee
5.50% Cv 18,400 660,100
KMC Telecom Holdings
Warrants 2,800 8,400
Lincoln Natl
7.75% Cm Cv 52,000 858,000
Loral Space & Communications
6.00% Cv 150,000 6,337,500
McKesson Financing Trust
5.00% Cv 33,700(b) 1,158,438
Mexico Value
Rights 1,000(c) 2,080
Primus Telecommunications
Warrants 2,300 144,900
PSINet
Cv Series C 13,200 1,056,825
Sinclair Capital
11.63% 30,000(b) 2,699,999
Sovereign Bancorp
7.50% Cv 28,000(b) 1,344,000
Suiza Capital
5.50% Cv 38,500 1,371,563
Unifi Communications
Warrants 2,000 20
Wendys Financing
5.00% Cm Cv Series A 21,000 853,125
Total preferred stocks & other
(Cost: $35,898,352) $38,773,573
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bonds (33.7%)
Issuer Coupon Principal Value(a)
rate amount
Government obligations (5.9%)
Govt of Algeria
(U.S. Dollar)
<S> <C> <C> <C> <C> <C>
03-04-00 7.06% $181,818(c) $181,610
Govt of Russia
(Russian Ruble)
12-15-20 6.63 6,800,000(b,c) 1,581,000
Govt Trust Certs Israel
11-15-01 9.25 1,133,075 1,152,247
People's Republic of China
(U.S. Dollar)
01-15-96 9.00 2,500,000(c) 2,357,998
Republic of Brazil
(U.S. Dollar)
04-15-14 8.00 7,279,260(c) 5,373,040
Resolution Funding Corp
Zero Coupon
07-15-20 6.56 5,000,000(e) 1,334,494
U.S. Treasury
06-30-03 5.38 40,000,000 38,563,064
08-15-03 5.75 43,300,000 42,130,900
02-15-04 5.88 12,500,000(k) 12,188,296
02-15-06 5.63 20,000,000 19,004,156
10-15-06 6.50 21,000,000 20,798,245
05-15-08 5.63 50,000,000(k) 46,913,244
11-15-16 7.50 62,000,000(k) 68,387,270
TIPS
07-15-02 3.63 10,000,000(n) 10,413,366
Zero Coupon
05-15-05 6.46 18,000,000(e) 12,759,480
11-15-21 6.26 35,000,000(e) 9,106,265
United Mexican States
(U.S. Dollar)
03-12-08 8.63 4,250,000(c) 4,202,188
05-15-26 11.50 3,750,000(c,k) 4,678,125
(U.S. Dollar) Series A
12-31-19 6.25 4,000,000(c) 3,247,520
Total 304,372,508
Mortgage-backed securities (12.0%)
Federal Home Loan Mtge Corp
03-01-15 7.50 25,000,000(p) 25,007,813
08-01-24 8.00 2,116,230 2,122,177
11-01-25 6.50 6,068,154 5,702,184
10-01-29 7.00 39,670,441 38,021,738
Federal Natl Mtge Assn
02-13-04 5.13 11,625,000 10,832,687
05-14-04 5.63 60,000,000 56,731,679
01-01-09 5.50 16,339,263 15,220,129
06-15-09 6.38 20,000,000 18,787,000
06-01-10 6.50 5,319,192 5,183,571
08-01-11 8.50 3,593,028 3,693,568
04-01-13 6.00 13,947,575 13,106,921
05-01-13 6.00 10,156,901 9,537,988
09-01-13 6.00 4,156,046 3,902,796
04-01-14 5.50 27,092,471 24,848,950
03-01-15 6.00 25,000,000(p) 23,429,688
03-01-15 7.00 25,000,000(p) 24,554,688
03-01-15 7.50 50,000,000(p) 48,999,999
04-01-22 8.00 1,911,161 1,921,901
04-01-23 8.50 2,356,540 2,421,603
05-01-23 6.50 1,664,594 1,569,396
05-01-24 6.00 4,650,957 4,258,509
06-01-24 9.00 1,342,861 1,393,946
02-01-25 8.50 984,516 1,007,278
05-01-25 8.50 1,135,209 1,161,455
09-01-25 6.50 3,771,731 3,539,543
11-01-25 7.50 3,801,608 3,730,328
02-01-26 7.00 5,405,554 5,187,656
07-01-26 7.50 3,444,837 3,384,552
02-01-27 7.50 4,024,083 3,951,167
03-01-28 6.00 13,499,924 12,246,996
04-01-28 6.00 17,582,131 15,966,284
10-01-28 6.00 18,602,116 16,875,654
10-01-28 7.00 18,073,011 17,326,667
11-01-28 6.00 25,780,309 23,387,638
03-01-29 6.50 33,493,109 31,305,984
05-01-29 6.50 19,437,418 18,167,960
08-01-29 6.50 19,818,569 18,499,445
11-01-29 6.50 19,888,955 18,591,292
12-01-29 7.00 6,988,928 6,699,555
01-01-30 7.00 17,985,746 17,241,055
03-01-30 8.00 25,000,000(p) 25,015,625
Collateralized Mtge Obligation
Trust Series Z
02-25-24 6.00 8,592,266 7,124,793
Govt Natl Mtge Assn
12-01-08 7.00 9,298,552 9,167,814
05-15-24 7.00 15,577,487 14,988,502
Merrill Lynch Mtge Investors
06-15-21 7.88 842,042(g) 770,205
Series 1996-C2 Cl D
12-21-28 6.96 7,500,000 6,894,750
Total 623,481,129
Aerospace & defense (0.2%)
BE Aerospace
Sr Sub Nts Series B
02-01-06 9.88 2,500,000 2,375,000
Compass Aerospace
Company Guaranty Series B
04-15-05 10.13 1,210,000 544,500
L-3 Communications
Sr Sub Nts Series B
05-01-07 10.38 2,690,000 2,730,350
Newport News Shipbuilding
Sr Nts
12-01-06 8.63 1,000,000 975,000
Northrop-Grumman
03-01-06 7.00 3,750,000 3,560,501
Roller Bearing
Company Guaranty Series B
06-15-07 9.63 1,000,000 915,000
Total 11,100,351
Airlines (0.2%)
Continental Airlines
Series 1974B
01-02-17 6.90 4,940,279 4,552,862
Series 1996A
04-15-15 6.94 4,524,819 4,248,171
Total 8,801,033
Automotive & related (0.7%)
Aftermarket Technology
Sr Sub Nts Series D
08-01-04 12.00 1,000,000 1,005,000
Arvin Capital
Company Guaranty
02-01-27 9.50 3,000,000 2,913,009
Delco Remy Intl
Company Guaranty
08-01-06 10.63 1,000,000 1,020,000
Sr Nts
12-15-07 8.63 500,000 470,000
Exide
Cv Sr Sub Nts
12-15-05 2.90 3,260,000(d) 1,688,093
Federal-Mogul
Company Guaranty
01-15-09 7.50 3,000,000 2,618,010
Ford Motor Credit
10-28-09 7.38 10,000,000 9,682,600
French (JL) Auto Casting
Company Guaranty Series B
06-01-09 11.50 2,000,000 2,020,000
Hayes Lemmerz Intl
Company Guaranty
07-15-06 11.00 1,000,000 1,010,000
Lear
Sub Nts
07-15-06 9.50 3,200,000 3,168,000
Mascotech
Cv Sub Deb
12-15-03 4.50 2,350,000 1,759,563
MSX Intl
Company Guaranty
01-15-08 11.38 1,485,000 1,381,050
Oxford Automotive
Company Guaranty Series D
06-15-07 10.13 2,635,000 2,476,900
Venture Holdings Trust
Sr Nts Series B
07-01-05 9.50 3,000,000 2,730,000
Total 33,942,225
Banks and savings & loans (0.9%)
Capital One Bank
05-15-08 6.70 5,300,000 4,843,032
Corp Andina de Fomento
(U.S. Dollar)
02-01-03 7.10 5,200,000(c) 5,093,149
Cullen/Frost Capital
Series A
02-01-27 8.42 3,200,000 3,069,939
Dao Heng Bank
(U.S. Dollar) Sub Nts
01-24-07 7.75 3,850,000(c,d) 3,685,774
Morgan (JP)
Sr Sub Medium-term Nts Series A
02-15-12 4.00 5,000,000(g) 4,352,050
Norwest
Sr Medium-term Nts Series G
09-15-02 6.38 5,800,000 5,668,614
Provident Trust
Company Guaranty
04-15-28 8.29 5,500,000 5,302,592
Union Planters Bank
Sub Nts
03-15-18 6.50 10,000,000 8,846,881
Union Planters Capital
Company Guaranty
12-15-26 8.20 2,600,000 2,358,815
Washington Mutual Capital
Company Guaranty
06-01-27 8.38 2,900,000 2,787,118
Total 46,007,964
Building materials & construction (0.1%)
Foster Wheeler
11-15-05 6.75 6,100,000 5,098,106
Chemicals (0.3%)
Allied Waste North America
Company Guaranty Series B
01-01-09 7.88 3,500,000 2,948,750
Dow Chemical
11-01-29 7.38 2,200,000 2,103,706
Lyondell Chemical
Series A
05-01-07 9.63 1,500,000 1,430,625
Rohm & Haas
07-15-29 7.85 6,000,000 5,996,154
Waste Management
Sr Nts
10-01-07 7.13 4,500,000 3,896,354
Total 16,375,589
Communications equipment & services (0.9%)
American Tower
Cv
02-15-10 5.00 1,410,000(d) 1,521,038
Aspect Communications
Zero Coupon Cv Sub Deb
08-10-18 6.00 3,400,000(e) 2,040,000
Celcaribe
Sr Nts
03-15-04 13.50 1,450,000 1,250,625
Commscope
Cv Sub Nts
12-15-06 4.00 1,300,000(d) 1,413,750
Corning
Cv Sub Nts
03-01-08 4.88 335,000 1,350,469
DLJ Secured Loan Trust
Sr Secured Ctfs
07-07-07 10.13 2,500,000 2,500,000
EchoStar Communications
Cv Sub Nts
01-01-07 4.88 1,400,000(d) 1,940,750
EchoStar DBS
Sr Nts
02-01-09 9.38 2,460,000 2,404,650
GST Telecom/GST Network Funding
Zero Coupon Sr Disc Nts
05-01-03 10.50 2,000,000(f) 990,000
GT Group Telecom
(U.S. Dollar) Zero Coupon
02-01-05 13.25 2,750,000(c,d,f) 1,650,000
KMC Telecom Holdings
Zero Coupon Sr Disc Nts
02-15-03 12.68 2,800,000(f) 1,610,000
KPNQWest
(U.S. Dollar) Sr Nts
06-01-09 8.13 5,000,000(c) 4,762,499
MJD Communications
Sr Sub Nts Series B
05-01-08 9.50 1,000,000 950,000
NTL
Cv Sub Nts
12-15-09 5.75 1,380,000(d) 1,407,600
Zero Coupon Sr Nts Series B
04-01-03 9.78 3,825,000(f) 2,553,188
Price Communications Wireless
Company Guaranty Series B
12-15-06 9.13 3,000,000 3,000,000
Rural Cellular
Sr Sub Nts Series B
05-15-08 9.63 1,750,000 1,732,500
Spectrasite Holdings
Zero Coupon Sr Disc Nts
04-15-04 11.25 2,000,000(f) 1,170,000
Triton Communications
Zero Coupon Company Guaranty
05-01-03 10.86 2,000,000(f) 1,445,000
Versatel Telecom
(European Monetary Unit)
12-17-04 4.00 1,860,000(c,d) 2,762,284
(U.S. Dollar) Sr Nts
05-15-08 13.25 2,700,000(c) 2,862,000
Vialog
Company Guaranty
11-15-01 12.75 5,000,000 3,875,000
Voicestream Wireless
Sr Nts
11-15-09 10.38 1,800,000(d,h) 1,860,750
Sr Nts Series A
08-15-06 11.63 2,000,000 2,140,000
Total 49,192,103
Computers & office equipment (0.2%)
ASM Lithography Holdings
(U.S. Dollar) Cv
11-30-04 4.25 1,400,000(c,d) 1,819,160
Cooperative Computing
Sr Sub Nts
02-01-08 9.00 2,000,000 762,500
Globix
Sr Nts
02-01-10 12.50 2,000,000(d) 1,990,000
Hewlett-Packard
Zero Coupon Sub Nts
10-14-17 3.13 2,100,000(e) 1,651,125
Internet Capital Group
Cv Sub Nts
12-21-04 5.50 450,000 445,500
PSINet
Sr Nts
11-01-08 11.50 3,000,000 3,045,000
Silicon Graphics
Cv Sr Nts
09-01-04 5.25 1,840,000 1,370,800
Solectron
Zero Coupon Cv
01-27-19 4.00 1,150,000(e) 664,125
Total 11,748,210
Electronics (0.1%)
Conexant Systems
Cv Sub Nts
02-01-07 4.00 590,000(d) 650,475
Intel
Cv Sub Nts
09-01-04 4.00 375,000 1,367,344
Photronics
Cv Sub Nts
06-04-04 6.00 600,000 925,500
Total 2,943,319
Energy (0.5%)
Devon Energy
Cv Deb
08-15-08 4.90 1,275,000 1,137,938
ESI Tractebel
Company Guaranty Series B
12-30-11 7.99 1,250,000 1,103,313
Honam Oil Refinery
(U.S. Dollar)
10-15-05 7.13 5,750,000(c,d) 5,458,162
Lodestar Holdings
Company Guaranty
05-15-05 11.50 3,000,000 900,000
Petroleos Mexicanos
(U.S. Dollar) Series P
09-15-27 9.50 2,000,000(c) 2,032,500
Roil
(U.S. Dollar)
12-05-02 12.78 2,584,000(c,d) 2,273,920
USX
03-01-08 6.85 12,000,000 11,202,998
Total 24,108,831
Energy equipment & services (0.1%)
Global Marine
09-01-07 7.13 4,500,000 4,286,565
Seacor Holdings
Cv Sub Nts
11-15-06 5.38 1,000,000 927,500
Total 5,214,065
Financial services (0.9%)
Airplanes GPA Cl D
(U.S. Dollar) Series 1
03-15-19 10.88 1,732,850(c) 1,486,889
Arcadia Financial
Sr Nts
03-15-07 11.50 1,575,000 1,653,750
Associates Corp of North America
Sr Nts
10-15-02 6.38 10,000,000 9,779,902
Bat-CRAVE-800
08-12-00 6.68 5,000,000(d) 4,997,750
08-12-00 6.86 3,000,000 3,000,977
Countrywide Home Loan
Company Guaranty
06-15-04 6.85 8,000,000 7,762,480
Duke Capital
Sr Nts
10-01-09 7.50 4,500,000 4,398,480
LaBranche
03-01-07 12.00 1,250,000(d) 1,243,750
Salomon
Sr Nts
01-15-06 6.75 4,000,000 3,799,356
Standard Credit Card Trust
Series A
10-07-04 5.95 3,000,000 2,876,790
Wilmington Trust
05-01-08 6.63 3,200,000 2,939,507
Total 43,939,631
Furniture & appliances (--%)
Interface
Sr Sub Nts Series B
11-15-05 9.50 1,500,000 1,357,500
Health care (0.2%)
Alaris Medical Systems
Company Guaranty
12-01-06 9.75 2,100,000 1,743,000
Alkermes
Cv Sub Nts
02-15-07 3.75 665,000(d) 966,744
Alpharma
Cv Sr Sub Nts
06-01-06 3.00 1,815,000(h) 2,191,613
Centocor
Cv Sub Deb
02-15-05 4.75 1,190,000 1,323,875
Inhale Theraptic Systems
Cv Sub Nts
02-08-07 5.00 1,350,000(d) 1,893,375
Watson Pharmaceuticals
Sr Nts
05-15-08 7.13 2,550,000 2,268,251
Total 10,386,858
Health care services (0.2%)
Fountain View
Company Guaranty Series B
04-15-08 11.25 2,150,000 1,591,000
Magellan Health Services
Sr Sub Nts
02-15-08 9.00 2,000,000 1,630,000
Owens & Minor
Company Guaranty Sr Sub Nts
06-01-06 10.88 1,200,000 1,231,500
Paracelsus Healthcare
Sr Sub Nts
08-15-06 10.00 2,000,000 900,000
Sunrise Assisted Living
Cv Sub Nts
06-15-02 5.50 2,600,000 1,972,750
Tenet Healthcare
Sr Nts
12-01-03 8.63 2,500,000 2,428,738
Sr Sub Nts Series B
12-01-08 8.13 2,300,000 2,104,500
Total 11,858,488
Industrial equipment & services (0.2%)
Fairfield Mfg
Sr Sub Nts
10-15-08 9.63 2,000,000 1,820,000
Terex
Company Guaranty Series D
04-01-08 8.88 2,100,000 1,848,000
Thermadyne Mfg
Company Guaranty
06-01-08 9.88 5,000,000 4,100,000
Total 7,768,000
Insurance (0.9%)
American General Institute Capital
Company Guaranty Series A
12-01-45 7.57 10,000,000(d) 9,133,380
Americo Life
Sr Sub Nts
06-01-05 9.25 1,600,000 1,594,000
Arkwright CSN Trust
08-15-26 9.63 3,000,000(d) 3,084,261
Executive Risk Capital
Company Guaranty Series B
02-01-27 8.68 3,000,000 2,974,608
Nationwide CSN Trust
02-15-25 9.88 9,000,000(d) 9,556,326
New England Mutual
02-15-24 7.88 2,000,000(d) 1,973,386
Principal Mutual
03-01-44 8.00 2,500,000(d) 2,302,015
SAFECO Capital
Company Guaranty
07-15-37 8.07 5,000,000 4,451,740
SunAmerica
08-30-05 7.34 5,000,000 4,995,495
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 3,750,000(c,d) 3,593,104
Total 43,658,315
Leisure time & entertainment (0.6%)
Activision
Cv Sub Nts
01-01-05 6.75 670,000 595,463
AMC Entertainment
Sr Sub Nts
03-15-09 9.50 2,000,000 1,560,000
Argosy Gaming
Company Guaranty
06-01-09 10.75 3,000,000 3,082,500
Coast Hotels & Casino
Company Guaranty
04-01-09 9.50 3,000,000 2,820,000
Hollywood Park
Company Guaranty Series B
02-15-07 9.25 1,875,000(d) 1,814,063
Horseshoe Gaming Holding
Company Guaranty
05-15-09 8.63 3,500,000 3,219,999
Lodgenet Entertainment
Sr Nts
12-15-06 10.25 2,000,000 2,000,000
Premier Parks
Sr Nts
04-01-06 9.25 1,250,000 1,181,250
Zero Coupon Sr Disc Nts
04-01-03 10.00 3,000,000(f) 1,935,000
Regal Cinemas
Sr Sub Nts
06-01-08 9.50 3,000,000 2,010,000
Riviera Holdings
Company Guaranty
08-15-04 10.00 2,250,000 1,985,625
Station Casinos
Sr Sub Nts
04-15-07 9.75 2,000,000 1,980,000
Time Warner
02-01-24 7.57 2,900,000 2,758,844
Trump Atlantic City Assn/Funding
1st Mtge Company Guaranty
05-01-06 11.25 1,000,000 690,000
United Artists Theatres
Series 1995A
07-01-15 9.30 1,844,676 1,294,096
Total 28,926,840
Media (1.6%)
Adelphia Communications
Sr Nts Series B
02-01-08 8.38 3,000,000 2,722,500
Antenna TV
08-01-07 9.00 3,000,000 2,730,000
Central Euro Media
(U.S. Dollar) Sr Nts
08-15-04 9.38 3,675,000(c) 1,515,938
Charter Communications Holdings/Charter Capital
Sr Nts
01-15-10 10.25 2,500,000(d) 2,487,500
Comcast Cable Communications
11-15-08 6.20 6,100,000 5,469,583
Cox Communications
11-15-15 7.25 5,000,000 4,625,279
06-15-25 7.63 5,000,000 4,790,350
Cox Enterprises
06-15-09 7.38 10,000,000(d) 9,671,500
CSC Holdings
Sr Nts
07-15-08 7.25 5,000,000 4,698,510
Sr Sub Nts
11-01-05 9.25 2,000,000 2,050,000
Golden Sky Systems
Company Guaranty Series B
08-01-06 12.38 1,500,000(d) 1,657,500
Interpublic Group
Cv Sub Nts
06-01-06 1.87 1,650,000 1,513,875
Lamar Media
Company Guaranty
12-01-06 9.63 4,100,000 4,120,500
MDC Communications
(U.S. Dollar) Sr Sub Nts
12-01-06 10.50 1,350,000(c) 1,296,000
Outdoor Systems
Company Guaranty
10-15-06 9.38 2,500,000 2,556,250
06-15-07 8.88 5,000,000 5,100,000
Pegasus Media & Communications
Sr Nts Series B
10-15-05 9.63 2,000,000 1,940,000
Rogers Cablesystems
(Canadian Dollar)
01-15-14 9.65 5,000,000(c) 3,638,307
Susquehanna Media
Sr Sub Nts
05-15-09 8.50 960,000 931,200
TCI Communications
08-01-15 8.75 3,850,000 4,188,762
Tele-Communications
02-15-23 8.75 3,500,000 3,605,380
Telewest Communications
(British Pound) Cv
02-19-07 5.25 805,000(c,d) 1,831,479
(U.S. Dollar) Zero Coupon Sr Disc Nts
04-15-04 9.25 1,600,000(c,d,f) 960,000
Time Warner Entertainment
Sr Nts
07-15-33 8.38 10,000,000 10,385,030
Total 84,485,443
Metals (0.3%)
EnviroSource
Sr Nts
06-15-03 9.75 1,000,000 680,000
Sr Nts Series B
06-15-03 9.75 1,500,000 1,020,000
Imexsa Export Trust
(U.S. Dollar)
05-31-03 10.13 2,251,586(c,d) 2,161,522
Ormet
Company Guaranty
08-15-08 11.00 2,700,000(d) 2,538,000
P & L Coal Holdings
Company Guaranty Series B
05-15-08 8.88 3,000,000 2,782,500
Pen Holdings
Company Guaranty Series B
06-15-08 9.88 3,000,000 2,730,000
U.S. Can
Company Guaranty
10-15-06 10.13 2,000,000 2,010,000
Total 13,922,022
Miscellaneous (1.2%)
Adams Outdoor Advertising
Sr Nts
03-15-06 10.75 2,000,000 2,075,000
Advanced Glassfiber Yarn
Sr Sub Nts
01-15-09 9.88 2,130,000 1,959,600
Argo-Tech
Company Guaranty
10-01-07 8.63 1,000,000 820,000
Bistro Trust
Sub Nts
12-31-02 9.50 12,000,000(d) 11,181,599
Continucare
Cv Sr Sub Nts
10-31-02 7.00 1,000,000(d) 125,000
Delphes 2
(U.S. Dollar)
05-05-09 7.75 5,000,000(c,d) 4,665,650
Dura Operating
Company Guaranty Series B
05-01-09 9.00 675,000 626,063
Equinix
12-01-07 13.00 2,000,000 2,060,000
Falcon Products
Company Guaranty Series B
06-15-09 11.38 2,000,000 1,870,000
First Empire Capital
Company Guaranty
02-01-27 8.23 4,000,000 3,775,370
Great Central Mines
(U.S. Dollar) Sr Nts
04-01-08 8.88 2,500,000(c) 2,262,500
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 4,000,000(c,d) 1,740,000
ISG Resources
04-15-08 10.00 2,760,000 2,463,300
Jasmine Submarine Telecom
(U.S. Dollar) Sr Nts
05-30-11 8.48 827,320(c,d) 744,414
Jorgensen (Earle M)
Sr Nts
04-01-05 9.50 1,225,000 1,145,375
Murrin Murrin Holdings
(U.S. Dollar) Sr Nts
08-31-07 9.38 1,000,000(c) 910,000
Nationwide Credit
Sr Nts Series A
01-15-08 10.25 2,500,000 1,700,000
Network Associates
Zero Coupon Cv Sub Deb
02-13-18 3.24 5,900,000(e) 2,197,750
Norcal Waste Systems
Company Guaranty Series B
11-15-05 13.50 2,000,000 2,137,500
NSM Steel
Company Guaranty
02-01-06 12.00 1,522,095(b,d) 91,326
Omega Cabinets
Sr Sub Nts
06-15-07 10.50 1,775,000 1,775,000
Oshkosh Truck
Company Guaranty
03-01-08 8.75 3,000,000 2,838,750
Outsourcing Solutions
Sr Sub Nts Series B
11-01-06 11.00 1,125,000 1,012,500
Pierce Leahy Command
Company Guaranty
05-15-08 8.13 4,050,000 3,533,625
SC Intl
09-01-07 9.25 1,950,000 1,794,000
Stellex Inds
Sr Sub Nts Series B
11-01-07 9.50 1,350,000 918,000
Teleglobe
(U.S. Dollar) Company Guaranty
07-20-29 7.70 2,000,000(c) 1,938,400
Vesta Capital
01-15-27 8.52 5,000,000(b,d) 1,773,025
Total 60,133,747
Multi-industry conglomerates (0.6%)
Coltec Inds
Company Guaranty
04-15-08 7.50 5,000,000 4,762,500
Jordan Inds
Sr Nts Series D
08-01-07 10.38 6,080,000 6,019,200
Packaged Ice
Company Guaranty Series B
02-01-05 9.75 3,000,000 2,670,000
Prime Succession
Sr Sub Nts
08-15-04 10.75 980,000 245,000
USI America Holdings
Company Guaranty
10-15-03 7.13 5,000,000 4,831,165
Sr Nts Series B
12-01-06 7.25 3,350,000 3,145,235
Westinghouse Electric
06-01-01 8.88 9,750,000 9,866,538
Total 31,539,638
Paper & packaging (0.5%)
Ball
Company Guaranty
08-01-08 8.25 1,750,000 1,662,500
Doman Inds
(U.S. Dollar) Sr Nts Series B
11-15-07 9.25 2,000,000(c) 1,660,000
Gaylord Container
Sr Nts
06-15-07 9.75 1,750,000 1,583,750
Graham Packaging/GPC Capital
Company Guaranty Series B
01-15-08 8.75 2,000,000 1,790,000
Owens-Illinois
Sr Nts
05-15-07 8.10 4,350,000 4,138,256
Packaging Corp of America
Company Guaranty
04-01-09 9.63 3,745,000 3,754,363
Quno Corp
(U.S. Dollar) Sr Nts
05-15-05 9.13 2,500,000(c) 2,625,000
Repap New Brunswick
(U.S. Dollar) Sr Nts
06-01-04 9.00 4,200,000(c) 4,058,250
Riverwood Intl
Company Guaranty Sr Nts
04-01-06 10.25 2,000,000 2,010,000
Silgan Holdings
06-01-09 9.00 2,650,000 2,563,875
Total 25,845,994
Restaurants & lodging (0.1%)
MGM Grand
02-06-08 6.88 7,380,000 6,507,918
Retail (0.2%)
Costco Companies
Zero Coupon Cv Sub Nts
08-19-17 3.50 793,000(e) 901,046
Maxim Group
Company Guaranty Series B
10-15-07 9.25 2,500,000 1,993,750
Meyer (Fred)
Company Guaranty
03-01-08 7.45 6,075,000 5,897,745
Wal-Mart CRAVE Trust
07-17-06 7.00 3,648,924(d) 3,497,676
Total 12,290,217
Textiles & apparel (0.1%)
Galey & Lord
Company Guaranty
03-01-08 9.13 4,750,000 1,472,500
Westpoint Stevens
Sr Nts
06-15-08 7.88 3,250,000 2,762,500
Total 4,235,000
Transportation (0.3%)
Atlas Air Series C
01-02-10 8.01 8,700,066 8,176,583
Greater Beijing First Expressways
(U.S. Dollar) Sr Nts
06-15-04 9.25 5,120,000(c) 1,740,800
Hermes Europe RailTel
(U.S. Dollar) Sr Nts
01-15-09 10.38 3,300,000(c) 3,085,500
Zhuhai Highway
(U.S. Dollar) Sub Nts
07-01-08 11.50 5,000,000(c,d) 1,900,000
Total 14,902,883
Utilities -- electric (1.2%)
Alabama Power
1st Mtge
12-01-24 9.00 2,200,000 2,287,419
Arizona Public Service
1st Mtge Sale Lease-backed Obligation
12-30-15 8.00 3,600,000 3,492,423
Cleveland Electric Illuminating
07-01-04 7.67 6,500,000 6,410,768
1st Mtge Series B
05-15-05 9.50 9,000,000 9,234,590
CMS Energy
Sr Nts
05-15-02 8.13 5,000,000 4,952,273
11-15-04 7.63 2,500,000 2,393,001
Connecticut Light & Power
1st Mtge Series C
06-01-02 7.75 5,000,000 4,977,857
El Paso Electric
1st Mtge Series D
02-01-06 8.90 2,750,000 2,842,813
Jersey Central Power & Light
1st Mtge
11-01-25 6.75 7,200,000 6,167,851
Public Service Electric & Gas
1st & Ref Mtge (AMBAC Insured)
01-01-16 6.75 2,600,000(i) 2,386,966
Salton Sea Funding
Series C
05-30-10 7.84 1,325,000 1,266,501
Sithe Independence Funding
Series A
12-30-13 9.00 1,500,000 1,527,183
Texas Utilities Electric
08-01-07 7.17 5,000,000 4,765,400
TXU Electric Capital
Company Guaranty
01-30-37 8.18 5,000,000 4,817,056
Western Massachusetts Electric
1st Mtge Series B
07-01-01 7.38 2,750,000 2,744,286
Total 60,266,387
Utilities -- gas (0.3%)
Columbia Gas System
Series E
11-28-10 7.32 7,000,000 6,456,805
El Paso Energy
Sr Nts
05-16-09 6.75 1,900,000 1,769,268
Sr Nts Series B
07-15-01 6.63 8,675,000 8,549,299
Total 16,775,372
Utilities -- telephone (2.2%)
360 Communications
04-01-09 7.60 3,000,000 2,949,760
Airtouch Communications
05-01-08 6.65 10,000,000 9,394,043
Allegiance Telecom
Zero Coupon Sr Disc Nts Series B
02-15-03 11.94 2,450,000(f) 1,788,500
AT&T Canada
(U.S. Dollar) Sr Nts
11-01-08 10.63 1,200,000(c) 1,344,000
(U.S. Dollar) Zero Coupon Sr Disc Nts
06-15-03 9.95 2,300,000(c,f) 1,817,000
Bell Atlantic Financial Services
Cv
09-15-05 4.25 1,151,000(d) 1,684,362
BellSouth Capital Funding
02-15-10 7.75 10,000,000 10,056,780
Call-Net Enterprises
(U.S. Dollar) Sr Nts
08-15-08 8.00 1,750,000(c) 1,373,750
COLT Telecom Group
(European Monetary Unit)
03-29-06 2.00 540,000(c,d) 1,443,776
France Telecom
(European Monetary Unit) Cv
11-29-04 4.13 1,650,000(c) 1,897,479
Geotek Communications
Cv Sr Sub Nts
02-15-01 12.00 1,655,000(b) 2,069
Hyperion Telecommunications
Sr Nts Series B
09-01-04 12.25 1,500,000 1,597,500
Intermedia Communications
Sr Nts Series B
11-01-07 8.88 1,000,000 935,000
06-01-08 8.60 3,000,000 2,760,000
03-01-09 9.50 2,000,000 1,910,000
Level 3 Communications
03-15-08 11.00 1,000,000(d) 1,002,500
03-15-10 6.00 1,330,000 1,369,900
McLeod USA
Sr Nts
03-15-08 8.38 2,300,000 2,110,250
02-15-09 8.13 2,250,000 2,019,375
Nextel Communications
11-15-09 9.38 2,500,000 2,409,375
Cv Sr Nts
01-15-10 5.25 1,350,000(d) 1,501,875
Primus Telecomm Group
02-15-07 5.75 2,130,000(d) 2,215,200
Sr Nts
08-01-04 11.75 2,300,000 2,277,000
Qwest Communications Intl
Sr Nts Series B
11-01-08 7.50 6,950,000 6,743,110
Rhythms NetConnections
Sr Nts
02-15-10 14.00 1,000,000(d) 990,000
RSL Communications
(U.S. Dollar) Company Guaranty
11-15-06 12.25 3,000,000(c) 2,910,000
Sprint Capital
Company Guaranty
05-01-09 6.38 10,000,000 9,097,600
U S WEST Capital Funding
Company Guaranty
08-15-01 6.88 20,000,000(d) 19,862,369
U S WEST Communications
11-10-26 7.20 5,000,000 4,436,364
United Pan-Europe Communications
(U.S. Dollar) Sr Nts
02-01-10 11.25 925,000(c,d) 931,938
02-01-10 11.50 550,000(c,d) 552,750
Verio
Sr Nts
11-15-09 10.63 2,000,000(d) 1,995,000
Vodafone AirTouch
(U.S. Dollar)
02-15-10 7.75 5,000,000(c,d) 4,972,900
Total 108,351,525
Total bonds
(Cost: $1,814,183,634) $1,729,537,211
Short-term securities (4.1%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.4%)
Federal Home Loan Bank Disc Nts
03-08-00 5.62% $700,000 $699,102
03-22-00 5.71 1,600,000 1,594,309
04-07-00 5.70 25,300,000 25,136,168
04-24-00 5.77 25,000,000 24,773,507
Federal Home Loan Mtge Corp Disc Nts
03-09-00 5.62 1,600,000 1,597,654
03-14-00 5.60 12,500,000 12,472,826
03-16-00 5.68 4,000,000 3,989,556
03-28-00 5.63 6,900,000 6,868,765
Federal Natl Mtge Assn Disc Nts
03-02-00 5.80 1,400,000 1,399,545
03-09-00 5.82 1,915,000 1,912,192
03-23-00 5.70 7,000,000 6,973,545
03-30-00 5.73 10,000,000 9,949,858
04-10-00 5.73 4,100,000 4,073,430
04-11-00 5.72 20,000,000 19,867,465
04-27-00 5.89 4,600,000 4,555,256
05-11-00 5.89 20,800,000 20,552,480
05-18-00 5.89 28,100,000 27,733,100
Total 174,148,758
Commercial paper (0.7%)
Barclays
03-23-00 5.80 2,000,000 1,992,621
Bell Atlantic Network Funding
03-07-00 5.72 2,300,000 2,297,446
Ciesco LP
04-19-00 5.90 5,900,000 5,851,243
Clorox
04-06-00 5.86 1,800,000 1,789,233
DaimlerChrysler North America
04-17-00 5.90 600,000 595,320
Ford Motor Credit
03-03-00 5.53 2,200,000 2,198,911
03-28-00 5.78 11,200,000 11,149,911
Paccar Financial
03-20-00 5.80 6,500,000 6,479,127
Windmill Funding
04-05-00 5.90 3,800,000(m) 3,777,428
Total 36,131,240
Total short-term securities
(Cost: $210,356,700) $210,279,998
Total investments in securities
(Cost: $3,925,429,171)(r) $5,296,396,666
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing. For long-term debt securities, item identified is in
default as to payment of interest and/or principal.
(c) Foreign security values are stated in U.S. dollars. For debt securities,
principal amounts are denominated in the currency indicated. As of Feb. 29,
2000, the value of foreign securities represented 10.22% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) For those zero coupon bonds that become coupon paying at a future date, the
interest rate disclosed represents the annualized effective yield from the date
of acquisition to interest reset date disclosed.
(g) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on Feb. 29, 2000.
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 29, 2000, is as follows:
Security Acquisition Cost
dates
Alpharma*
3.00% Cv Sr Sub Nts 2006 10-14-99 thru 02-24-00 $1,983,043
Voicestream*
10.38% Sr Nts 2009 11-04-99 1,800,000
*Represents a security sold under Rule 144A, which is exempt from registration
under the Securities Act of 1933, as amended.
(i) The following abbreviations are used in portfolio descriptions to identify
the insurer of the issue:
AMBAC -- American Municipal Bond Association Corporation
(j) ACES (Automatically Convertible Equity Securities) are structured as
convertible preferred securities. Investors receive an enhanced yield but based
upon a specific formula, potential appreciation is limited. ACES pay dividends,
have voting rights, are noncallable for at least three years and upon maturity,
convert into shares of common stock.
(k) Security is partially or fully on loan. See Note 5 to the financial
statements.
(l) Pay-in-kind securities are securities in which the issuer makes interest or
dividend payments in cash or in additional securities. The securities usually
have the same terms as the original holdings.
(m) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(n) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semiannual interest
payments equal a fixed percentage of the inflation-adjusted principal amount.
(o) At Feb. 29, 2000, securities valued at $26,400,000 were held to cover open
call options written as follows:
Issuer Shares Exercise Expiration Value(a)
price date
American Power Conversion 100,000 $35 March 2000 $137,500
American Power Conversion 100,000 35 June 2000 418,750
Time Warner 50,000 85 March 2000 218,750
Time Warner 50,000 85 April 2000 362,500
Washington Mutual 250,000 25 April 2000 195,312
Washington Mutual 250,000 23 April 2000 406,250
Total $1,739,062
(p) At Feb. 29, 2000, the cost of securities purchased, including interest
purchased, on a when-issued basis was $146,904,253.
(q) PRIDES (Preferred Redeemable Increased Dividend Equity Securities) are
structured as convertible preferred securities. Investors receive an enhanced
yield but based upon a specific formula, potential appreciation is limited.
PRIDES pay dividends, have voting rights, are noncallable for three years and
upon maturity, convert into shares of common stock.
(r) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $3,925,429,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $1,637,660,000
Unrealized depreciation (266,692,000)
------------
Net unrealized appreciation $1,370,968,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - New Dimensions Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (93.9%)
Issuer Shares Value(a)
Aerospace & defense (0.8%)
<S> <C> <C>
Honeywell Intl 506,000 $24,351,250
United Technologies 236,000 12,021,250
Total 36,372,500
Airlines (1.1%)
AMR 326,300(b) 17,253,113
Southwest Airlines 1,956,250 36,068,359
Total 53,321,472
Banks and savings & loans (2.1%)
State Street 537,200 39,148,450
Wells Fargo 1,875,600 62,012,025
Total 101,160,475
Beverages & tobacco (0.3%)
Coca-Cola 326,200 15,800,313
Communications equipment & services (5.9%)
Lucent Technologies 1,101,800 65,557,100
Motorola 684,100 116,639,049
Nokia ADR Cl A 244,200(c) 48,427,913
Nortel Networks 162,800(c) 18,152,200
Tellabs 681,600(b) 32,716,800
Total 281,493,062
Computers & office equipment (21.3%)
America Online 1,096,100(b) 64,669,900
Automatic Data Processing 521,400 22,713,488
BMC Software 456,926(b) 21,018,596
Cisco Systems 2,377,800(b) 314,315,437
EMC 978,600(b) 116,453,399
EQUANT 145,000(b,c) 16,416,129
Hewlett-Packard 293,100 39,421,950
Intl Business Machines 815,500 83,181,000
Microsoft 1,304,700(b) 116,607,562
Novell 1,309,700(b) 43,301,956
Oracle 570,000(b) 42,322,500
Solectron 1,106,100(b) 72,449,550
Sun Microsystems 325,800(b) 31,032,450
Yahoo! 228,200(b) 36,440,688
Total 1,020,344,605
Electronics (18.6%)
Agilent Technologies 195,200(b) 20,239,800
Applied Materials 326,200(b) 59,674,213
Corning 603,400 113,439,200
Intel 1,141,700 129,012,100
JDS Uniphase 1,220,800(b) 321,985,999
Teradyne 602,100(b) 52,382,700
Texas Instruments 1,174,600 195,570,900
Total 892,304,912
Energy (3.0%)
Chevron 309,400 23,108,313
Exxon Mobil 1,628,398 122,638,724
Total 145,747,037
Energy equipment & services (0.5%)
Halliburton 586,200 22,385,513
Financial services (5.2%)
Citigroup 1,891,850 97,784,996
Kansas City Southern Inds 360,600 28,397,250
MBNA 1,668,350 37,954,963
Morgan Stanley, Dean Witter, Discover & Co 1,174,580 82,734,479
Schwab (Charles) 60,600 2,533,838
Total 249,405,526
Health care (4.9%)
Bristol-Myers Squibb 1,220,300 69,328,293
Guidant 102,200(b) 6,885,725
Medtronic 1,174,700 56,899,531
Pfizer 1,082,100 34,762,463
Schering-Plough 721,700 25,169,288
Warner-Lambert 481,600 41,206,900
Total 234,252,200
Health care services (0.8%)
Cardinal Health 913,450 37,679,813
Household products (0.8%)
Colgate-Palmolive 715,700 37,350,594
Industrial equipment & services (0.4%)
Illinois Tool Works 390,800 20,199,475
Insurance (1.1%)
American Intl Group 619,940 54,825,944
Leisure time & entertainment (1.8%)
Time Warner 985,400 84,251,700
Media (4.9%)
CBS 1,628,240(b) 96,982,045
Clear Channel Communications 326,200(b) 21,733,075
Comcast Special Cl A 1,008,900 42,878,250
Gannett 1,125,086 73,341,544
Total 234,934,914
Multi-industry conglomerates (4.4%)
General Electric 1,223,300 161,704,968
Tyco Intl 1,327,544(c) 50,363,701
Total 212,068,669
Paper & packaging (0.4%)
Intl Paper 521,200 19,186,675
Restaurants & lodging (0.6%)
Marriott Intl Cl A 962,700 26,534,419
Retail (8.7%)
Costco Wholesale 1,465,500(b) 72,725,438
Home Depot 1,467,950 84,865,859
Safeway 1,446,300(b) 55,772,944
Target 1,011,300 59,666,700
Wal-Mart Stores 2,968,300 144,519,105
Total 417,550,046
Utilities -- gas (1.9%)
El Paso Energy 912,000 33,801,000
Enron 813,700 56,145,300
Total 89,946,300
Utilities -- telephone (4.3%)
AT&T 408,300 20,185,331
Bell Atlantic 424,200 20,759,288
BellSouth 540,000 22,005,000
Global Crossing 150,000(b,c) 6,993,750
Level 3 Communications 100,000(b) 11,387,500
MCI WorldCom 1,467,900(b) 65,505,037
U S WEST Communications Group 378,600 27,495,825
Vodafone AirTouch ADR 546,550(c,e) 31,529,103
Total 205,860,834
Total common stocks
(Cost: $2,733,922,453) $4,492,976,998
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (6.4%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.6%)
Federal Home Loan Bank Disc Nts
<S> <C> <C> <C>
03-08-00 5.62% $4,000,000 $3,994,871
03-08-00 5.70 10,500,000 10,486,536
04-12-00 5.74 29,800,000 29,589,280
Federal Home Loan Mtge Corp Disc Nts
03-09-00 5.62 10,000,000 9,985,338
03-09-00 5.70 2,400,000 2,396,481
03-14-00 5.60 14,700,000 14,668,043
03-21-00 5.64 21,300,000 21,230,171
04-27-00 5.85 23,900,000 23,667,527
Federal Natl Mtge Assn Disc Nts
03-02-00 5.61 14,000,000 13,995,454
03-23-00 5.70 30,000,000 29,886,620
04-03-00 5.76 10,600,000 10,542,685
Total 170,443,006
Commercial paper (2.8%)
ANZ (Delaware)
03-15-00 5.98 3,500,000 3,491,571
AT&T
03-17-00 5.77 9,700,000 9,672,656
Bayer
04-11-00 5.86 11,600,000(d) 11,519,882
BBV Finance (Delaware)
03-17-00 5.79 4,600,000 4,587,466
04-28-00 5.92 17,600,000 17,423,046
CAFCO
03-28-00 5.83 12,000,000(d) 11,945,866
Corporate Receivables
04-26-00 5.95 5,900,000(d) 5,844,511
CXC
04-24-00 5.96 3,000,000(d) 2,972,821
DaimlerChrysler North America
04-17-00 5.90 11,400,000 11,311,080
Delaware Funding
03-15-00 5.76 3,500,000(d) 3,491,614
04-27-00 5.95 2,700,000(d) 2,673,737
Deutsche Bank Financial
03-08-00 5.79 2,900,000 2,896,275
Falcon Asset
03-27-00 5.80 6,300,000(d) 6,272,736
Ford Motor Credit
03-28-00 5.78 5,900,000 5,873,614
General Electric Capital
03-01-00 5.88 10,400,000 10,398,301
GMAC
03-30-00 5.79 5,300,000 5,274,560
SBC Communications
03-02-00 5.77 3,100,000(d) 3,099,006
Sheffield Receivables
03-22-00 5.82 5,500,000(d) 5,480,505
04-14-00 5.89 4,000,000(d) 3,970,750
Toyota Motor Credit
04-12-00 5.86 4,300,000(d) 4,270,107
Variable Funding
04-07-00 5.89 2,900,000(d) 2,881,221
Total 135,351,325
Total short-term securities
(Cost: $305,878,360) $305,794,331
Total investments in securities
(Cost: $3,039,800,813)(f) $4,798,771,329
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000, the
value of foreign securities represented 3.59% of net assets.
(d) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(e) Security is partially or fully on loan. See Note 5 to the financial
statements.
(f) At Feb. 29, 2000, the cost of securities for federal income tax purposes was
approximately $3,039,800,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $1,832,602,000
Unrealized depreciation (73,631,000)
-----------
Net unrealized appreciation $1,758,971,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Small Cap Advantage Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (95.7%)
Issuer Shares Value(a)
Airlines (0.9%)
<S> <C> <C>
America West Holdings Cl B 2,000(b) $26,750
Amtran 1,300(b) 21,938
SkyWest 2,200 65,312
Total 114,000
Automotive & related (1.8%)
DollarThrifty Automotive Group 2,800(b) 36,750
Gentex 3,650(b) 106,648
Smith (AO) 2,100 36,225
Tower Automotive 3,500(b) 41,563
Winnebago Inds 600 12,825
Total 234,011
Banks and savings & loans (3.7%)
Commerce Bancorp 925 31,103
Cullen/Frost Bankers 2,200 47,300
Dime Community Bancshares 1,600 23,700
First Financial Holdings 100 1,525
First Midwest Bankcorp 1,350 33,666
Flagstar Bancorp 2,500 32,188
Hamilton Bancorp 1,900(b) 31,706
Hudson United Bancorp 612 12,355
MAF Bancorp 1,500 25,500
NBT Bancorp 1,125 14,625
Provident Bankshares 700 11,288
Queens County Bancorp 1,600 30,400
Republic Bancorp 2,950 23,600
Silicon Valley Bancshares 700(b) 55,475
U.S. Trust 600 83,099
Webster Financial 1,000 21,125
Total 478,655
Beverages & tobacco (0.9%)
Beringer Wine Estates Holdings Cl B 1,100(b) 39,669
Canandaigua Wine Cl A 1,500(b) 73,500
Total 113,169
Building materials & construction (3.4%)
Dycom Inds 2,750(b) 137,499
Elcor 930 31,155
Florida Rock Inds 1,400 46,638
Horton (DR) 4,300 48,375
Insituform Technologies Cl A 2,100(b) 59,324
NCI Building Systems 1,500(b) 22,688
Pulte 1,500 25,219
Ryland Group 2,000 35,500
URS 2,700(b) 36,788
Total 443,186
Chemicals (0.5%)
Geon 1,700 35,488
MacDermid 700 23,931
Total 59,419
Communications equipment & services (5.7%)
Adaptive Broadband 400(b) 46,013
Adtran 200(b) 14,713
Advanced Fibre Communications 400(b) 27,250
Aspect Communications 1,700(b) 109,543
C-COR Electronics 800(b) 35,775
Com21 600(b) 42,000
CommScope 2,760(b) 107,467
Digital Microwave 2,250(b) 75,094
Harmonic Lightwaves 100(b) 13,694
InterVoice 1,100(b) 39,738
Leap Wireless Intl 510(b) 44,721
P-COM 4,700(b) 85,774
Proxim 500(b) 71,750
Spectrian 1,100(b) 25,300
Total 738,832
Computers & office equipment (17.3%)
About.com 630(b) 44,258
Acxiom 1,200(b) 34,650
ADAC Laboratories 1,750(b) 21,766
American Management Systems 1,400(b) 44,538
Aspect Development 200(b) 29,775
Aspen Technology 1,200(b) 53,700
BindView Development 700(b) 23,625
BISYS Group 400(b) 20,625
Black Box 400(b) 29,925
Clarify 450(b) 64,940
Cognex 1,300(b) 57,119
Dendrite Intl 2,550(b) 62,793
Diamond Technology Partners 440(b) 30,085
Emulex 200(b) 32,000
Entrust Technologies 200(b) 17,650
FactSet Research Systems 1,300 39,163
go2net 200(b) 17,400
Hadco 820(b) 45,408
Harbinger 1,000(b) 32,063
HearMe 900(b) 18,731
HNC Software 470(b) 46,236
Hyperion Solutions 1,400(b) 69,124
Insight Enterprises 800(b) 25,100
ISS Group 200(b) 21,000
Kronos 700(b) 44,450
Macromedia 1,750(b) 151,265
MedQuist 1,000(b) 25,750
Mercury Interactive 2,500(b) 240,937
Micromuse 200(b) 28,363
MICROS Systems 500(b) 27,688
MicroStrategy 100 13,906
Natl Computer Systems 1,000 39,750
Natl Instruments 1,400(b) 62,868
New Era of Networks 250(b) 22,906
Peregrine Systems 500(b) 27,313
Pinnacle Systems 700(b) 35,088
Profit Recovery Group Intl 2,900(b) 53,650
Project Software & Development 300(b) 23,231
Proxicom 600(b) 25,125
Rare Medium Group 200(b) 12,000
Razorfish Cl A 380(b) 12,730
Remedy 1,800(b) 102,037
RSA Security 900(b) 60,243
S1 300(b) 30,188
SAGENT 820(b) 14,299
SanDisk 300(b) 26,700
SERENA Software 500(b) 21,094
THQ 900(b) 18,169
USinternetworking 300(b) 20,025
Verity 700(b) 37,363
VerticalNet 100(b) 22,000
webMethods 100(b) 30,806
Whittman-Hart 1,700(b) 77,137
Xircom 1,100(b) 45,684
Zixit 300(b) 16,134
Total 2,250,573
Electronics (14.2%)
Alpha Inds 820(b) 119,053
Amkor Technology 600 31,163
ANADIGICS 100(b) 13,500
Anixter Intl 1,000(b) 18,688
Audiovox Cl A 200(b) 12,941
Burr-Brown 850(b) 49,884
C-Cube Microsystems 900(b) 83,925
Credence Systems 100(b) 13,325
CTS 800 51,600
Cypress Semiconductor 600(b) 27,375
Dallas Semiconductor 700 28,263
Dionex 800(b) 25,250
Electro Scientific Inds 1,280(b) 72,560
Etec Systems 520(b) 61,246
Exar 795(b) 55,203
Harman Intl Inds 500 30,969
Helix Technology 1,100 78,238
Integrated Device Technology 500(b) 18,438
Intl Rectifier 1,600(b) 67,000
KEMET 900(b) 55,294
Kulicke & Soffa Inds 1,200(b) 95,400
Lam Research 200(b) 31,225
Lattice Semiconductor 1,500(b) 105,374
Micrel 1,000(b) 115,249
MRV Communications 100(b) 15,681
Photronics 300(b) 12,769
Power Integrations 900(b) 46,744
Powerwave Technologies 750(b) 119,905
S3 2,000(b) 31,875
Sensormatic Electronics 2,200 41,800
Siliconix 300(b) 24,300
Three-Five Systems 966(b) 59,288
TranSwitch 200(b) 23,500
Trimble Navigation 2,300(b) 55,200
TriQuint Semiconductor 200(b) 23,750
Varian Medical Systems 2,400 95,850
Vicor 1,330(b) 30,258
Total 1,842,083
Energy (0.9%)
Barrett Resources 2,200(b) 64,075
Forest Oil 2,600(b) 21,288
HS Resources 2,200(b) 36,300
Total 121,663
Energy equipment & services (1.8%)
Louis Dreyfus Natural Gas 1,700(b) 35,063
Marine Drilling 2,300(b) 52,468
Patterson Energy 600(b) 13,688
Pride Intl 4,800(b) 71,099
Tuboscope 3,000(b) 50,063
UTI Energy 400(b) 12,825
Total 235,206
Financial services (1.9%)
Delphi Financial Group Cl A 1,414(b) 37,294
Financial Federal 1,500(b) 25,688
Jefferies Group 1,400 32,725
Metris Companies 1,600 41,400
Radian Group 1,800 62,437
Raymond James Financial 1,300 25,675
SEI Investments 200 17,863
Total 243,082
Food (1.2%)
Earthgrains 2,700 40,500
Performance Food Group 1,400(b) 33,250
Smithfield Foods 3,200(b) 49,600
Suiza Foods 800(b) 31,300
Total 154,650
Furniture & appliances (1.2%)
Briggs & Stratton 800 26,750
Ethan Allen Interiors 2,000 46,625
Furniture Brands Intl 1,600(b) 25,700
La-Z-Boy 3,200 53,200
Total 152,275
Health care (11.7%)
Affymetrix 100(b) 28,963
Alpharma Cl A 2,200 76,175
Bio-Technology General 1,200(b) 23,063
Cephalon 1,000(b) 66,469
Coherent 1,600(b) 169,599
COR Therapeutics 400(b) 35,850
Diversa 200(b) 26,700
Enzo Biochem 750(b) 59,438
ENZON 270(b) 15,660
Gilead Sciences 200(b) 15,300
Human Genome Sciences 200(b) 43,650
IDEC Pharmaceuticals 1,100(b) 154,962
Immune Response 1,720(b) 26,660
Incyte Pharmaceuticals 700(b) 192,893
Jones Pharma 1,250 89,687
Liposome 1,700(b) 22,844
Priority Healthcare Cl B 1,300(b) 62,400
Protein Design Labs 510(b) 127,595
Quest Diagnostics 2,300(b) 78,919
Sequenom 200(b) 25,000
Summit Technology 400(b) 3,000
Techne 900(b) 77,203
Vertex Pharmaceuticals 900(b) 65,363
Wesley Jessen VisionCare 1,200(b) 34,500
Total 1,521,893
Health care services (2.5%)
Abgenix 100(b) 32,213
Apria Healthcare Group 2,400(b) 34,200
Celera Genomics 100(b) 24,400
Cerner 650(b) 23,034
Cytyc 900(b) 41,400
Orthodontic Centers of America 3,500(b) 60,594
Patterson Dental 1,500(b) 54,047
Renal Care Group 2,800(b) 49,175
Total 319,063
Household products (0.2%)
Valence Technology 900(b) 30,684
Industrial equipment & services (1.0%)
Kennametal 1,400 32,550
Manitowoc 1,500 40,406
Roper Inds 1,600 43,600
Terex 1,300(b) 15,438
Total 131,994
Insurance (1.7%)
Blanch (EW) Holdings 700 32,900
Fidelity Natl Financial 900 11,306
First American Financial 1,100 12,788
Gallagher (Arthur J) 1,000 51,125
Hooper Holmes 2,500 76,875
LandAmerica Financial Group 800 14,400
Reinsurance Group of America 1,100 18,769
Total 218,163
Leisure time & entertainment (0.5%)
Aztar 7,300(b) 69,350
Media (3.2%)
Catalina Marketing 830(b) 70,653
Emmis Communications Cl A 740(b) 27,010
McClatchy Newspapers 1,100 38,019
Modem Media Poppe Tyson 200(b) 15,875
Price Communications 1,800(b) 42,975
Radio One Cl A 250(b) 16,438
Scholastic 800(b) 41,450
Snyder Communications 2,000(b) 48,500
True North Communications 1,200 44,400
Valassis Communications 2,500(b) 69,219
Total 414,539
Metals (1.3%)
Mueller Inds 2,100(b) 60,112
Ryerson Tull 2,400 31,800
Steel Technologies 4,100 38,438
Stillwater Mining 1,200(b) 44,550
Total 174,900
Miscellaneous (2.2%)
Apex 600(b) 26,925
Avenue A 800(b) 57,599
Beasley Broadcast Group Cl A 1,650(b) 19,800
eLoyalty 1,400(b) 42,788
Intraware 450(b) 34,397
Nextel Partners Cl A 550(b) 17,600
PFF Bancorp 2,200 33,275
Philadelphia Suburban 1,400 25,900
TSI Intl Software 200(b) 16,963
XCare.net 400(b) 7,600
Total 282,847
Multi-industry conglomerates (2.2%)
Agribrands Intl 1,000(b) 36,563
Bell & Howell 900(b) 29,475
Brady (WH) Cl A 2,500 67,812
Interim Services 2,200(b) 54,862
NCO Group 1,100(b) 25,713
Sylvan Learning Systems 700(b) 10,413
Zebra Technologies Cl A 1,000(b) 66,562
Total 291,400
Paper & packaging (1.0%)
AptarGroup 2,100 50,269
Ball 500 13,469
Pope & Talbot 2,900 55,462
Silgan Holdings 1,250(b) 15,781
Total 134,981
Restaurants & lodging (2.0%)
Applebee's Intl 900 25,341
CEC Entertainment 1,900(b) 43,225
Cheesecake Factory (The) 1,180(b) 35,105
Jack in the Box 1,100(b) 22,069
Ruby Tuesday 2,920 49,457
Ryan's Family Steak Houses 4,900(b) 46,856
Taco Cabana Cl A 5,900(b) 35,400
Total 257,453
Retail (4.1%)
Ames Dept Stores 1,300(b) 18,363
Copart 1,000(b) 21,031
Fossil 3,000(b) 68,063
Linens `N Things 1,900(b) 37,406
Men's Wearhouse 2,950(b) 68,495
NBTY 2,030(b) 28,547
Pacific Sunwear of California 1,450(b) 36,884
Regis 2,500 38,750
ShopKo Stores 1,800(b) 29,925
United Stationers 1,600(b) 43,000
Whole Foods Market 1,000(b) 37,969
Zale 2,600(b) 97,825
Total 526,258
Textiles & apparel (0.6%)
Brown Shoe 3,900 40,950
Dixie Group 5,400(b) 31,050
Total 72,000
Transportation (2.3%)
Atlas Air 1,400(b) 33,863
EGL 800(b) 22,500
Expeditors Intl of Washington 700 26,425
Landstar System 1,400(b) 78,662
Offshore Logistics 3,200(b) 31,800
USFreightways 2,200 73,150
Werner Enterprises 2,600 34,775
Total 301,175
Utilities -- electric (1.9%)
Avista 800 24,050
Cleco 1,100 35,200
El Paso Electric 5,200(b) 49,725
Public Service Co of New Mexico 2,500 38,438
TNP Enterprises 1,400 60,462
United Illuminating 1,100 44,688
Total 252,563
Utilities -- gas (1.3%)
Equitable Resources 1,200 45,300
New Jersey Resources 800 29,700
ONEOK 800 18,150
Piedmont Natural Gas 900 22,275
Southwestern Energy 4,700 32,900
UGI 1,400 26,250
Total 174,575
Utilities -- telephone (0.6%)
Brightpoint 3,100(b) 39,912
TALK.com 1,900(b) 32,063
Total 71,975
Total common stocks
(Cost: $11,360,286) $12,426,617
Total investments in securities
(Cost: $11,360,286)(c) $12,426,617
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) At Feb. 29, 2000 the cost of securities for federal income tax purposes was
approximately $11,360,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $2,097,000
Unrealized depreciation (1,030,000)
----------
Net unrealized appreciation $1,067,000
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP VP - Strategy Aggressive Fund
Feb. 29, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (91.2%)
Issuer Shares Value(a)
Airlines (0.4%)
<S> <C> <C>
Alaska Air Group 750,000(b) $19,875,000
Amtran 9,940(b) 167,738
SkyWest 7,747 229,989
Total 20,272,727
Automotive & related (--%)
Gentex 36,792(b) 1,075,016
O'Reilly Automotive 16,590(b) 232,260
Winnebago Inds 8,100 173,138
Total 1,480,414
Banks and savings & loans (1.5%)
Commerce Bancorp 10,462 351,785
Flagstar Bancorp 9,821 126,445
Hamilton Bancorp 13,865(b) 231,372
Hudson United Bancorp 4,220 85,191
NBT Bancorp -- 5
Old Natl Bancorp 7,901 197,525
Queens County Bancorp 8,965 170,335
Sovereign Bancorp 3,375,000 24,468,750
TCF Financial 696,000 13,789,500
U.S. Trust 6,731 932,244
UnionBanCal 843,000 27,081,375
Total 67,434,527
Beverages & tobacco (--%)
Beringer Wine Estates Holdings Cl B 6,190(b) 223,227
Building materials & construction (--%)
Centex Construction Products 2,382 55,382
Dycom Inds 23,514(b) 1,175,699
Elcor 9,600 321,600
Insituform Technologies Cl A 8,400(b) 237,300
NCI Building Systems 7,869(b) 119,019
Total 1,909,000
Chemicals (--%)
MacDermid 8,611 294,389
Communications equipment & services (13.2%)
Adaptive Broadband 5,600(b) 644,175
Amdocs 870,000(b) 64,543,125
Aspect Communications 22,000(b) 1,417,625
C-COR Electronics 10,600(b) 474,019
CIENA 470,000(b) 75,111,875
Com21 4,200(b) 294,000
CommScope 174,895(b) 6,809,974
Copper Mountain Networks 780,000(b) 67,811,250
Covad Communications Group 755,000(b) 68,138,750
Digital Microwave 494,100(b) 16,490,588
Ditech Communications 105,000(b) 11,471,250
Fairchild Semiconductor Intl Cl A 450,000(b) 16,987,500
Finisar 560,000(b) 79,099,999
Harmonic Lightwaves 452,200(b,e) 61,923,138
InterVoice 10,200(b) 368,475
Leap Wireless Intl 2,900(b) 254,294
Net2Phone 460,000(b,e) 26,622,500
Next Level Communications 800(b) 107,600
P-COM 22,300(b) 406,975
Plantronics 2,817(b) 223,775
Proxim 6,300(b) 904,050
Research in Motion 450,000(b,c) 60,862,500
Spectrian 7,800(b) 179,400
Turnstone Systems 44,000(b) 8,450,750
VoiceStream Wireless 288,750(b) 38,421,797
Total 608,019,384
Computer software & services (1.5%)
Citrix Systems 420,000(b) 44,283,750
Electronic Arts 240,000(b) 24,000,000
Total 68,283,750
Computers & office equipment (24.6%)
About.com 4,900(b) 344,225
Actuate 4,900(b) 305,638
Acxiom 10,058(b) 290,425
American Management Systems 14,303(b) 455,014
Aspen Technology 9,200(b) 411,700
BEA Systems 140,000(b) 17,718,750
BISYS Group 6,512(b) 335,775
Black Box 6,900(b) 516,206
Braun Consulting 116,800(b) 6,774,400
Ciber 5,100(b) 118,575
Clarify 9,300(b) 1,342,106
Cognex 15,218(b) 668,641
Concentric Network 771,000(b) 41,344,875
Dendrite Intl 19,447(b) 478,882
Diamond Technology Partners 3,000(b) 205,125
Digital Island 180,000(b) 20,902,500
Edwards (JD) & Co 380,800(b) 15,470,000
Emulex 600(b) 96,000
Extreme Networks 615,000(b) 68,418,750
F5 Networks 225,000(b,e) 20,250,000
FactSet Research Systems 18,792 566,109
FileNet 9,400(b) 402,438
Fiserv 975,000(b) 26,568,750
Great Plains Software 3,300(b) 229,556
Harbinger 13,700(b) 439,256
Henry (Jack) & Associates 3,406 237,994
HNC Software 7,200(b) 708,300
Hyperion Solutions 15,200(b) 750,500
i2 Technologies 224,000(b) 36,624,000
InfoSpace.com 680,000(b) 147,559,999
Insight Enterprises 8,500(b) 266,688
Juniper Networks 252,000(b,e) 69,126,749
Keynote Systems 242,000(b) 39,627,500
Kronos 6,298(b) 399,923
Liberate Technologies 415,000(b) 42,278,125
Lycos 280,000(b) 16,695,000
Macromedia 19,406(b) 1,677,406
MedQuist 913,290(b) 23,517,218
Mercury Computer Systems 4,600(b) 221,663
Mercury Interactive 1,097,244(b) 105,746,890
MICROS Systems 5,700(b) 315,638
Mission Critical Software 530,000(b) 32,462,500
Natl Computer Systems 9,937 394,996
Natl Instruments 9,276(b) 416,550
Navigant Consulting 8,400(b) 80,850
NetRadio 185,000(b) 878,750
New Era of Networks 2,660(b) 243,723
Novell 981,000(b) 32,434,313
Parametric Technology 365,000(b) 11,064,063
Peregrine Systems 764,000(b) 41,733,500
Pinnacle Systems 9,000(b) 451,125
Profit Recovery Group Intl 25,590(b) 473,415
Progress Software 23,090(b) 575,807
Project Software & Development 4,800(b) 371,700
Proxicom 4,600(b) 192,625
QRS 2,600(b) 245,375
Razorfish Cl A 2,800(b) 93,800
Remedy 15,300(b) 867,319
RSA Security 12,900(b) 863,494
Safeguard Scientifics 436,800(b) 76,412,699
SAGENT 5,900(b) 102,881
Sapient 330,000(b) 23,595,000
Scient 180,000(b) 12,735,000
SERENA Software 3,300(b) 139,219
SunGard Data Systems 912,000(b) 27,360,000
THQ 6,700(b) 135,256
VeriSign 562,000(b) 142,185,999
Verity 10,000(b) 533,750
webMethods 39,100(b) 12,045,244
Whittman-Hart 19,918(b) 903,779
Xircom 12,742(b) 529,191
Zixit 3,750(b) 201,680
Total 1,131,130,892
Electronics (12.7%)
Advanced Energy Inds 675,000(b) 49,106,250
Alpha Inds 9,723(b) 1,411,658
Burr-Brown 13,416(b) 787,352
C-Cube Microsystems 13,103(b) 1,221,855
CTS 12,182 785,739
Dallas Semiconductor 10,400 419,900
Dionex 6,811(b) 214,972
Electro Scientific Inds 13,000(b) 736,938
Etec Systems 8,200(b) 965,806
Exar 5,250(b) 364,547
Flextronics Intl 1,240,000(b,c,e) 75,485,000
Helix Technology 12,708 903,857
Integrated Device Technology 420,000(b) 15,487,500
Jabil Circuit 604,500(b) 41,974,969
KEMET 14,800(b) 909,275
Kulicke & Soffa Inds 9,000(b) 715,500
Lattice Semiconductor 20,000(b) 1,405,000
Methode Electronics Cl A 6,380 370,838
Micrel 13,710(b) 1,580,078
Novellus Systems 807,000(b) 47,865,188
PMC-Sierra 630,000(b,c) 121,629,374
Power Integrations 4,900(b) 254,494
Powerwave Technologies 10,504(b) 1,679,327
SDL 240,000(b) 98,399,999
Semtech 2,600(b) 162,500
Teradyne 259,000(b) 22,533,000
Therma-Wave 17,300(b) 696,325
Three-Five Systems 9,200(b) 564,650
Trimble Navigation 16,200(b) 388,800
Vicor 13,100(b) 298,025
Vitesse Semiconductor 906,000(b) 94,054,124
Total 583,372,840
Energy (1.6%)
Anadarko Petroleum 600,000 18,450,000
Apache 750,000 27,374,999
Barrett Resources 6,500(b) 189,313
EOG Resources 1,125,000 17,156,250
Pogo Producing 10,831 250,467
Tosco 420,000 11,235,000
Total 74,656,029
Energy equipment & services (0.3%)
Cooper Cameron 210,000(b) 11,602,500
Marine Drilling 12,941(b) 295,217
Total 11,897,717
Financial services (2.1%)
Eaton Vance 3,800 157,463
Financial Federal 5,200(b) 89,050
Jefferies Group 8,234 192,470
Kansas City Southern Inds 537,000 42,288,750
Knight/Trimark Group Cl A 1,130,000(b,e) 52,968,749
Metris Companies 9,900 256,163
SEI Investments 4,321 385,919
Total 96,338,564
Food (1.1%)
Earthgrains 9,696 145,440
Intl Home Foods 9,400(b) 159,213
Smithfield Foods 6,977(b) 108,144
Suiza Foods 920,000(b) 35,994,999
U.S. Foodservice 890,000(b) 15,741,875
Total 52,149,671
Furniture & appliances (--%)
Ethan Allen Interiors 15,842 369,317
Health care (8.2%)
Affymetrix 600(b) 173,775
Alkermes 600,000(b) 115,124,999
Alpharma Cl A 16,470 570,274
Barr Laboratories 9,391(b) 447,246
Bio-Technology General 15,000(b) 288,281
Biomatrix 7,221(b,e) 212,117
Biovail Corp Intl 180,000(b,c) 11,880,000
Caliper Technologies 26,600(b) 4,729,813
Cephalon 11,300(b) 751,097
COR Therapeutics 4,200(b) 376,425
Diversa 27,300(b) 3,644,550
Enzo Biochem 11,900(b) 943,075
ENZON 2,000(b) 116,000
Gilead Sciences 138,000(b) 10,557,000
IDEC Pharmaceuticals 715,738(b) 100,829,591
Immune Response 13,300(b) 206,150
Incyte Pharmaceuticals 80,122(b) 22,078,619
Jones Pharma 15,971 1,145,919
Liposome 12,500(b) 167,969
Maxygen 115,000(b) 16,861,875
MedImmune 235,000(b) 46,647,500
Mylan Laboratories 718,800 16,532,400
Protein Design Labs 7,500(b) 1,876,406
Sequenom 315(b) 39,375
Stryker 150,000 8,775,000
Techne 9,939(b) 852,580
Teva Pharmaceutical Inds ADR 240,000(c) 10,350,000
Vertex Pharmaceuticals 9,600(b) 697,200
Wesley Jessen VisionCare 10,100(b) 290,375
Total 377,165,611
Health care services (1.4%)
Abgenix 70,000(b) 22,548,749
Cytyc 6,000(b) 276,000
LifePoint Hospitals 10,200(b) 153,638
McKesson HBOC 552,000 10,695,000
Medical Manager 225,000(b) 18,942,188
Patterson Dental 18,722(b) 674,577
Renal Care Group 550,112(b) 9,661,342
Total 62,951,494
Household products (--%)
Scotts Cl A 6,573(b) $213,623
Valence Technology 11,300(b) 385,259
Total 598,882
Industrial equipment & services (0.3%)
Asyst Technologies 300,000(b) 13,762,499
Graco 7,800 235,463
Manitowoc 9,399 253,186
Roper Inds 17,400 474,150
Terex 7,930(b) 94,169
Total 14,819,467
Insurance (0.8%)
Blanch (EW) Holdings 383,300 18,015,100
Fidelity Natl Financial 7,038 88,415
Gallagher (Arthur J) 10,588 541,312
Hooper Holmes 22,904 704,298
Reinsurance Group of America 5,629 96,045
XL Capital Cl A 450,000(c) 18,196,874
Total 37,642,044
Leisure time & entertainment (0.3%)
Polaris Inds 4,746 145,346
SFX Entertainment Cl A 305,000(b) 11,742,500
Total 11,887,846
Media (4.1%)
Adelphia Communications Cl A 630,000(b) 34,610,625
ADVO 8,295(b) 230,186
Catalina Marketing 6,415(b) 546,077
Emmis Communications Cl A 511,000(b) 18,651,500
Hispanic Broadcasting 190,000(b) 17,753,125
Mediacom Communications 210,000(b,e) 3,583,125
Price Communications 12,100(b) 288,888
Radio One Cl A 1,900(b) 124,925
TMP Worldwide 280,000(b) 38,062,500
True North Communications 14,191 525,067
Univision Communications Cl A 530,000(b) 53,993,749
USA Networks 87,500(b) 1,963,281
Valassis Communications 23,240(b) 643,458
Young & Rubicam 392,000 19,796,000
Total 190,772,506
Metals (1.0%)
Nucor 900,000 44,718,750
Miscellaneous (6.5%)
Akamai Technologies 30,000(b,e) 7,837,500
Apex 5,900(b) 264,763
Apropos Technology 56,300(b) 2,695,363
CacheFlow 600(b) 73,050
Chordiant Software 44,400(b,e) 1,554,000
Crossroads Systems 143,850(b) 20,534,588
Cumulus Media Cl A 600,000(b) 17,925,000
Digex 270,000(b) 43,740,000
Dobson Communications Cl A 170,000(b,e) 3,230,000
eLoyalty 16,000(b) 489,000
eMerge Interative Cl A 43,680(b) 2,320,500
FirePond 42,000(b) 4,092,375
FLAG Telecom Holdings 470,600(b,c) 13,470,925
Intersil Holding 372,400(b) 22,111,250
InterTrust Technologies 180,000(b) 15,288,750
Intraware 2,700(b) 206,381
JNI 600,000(b) 48,974,999
John Nuveen Cl A 6,329 218,351
L90 180,000(b) 3,746,250
Metasolv Software 138,000(b) 12,161,250
Nextel Partners Cl A 3,850(b) 123,200
Philadelphia Suburban 17,443 322,696
Terayon Communication Systems 300,000(b) 77,137,499
Witness Sytems 20,400(b) 749,700
XCare.net 2,900(b) 55,100
Total 299,322,490
Multi-industry conglomerates (1.2%)
Bell & Howell 4,060(b) 132,965
Corinthian Colleges 6,600(b) 117,975
Electronics for Imaging 600,000(b) 35,625,000
Metamor Worldwide 975,000(b) 19,987,500
NCO Group 6,320(b) 147,730
Zebra Technologies Cl A 10,500(b) 698,906
Total 56,710,076
Paper & packaging (--%)
Buckeye Technologies 13,489(b) 214,981
Restaurants & lodging (--%)
Applebee's Intl 10,300 290,009
CEC Entertainment 16,430(b) 373,771
Cheesecake Factory (The) 7,700(b) 229,075
Jack in the Box 14,115(b) 283,182
Sonic 7,282(b) 176,589
Taco Cabana Cl A 23,589(b) 141,534
Total 1,494,160
Retail (2.2%)
99 Cents Only Stores 3,503(b) 87,786
American Eagle Outfitters 757,000(b) 19,303,500
Bed Bath & Beyond 1,000,000(b) 28,374,999
Copart 11,900(b) 250,272
Cost Plus 7,600(b) 141,075
EMusic.com 1,020,000(b,e) 5,992,500
Family Dollar Stores 1,060,000 18,417,500
Fossil 22,141(b) 502,324
Linens `N Things 15,233(b) 299,900
Pacific Sunwear of California 12,301(b) 312,907
Regis 22,727 352,269
Tiffany 351,000 22,529,812
Tuesday Morning 450,000(b) 5,850,000
Whole Foods Market 9,000(b) 341,719
Williams-Sonoma 6,333(b) 195,927
Total 102,952,490
Transportation (--%)
EGL 14,600(b) 410,625
Expeditors Intl of Washington 24,187 913,059
Total 1,323,684
Utilities -- telephone (6.0%)
Alamosa PCS Holdings 9,100(b) 329,875
Allegiance Telecom 1,147,500(b) 113,459,062
Cypress Communications 170,000(b,e) 3,963,125
Intermedia Communications 5,288(b) 334,797
Intermedia Communications 701,000(b) 44,382,063
RCN 610,000(b) 36,523,750
TALK.com 18,400(b) 310,500
Western Wireless Cl A 213,000(b) 10,330,500
WinStar Communications 838,000(b) 64,840,250
Total 274,473,922
Total common stocks
(Cost: $2,372,720,255) $4,194,880,851
Preferred stocks & other (0.7%)
Issuer Shares Value(a)
Aurgin Systems
2.46% 2,440,000(h) $6,002,400
FREEI.Net
8.05% 869,488(b,h) 6,999,378
MarsMusic.com Cl A
Cv 7,000,000(h) 7,000,000
Protein Delivery
2.50% 2,800,000(h) 7,000,000
SignalSoft Cl E
Cv 1,182,432(h) 6,999,998
Total preferred stocks & other
(Cost: $34,002,411) $34,001,776
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bonds (0.3%)
Issuer Coupon Principal Value(a)
rate amount
Equinix
<S> <C> <C> <C> <C> <C>
12-01-07 13.00% $13,800,000(d) $14,214,000
Total bonds
(Cost: $13,800,000) $14,214,000
Options purchased (--%)
Issuer Shares Exercise Expiration Value(a)
price date
Calls
McKesson HBOC 70,000 $20 May 2000 $146,563
Renal Care Group 225,000 23 March 2000 14,062
Sungard Data 450,000 25 April 2000 918,750
Total options purchased
(Cost: $873,618) $1,079,375
Short-term securities (11.4%)(g)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (6.1%)
Federal Home Loan Bank Disc Nts
03-10-00 5.64% $22,000,000 $21,965,594
03-17-00 5.78 1,500,000 1,495,772
04-07-00 5.70 25,100,000 24,937,463
Federal Home Loan Mtge Corp Disc Nt
03-23-00 5.77 4,900,000 4,881,481
Federal Natl Mtge Assn Disc Nts
03-16-00 5.78 2,600,000 2,593,211
03-23-00 5.70 24,200,000 24,108,539
04-05-00 5.75 12,100,000 12,030,787
04-06-00 5.75 47,300,000 47,006,494
04-10-00 5.73 30,000,000 29,805,588
04-20-00 5.80 25,500,000 25,281,531
05-18-00 5.89 47,500,000 46,879,795
SLMA Disc Nt
03-27-00 5.69 39,100,000 38,933,727
Total 279,919,982
Commercial paper (5.3%)
Alcoa
04-17-00 5.88 1,200,000 1,190,672
American General Finance
03-31-00 5.80 8,100,000 8,059,754
AT&T
03-24-00 5.72 11,800,000 11,752,714
BBV Finance (Delaware)
03-17-00 5.79 15,400,000 15,358,038
Bell Atlantic Finance Services
03-01-00 5.69 7,100,000 7,098,878
BellSouth Telecommunications
03-29-00 5.79 15,000,000 14,930,400
Cargill Global Funding
04-27-00 5.92 2,100,000(f) 2,079,849
Clorox
04-06-00 5.86 4,200,000 4,174,877
04-26-00 5.88 6,700,000 6,636,986
Dresdner US Finance
03-09-00 5.74 6,500,000 6,490,470
Emerson Electric
04-18-00 5.87 8,000,000(f) 7,935,537
Ford Motor Credit
03-28-00 5.78 7,900,000 7,864,669
Gateway Fuel
03-02-00 5.80 19,400,000 19,393,749
GMAC
03-30-00 5.79 12,000,000 11,942,400
Household Finance
03-15-00 5.77 10,800,000 10,774,080
03-31-00 5.81 10,000,000 9,950,227
Intl Lease Finance
04-25-00 5.85 3,000,000 2,972,280
Merrill Lynch
03-01-00 5.70 16,500,000 16,497,386
Northern States Power
03-21-00 5.99 7,700,000 7,673,948
Sheffield Receivables
03-27-00 5.82 12,000,000(f) 11,947,890
04-14-00 5.89 2,200,000(f) 2,183,913
Toyota Motor Credit
04-12-00 5.86 26,100,000(f) 25,918,559
04-18-00 5.88 11,200,000 11,111,124
USAA Capital
04-10-00 5.86 18,700,000 18,573,707
Total 242,512,107
Total short-term securities
(Cost: $522,581,809) $522,432,089
Total investments in securities
(Cost: $2,943,978,093)(i) $4,766,608,091
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. As of Feb. 29, 2000 the
value of foreign securities represented 6.78% of net assets.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Security is partially or fully on loan. See Note 5 to the financial
statements.
(f) Commercial paper sold within terms of a private placement memorandum, exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "accredited investors."
This security has been determined to be liquid under guidelines established by
the board.
(g) At Feb. 29, 2000, securities valued at $7,315,000 were held to cover open
call options written as follows:
Issuer Shares Exercise Expiration Value(a)
price date
SFX Entertainment 190,000 $35 March 2000 $783,750
At Feb. 29, 2000 cash or short-term securities were designated to cover open put
options written as follows:
Issuer Shares Exercise Expiration Value(a)
price date
TMP Worldwide 70,000 $135 March 2000 $673,750
(h) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). Information concerning such security
holdings at Feb. 29, 2000, is as follows:
Security Acquisition Cost
dates
Aurgin Systems
2.46% 12-16-99 $6,002,400
FREEI.Net
8.05% 11-04-99 thru 02-28-00 7,000,013
MarsMusic.com Cl A
Cv 12-01-99 7,000,000
Protein Delivery
2.50% 05-04-99 7,000,000
SignalSoft Cl E
Cv 12-15-99 6,999,998
(i) At Feb. 29, 2000 the cost of securities for federal income tax purposes was
approximately $2,943,978,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $1,941,151,000
Unrealized depreciation (118,521,000)
------------
Net unrealized appreciation $1,822,630,000
<PAGE>
American Express
Variable Portfolio Funds
200 AXP Financial Center
Minneapolis, MN 55474
AMERICAN
EXPRESS
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
S-6462 R (4/00)
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