American Express(R)
Variable Portfolio Funds
AXP(SM) Variable Portfolio -
New Dimensions Fund(R)
2000 SEMIANNUAL REPORT
AMERICAN
EXPRESS
Managed by IDS Life Insurance Company
<PAGE>
CONTENTS
From the Chairman 3
From the Portfolio Manager 4
The 10 Largest Holdings 5
Financial Statements 6
Notes to Financial Statements 9
Investments in Securities 14
<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 manager's letter that follows provides 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.
Sincerely,
Arne H. Carlson
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(picture of) Gordon M. Fines
Gordon Fines
Portfolio Manager
From the Portfolio Manager
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
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<TABLE>
<CAPTION>
The 10 Largest Holdings
Percent Value
(of net assets) (as of Feb. 29, 2000)
<S> <C> <C>
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) piechart
The 10 holdings listed here make up 36.36% of net assets
</TABLE>
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<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP VP - New Dimensions Fund
Feb. 29, 2000 (Unaudited)
Assets
Investments in securities, at value (Note 1)
<S> <C> <C>
(identified cost $3,039,800,813) $4,798,771,329
Receivable for investment securities sold 12,717,598
Dividends and accrued interest receivable 2,265,134
U.S. government securities held as collateral (Note 4) 21,491,404
- ----------
Total assets 4,835,245,465
-------------
Liabilities
Disbursements in excess of cash on demand deposit 5,404
Dividends payable to shareholders (Note 1) 1,259,831
Payable for investment securities purchased 24,729,310
Accrued investment management services fee 2,249,654
Accrued distribution fee 465,458
Accrued administrative services fee 154,099
Payable upon return of securities loaned (Note 4)21,491,404
Other accrued expenses 62,977
------
Total liabilities 50,418,137
----------
Net assets applicable to outstanding capital stock $4,784,827,328
==============
Represented by
Capital stock-- $.01 par value (Note 1) $2,084,011
Additional paid-in capital 2,956,321,100
Undistributed net investment income 42,095
Accumulated net realized gain (loss) 67,409,606
Unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 1,758,970,516
-------------
Total-- representing net assets applicable to outstanding capital stock $4,784,827,328
==============
Shares outstanding 208,401,134
-----------
Net asset value per share of outstanding capital stock $ 22.96
--------------
See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
Statement of operations
AXP VP - New Dimensions Fund
Six months ended Feb. 29, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 11,727,114
Interest 9,386,064
---------
Total income 21,113,178
----------
Expenses (Note 2):
Investment management services fee 12,522,053
Distribution fees 2,332,907
Administrative services fees and expenses 898,134
Custodian fees 149,863
Compensation of board members 8,834
Printing and postage 15,727
Audit fees 11,000
Other 2,429
-----
Total expenses 15,940,947
----------
Earnings credits on cash balances (Note 2) (23)
- ---
Total net expenses 15,940,924
Investment income (loss) -- net 5,172,254
---------
Realized and unrealized gain (loss) -- net Net realized gain (loss) on:
Security transactions (Note 3) 69,017,579
Foreign currency transactions (42,102)
-------
Net realized gain (loss) on investments 68,975,477
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 775,849,598
-----------
Net gain (loss) on investments and foreign currencies 844,825,075
-----------
Net increase (decrease) in net assets resulting from operations $849,997,329
============
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
Statements of changes in net assets
AXP VP - New Dimensions Fund
Feb. 29, 2000 Aug. 31, 1999
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 5,172,254 $ 9,929,837
Net realized gain (loss) on investments 68,975,477 32,818,556
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 775,849,598 838,085,236
----------- -----------
Net increase (decrease) in net assets resulting from operations 849,997,329 880,833,629
----------- -----------
Distributions to shareholders from:
Net investment income (5,130,152) (9,929,837)
Net realized gain (34,324,741) (2,459,211)
----------- ----------
Total distributions (39,454,893) (12,389,048)
----------- -----------
Capital share transactions (Note 5)
Proceeds from sales 442,094,439 744,395,091
Reinvestment of distributions at net asset value 38,195,062 12,389,048
Payments for redemptions (44,229,255) (46,528,713)
----------- -----------
Increase (decrease) in net assets from capital share transactions 436,060,246 710,255,426
----------- -----------
Total increase (decrease) in net assets 1,246,602,682 1,578,700,007
Net assets at beginning of period 3,538,224,646 1,959,524,639
Net assets at end of period $4,784,827,328 $3,538,224,646
============== ==============
Undistributed (excess of distributions over) net investment income $ 42,095 $ (7)
See accompanying notes to financial statements.
</TABLE>
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Notes to Financial Statements
American Express Variable Portfolio Funds
AXP VP - New Dimensions Fund
(Unaudited as to Feb. 29, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The Fund has 10 billion
authorized shares of capital stock.
The Fund invests primarily in common stocks showing potential for significant
growth.
Shares of the 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, 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.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the 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 Fund gives up the
opportunity for profit if the market price of the security increases. The risk
in writing a put option is that the Fund 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 Fund pays a premium whether or not the option is exercised. The Fund
also has the additional risk of being unable to enter into a closing transaction
if a liquid secondary market does not exist. The Fund 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 Fund 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 Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy or write put and call options on 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 Fund is 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 Fund each day. The variation margin payments are equal to the
daily changes in the contract value and recorded as unrealized gains and losses.
The Fund recognizes 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 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 Fund and the resulting unrealized
appreciation and/or depreciation are determined using foreign currency exchange
rates from an independent pricing service. The Fund is subject to the credit
risk that the other party will not complete its contract obligations.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute substantially all
of its taxable income to the Variable Accounts. No provision for income or
excise taxes is thus required. The 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 Fund.
Dividends
As of Feb. 29, 2000, a dividend declared for the Fund payable March 1, 2000 was
$0.006 per share.
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, when available, are declared
and paid quarterly. 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 Fund has an Investment Management agreement with IDS Life for managing
investments, record keeping and other services that are based solely on the
assets of the Fund. The management fee is a percentage of the Fund's average
daily net assets in reducing percentages from 0.63% to 0.57% annually. IDSLife,
in turn, pays to American Express Financial Corporation (AEFC) a fee of 0.25% of
the Fund's average daily net assets for the year. In addition to paying its own
management fee, brokerage commissions, taxes and costs of certain legal
services, the Fund will reimburse IDS Life an amount equal to the cost of
certain expenses incurred and paid by IDS Life in connection with the Fund's
operations. The Fund also pays custodian fees to American Express Trust Company,
an affiliate of IDS Life.
The Fund has an Administrative Services Agreement with AEFC. Under this
agreement, the Fund pays AEFC a fee for administration and accounting services
at a percentage of the Fund's average daily net assets in reducing percentages
from 0.050% to 0.030% annually.
A minor portion of additional administrative service expenses paid by the Fund
are consultants' fees and fund office expenses. Under this agreement, the Fund
also pays taxes, audit and certain legal fees, registration fees for shares,
compensation of board members, corporate filing fees and any other expenses
properly payable by the Fund and approved by the board.
Effective Sept. 21, 1999, the Fund has an agreement with IDS Life for
distribution services. Under a Plan and Agreement of Distribution, the Fund
pays a distribution fee at an annual rate up to 0.125% of the Fund's average
dailynet assets.
During the six months ended Feb. 29, 2000, the Fund's custodian fees were
reduced by $23 as a result of earnings credits from overnight cash balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $841,881,623 and $431,446,502, respectively, for the six
months ended Feb. 29, 2000.
Net realized gains and losses on investment sales are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with IDS Life were $26,658 for
the six months ended Feb. 29, 2000.
4. LENDING OF PORTFOLIO SECURITIES
As of Feb. 29, 2000 securities valued at $20,709,633 were on loan to
brokers. For collateral the Fund received U.S. government securities valued at
$21,491,404. Income from securities lending amounted to $13,502 for the six
months ended Feb. 29, 2000. The risks to the Fund of securities lending are that
the borrower may not provide additional collateral when required or return the
securities when due.
5. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended Feb. 29, 2000
Sold 21,120,989
Issued for reinvested distributions 1,854,426
Redeemed (2,096,056)
----------
Net increase (decrease) 20,879,359
Year ended Aug. 31, 1999
Sold 42,053,242
Issued for reinvested distributions 669,065
Redeemed (2,661,999)
----------
Net increase (decrease) 40,060,308
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<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS
The table below shows certain important financial information for evaluating the
Fund's results.
Fiscal period ended Aug. 31,
Per share income and capital changesa
<S> <C> <C> <C> <C> <C>
2000b 1999 1998 1997 1996c
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>
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<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
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
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 4 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>
American
Express
Funds
American Express Variable
Portfolio Funds
200 AXP Financial Center
Minneapolis, MN 55474
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
S-6413 R (4/00)
