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AXP(SM) New
Dimensions
Fund
1999 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
(icon of) ruler
The goal of AXP New Dimensions Fund is long-term growth of capital. The Fund
primarily invests in common stocks showing potential for significant growth.
(This annual report includes a prospectus that describes in detail the Fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.)
Distributed by American Express Financial Advisors Inc.
AMERICAN EXPRESS Financial Advisors (logo)
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Fast-track Stocks
What type of stock has been the driving force behind the dramatic increases
posted by U.S. and foreign stock markets in recent years? The answer is growth
stocks -- that is, stocks of companies that have a track record of increasing
their business and profits at a rapid pace. These companies, some large and
well-known, others smaller and newly discovered, form the foundation of AXP New
Dimensions Fund. The Fund looks for companies from around the world that not
only have a history of continuous growth, but are believed to be poised to
continue growing over the long term due to their management, marketing
innovation and/or technological advances.
AXP NEW DIMENSIONS FUND (This annual report is not part of the prospectus.)
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Table of Contents
1999 ANNUAL REPORT
The purpose of this annual report is to tell
investors how the Fund performed.
From the Chairman 4
From the Portfolio Manager 4
Fund Facts 6
The 10 Largest Holdings 7
Making the Most of the Fund 8
The Fund's Long-term Performance 9
Independent Auditors' Report (Fund) 10
Financial Statements (Fund) 11
Notes to Financial Statements (Fund) 14
Independent Auditors' Report (Portfolio) 19
Financial Statements (Portfolio) 20
Notes to Financial Statements
(Portfolio) 23
Investments in Securities 28
Federal Income Tax Information 39
1999 PROSPECTUS
The prospectus, which is bound into the
middle of this annual report, describes the
Fund in detail.
The Fund 3p
Goal 3p
Investment Strategy 3p
Risks 5p
Past Performance 7p
Fees and Expenses 9p
Management 10p
Buying and Selling Shares 10p
Valuing Fund Shares 10p
Investment Options 11p
Purchasing Shares 12p
Sales Charges 15p
Exchanging/Selling Shares 19p
Distributions and Taxes 24p
Personalized Shareholder
Information 26p
Master/Feeder Structure 27p
About the Company 28p
Quick Telephone Reference 30p
Financial Highlights 31p
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
American Express (R) Funds held shareholder meetings in June 1999. Shareholders
approved all of the proposals advanced by management. Among the proposals were:
o The election of Board members and the selection of KPMG LLP as independent
auditors.
o Change in the Fund name from "IDS" to "AXP."
o A new shareholder service and distribution plan.
o Changes with respect to fundamental investment policies.
No other business was presented at the meeting, which was concluded by a report
to shareholders from the Investment Department of American Express Financial
Corporation.
Thanks to all of you for your effort in reviewing the proxy material and voting
your proxies.
Arne H. Carlson
(picture of) Gordon Fines
Gordon Fines
Portfolio manager
From the Portfolio Manager
AXP New Dimensions Fund overcame a steep decline at the outset of the past
fiscal year to post a healthy gain for the period as a whole. For the 12 months
- -- August 1998 through July 1999 -- the Fund's Class A shares generated a total
return of 20.04%. (A portion of the return came in the form of a capital gain,
which was paid to shareholders last December and reduced the Fund's net asset
value by a like amount.)
The U.S. stock market was in the throes of a sell-off when the period began.
Worried about worsening economic problems in Asia, Russia and Latin America,
investors concluded that American corporate profits were at considerable risk.
Most vulnerable, they reasoned, were technology companies, whose stocks were hit
especially hard during the decline. For the Fund, the result was a loss of
nearly 16% in August 1998.
AXP NEW DIMENSIONS FUND (This annual report is not part of the prospectus.)
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That was a deep hole to climb out of, but stocks wasted no time in doing it.
Supported in large part by three reductions in short-term interest rates by the
Federal Reserve Board, the market made up all of its lost ground by the end of
November, then followed that with two more months of strong gains. From that
point, gains became more difficult to come by, as a steady rise in long-term
interest rates kept stocks off balance much of the time.
LARGE-CAPS STILL LEAD THE PACK
The large-capitalization growth stocks that have been the mainstays of the Fund
for several years continued to prove their worth during the period. General
Electric, Cisco Systems, Microsoft, Pfizer, IBM, Wal-Mart and Texas Instruments
- -- all among the Fund's largest holdings -- were particularly strong.
Looking at stock sectors, the emphasis remained on technology, health care,
financial services and business services. As for changes to the portfolio, last
fall I established a modest position in utility stocks to provide some cushion
for the Fund in the event of additional market downturns. Beyond that, I trimmed
the exposure to technology-related stocks with especially high valuations and
added a bit to cyclical, or economically sensitive, holdings.
In the last report to shareholders six months ago, I mentioned that the key
influence on stocks would likely be the strength of corporate profits. As it
turned out, earnings proved to be good on an overall basis. At this point
(mid-August), the primary focus is on interest rates, which are up considerably
since last fall. If they come down, or at least level off, I think stocks could
well gain some ground in the months ahead. A continuation of the interest-rate
upturn, however, would almost surely present a problem.
Gordon Fines
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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Fund Facts
Class A -- 12-month performance
(All figures per share)
Net asset value (NAV)
July 31, 1999 $31.21
July 31, 1998 $27.59
Increase $ 3.62
Distributions -- Aug. 1, 1998 - July 31, 1999
From income $ 0.11
From capital gains $ 1.64
Total distribution $ 1.75
Total return* +20.04%**
Class B -- 12-month performance
(All figures per share)
Net asset value (NAV)
July 31, 1999 $30.54
July 31, 1998 $27.19
Increase $ 3.35
Distributions -- Aug. 1, 1998 - July 31, 1999
From income $ 0.05
From capital gains $ 1.64
Total distribution $ 1.69
Total return* +19.13%**
Class Y -- 12-month performance
(All figures per share)
Net asset value (NAV)
July 31, 1999 $31.24
July 31, 1998 $27.62
Increase $ 3.62
Distributions -- Aug. 1, 1998 - July 31, 1999
From income $ 0.13
From capital gains $ 1.64
Total distribution $ 1.77
Total return* +20.12%**
*The prospectus discusses the effect of sales charges, if any, on the various
classes.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested.
AXP NEW DIMENSIONS FUND (This annual report is not part of the prospectus.)
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The 10 Largest Holdings
Percent Value
(of net assets) (as of July 31, 1999)
Intl Business Machines 5.42% $1,256,875,000
Cisco Systems 4.29 994,000,000
General Electric 3.29 763,000,000
Wal-Mart Stores 3.28 760,500,000
Microsoft 2.67 617,850,000
Time Warner 2.61 603,972,000
Texas Instruments 2.24 518,400,000
MCI WorldCom 2.14 495,000,000
Tyco Intl 2.11 488,437,500
Safeway 2.09 484,875,000
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 30.14% of net assets
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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Making the Most of the Fund
BUILD YOUR ASSETS SYSTEMATICALLY
One of the best ways to invest in the Fund is by dollar-cost averaging -- a
time-tested strategy that can make market fluctuations work for you. To
dollar-cost average, simply invest a fixed amount of money regularly. You'll
automatically buy more shares when the Fund's share price is low, fewer shares
when it is high. The chart below shows how dollar-cost averaging works. In these
three hypothetical scenarios, you will see six months of share price
fluctuations.
This strategy does not ensure a profit or avoid a loss if the market declines.
But, if you can continue to invest regularly through changing market conditions
even when the price of your shares fall or the market declines, it can be an
effective way to accumulate shares to meet your long-term goals.
How dollar-cost averaging works
Jan Feb Mar Apr May Jun
$15 $16 $18 $20
$10 $10 $12 $14
$ 5
Accumulated shares* Average market Your average
price per share cost per share
42.25 $15 $14.20
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Jan Feb Mar Apr May Jun
$15
$10 $10 $10
$ 5 $8 $5 $5 $8
Accumulated shares* Average market Your average
price per share cost per share
85.0 $7.66 $7.05
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Jan Feb Mar Apr May Jun
$15
$10 $10 $8 $6 $7
$ 5 $4 $4
Accumulated shares* Average market Your average
price per share cost per share
103.5 $6.50 $5.80
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$100 invested per month. Total invested: $600.
*Shares purchased is determined by dividing the amount invested per month by the
current share price.
THREE WAYS TO BENEFIT FROM A MUTUAL FUND:
o your shares increase in value when the Fund's investments do well
o you receive capital gains when the gains on investments sold by the Fund
exceed losses
o you receive income when the Fund's stock dividends, interest and short-term
gains exceed its expenses.
All three make up your total return. You potentially can increase your
investment if, like most investors, you reinvest your dividends and capital gain
distributions to buy additional shares of the Fund or another fund.
AXP NEW DIMENSIONS FUND (This annual report is not part of the prospectus.)
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The Fund's Long-term Performance
How your $10,000 has grown in AXP New Dimensions Fund
$60,000
X
$50,000 $54,461
AXP New
Dimensions
$40,000 Fund Class A
$30,000 S&P 500 Index
X
$20,000 X
Lipper Growth
Fund Index
$9,500
89 90 91 92 93 94 95 96 97 98 99
Average annual total return (as of June 30, 1999)
1 year 5 years 10 years Since inception*
Class A +14.04% +22.71% +18.47% --%
Class B +14.13% --% --% +24.70%
Class Y +20.12% --% --% +26.02%
*Inception date was March 20, 1995.
Assumes: Holding period from 8/1/89 to 7/31/99. Returns do not reflect taxes
payable on distributions. Reinvestment of all income and capital gain
distributions for the Fund, with a value of $24,816. Also see "Past
Performance"in the Fund's current prospectus.
On the graph above you can see how the Fund's total return compared to two
widely cited performance indexes, Standard &Poor's 500 Index (S&P 500 Index) and
the Lipper Growth Fund Index. In comparing AXP New Dimensions Fund (Class A) to
the two indexes, you should take into account the fact that the Fund's
performance reflects the maximum sales charge of 5%, while such charges are not
reflected in the performance of the indexes.
Your investment and return values fluctuate so that your shares, when redeemed,
may be worth more or less than the original cost. Average annual total return
figures reflect the impact of the applicable sales charge up to a maximum of 5%.
This was a period of widely fluctuating security prices. Past performance is no
guarantee of future results.
S&P 500 Index, an unmanaged list of common stocks, is frequently used as a
general measure of market performance. The index reflects reinvestment of all
distributions and changes in market prices, but excludes brokerage commissions
or other fees. However, the S&P 500 companies may be generally larger than those
in which the Portfolio invests.
Lipper Growth Fund Index, published by Lipper Analytical Services, Inc.,
includes 30 funds that are generally similar to this Fund, although some funds
in the index may have somewhat different investment policies or objectives.
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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The financial statements contained in Post-Effecive Amendment #60 to
Registration Statement No. 2-28529 filed on or about September 29, 1999, are
incorporated herein by reference.
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Federal Income Tax Information
The Fund is required by the Internal Revenue Code of 1986 to tell its
shareholders about the tax treatment of the dividends it pays during its fiscal
year. The dividends listed below are reported to you on Form 1099-DIV, Dividends
and Distributions. Shareholders should consult a tax advisor on how to report
distributions for state and local tax purposes.
AXP New Dimensions Fund, Inc.
Fiscal year ended July 31, 1999
Class A
Income distribution taxable as dividend income, 100% qualifying for deduction by
corporations.
Payable date Per share
Dec. 23, 1998 $0.10983
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $1.63905
Total distributions $1.74888
The distribution of $1.74888 per share, payable Dec. 23, 1998, consisted of
$0.05894 derived from net investment income, $0.05089 from net short-term
capital gains (a total of $0.10983 taxable as dividend income) and $1.63905 from
net long-term capital gains.
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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Class B
Income distribution taxable as dividend income, 100% qualifying for deduction by
corporations.
Payable date Per share
Dec. 23, 1998 $0.05089
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $1.63905
Total distributions $1.68994
The distribution of $1.68994 per share, payable Dec. 23, 1998, consisted of
$0.05089 from net short-term capital gains and $1.63905 from net long-term
capital gains.
AXP NEW DIMENSIONS FUND (This annual report is not part of the prospectus.)
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Class Y
Income distribution taxable as dividend income, 100% qualifying for deduction by
corporations.
Payable date Per share
Dec. 23, 1998 $0.12753
Capital gain distribution taxable as long-term capital gain.
Payable date Per share
Dec. 23, 1998 $1.63905
Total distributions $1.76658
The distribution of $1.76658 per share, payable Dec. 23, 1998, consisted of
$0.07664 derived from net investment income, $0.05089 from net short-term
capital gains (a total of $0.12753 taxable as dividend income) and $1.63905 from
net long-term capital gains.
(This annual report is not part of the prospectus.) ANNUAL REPORT -- 1999
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AXP New Dimensions Fund
IDS Tower 10
Minneapolis, MN 55440-0010
AMERICAN EXPRESS Financial Advisors (logo)
S-6440 N (9/99)
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STATEMENT OF DIFFERENCES
Difference Description
1) The layout is different 1) Some of the layout in the
throughout the annual report. annual report to
shareholders is in two
columns.
2) There are pictures, icons 2) Each picture, icon and
and graphs throughout the graph is described in
annual report. parentheses.
