AXPSM Growth
Dimensions
Fund
2000 ANNUAL REPORT
(PROSPECTUS ENCLOSED)
American
Express(R)
Funds
(icon of) ruler
AXP Growth Dimensions Fund seeks to provide shareholders with long-term capital
growth.
(This wrapper 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.)
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Profit Power
Rising stock prices often go hand-in-hand with rising profits. AXP Growth
Dimensions Fund tries to identify companies with above-average profit potential
and the staying power to provide long-term capital appreciation.
AXP GROWTH DIMENSIONS FUND
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Table of Contents
2000 ANNUAL REPORT
The purpose of this annual report is to tell investors how the Fund performed.
From the Chairman 4
From the Portfolio Managers 4
Fund Facts 6
The 10 Largest Holdings 8
Making the Most of the Fund 9
Independent Auditors' Report 10
Financial Statements 11
Notes to Financial Statements 14
Investments in Securities 25
ANNUAL REPORT - 2000
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(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
The financial markets have always had their ups and downs, but in recent months
volatility has become more frequent and intense. While no one can say with
certainty what the markets will do, American Express Financial Corporation, the
Fund's investment manager, expects economic growth to continue this year,
accompanied by a modest rise in long-term interest rates. But no matter what
transpires, this is a great time to take a close look at your goals and
investments. We encourage you to:
o Consult a professional investment advisor who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable through retirement
plans of your employer.
o Learn as much as you can about your current investments.
The portfolio managers' letter that follows provides a review of the Fund's
investment strategies and performance. The annual report contains other valuable
information as well. The Fund's prospectus describes its investment objectives
and how it intends to achieve those objectives. As experienced investors know,
information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
On behalf of the Board,
Arne H.Carlson
(picture of) Gordon M. Fines
Gordon M. Fines
Portfolio manager
From the Portfolio Managers
AXP Growth Dimensions Fund lost a bit of ground during its brief initial
reporting period -- June 26 (when shares became publicly available) through July
31, 2000 (the end of the Fund's fiscal year). Over the five weeks, the return
for the Fund's Class A shares was -1.02%, excluding the sales charge.
AXP GROWTH DIMENSIONS FUND
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The period got off to a good start, as the stock market advanced nicely until
mid-July. At that point, concerns about future Federal Reserve actions regarding
interest rates and increasing doubts about the strength of corporate profits
over the rest of the year spawned a two-week market decline. But stocks picked
up in the final days of July, to end the period on a positive note. The Fund's
performance basically tracked the pattern of the market during the five weeks.
(picture of) Anne Obermeyer
Anne Obermeyer
Portfolio manager
(picture of) Doug Guffy
Doug Guffy
Portfolio manager
STARTING FROM SCRATCH
Because this was a brand new fund, we spent much of the period constructing the
portfolio, which consisted of 55 stocks at period-end - right in the middle of
the range we expect to hold on an ongoing basis. Because of our emphasis on
large companies with above-average earnings growth, most of our purchases came
from the technology sector, including telecommunications equipment and
networking stocks. Some prominent names included Cisco Systems, Corning, Intel,
Selectron, Microsoft and Jabil. All told, technology comprised about 50% of the
portfolio.
Although considerably smaller, health care was the next-largest area of
investment. Major purchases included Guidant, Pfizer, Medtronic and Pharmacia.
The remainder of the investments were widely spread among several sectors,
including financial services stocks such as Charles Schwab, American
International Group and Citigroup.
As we begin a new fiscal year -- the first full one for the Fund -- we think the
investment environment is likely to improve gradually in the months ahead. While
the market could well be kept off balance over the near term by uncertainty
about inflation, interest rates, corporate profits and the presidential
election, we see a powerful, positive factor remaining at work: ongoing, solid
economic growth. If our outlook in that regard is correct, companies with
healthy growth prospects should ultimately reward investors as the year
progresses.
Gordon M. Fines
Anne Obermeyer
Doug Guffy
ANNUAL REPORT - 2000
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Fund Facts
Class A -- June 26, 2000* - July 31, 2000
(All figures per share)
Net asset value (NAV)
July 31, 2000 $4.87
June 26, 2000* $4.92
Decrease $0.05
Distributions -- June 26, 2000* - July 31, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -1.02%***
Class B -- June 26, 2000* - July 31, 2000
(All figures per share)
Net asset value (NAV)
July 31, 2000 $4.87
June 26, 2000* $4.92
Decrease $0.05
Distributions -- June 26, 2000* - July 31, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -1.02%***
AXP GROWTH DIMENSIONS FUND
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Class C -- June 26, 2000* - July 31, 2000
(All figures per share)
Net asset value (NAV)
July 31, 2000 $4.87
June 26, 2000* $4.92
Decrease $0.05
Distributions -- June 26, 2000* - July 31, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -1.02%***
Class Y -- June 26, 2000* - July 31, 2000
(All figures per share)
Net asset value (NAV)
July 31, 2000 $4.88
June 26, 2000* $4.92
Decrease $0.04
Distributions -- June 26, 2000* - July 31, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -0.81%***
* When shares became publicly available.
** Returns do not include sales load. 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.
ANNUAL REPORT - 2000
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The 10 Largest Holdings
Percent Value
(of net assets) (as of July 31, 2000)
Cisco Systems 3.94% $1,338,708
Corning 3.44 1,166,961
Guidant 3.26 1,107,570
JDS Uniphase 3.23 1,097,110
Microsoft 3.05 1,035,956
Tyco Intl 2.94 998,895
Intel 2.87 974,549
Solectron 2.85 968,422
Pfizer 2.66 902,408
Schwab (Charles) 2.55 864,567
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 30.79% of net assets
AXP GROWTH DIMENSIONS FUND
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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 falls 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
_______________________________________________________________________________
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
_______________________________________________________________________________
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
_______________________________________________________________________________
$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.
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.
ANNUAL REPORT - 2000
<PAGE>
The financial statements contained in Post-Effective Amendment #64 to
Registration Statement No. 2-28529 filed on or about September 27, 2000, are
incorporated herein by reference.
<PAGE>
American
Express(R)
Funds
AXP Growth Dimensions Fund
70100 AXP Financial Center
Minneapolis, MN 55474
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
S-6004 C (9/00)
This report must be accompanied or preceded by the Fund's current prospectus.
Distributed by American Express Financial Advisors Inc. Member NASD. American
Express Company is separate from American Express Financial Advisors Inc. and is
not a broker-dealer.
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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.
