AXPSM
Precious
Metals Fund
2000 SEMIANNUAL REPORT
American
Express(R)
Funds
(icon of) ruler
AXP Precious Metals Fund seeks to provide shareholders with long-term growth of
capital.
<PAGE>
All That Glitters
While investors typically look to stocks and bonds for the best return on their
money, there are times when hard assets such as gold can play a small but
important role in a diversified portfolio. Because owning the metal itself is
often impractical, most investors put their money in stocks of companies that
mine gold and other precious metals. Those stocks, which form the bedrock of AXP
Precious Metals Fund, usually move in tandem with the prices of the metals.
<PAGE>
CONTENTS
From the Chairman 3
From the Portfolio Manager 3
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements 7
Notes to Financial Statements 10
Investments in Securities 19
<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, accompanied by a
modest rise in long-term interest rates. But no matter what transpires, this is
a great time to take a close look at your goals and investments. We encourage
you to:
o Consult a professional investment advisor who can help you cut through
mountains of data.
o Set financial goals that extend beyond those achievable
through retirement plans of your employer.
o Learn as much as you can about your current investments.
The portfolio manager's letter that follows provides a review of the Fund's
investment strategies and performance. The semiannual report contains other
valuable information as well. The Fund's prospectus describes its investment
objectives and how it intends to achieve those objectives. As experienced
investors know, information is vital to making good investment decisions.
So, take a moment and decide again whether the Fund's investment objectives and
management style fit with your other investments to help you reach your
financial goals. And make it a practice on a regular basis to assess your
investment options.
On behalf of the Board,
Arne H. Carlson
(picture of) Clay L. Hoes
Clay L. Hoes
Portfolio manager
From the Portfolio Manager
AXP Precious Metals Fund experienced a loss in the first half of the fiscal
year, as the price of gold continued to decline. For the six months -- April
through September 2000 -- the Fund's Class A shares lost 8.08% (excluding the
sales charge).
The fundamental story for gold over the period was basically the same as it's
been for the past several years: modest overall demand for gold jewelry and
coins around the globe, combined with limited gold production. Compounding the
situation was continued selling of gold reserves by central banks, most notably
in the United Kingdom and Switzerland. This helped keep a lid on the price of
gold.
SUBDUED INFLATION
Gold couldn't get much help from inflation, either, as the data in the U.S. and
other major markets showed little if any increase in consumer prices. (Gold has
traditionally been looked upon as a store of value in an environment of rising
inflation, and, therefore, has often experienced a rise in price during such
periods.) A run-up in the price of oil during the period raised the possibility
of a future inflation spike in the minds of some investors, but that trend
failed to have much follow-through effect on gold. For the six months, gold
declined from $281 an ounce to $277.
While the environment made things difficult for stocks of gold producers, stocks
of gold-exploration companies fared better. To take advantage of that situation,
I added several of the latter to the portfolio, including Brancote Holding PLC,
Gabriel Resources and Goldfields. While they constituted small positions on an
individual basis, as a group they made a solid contribution to Fund performance.
I also established a new position in Aber, a diamond producer based in Canada.
Probably the most interesting segment of the precious metals group was
palladium, which, along with its sister metal, platinum, is used in the
production of catalytic converters for cars and trucks. As cleaner air has
become an increasingly global concern, demand for those metals has risen and is
expected to remain high. In addition, demand for platinum jewelry has been on
the rise, often at the expense of gold. The Fund's biggest investment in that
segment -- and, in fact, the Fund's biggest holding overall -- is Montana-based
Stillwater Mining. Although the stock declined during the six months, it has
been a long-term winner for the Fund. During the six months, I beefed up the
exposure to palladium by adding North American Palladium, and added to platinum
by establishing a position in Impala Platinum and adding to holdings of Kroondal
Platinum.
Heading into the second half of the fiscal year, I think the best opportunities
continue to be in platinum/palladium and gold-exploration stocks, which, at the
end of past period, accounted for about 23% and 12%, respectively, of the
portfolio. The bulk of the rest of the portfolio remained in stocks of gold
producers.
Clay L. Hoes
<PAGE>
Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 2000 $4.55
March 31, 2000 $4.95
Decrease $0.40
Distributions -- April 1, 2000 - Sept. 30, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -8.08%
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 2000 $4.44
March 31, 2000 $4.85
Decrease $0.41
Distributions -- April 1, 2000 - Sept. 30, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -8.45%
Class C-- June 26, 2000* - Sept. 30, 2000
(All figures per share)
Net asset value (NAV)
Sept. 30, 2000 $4.43
June 26, 2000* $4.57
Decrease $0.14
Distributions-- June 26, 2000* - Sept. 30, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -3.06%***
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
Sept. 30, 2000 $4.56
March 31, 2000 $4.95
Decrease $0.39
Distributions -- April 1, 2000 - Sept. 30, 2000
From income $ --
From capital gains $ --
Total distributions $ --
Total return** -7.88%
*Inception date.
**The total return is a hypothetical investment in the Fund with all
distributions reinvested. Returns do not include sales load. The prospectus
discusses the effect of sales charges, if any, on the various classes.
***The total return for Class C is not annualized.
<PAGE>
The 10 Largest Holdings
Percent Value
(of net assets) (as of Sept. 30, 2000)
Stillwater Mining 11.72% $4,466,549
Meridian Gold 10.47 3,987,771
Goldcorp Cl A 7.12 2,711,684
Barrick Gold 6.20 2,363,750
Newmont Mining 5.80 2,210,000
Gabriel Resources 5.21 1,986,761
Impala Platinum Holdings 4.55 1,733,832
Harmony Gold Mining 4.00 1,524,720
Compania de Minas Buenaventura ADR 3.89 1,483,125
Brancote Holdings 3.77 1,435,994
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 62.73% of net assets
<PAGE>
<TABLE>
<CAPTION>
Financial Statements
Statement of assets and liabilities
AXP Precious Metals Fund, Inc.
Sept. 30, 2000 (Unaudited)
Assets
Investments in securities at value (Note 1)
<S> <C> <C>
(identified cost $37,503,575) $ 38,864,961
Cash in bank on demand deposit 5,236
Dividends and accrued interest receivable 105,230
Receivable for investment securities sold 8,850
-----
Total assets 38,984,277
----------
Liabilities
Payable for investment securities purchased 818,100
Accrued investment management services fee 810
Accrued distribution fee 398
Accrued transfer agency fee 472
Accrued administrative services fee 61
Other accrued expenses 63,760
------
Total liabilities 883,601
-------
Net assets applicable to outstanding capital stock $ 38,100,676
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 84,093
Additional paid-in capital 83,306,396
Net operating loss (99,374)
Accumulated net realized gain (loss) (Note 7) (46,550,287)
Unrealized appreciation (depreciation) on investments and
on translation of assets and liabilities in foreign currencies 1,359,848
---------
Total-- representing net assets applicable to outstanding capital stock $ 38,100,676
============
Net assets applicable to outstanding shares: Class A $ 31,017,339
Class B $ 7,041,558
Class C $ 35,265
Class Y $ 6,514
Net asset value per share of outstanding capital stock:
Class A shares 6,814,534 $ 4.55
Class B shares 1,585,347 $ 4.44
Class C shares 7,957 $ 4.43
Class Y shares 1,429 $ 4.56
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of operations
AXP Precious Metals Fund, Inc.
Six months ended Sept. 30, 2000 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 198,752
Interest 100,214
Less foreign taxes withheld (7,438)
------
Total income 291,528
-------
Expenses (Note 2):
Investment management services fee 164,931
Distribution fee
Class A 42,752
Class B 39,166
Class C 46
Transfer agency fee 82,051
Incremental transfer agency fee
Class A 8,078
Class B 2,355
Class C 1
Service fee - Class Y 3
Administrative services fees and expenses 12,426
Compensation of board members 3,819
Custodian fees 9,917
Printing and postage 1,447
Registration fees 15,358
Audit fees 10,000
Other 3,012
-----
Total expenses 395,362
Earnings credits on cash balances (Note 2) (4,460)
- ------
Total net expenses 390,902
-------
Investment income (loss)-- net (99,374)
-------
Realized and unrealized gain (loss) -- net Net realized gain (loss) on:
Security transactions (Note 3) (8,008,103)
Foreign currency transactions (20,371)
Options contracts written (Note 5) 103,321
- -------
Net realized gain (loss) on investments (7,925,153)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 4,416,556
---------
Net gain (loss) on investments and foreign currencies (3,508,597)
----------
Net increase (decrease) in net assets resulting from operations $(3,607,971)
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP Precious Metals Fund, Inc.
Sept. 30, 2000 March 31, 2000
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ (99,374) $ (222,660)
Net realized gain (loss) on investments (7,925,153) (8,948,614)
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilites in foreign currencies 4,416,556 4,800,251
--------- ---------
Net increase (decrease) in net assets resulting from operations (3,607,971) (4,371,023)
---------- ----------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 22,720,141 94,960,719
Class B shares 518,974 5,407,758
Class C shares 37,000 --
Class Y shares -- 16,725
Payments for redemptions
Class A shares (26,857,712) (104,924,748)
Class B shares (Note 2) (1,430,437) (3,427,144)
Class Y shares -- (8,062)
------
Increase (decrease) in net assets from capital share transactions (5,012,034) (7,974,752)
---------- ----------
Total increase (decrease) in net assets (8,620,005) (12,345,775)
Net assets at beginning of period 46,720,681 59,066,456
---------- ----------
Net assets at end of period $38,100,676 $ 46,720,681
=========== ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP Precious Metals Fund, Inc.
(Unaudited as to Sept. 30, 2000)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 (as amended) as
a non-diversified, open-end management investment company. The Fund has 10
billion authorized shares of capital stock. The Fund invests primarily in
securities of companies engaged in the exploration, mining, processing or
distribution of gold and other precious metals. Most of these companies will be
located outside of the United States.
Class C shares of the Fund were offered to the public on June 26, 2000. Prior to
this date, American Express Financial Corporation (AEFC) purchased 429 shares of
capital stock, which represented the initial capital in Class C at $4.66 per
share.
The Fund offers Class A, Class B, Class C and Class Y shares.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge (CDSC)
and automatically convert to Class A shares during the ninth calendar year of
ownership.
o Class C shares may be subject to a CDSC.
o Class Y shares have no sales charge and are offered only to
qualifying institutional investors.
All classes of shares have identical voting, dividend, and liquidation rights.
The distribution fee, incremental transfer agency fee and service fee (class
specific expenses) differ among classes. Income, expenses (other than class
specific expenses) and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon its relative net assets.
The Fund's significant accounting policies are summarized below:
Use of estimates
Preparing financial statements that conform to accounting principles generally
accepted in the United States of America requires management to make estimates
(e.g., on assets and liabilities) that could differ from actual results.
Valuation of securities
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 current interest rates;
those maturing in 60 days or less are valued at amortized cost. Investments in
metals, if any, are valued daily using data from independent brokers and pricing
services.
Option transactions
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, 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.
The Fund also may buy and sell put and call options and write covered call
options on portfolio securities as well as write cash-secured put options. 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.
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 and 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 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 are 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. The effect of changes in foreign exchange
rates on realized and unrealized security gains or losses is reflected as a
component of such gains or losses. 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 and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation 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 shareholders. No provision for income or excise taxes
is thus required.
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 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. 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)
were recorded by the Fund.
Dividends to shareholders
An annual dividend from net investment income, declared and paid at the end of
the calendar year, when available, is reinvested in additional shares of the
Fund at net asset value or payable in cash. Capital gains, when available, are
distributed along with the last income dividend of the calendar year.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date and interest income,
including level-yield amortization of premium and discount, is accrued daily.
2. EXPENSES AND SALES CHARGES
The Fund has agreements with AEFC to manage its portfolio and provide
administrative services. Under an Investment Management Services Agreement, AEFC
determines which securities will be purchased, held or sold. The management fee
is a percentage of the Fund's average daily net assets in reducing percentages
from 0.8% to 0.675% annually. The fee may be adjusted upward or downward by a
performance incentive adjustment based on a comparison of the performance of
Class A shares of AXP Precious Metals Fund to the Lipper Gold Funds Index. The
maximum adjustment is 0.12% 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 adjustment decreased the fee by
$3,273 for the six months ended Sept. 30, 2000.
Under an Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.06% to 0.035% annually. A minor
portion of additional administrative service expenses paid by the Fund are
consultants' fees and fund office expenses. Under this agreement, the Fund also
pays taxes, audit and certain legal fees, registration fees for shares,
compensation of board members, corporate filing fees and any other expenses
properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19.00
o Class B $20.00
o Class C $19.50
o Class Y $17.00
The Fund has agreements with American Express Financial Advisors Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution, the Fund pays a distribution fee at an annual rate up
to 0.25% of the Fund's average daily net assets attributable to Class A shares
and up to 1.00% for Class B and Class C shares.
Under a Shareholder Service Agreement, the Fund's Class Y shares pay a fee for
service provided to shareholders by financial advisors and other servicing
agents. The fee is calculated at a rate of 0.10% of the Fund's average daily net
assets.
Sales charges received by the Distributor for distributing Fund shares were
$14,432 for Class A and $7,848 for Class B for the six months ended Sept. 30,
2000.
During the six months ended Sept. 30, 2000, the Fund's custodian and transfer
agency fees were reduced by $4,460 as a result of earnings credits from
overnight cash balances. The Fund also pays custodian fees to American Express
Trust Company, an affiliate of AEFC.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $34,010,977 and $39,547,163, respectively, for the six
months ended Sept. 30, 2000. Realized gains and losses are determined on an
identified cost basis.
Brokerage commissions paid to brokers affiliated with AEFC were $28,590 for the
six months ended Sept. 30, 2000.
Income from securities lending amounted to $980 for the six months ended Sept.
30, 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.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are
as follows:
Six months ended Sept. 30, 2000
Class A Class B Class C* Class Y
Sold 4,778,852 112,035 7,957 --
Issued for
reinvested distributions -- -- -- --
Redeemed (5,649,293) (312,553) -- --
---------- --------
Net increase (decrease) (870,441) (200,518) 7,957 --
-------- -------- -----
* Inception date was June 26, 2000.
Year ended March 31, 2000
Class A Class B Class C Class Y
Sold 17,083,825 996,586 N/A 2,843
Issued for
reinvested distributions -- -- N/A --
Redeemed (18,843,736) (630,484) N/A (1,550)
----------- -------- ------
Net increase (decrease) (1,759,911) 366,102 N/A 1,293
---------- ------- -----
5. OPTIONS CONTRACTS WRITTEN
Contracts and premium amounts associated with options contracts written are
as follows:
Six months ended Sept. 30, 2000
Puts Calls
Contracts Premium Contracts Premium
Balance March 31, 2000 -- $ -- -- $ --
Opened 500 100,997 100 15,324
Closed (500) (100,997) -- --
Expired -- -- (100) (15,324)
---- -------
Balance Sept. 30, 2000 -- $ -- -- $ --
See "Summary of significant accounting policies."
6. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express mutual funds, permits
borrowings up to $200 million, collectively. Interest is charged to each Fund
based on its borrowings at a rate equal to the Federal Funds Rate plus 0.30% or
the Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to
90 days after such loan is executed. The Fund also pays a commitment fee equal
to its pro rata share of the amount of the credit facility at a rate of 0.05%
per annum. The Fund had no borrowings outstanding during the six months ended
Sept. 30, 2000.
7. CAPITAL LOSS CARRY-OVER
For federal income tax purposes, the Fund had a capital loss carry-over of
$36,699,656 as of March 31, 2000, that will expire in 2006 through 2009 if not
offset by capital gains. It is unlikely the board will authorize a distribution
of any net realized capital gains until the available capital loss carry-over
has been offset or expires.
<PAGE>
<TABLE>
<CAPTION>
8. FINANCIAL HIGHLIGHTS
The table below shows certain important financial information for evaluating the
Fund's results.
Fiscal period ended March 31,
Per share income and capital changesa
Class A
2000b 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.95 $5.45 $6.82 $10.47 $13.75
Income from investment operations:
Net investment income (loss) (.01) (.02) (.01) -- (.08)
Net gains (losses) (both realized
and unrealized) (.39) (.48) (1.31) (3.46) (2.54)
Total from investment operations (.40) (.50) (1.32) (3.46) (2.62)
Less distributions:
Dividends from net investment income -- -- (.05) (.08) --
Distributions from realized gains -- -- -- (.11) (.66)
Total distributions -- -- (.05) (.19) (.66)
Net asset value, end of period $4.55 $4.95 $5.45 $6.82 $10.47
Ratios/supplemental data
Net assets, end of period
(in millions) $31 $38 $51 $61 $83
Ratio of expenses to average
daily net assetsc 1.73%d 1.69% 1.66% 1.51% 1.50%
Ratio of net investment income
(loss) to average daily
net assets (.33%)d (.27%) (.20%) .06% (.58%)
Portfolio turnover rate
(excluding short-term securities) 90% 114% 44% 112% 76%
Total returne (8.08%) (9.11%) (19.40%) (32.87%) (19.91%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Sept. 30, 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 a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fiscal period ended March 31,
Per share income and capital changesa
Class B
2000b 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.85 $5.38 $6.73 $10.30 $13.65
Income from investment operations:
Net investment income (loss) (.03) (.05) (.05) (.04) (.14)
Net gains (losses) (both realized
and unrealized) (.38) (.48) (1.29) (3.41) (2.55)
Total from investment operations (.41) (.53) (1.34) (3.45) (2.69)
Less distributions:
Dividends from net investment income -- -- (.01) (.01) --
Distributions from realized gains -- -- -- (.11) (.66)
Total distributions -- -- (.01) (.12) (.66)
Net asset value, end of period $4.44 $4.85 $5.38 $6.73 $10.30
Ratios/supplemental data
Net assets, end of period
(in millions) $7 $9 $8 $9 $8
Ratio of expenses to average
daily net assetsc 2.49%d 2.46% 2.46% 2.28% 2.27%
Ratio of net investment income
(loss) to average daily
net assets (1.09%)d (1.04%) (.97%) (.74%) (1.46%)
Portfolio turnover rate
(excluding short-term securities) 90% 114% 44% 112% 76%
Total returne (8.45%) (9.78%) (20.02%) (33.41%) (20.52%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Sept. 30, 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 a sales charge.
</TABLE>
<PAGE>
Fiscal period ended March 31,
Per share income and capital changesa
Class C
2000b
Net asset value, beginning of period $4.57
Income from investment operations:
Net investment income (loss) (.01)
Net gains (losses) (both realized
and unrealized) (.13)
Total from investment operations (.14)
Net asset value, end of period $4.43
Ratios/supplemental data
Net assets, end of period (in millions) $--
Ratio of expenses to average daily
net assetsc 2.49%d
Ratio of net investment income
(loss) to average daily net assets .15%d
Portfolio turnover rate
(excluding short-term securities) 90%
Total returne (3.06%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Inception date was June 26, 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 a sales charge.
<PAGE>
<TABLE>
<CAPTION>
Fiscal period ended March 31,
Per share income and capital changesa
Class Y
2000b 2000 1999 1998 1997
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.95 $5.43 $6.80 $10.52 $13.76
Income from investment operations:
Net investment income (loss) -- -- (.01) .03 (.05)
Net gains (losses) (both realized
and unrealized) (.39) (.48) (1.30) (3.52) (2.53)
Total from investment operations (.39) (.48) (1.31) (3.49) (2.58)
Less distributions:
Dividends from net investment income -- -- (.06) (.12) --
Distributions from realized gains -- -- -- (.11) (.66)
Total distributions -- -- (.06) (.23) (.66)
Net asset value, end of period $4.56 $4.95 $5.43 $6.80 $10.52
Ratios/supplemental data
Net assets, end of period
(in millions) $-- $-- $-- $-- $--
Ratio of expenses to average
daily net assetsc 1.52%d 1.52% 1.38% 1.26% 1.27%
Ratio of net investment income
(loss) to average daily
net assets (.18%)d (.19%) .01% .36% (.33%)
Portfolio turnover rate
(excluding short-term securities) 90% 114% 44% 112% 76%
Total returne (7.88%) (8.89%) (19.31%) (32.79%) (19.75%)
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Sept. 30, 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 a sales charge.
</TABLE>
<PAGE>
Investments in Securities
AXP Precious Metals Fund, Inc.
Sept. 30, 2000 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (94.9%)
Issuer Shares Value(a)
Australia (8.5%)(c)
Delta Gold 2,200,000 $1,382,163
Goldfields 300,000 243,720
Kingsgate Consolidated 1,500,000(b) 519,936
MIM Holdings 500,000 295,172
Portman 500,000 230,180
QCT Resources 800,000 563,264
Total 3,234,435
Canada (41.9%)(c)
Aber Diamond 65,000(b) 518,410
Agnico-Eagle Mines 180,000 1,052,772
Barrick Gold 155,000 2,363,750
CSA Management Cl A 20,000(b) 272,498
Francisco Gold 100,000(b) 398,777
Franco-Nevada Mining 100,000 983,650
Gabriel Resources 879,200 1,986,761
Goldcorp Cl A 400,000 2,711,684
IAMGOLD 300,000(b) 498,471
Meridian Gold 600,000(b) 3,987,771
Pacific Rim Mining 200,000(b) 199,389
Teck Cl B 145,000(b) 987,804
Total 15,961,737
Peru (3.9%)(c)
Compania de Minas Buenaventura ADR 105,000 1,483,125
South Africa (10.4%)(c)
Harmony Gold Mining 300,000 1,524,720
Impala Platinum Holdings 40,000 1,733,832
Kroondal Platinum Mines 200,000(b) 686,885
Total 3,945,437
United Kingdom (3.8%)(c)
Brancote Holdings 750,000(b) 1,435,994
United States (26.5%)
EXE Technologies 95,000(b) 1,425,000
Freeport-McMoRan Copper & Gold Cl B 100,000(b) 881,250
Newmont Mining 130,000 $2,210,000
Stillwater Mining 165,000(b) 4,466,549
Vastera 50,000(b) 1,100,000
Total 10,082,799
Total common stocks
(Cost: $34,404,240) 36,143,527
Other (0.3%)
Issuer Shares Value(a)
Canada(c)
Minefinders
Special Warrants 125,000 $95,540
Sedna Geotek
Warrants 228,516(d) --
Total other
(Cost: $458,278) $95,540
Option purchased (1.7%)
Issuer Contracts Exercise Expiration Value(a)
price date
Call
Stillwater Mining 100,000 $22.50 Jan. 2001 $645,000
Total option purchased
(Cost: $659,250) $645,000
Short-term securities (5.2%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies
Federal Home Loan Bank Disc Nts
11-17-00 6.45% $700,000 $693,712
11-24-00 6.44 500,000 494,879
Federal Home Loan Mtge Corp Disc Nt
10-03-00 6.38 200,000 199,858
Federal Natl Mtge Assn Disc Nt
12-07-00 6.48 600,000 592,445
Total 1,980,894
Total short-term securities
(Cost: $1,981,807) $1,980,894
Total investments in securities
(Cost: $37,503,575)(e) $38,864,961
See accompanying notes to investments in securities.
<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 Sept. 30, 2000,
the value of foreign securities
represented 68.65% of net assets.
(d) Negligible market value.
(e) At Sept. 30, 2000, the cost of securities for federal income tax purposes
was approximately $37,504,000 and the approximate aggregate gross
unrealized appreciation and depreciation based on that cost was:
Unrealized appreciation $5,261,000
Unrealized depreciation (3,900,000)
----------
Net unrealized appreciation $1,361,000
----------
<PAGE>
American
Express(R)
Funds
AXP Precious Metals Fund
70100 AXPFinancial Center
Minneapolis, MN 55474
Ticker Symbol
Class A: INPMX Class B: INPBX
Class C: N/A Class Y: N/A
PRSRT STD AUTO
U.S. POSTAGE
PAID
AMERICAN
EXPRESS
S-6144 P (11/00)
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.
