AXP (SM) State
Tax-Exempt
Funds
1999 SEMIANNUAL REPORT
American
Express(R)
Funds
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Tax-exempt funds from the following states:
California
Massachusetts
Michigan
Minnesota
New York
Ohio
Each Fund seeks to provide shareholders with a high level of income generally
exempt from federal income tax as well as from the respective state and local
income tax.
<PAGE>
Twice the Tax Relief
Many people who want to reduce their tax burden favor municipal bonds because
the interest they pay is generally free from federal tax. If you want to reduce
state tax, too, you can invest in municipal bonds in the state you reside.
Investments in municipal bonds are one of the best tax-advantaged investments
still available to individuals. What's more, the money you invest is typically
used by municipalities to fund projects such as schools and highways. So, with
this investment, the benefits reach well beyond your pocketbook.
Contents
From the Chairman 3
From the Portfolio Manager 4
Fund Facts 5
The 10 Largest Holdings 11
Financial Statements 17
Notes to Financial Statements 24
Investments in Securities 38
<PAGE>
(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the boaard
From the Chairman
We are in an extraordinary period for investing in financial assets. Looking at
year 2000, American Express Financial Corporation, the Fund's investment
manager, expects the economy to continue to grow and long-term interest rates to
rise only slightly. 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. 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
<PAGE>
(picture of) Paul B. Hylle
Paul B. Hylle
Portfolio Manager
From the Portfolio Manager
In a very difficult environment for bonds, especially municipal issues, the
Class A shares of AXP State Tax-Exempt Funds experienced losses (excluding the
sales charge) on a total return basis (which includes net asset value change and
interest income) during the first half of the fiscal year - July through
December 1999. The Funds' monthly interest payout, however, remained largely
unchanged over the six months.
Although the data had yet to reflect a significant upturn in consumer prices,
the fear of potentially higher inflation was in the air when the period began.
Fostering investors' concerns were ongoing economic strength, a run-up in oil
prices, an unusually tight labor market and a hike in short-term interest rates
by the Federal Reserve Board just prior to the start of the period.
Selling pressure increases
The ultimate result of these factors was increased selling pressure on bonds,
which in turn dragged down prices for much of the six months. A particular
problem for municipal issues was heavy selling on the part of insurance
companies, which historically have been large holders of municipals. Also adding
to the negative environment was a sizable new supply of corporate bonds, which
further drew potential buyers away from the municipal market, and generally weak
cash flow into municipal bond mutual funds.
For the Funds, this meant that, while they continued to earn interest income
from its holdings, the drop in bond prices resulted in a decline in the net
asset value (NAV). This was aggravated somewhat by my decision to increase the
duration of the Funds' portfolios in anticipation of a potential interest-rate
decline, which did not develop. (Duration, a function of the average maturity of
the securities in a portfolio, affects the NAV's sensitivity to interest-rate
changes. In general, the longer the duration, the greater the sensitivity.) On
the other hand, I'm glad to be able to report that the Funds' interest income
held up relatively well. This reflects my continued emphasis on keeping the
Funds' income as high as prudently possible.
Looking at the Funds on an individual basis, all of the states represented
remained in good-to-excellent financial health, thanks to ongoing economic
growth. As a result, they also continued to enjoy bond-quality upgrades from
rating agencies.
As we enter the second half of the fiscal year, I'm looking forward to what I
think will be a gradually improving bond market, especially for municipals.
First and probably foremost, I think we'll see signs that the economy is
starting to cool off a bit, which in turn should alleviate concern on the part
of investors and the Federal Reserve Board that inflation may be about to shoot
up. Ultimately, that should reduce some of the upward pressure on interest
rates. Beyond that, it appears that the bulk of selling pressure from
institutional bond investors is over and that the municipal market won't be
flooded with a supply of new issues in the months ahead.
Paul B. Hylle
<PAGE>
Fund Facts
AXP California Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.90
June. 30, 1999 $5.18
Decrease $0.28
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* -3.04%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.90
June. 30, 1999 $5.18
Decrease $0.28
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.11
From capital gains $ --
Total distributions $0.11
Total return* -3.39%**
* 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.
<PAGE>
AXP Massachusetts Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.06
June. 30, 1999 $5.39
Decrease $0.33
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* -3.53%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.06
June. 30, 1999 $5.39
Decrease $0.33
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* -3.90%**
* 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.
<PAGE>
AXP Michigan Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.07
June. 30, 1999 $5.38
Decrease $0.31
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* -3.18%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.07
June. 30, 1999 $5.38
Decrease $0.31
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* -3.57%**
* 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.
<PAGE>
AXP Minnesota Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.95
June. 30, 1999 $5.26
Decrease $0.31
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* -3.20%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.95
June. 30, 1999 $5.26
Decrease $0.31
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* -3.57%**
* 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.
<PAGE>
AXP New York Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.85
June. 30, 1999 $5.15
Decrease $0.30
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.13
From capital gains $ --
Total distributions $0.13
Total return* -3.28%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $4.85
June. 30, 1999 $5.15
Decrease $0.30
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.11
From capital gains $ --
Total distributions $0.11
Total return* -3.65%**
* 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.
<PAGE>
AXP Ohio Tax-Exempt Fund
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.06
June. 30, 1999 $5.36
Decrease $0.30
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.14
From capital gains $ --
Total distributions $0.14
Total return* -3.10%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
Dec. 31, 1999 $5.06
June. 30, 1999 $5.36
Decrease $0.30
Distributions -- July 1, 1999 - Dec. 31, 1999
From income $0.12
From capital gains $ --
Total distributions $0.12
Total return* -3.49%**
* 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.
<PAGE>
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The 10 Largest Holdings
AXP California Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1999)
Anaheim Public Finance Authority Revenue Bonds
Electric Utilities San Juan Series 2
<S> <C> <C>
5.75% 2022 4.49% $10,824,053
Los Angeles Water & Power
Electric Plant Revenue Bonds Series 1990
7.13% 2030 2.78 6,697,989
Statewide Community Development Authority
Revenue Certificate of Participation
St. Joseph Health System Group
6.50% 2015 2.49 6,007,704
Community Development Authority Health Facilities
Unihealth America Certificate of Participation
Series 1993 Inverse Floater
7.77% 2011 2.23 5,387,500
San Francisco City & County Airport Commission
International Airport Refunding Revenue Bonds Issue 20
2nd Series 1998
4.50% 2026 2.03 4,892,563
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation
Eisenhower Memorial Hospital
7.00% 2022 1.88 4,546,310
Fontana Redevelopment Agency
Refunding Certificate of Participation
Police Facility Series 1993
5.63% 2016 1.78 4,285,530
Northern California Transmission Select Auction
Variable Rate Security & Residual Interest Revenue Bonds
Inverse Floater
5.50% 2024 1.74 4,191,840
Redding Redevelopment Agency Tax Allocation
Refunding Bonds Canby Hilltop Cypress Series D
5.00% 2023 1.68 4,056,523
Sacramento Municipal Utility District Pre-refunded Bonds
Series Y
6.75% 2019 1.49 3,593,970
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities".
The 10 holdings listed
here make up 22.59%
of net assets
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The 10 Largest Holdings
AXP Massachusetts Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1999)
Boston City Hospital Refunding Revenue Bonds
Series B
<S> <C> <C>
5.75% 2023 3.48% $2,776,259
Health & Educational Facilities Authority
Revenue Bonds Suffolk University Series B
6.35% 2022 3.14 2,509,122
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System Series 1993A
5.25% 2021 2.73 2,177,075
State Health & Education Facilities Authority
Pre-refunded Revenue Bonds Boston College
Series 1991J
6.63% 2021 2.55 2,033,721
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison Series 1993
5.88% 2008 2.43 1,937,100
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Hospital Series 1991B
7.25% 2013 2.31 1,846,548
State Turnpike Authority Metro Highway System
Senior Lien Revenue Bonds Toll Road Series 1997A
5.00% 2037 2.06 1,641,040
Municipal Wholesale Electric Power
Supply System Refunding Revenue Bonds
Series 1994B
4.75% 2011 2.02 1,611,155
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
9.00% 2015 2.01 1,604,850
State Health & Education Facilities Authority
College Revenue Bonds Brandeis University
Series 1998I
4.75% 2028 1.99 1,592,680
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further details about these holdings,
please refer to the section entitled "Investments in Securities".
The 10 holdings listed
here make up 24.72%
of net assets
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<CAPTION>
The 10 Largest Holdings
AXP Michigan Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1999)
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds
<S> <C> <C>
5.75% 2022 3.14% $2,408,549
Fowlerville Community Schools
Unlimited Tax General Obligation Refunding Bonds
4.75% 2026 2.94 2,259,521
State Building Authority Refunding Revenue Bonds
Series 1991I
6.25% 2020 2.89 2,215,774
State Hospital Finance Authority Hospital Pre-refunded
Revenue Bonds McLaren Obligated Group Series 1991A
7.50% 2021 2.43 1,866,043
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Ford Motor Series 1991A
7.10% 2006 2.38 1,826,451
Grand Ledge Public Schools Unlimited Tax General
Obligation Refunding Bonds Eaton, Clinton & Ionia
Counties Series 1995
5.38% 2024 2.36 1,807,840
Detroit Sewer Disposal Pre-refunded Revenue Bonds
5.70% 2023 2.16 1,656,416
Farmington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A
6.50% 2022 2.06 1,583,820
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991
7.20% 2016 2.06 1,581,030
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B
7.00% 2008 2.05 1,576,545
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities."
10 holdings listed
here make up 24.47%
of net assets
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The 10 Largest Holdings
AXP Minnesota Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1999)
State University Board of Regents General Obligation
Bonds Series 1996A
<S> <C> <C>
5.50% 2021 2.97% $11,880,749
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993A
4.75% 2018 2.82 11,260,214
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Group Health Plan Series 1992
6.75% 2013 2.63 10,521,314
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991
6.70% 2011 2.07 8,266,879
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1997E
5.90% 2029 2.03 8,115,134
Southern Minnesota Municipal Power Agency
Revenue Bonds
4.75% 2016 1.96 7,811,879
Hennepin County Lease Revenue Certificates of
Participation Series 1991
6.80% 2017 1.89 7,542,755
Edina Multi-family Housing Revenue Bonds Walker
Assisted Living Series 1991
9.00% 2031 1.81 7,231,088
St. Paul Housing & Redevelopment Authority
Sales Tax Revenue Bonds Civic Center
Escrowed to Maturity
5.55% 2023 1.79 7,156,500
Faribault Rice & Goodhue Counties Independent
School District 656 General Obligation School
Building Bonds Series 1995
5.75% 2015 1.79 7,149,435
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities."
The 10 holdings listed
here make up 21.76%
of net assets
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The 10 Largest Holdings
AXP New York Tax-Exempt Fund
Percent Value
(of net assets (as of Dec. 31, 1999)
United Nations Development Senior Lien
Pre-refunded Revenue Bonds Series 1992A
<S> <C> <C>
6.00% 2026 4.52% $4,763,294
State Local Government Assistance Pre-refunded
Sales Tax Revenue Bonds Series 1991A
7.00% 2016 3.98 4,200,519
State Mortgage Agency Homeowner Mortgage
Refunding Revenue Bonds Series 1991TT
7.50% 2015 3.93 4,143,519
State Mortgage Agency Homeowner Mortgage
Revenue Bonds 27th Series 1992
6.90% 2015 3.00 3,165,360
Triborough Bridge & Tunnel Authority General
Purpose Pre-refunded Revenue Bonds Series 1990S
7.00% 2021 2.96 3,126,390
State Environmental Facilities State Water Revolving
Fund Pollution Control Revenue Bonds Series 1990A
7.50% 2012 2.94 3,100,770
State Dormitory Authority College Revenue Bonds
Consolidated City University System Series 1993A
5.75% 2013 2.85 3,008,400
State Energy Research & Development Authority
Solid Waste Disposal Revenue Bonds
New York State Electric & Gas Company Series 1993A A.M.T.
5.70% 2028 2.63 2,777,340
State Thruway Authority Local Highway & Bridge
Service Contract Pre-refunded Revenue Bonds
Series 1991
6.00% 2011 2.41 2,545,350
State Energy Research & Development Authority
Pollution Control Refunding Revenue Bonds
Rochester Gas & Electric Series 1992B A.M.T.
6.50% 2032 2.40 2,532,875
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities."
The 10 holdings listed
here make up 31.62%
of net
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<CAPTION>
The 10 Largest Holdings
AXP Ohio Tax-Exempt Fund
Percent Value
(of net assets) (as of Dec. 31, 1999)
Lakota Local School District
Unlimited Tax Improvement General Obligation Bonds
<S> <C> <C>
6.25% 2014 3.10% $2,140,301
Erie County Hospital Improvement Refunding
Revenue Bonds Firelands Community Hospital Series 1992
6.75% 2015 2.95 2,037,740
State Air Quality Development Authority Refunding
Revenue Bonds Series 1994 A.M.T.
6.38% 2029 2.91 2,012,260
State Municipal Electric Generation Agency Revenue Bonds
Joint Venture 5
5.38% 2024 2.63 1,817,940
Butler County Hospital Facility Improvement Refunding
Revenue Bonds Fort Hamilton-Hughes Memorial Center
Series 1991
7.50% 2010 2.62 1,811,128
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds
Counties of Adams & Highland Series 1995
5.25% 2021 2.60 1,800,340
Lorain County Hospital Facilities Refunding Revenue Bonds
EMH Regional Medical Center Series 1995
5.38% 2021 2.59 1,792,860
Franklin County Convention Facilities Authority Tax & Lease
Revenue Anticipation Pre-refunded Bonds
7.00% 2019 2.27 1,568,715
State Housing Finance Agency Mortgage Revenue
Bonds Aristocrat South Board & Care Series 1991A A.M.T.
7.30% 2031 2.22 1,533,120
Cuyahoga County Hospital Refunding Revenue Bonds
Cleveland Clinic Foundation Series 1992
5.50% 2011 2.18 1,505,610
Note: Investment income from certain securities may be subject to the
Alternative Minimum Tax (A.M.T.). For further detail about these holdings,
please refer to the section entitled "Investments in Securities."
The 10 holdings listed
here make up 26.07%
of net assets
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<CAPTION>
Financial Statements
Statements of assets and liabilities
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Dec. 31, 1999 (Unaudited) Fund Fund Fund
Assets
Investments in securities, at value (Note 1)
<S> <C> <C> <C>
(identified cost $238,366,885, $79,888,234 and $73,827,275) $237,937,200 78,788,741 $74,296,390
Cash in bank on demand deposit 14,422 175,217 1,359,538
Accrued interest receivable 3,735,463 1,810,515 1,225,505
Receivable for investment securities sold -- 85,511 --
------ ------ ------
Total assets 241,687,085 80,859,984 76,881,433
Liabilities
Dividends payable to shareholders 311,342 98,473 100,741
Payable for investment securities purchased 745 943,076 1,255
Accrued investment management services fee 3,113 1,029 988
Accrued distribution fee 2,077 886 663
Accrued transfer agency fee 290 146 112
Accrued administrative services fee 265 87 84
Other accrued expenses 63,909 3,942 16,689
------ ----- ------
Total liabilities 381,741 1,047,639 120,532
------- --------- -------
Net assets applicable to outstanding shares $241,305,344 $79,812,345 $76,760,901
============ =========== ===========
Represented by
Shares of beneficial interest-- $.01 par value (Note 1) $ 492,733 $ 157,762 $ 151,298
Additional paid-in capital 246,743,996 82,408,496 78,024,463
Undistributed (excess of distributions over) net investment income -- 1,452 1
Accumulated net realized gain (loss) (Note 6) (5,500,955) (1,602,130) (1,825,754)
Unrealized appreciation (depreciation) on investments (Note 5) (430,430) (1,153,235) 410,893
-------- ---------- -------
Total -- representing net assets applicable to outstanding shares $241,305,344 $79,812,345 $76,760,901
============ =========== ===========
Net assets applicable to outstanding shares: Class A $221,083,281 $63,364,724 $70,148,795
Class B $ 20,222,063 $16,447,621 $ 6,612,106
Outstanding shares of beneficial interest: Class A shares 45,143,734 12,524,921 13,826,650
Class B shares 4,129,569 3,251,271 1,303,196
Net asset value per share: Class A $ 4.90 $ 5.06 $ 5.07
Class B $ 4.90 $ 5.06 $ 5.07
------------ ----------- -----------
See accompanying notes to financial statements.
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<CAPTION>
Statements of assets and liabilities
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Dec. 31, 1999 (Unaudited) Fund Fund Fund
Assets
Investments in securities, at value (Note 1)
<S> <C> <C> <C>
(identified cost $403,718,446, $103,049,643 and $68,528,797) $395,519,397 $103,725,013 $68,443,391
Cash in bank on demand deposit -- 148,910 --
Accrued interest receivable 7,883,631 1,930,672 947,518
Receivable for investment securities sold 62,187 -- 16,251
------ -------- ------
Total assets 403,465,215 105,804,595 69,407,160
Liabilities
Disbursements in excess of cash on demand deposit 3,330,615 -- 128,884
Dividends payable to shareholders 575,394 276,417 90,810
Payable for investment securities purchased 2,063 2,531 --
Accrued investment management services fee 5,130 1,359 899
Accrued distribution fee 3,721 1,009 621
Accrued transfer agency fee 668 175 110
Accrued administrative services fee 424 116 76
Other accrued expenses 89,196 36,489 37,418
------ ------ ------
Total liabilities 4,007,211 318,096 258,818
--------- ------- -------
Net assets applicable to outstanding shares $399,458,004 $105,486,499 $69,148,342
============ ============ ===========
Represented by
Shares of beneficial interest -- $.01 par value (Note 1) $ 807,268 $ 217,721 $ 136,789
Additional paid-in capital 415,214,306 107,549,145 70,887,689
Undistributed (excess of distributions over) net investment income (1,186) -- (1)
Accumulated net realized gain (loss) (Note 6) (8,267,259) (2,838,288) (1,732,318)
Unrealized appreciation (depreciation) on investments (Note 5) (8,295,125) 557,921 (143,817)
---------- ------- --------
Total -- representing net assets applicable to outstanding shares $399,458,004 $105,486,499 $69,148,342
============ ============ ===========
Net assets applicable to outstanding shares: Class A $354,158,352 $ 91,596,576 $62,221,419
Class B $ 45,299,652 $ 13,889,923 $ 6,926,923
Outstanding shares of beneficial interest: Class A shares 71,572,567 18,905,376 12,308,782
Class B shares 9,154,258 2,866,692 1,370,147
Net asset value per share: Class A $ 4.95 $ 4.85 $ 5.06
Class B $ 4.95 $ 4.85 $ 5.06
------------ ------------ -----------
See accompanying notes to financial statements.
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Statements of operations
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
California Massachusetts Michigan
Tax-Exempt Tax-Exempt Tax-Exempt
Six months ended Dec. 31, 1999 (Unaudited) Fund Fund Fund
Investment income
Income:
<S> <C> <C> <C>
Interest $ 7,575,820 $ 2,588,463 $ 2,478,731
------------- ------------ ------------
Expenses (Note 2):
Investment management services fee 602,169 199,570 191,011
Distribution fee
Class A 294,470 85,137 93,145
Class B 104,905 83,960 33,823
Transfer agency fee 49,169 24,533 18,940
Incremental transfer agency fee
Class A 4,953 2,276 1,955
Class B 998 791 313
Administrative services fees and expenses 52,333 16,854 16,101
Compensation of board members 3,745 3,746 3,745
Custodian fees 10,491 3,752 6,636
Printing and postage 11,242 -- 2,932
Registration fees 11,774 4,899 13,315
Audit fees 8,500 7,750 7,750
Other 267 413 483
--- --- ---
Total expenses 1,155,016 433,681 390,149
Earnings credits on cash balances (Note 2) (6,356) (9,344) (3,267)
------ ------ ------
Total net expenses 1,148,660 424,337 386,882
--------- ------- -------
Investment income (loss)-- net 6,427,160 2,164,126 2,091,849
--------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 252,454 (216,007) (116,400)
Financial futures contracts (312,935) (434,048) (474,581)
-------- -------- --------
Net realized gain (loss) on investments (60,481) (650,055) (590,981)
Net change in unrealized appreciation (depreciation) on investments (14,494,146) (4,635,507) (4,079,933)
----------- ---------- ----------
Net gain (loss) on investments (14,554,627) (5,285,562) (4,670,914)
----------- ---------- ----------
Net increase (decrease) in net assets resulting from operations $ (8,127,467) $ (3,121,436) $ (2,579,065)
============= ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of operations
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
Minnesota New York Ohio
Tax-Exempt Tax-Exempt Tax-Exempt
Six months ended Dec. 31, 1999 (Unaudited) Fund Fund Fund
Investment income
Income:
<S> <C> <C> <C>
Interest $ 14,097,894 $3,396,467 $ 2,269,333
------------ ---------- -----------
Expenses (Note 2):
Investment management services fee
1,008,847 262,654 174,496
Distribution fee
Class A 491,227 122,900 83,496
Class B 231,354 67,231 37,278
Transfer agency fee 113,927 29,951 18,832
Incremental transfer agency fee
Class A 11,421 2,925 1,913
Class B 2,397 745 357
Administrative services fees and expenses 88,535 22,364 14,661
Compensation of board members 4,107 3,745 3,746
Custodian fees 11,170 11,373 2,613
Printing and postage 16,808 -- 2,977
Registration fees 13,063 25,010 10,427
Audit fees 9,000 8,500 7,750
Other 2,849 4,418 384
----- ----- ---
Total expenses 2,004,705 561,816 358,930
Earnings credits on cash balances (Note 2) (23,461) (3,666) (1,496)
------- ------ ------
Total net expenses 1,981,244 558,150 357,434
--------- ------- -------
Investment income (loss)-- net 12,116,650 2,838,317 1,911,899
---------- --------- ---------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 543,263 338,477 (105,575)
Financial futures contracts (581,953) (960,264) (474,144)
-------- -------- --------
Net realized gain (loss) on investments (38,690) (621,787) (579,719)
Net change in unrealized appreciation (depreciation) on investments (26,551,178) (6,117,258) (3,753,175)
----------- ---------- ----------
Net gain (loss) on investments (26,589,868) (6,739,045) (4,332,894)
----------- ---------- ----------
Net increase (decrease) in net assets resulting from operations $(14,473,218) $(3,900,728) $(2,420,995)
============ =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
California Tax-Exempt Fund Massachusetts Tax-Exempt Fund
Dec. 31, 1999 June 30, 1999 Dec. 31, 1999June 30, 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 $ 6,427,160 $ 13,224,245 $ 2,164,126 $ 4,137,785
Net realized gain (loss) on investments (60,481) (132,232) (650,055) 35,026
Net change in unrealized appreciation
(depreciation) on investments (14,494,146) (8,521,862) (4,635,507) (2,888,857)
----------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (8,127,467) 4,570,151 (3,121,436) 1,283,954
---------- --------- ---------- ---------
Distributions to shareholders from:
Net investment income
Class A (5,973,813) (12,458,083) (1,821,687) (3,454,620)
Class B (453,346) (766,108) (383,987) (640,114)
Net realized gain
Class A -- -- (507) (33,427)
Class B -- -- (130) (7,530)
---------- ----------- ---------- ----------
Total distributions (6,427,159) (13,224,191) (2,206,311) (4,135,691)
---------- ----------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 18,083,701 42,285,590 7,356,465 16,960,957
Class B shares 3,103,817 8,682,050 3,005,681 6,288,904
Reinvestment of distributions at net asset value
Class A shares 3,967,722 8,430,940 1,444,109 2,675,840
Class B shares 346,959 588,371 318,832 532,827
Payments for redemption
Class A shares (33,555,605) (36,166,864) (11,601,208) (13,594,414)
Class B shares (Note 2) (2,981,027) (2,589,325) (2,746,639) (2,358,655)
---------- ---------- ---------- ----------
Increase (decrease) in net assets
from share transactions (11,034,433) 21,230,762 (2,222,760) 10,505,459
----------- ---------- ---------- ----------
Total increase (decrease) in net assets (25,589,059) 12,576,722 (7,550,507) 7,653,722
Net assets at beginning of period 266,894,403 254,317,681 87,362,852 79,709,130
----------- ----------- ---------- ----------
Net assets at end of period $241,305,344 $266,894,403 $79,812,345 $87,362,852
============ ============ =========== ===========
Undistributed (excess of distributions over)
net investment income $ -- $ (1) $ 1,452 $ 43,000
------------ ------------ ----------- -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
Michigan Tax-Exempt Fund Minnesota Tax-Exempt Fund
Dec. 31, 1999 June 30, 1999 Dec. 31, 1999June 30, 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 $ 2,091,849 $ 4,125,432 $ 12,116,650 $ 23,021,915
Net realized gain (loss) on investments (590,981) 460,666 (38,690) 399,217
Net change in unrealized appreciation
(depreciation) on investments (4,079,933) (3,039,567) (26,551,178) (13,019,298)
---------- ---------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations (2,579,065) 1,546,531 (14,473,218) 10,401,834
---------- --------- ----------- ----------
Distributions to shareholders from:
Net investment income
Class A (1,940,720) (3,880,954) (10,993,113) (21,267,346)
Class B (151,086) (244,520) (1,122,878) (1,747,010)
Net realized gain
Class A (4,302) (295,764) -- --
Class B (408) (21,598) -- --
---- ------- ------- -------
Total distributions (2,096,516) (4,442,836) (12,115,991) (23,014,356)
---------- ---------- ----------- -----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 6,144,580 10,840,031 34,107,248 81,903,764
Class B shares 1,029,169 2,076,128 7,356,788 19,340,345
Reinvestment of distributions at net asset value
Class A shares 1,399,829 3,033,680 8,501,793 16,537,485
Class B shares 117,190 216,608 919,584 1,430,174
Payments for redemptions
Class A shares (9,735,851) (11,501,402) (70,439,472) (66,199,264)
Class B shares (Note 2) (720,628) (620,911) (5,790,676) (5,079,371)
-------- -------- ---------- ----------
Increase (decrease) in net assets
from share transactions (1,765,711) 4,044,134 (25,344,735) 47,933,133
---------- --------- ----------- ----------
Total increase (decrease) in net assets (6,441,292) 1,147,829 (51,933,944) 35,320,611
Net assets at beginning of period 83,202,193 82,054,364 451,391,948 416,071,337
---------- ---------- ----------- -----------
Net assets at end of period $76,760,901 $83,202,193 $399,458,004 $451,391,948
=========== =========== ============ ============
Undistributed (excess of distributions over)
net investment income $ 1 $ (42) $ (1,186) $ (1,845)
----------- ----------- ------------ ------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of changes in net assets
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
New York Tax-Exempt Fund Ohio Tax-Exempt Fund
Dec. 31, 1999 June 30, 1999 Dec. 31, 1999 June 30, 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 $ 2,838,317 $ 5,613,733 $ 1,911,899 $ 3,762,612
Net realized gain (loss) on investments (621,787) 211,975 (579,719) 99,839
Net change in unrealized appreciation
(depreciation) on investments (6,117,258) (3,443,059) (3,753,175) (2,055,350)
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations (3,900,728) 2,382,649 (2,420,995) 1,807,101
---------- --------- ---------- ---------
Distributions to shareholders from:
Net investment income
Class A (2,539,642) (5,126,805) (1,746,295) (3,477,589)
Class B (298,675) (485,770) (166,633) (282,186)
-------- -------- -------- --------
Total distributions (2,838,317) (5,612,575) (1,912,928) (3,759,775)
---------- ---------- ---------- ----------
Share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 7,117,704 13,763,495 5,409,184 12,196,295
Class B shares 2,854,428 5,556,166 820,796 3,287,691
Reinvestment of distributions at net asset value
Class A shares 1,784,695 3,536,147 1,218,013 2,533,703
Class B shares 233,938 382,826 126,140 214,576
Payments for redemptions
Class A shares (13,811,811) (17,500,028) (9,351,666) (11,351,271)
Class B shares (Note 2) (1,899,721) (1,828,945) (1,359,403) (820,294)
---------- ---------- ---------- --------
Increase (decrease) in net assets
from share transactions (3,720,767) 3,909,661 (3,136,936) 6,060,700
---------- --------- ---------- ---------
Total increase (decrease) in net assets (10,459,812) 679,735 (7,470,859) 4,108,026
Net assets at beginning of period 115,946,311 115,266,576 76,619,201 72,511,175
----------- ----------- ---------- ----------
Net assets at end of period $105,486,499 $115,946,311 $69,148,342 $76,619,201
============ ============ =========== ===========
Undistributed (excess of distributions over)
net investment income $ -- $ -- $ (1) $ 1,028
---------- ---------- ----------- -----------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
AXP California Tax-Exempt Trust
AXP Special Tax-Exempt Series Trust
(Unaudited as to Dec. 31, 1999)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AXP California Tax-Exempt Trust and AXP Special Tax-Exempt Series Trust were
organized as Massachusetts business trusts. AXP California Tax-Exempt Trust
includes only AXP California Tax-Exempt Fund. AXP Special Tax-Exempt Series
Trust is a "series fund" that is currently composed of individual state
tax-exempt funds and one insured national tax-exempt fund, including AXP
Massachusetts Tax-Exempt Fund, AXP Michigan Tax-Exempt Fund, AXP Minnesota
Tax-Exempt Fund, AXP New York Tax-Exempt Fund, and AXP Ohio Tax-Exempt Fund (the
Funds). The Funds are non-diversified, open-end management investment companies
as defined in the Investment Company Act of 1940 (as amended). Each Fund has
unlimited authorized shares of beneficial interest.
Each Fund's goal is to provide a high level of income generally exempt from
federal income tax as well as from the respective state and local income tax. A
portion of each Fund's assets may be invested in bonds whose interest is subject
to the alternative minimum tax computation. The Funds concentrate their
investments in a single state and therefore may have more credit risk related to
the economic conditions of the respective state than Funds that have a broader
geographical diversification.
Each Fund offers Class A and Class B 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 and
automatically convert to Class A shares during the ninth calendar year
of ownership.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee and incremental transfer agency fee (class specific
expenses) differs 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 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 sale 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.
Option transactions
To produce incremental earnings, protect gains and facilitate buying and selling
of securities for investments, the Funds 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 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 also may write over-the-counter options 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. Each Fund
will realize a gain or loss when the option transaction expires or closes. When
options on debt securities or futures are exercised, the Fund will realize a
gain or loss. When other options are 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 the
premium received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Funds may buy and
sell financial 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 are recorded as unrealized gains and
losses. The Funds recognize a realized gain or loss when the contract is closed
or expires.
Securities purchased on a when-issued basis
Delivery and payment for securities that have been purchased by the 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
fluctuation, and they may affect the Fund's net assets the same as owned
securities. The Fund designates cash or liquid high-grade debt securities at
least equal to the amount of its commitment. As of Dec. 31, 1999, AXP
Massachusetts Tax-Exempt Fund has entered into outstanding when-issued or
forward commitments of $992,651.
Federal taxes
Each Fund's policy 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. 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 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 Funds.
Dividends to shareholders
Dividends from net investment income, declared daily and paid monthly, are
reinvested in additional shares of each 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. Interest income, including level-yield amortization of premium and
discount, is accrued daily.
2. EXPENSES AND SALES CHARGES
Each Fund has agreements with American Express Financial Corporation (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 each Fund's
average daily net assets in reducing percentages from 0.47% to 0.38% annually.
Under an Administrative Services Agreement, each 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 0.04% to 0.02% 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. Each Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19.50
o Class B $20.50
Each Fund has agreements with American Express Financial Advisors Inc. (the
Distributor) for distribution and shareholder services. Under a Plan and
Agreement of Distribution, each 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 shares.
<PAGE>
Sales charges received by the Distributor for
distributing the Funds' shares for the six months ended Dec. 31, 1999, are as
follows:
Fund Class A Class B
California Tax-Exempt Fund $207,877 $36,568
Massachusetts Tax-Exempt Fund 145,052 14,597
Michigan Tax-Exempt Fund 125,967 9,186
Minnesota Tax-Exempt Fund 453,266 37,152
New York Tax-Exempt Fund 84,261 19,550
Ohio Tax-Exempt Fund 86,496 20,843
During the six months ended Dec. 31, 1999, the Funds' custodian and transfer
agency fees were reduced as a result of earnings credits from overnight cash
balances as follows:
Fund Reduction
California Tax-Exempt Fund $6,356
Massachusetts Tax-Exempt Fund 9,344
Michigan Tax-Exempt Fund 3,267
Minnesota Tax-Exempt Fund 23,461
New York Tax-Exempt Fund 3,666
Ohio Tax-Exempt Fund 1,496
3. SECURITIES TRANSACTIONS
For the six months ended Dec. 31, 1999, cost of purchases and proceeds from
sales (other than short-term obligations) aggregated for each Fund are as
follows:
Fund Purchases Proceeds
California Tax-Exempt Fund $29,262,829 $45,481,802
Massachusetts Tax-Exempt Fund 5,626,285 8,191,815
Michigan Tax-Exempt Fund 5,636,038 9,250,263
Minnesota Tax-Exempt Fund 43,861,669 53,812,501
New York Tax-Exempt Fund 7,342,016 11,896,778
Ohio Tax-Exempt Fund 6,880,592 9,151,980
Realized gains and losses are determined on an identified cost basis.
4. SHARE TRANSACTIONS
Transactions in shares of each Fund for the periods indicated are as follows:
California Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 3,610,531 615,261
Issued for reinvested distributions 790,360 69,150
Redeemed (6,691,941) (595,237)
---------- --------
Net increase (decrease) (2,291,050) 89,174
Year ended June 30, 1999
Class A Class B
Sold 7,876,900 1,618,457
Issued for reinvested distributions 1,573,110 109,894
Redeemed (6,741,823) (485,671)
---------- --------
Net increase (decrease) 2,708,187 1,242,680
Massachusetts Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 1,410,179 576,053
Issued for reinvested distributions 276,871 61,121
Redeemed (2,233,070) (525,073)
---------- --------
Net increase (decrease) (546,020) 112,101
Year ended June 30, 1999
Class A Class B
Sold 3,046,475 1,130,787
Issued for reinvested distributions 481,681 95,959
Redeemed (2,445,264) (425,397)
---------- --------
Net increase (decrease) 1,082,892 801,349
Michigan Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 1,183,433 197,160
Issues for reinvested distributions 268,883 22,505
Redeemed (1,875,157) (139,195)
---------- --------
Net increase (decrease) (422,841) 80,470
Year ended June 30, 1999
Class A Class B
Sold 1,952,027 218,977
Issues for reinvested distributions 546,553 194,235
Redeemed (2,069,273) (111,961)
---------- --------
Net increase (decrease) 429,307 301,251
Minnesota Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 6,685,752 1,443,353
Issued for reinvested distributions 1,670,712 180,816
Redeemed (13,913,231) (1,144,240)
----------- ----------
Net increase (decrease) (5,556,767) 479,929
Year ended June 30, 1999
Class A Class B
Sold 15,143,882 3,578,954
Issued for reinvested distributions 3,061,091 264,909
Redeemed (12,237,821) (942,705)
----------- --------
Net increase (decrease) 5,967,152 2,901,158
New York Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 1,437,455 575,197
Issued for reinvested distributions 358,241 46,965
Redeemed (2,788,407) (380,855)
---------- --------
Net increase (decrease) (992,711) 241,307
Year ended June 30, 1999
Class A Class B
Sold 2,594,887 1,048,359
Issued for reinvested distributions 667,318 72,294
Redeemed (3,294,574) (345,553)
---------- --------
Net increase (decrease) (32,369) 775,100
Ohio Tax-Exempt Fund
Six months ended Dec. 31, 1999
Class A Class B
Sold 1,046,375 157,904
Issued for reinvested distributions 234,779 24,321
Redeemed (1,810,446) (261,834)
---------- --------
Net increase (decrease) (529,292) (79,609)
Year ended June 30, 1999
Class A C lass B
Sold 2,212,340 596,770
Issued for reinvested distributions 460,278 38,999
Redeemed (2,061,123) (149,003)
---------- --------
Net increase (decrease) 611,495 486,766
5. INTEREST RATE FUTURES CONTRACTS
Investments in securities as of Dec. 31, 1999, included securities that were
valued and pledged as collateral to cover initial margin deposits, (see "Summary
of significant accounting policies") as follows:
Open
Market value purchase (sale)
Fund of collateral contracts
California Tax-Exempt Fund $ 196,694 (30)
Massachusetts Tax-Exempt Fund 81,750 37
Michigan Tax-Exempt Fund 1,652,763 40
Minnesota Tax-Exempt Fund 195,156 66
New York Tax-Exempt Fund 231,728 81
Ohio Tax-Exempt Fund 1,513,920 40
The market value of the open purchase contracts (sale contracts for California
Tax-Exempt Fund) as of Dec. 31, 1999, was as follows:
Net
Market value unrealized
Fund of futures gain (loss)
California Tax-Exempt Fund $2,774,063 $ (745)
Massachusetts Tax-Exempt Fund 3,421,344 (53,742)
Michigan Tax-Exempt Fund 3,698,750 (58,222)
Minnesota Tax-Exempt Fund 6,102,938 (96,076)
New York Tax-Exempt Fund 7,489,969 (117,449)
Ohio Tax-Exempt Fund 3,698,750 (58,411)
The Funds maintain, in a segregated account with its custodian, advanced
refunded bonds with at least a market value equal to the value of open long
futures contracts. Advanced refunded bonds are highly liquid, usually covered by
government securities, which will be refunded at the bond's first call date.
6. CAPITAL LOSS CARRYOVER
For federal income tax purposes, capital loss carryovers were as follows as of
June 30, 1999:
Fund Carryover Expiration date
California Tax-Exempt Fund $1,940,553 2006-2008
Massachusetts Tax-Exempt Fu 207,717 2008
Michigan Tax-Exempt Fund 233,234 2008
Minnesota Tax-Exempt Fund 1,997,741 2005-2008
New York Tax-Exempt Fund 1,342,074 2005-2008
Ohio Tax-Exempt Fund 182,633 2005-2008
It is unlikely the board will authorize a distribution of any net realized
capital gains for a Fund until the respective capital loss carryover has been
offset or expires.
7. BANK BORROWINGS
Each Fund has a revolving credit agreement with U.S. Bank, N.A., whereby each
Fund is permitted to have bank borrowings for temporary or emergency purposes to
fund shareholder redemptions. Each 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 each 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. Each 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. Each Fund had no borrowings outstanding during the
six months ended Dec. 31, 1999.
<PAGE>
<TABLE>
<CAPTION>
8. FINANCIAL HIGHLIGHTS
The tables below show certain important financial information for evaluating
each Fund's results.
AXP California Tax-Exempt Trust
AXP California Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
Net asset value, beginning of period $5.18 $5.35 $5.24 $5.15 $5.16 $5.18 $5.35 $5.24 $5.15 $5.16
Income from investment operations:
Net investment income (loss) .13 .27 .29 .29 .28 .11 .22 .25 .25 .24
Net gains (losses) (both realized and unrealized) (.28) (.17) .11 .10 .02 (.28) (.17) .11 .10 .02
Total from investment operations (.15) .10 .40 .39 .30 (.17) .05 .36 .35 .26
Less distributions:
Dividends from net investment income (.13) (.27) (.29) (.29) (.28) (.11) (.22) (.25) (.25) (.24)
Distributions from realized gains -- -- -- (.01) (.03) -- -- -- (.01) (.03)
Total distributions (.13) (.27) (.29) (.30) (.31) (.11) (.22) (.25) (.26) (.27)
Net asset value, end of period $4.90 $5.18 $5.35 $5.24 $5.15 $4.90 $5.18 $5.35 $5.24 $5.15
Ratios/supplemental data
Net assets, end of period (in millions) $221 $246 $239 $232 $234 $20 $21 $15 $10 $6
Ratio of expenses to average daily net assetsd .84%c .79% .75% .77% .80% 1.60%c 1.53% 1.50% 1.52% 1.57%
Ratio of net investment income (loss)
to average daily net assets 5.07%c 4.97% 5.24% 5.64% 5.40% 4.32%c 4.23% 4.50% 4.94% 4.64%
Portfolio turnover rate
(excluding short-term securities) 12% 16% 15% 14% 15% 12% 16% 15% 14% 15%
Total returne (3.04%) 1.80% 7.72% 7.77% 6.00% (3.39%) 1.03% 6.94% 6.95% 5.19%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP Special Tax-Exempt Series Trust
AXP Massachusetts Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.39 $5.56 $5.42 $5.30 $5.27 $5.39 $5.56 $5.42 $5.30 $5.27
Income from investment operations:
Net investment income (loss) .14 .27 .29 .29 .28 .12 .23 .24 .25 .24
Net gains (losses) (both realized and unrealized) (.33) (.17) 14 .12 .03 (.33) (.17) .14 .12 .03
Total from investment operations (.19) .10 .43 .41 .31 (.21) .06 .38 .37 .27
Less distributions:
Dividends from net investment income (.14) (.27) (.29) (.29) (.28) (.12) (.23) (.24) (.25) (.24)
Net asset value, end of period $5.06 $5.39 $5.56 $5.42 $5.30 $5.06 $5.39 $5.56 $5.42 $5.30
Ratios/supplemental data
Net assets, end of period (in millions) $63 $70 $67 $67 $68 $16 $17 $13 $8 $6
Ratio of expenses to average daily net assetsd .87%c .81% .82% .84% .86% 1.63%c 1.56% 1.57% 1.59% 1.63%
Ratio of net investment income (loss)
to average daily net assets 5.25%c 4.99% 5.17% 5.32% 5.26% 4.49%c 4.25% 4.43% 4.58% 4.51%
Portfolio turnover rate
(excluding short-term securities) 7% 5% 9% 8% 6% 7% 5% 9% 8% 6%
Total returne (3.53%) 1.72% 8.13% 7.81% 5.96% (3.90%) .96% 7.32% 7.00% 5.19%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP Special Tax-Exempt Series Trust
AXP Michigan Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
Net asset value, beginning of per iod $5.38 $5.57 $5.44 $5.36 $5.39 $5.38 $5.57 $5.44 $5.36 $5.39
Income from investment operations:
Net investment income (loss) .14 .28 .29 .29 .30 .12 .24 .25 .25 .25
Net gains (losses)
(both realized and unrealized) (.31) (.17) .13 .08 .04 (.31) (.17) .13 .08 .04
Total from investment operations (.17) .11 .42 .37 .34 (.19) .07 .38 .33 .29
Less distributions:
Dividends from net investment income (.14) (.28) (.29) (.29) (.30) (.12) (.24) (.25) (.25) (.25)
Distributions from realized gains -- (.02) -- -- (.07) -- (.02) -- -- (.07)
Total distributions (.14) (.30) (.29) (.29) (.37) (.12) (.26) (.25) (.25) (.32)
Net asset value, end of period $5.07 $5.38 $5.57 $5.44 $5.36 $5.07 $5.38 $5.57 $5.44 $5.36
Ratios/supplemental data
Net assets, end of period (in millions) $70 $77 $77 $77 $79 $7 $7 $5 $4 $3
Ratio of expenses to average daily net assetsd .90%c .83% .82% .81% .82% 1.66%c 1.59% 1.57% 1.56% 1.59%
Ratio of net investment income
(loss) to average daily net assets 5.24%c 5.00% 5.19% 5.38% 5.37% 4.49%c 4.25% 4.44% 4.65% 4.63%
Portfolio turnover rate
(excluding short-term securities) 7% 20% 10% 21% 29% 7% 20% 10% 21% 29%
Total returne (3.18%) 1.92% 7.66% 7.12% 6.30% (3.57%) 1.17% 6.86% 6.32% 5.57%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP Special Tax-Exempt Series Trust
AXP Minnesota Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
Net asset value, beginning of period $5.26 $5.41 $5.30 $5.20 $5.19 $5.26 $5.41 $5.30 $5.20 $5.19
Income from investment operations:
Net investment income (loss) .14 .29 .30 .31 .30 .12 .25 .26 .27 .26
Net gains (losses)
(both realized and unrealized) (.31) (.15) .11 .10 .01 (.31) (.15) .11 .10 .01
Total from investment operations (.17) .14 .41 .41 .31 (.19) .10 .37 .37 .27
Less distributions:
Dividends from net investment income (.14) (.29) (.30) (.31) (.30) (.12) (.25) (.26) (.27) (.26)
Net asset value, end of period $4.95 $5.26 $5.41 $5.30 $5.20 $4.95 $5.26 $5.41 $5.30 $5.20
Ratios/supplemental data
Net assets, end of period (in millions) $354 $406 $385 $376 $393 $45 $46 $31 $22 $16
Ratio of expenses to average daily net assetsd .83%c .78% .75% .75% .80% 1.59%c 1.54% 1.50% 1.50% 1.57%
Ratio of net investment income (loss)
to average daily net assets 5.60%c 5.37% 5.61% 5.81% 5.66% 4.85%c 4.61% 4.86% 5.05% 4.94%
Portfolio turnover rate
(excluding short-term securities) 10% 13% 8% 14% 13% 10% 13% 8% 14% 13%
Total returne (3.20%) 2.62% 7.96% 8.06% 5.99% (3.57%) 1.85% 7.17% 7.23% 5.20%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP Special Tax-Exempt Series Trust
AXP New York Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
Net asset value, beginning of period $5.15 $5.29 $5.15 $5.06 $5.09 $5.15 $5.29 $5.15 $5.06 $5.09
Income from investment operations:
Net investment income (loss) .13 .25 .27 .28 .29 .11 .21 .23 .25 .25
Net gains (losses) (both realized and unrealized) (.30) (.14) .14 .09 (.03) (.30) (.14) .14 .09 (.03)
Total from investment operations (.17) .11 .41 .37 .26 (.19) .07 .37 .34 .22
Less distributions:
Dividends from net investment income (.13) (.25) (.27) (.28) (.29) (.11) (.21) (.23) (.25) (.25)
Net asset value, end of period $4.85 $5.15 $5.29 $5.15 $5.06 $4.85 $5.15 $5.29 $5.15 $5.06
Ratios/supplemental data
Net assets, end of period (in millions) $92 $102 $105 $108 $115 $14 $14 $10 $8 $5
Ratio of expenses to average daily net assetsd .92%c .82% .79% .81% .82% 1.65%c 1.57% 1.55% 1.56% 1.59%
Ratio of net investment income (loss)
to average daily net assets 5.17%c 4.93% 5.22% 5.55% 5.51% 4.44%c 4.20% 4.47% 4.81% 4.79%
Portfolio turnover rate
(excluding short-term securities) 7% 8% 10% 12% 9% 7% 8% 10% 12% 9%
Total returne (3.28%) 2.04% 8.20% 7.60% 5.23% (3.65%) 1.28% 7.35% 6.80% 4.40%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AXP Special Tax-Exempt Series Trust
AXP Ohio Tax-Exempt Fund
Fiscal period ended June 30,
Per share income and capital changesa
Class A Class B
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1999b 1999 1998 1997 1996 1999b 1999 1998 1997 1996
Net asset value, beginning of period $5.36 $5.50 $5.38 $5.28 $5.28 $5.36 $5.50 $5.38 $5.28 $5.28
Income from investment operations:
Net investment income (loss) .14 .27 .29 .29 .29 .12 .23 .24 .25 .24
Net gains (losses) (both realized and unrealized) (.30) (.14) .12 .10 .01 (.30) (.14) .13 .10 .01
Total from investment operations (.16) .13 .41 .39 .30 (.18) .09 .37 .35 .25
Less distributions:
Dividends from net investment income (.14) (.27) (.29) (.29) (.29) (.12) (.23) (.25) (.25) (.24)
Distributions from realized gains -- -- -- -- (.01) -- -- -- -- (.01)
Total distributions (.14) (.27) (.29) (.29) (.30) (.12) (.23) (.25) (.25) (.25)
Net asset value, end of period $5.06 $5.36 $5.50 $5.38 $5.28 $5.06 $5.36 $5.50 $5.38 $5.28
Ratios/supplemental data
Net assets, end of period (in millions) $62 $69 $67 $67 $72 $7 $8 $5 $4 $2
Ration of expenses to average daily net assetsd .89%c .88% 83% .83% .85% 1.65%c 1.63% 1.59% 1.59% 1.59%
Ratio of net investment income (loss)
to average daily net assets 5.23%c 5.02% 5.22% 5.46% 5.35% 4.47%c 4.27% 4.47% 4.74% 4.63%
Portfolio turnover rate
(excluding short-term securities) 10% 5% 10% 9% 24% 10% 5% 10% 9% 24%
Total returne (3.10%) 2.50% 7.79% 7.43% 5.76% (3.49%) 1.75% 6.98% 6.62% 4.96%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Six months ended Dec. 31, 1999 (Unaudited).
c Adjusted to an annual basis.
d Effective fiscal year 1996, expense ratio is based on total expenses of the
Fund before reduction of earnings credits on cash balances.
e Total return does not reflect payment of a sales charge.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Investments in Securities
AXP California Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (96.8%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
ABAG Financial Authority for Nonprofit Corporations
Certificate of Participation International School
Series 1996
<S> <C> <C> <C>
05-01-26 7.38% $2,200,000 $2,252,932
Alhambra City Elementary School District
Los Angeles County Election of 1999
General Obligation Bonds Zero Coupon
Series 1999A (FSA Insured)
09-01-22 5.95 1,055,000(e) 261,471
Alta Loma School District Unlimited Tax
Capital Appreciation General Obligation Bonds
Zero Coupon Series 1999A (FGIC Insured)
08-01-23 5.69 2,600,000(e) 607,646
Anaheim Public Finance Authority
Capital Appreciation Improvement Revenue Bonds
Zero Coupon Series 1997C (FSA Insured)
09-01-25 5.61 2,170,000(e) 448,257
Anaheim Public Finance Authority
Revenue Bonds Electric Utilities
San Juan Series 2 (FGIC Insured)
10-01-22 5.75 11,100,000 10,824,053
Brea Public Financing Authority Water Refunding Bonds
(FGIC Insured)
07-01-21 4.75 1,000,000 835,300
Brea Redevelopment Agency Tax Allocation Refunding Bonds
Redevelopment Project AB (MBIA Insured)
08-01-17 5.50 1,800,000 1,716,084
Burbank Redevelopment Agency Tax Allocation Bonds
Golden State Series 1993A
12-01-23 6.00 2,000,000 1,938,240
Chapman College Educational Facilities Authority
Revenue Bonds Series 1991B
01-01-18 7.50 500,000 526,395
Clearlake Redevelopment Agency
Highlands Park Community Development
Tax Allocation Bonds Series 1993
10-01-23 6.40 1,420,000 1,378,380
Community Development Authority Health Facilities
Unihealth America Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured)
10-01-11 7.77 5,000,000(f) 5,387,500
Contra Costa County Residential Rent Facility
Multi-family Housing Revenue Bonds Cypress Meadows
Series 1998E A.M.T.
09-01-28 7.00 2,000,000 1,736,240
Corona Community Facilities District 90-1
Special Tax Refunding Bonds Series 1998A
09-01-20 4.70 1,905,000 1,586,484
East Bay Municipal Utility District
Water Systems Revenue Bonds
(MBIA Insured)
06-01-28 4.75 2,695,000 2,182,788
Eastern Municipal Water District Riverside County
Water & Sewer Pre-refunded Revenue
Certificates of Participation Series 1991 (FGIC Insured)
07-01-20 6.50 3,000,000 3,149,850
Eastern Municipal Water District Riverside County
Water & Sewer Revenue Certificates of Participation
Series 1991
07-01-23 6.00 1,000,000 1,042,310
El Centro Financial Authority Water & Wastewater
Revenue Bonds Series 1997A (AMBAC Insured)
10-01-27 5.13 1,200,000 1,046,580
El Monte Department Public Social Services Facility
Certificates of Participation (AMBAC Insured)
06-01-30 4.75 1,500,000 1,202,160
Encinitas Unified School District
Unlimited General Obligation Bonds
Zero Coupon Series 1996 (MBIA Insured)
08-01-15 5.85 2,500,000(e) 1,010,225
08-01-16 5.85 1,000,000(e) 375,170
Folsom Special Tax Refunding Bonds
Community Facilities District 10
09-01-24 7.00 3,000,000 2,948,460
Fontana Redevelopment Agency
Refunding Certificate of Participation
Police Facility Series 1993
04-01-16 5.63 4,500,000 4,285,530
Fontana Unified School District
San Bernardino County General Obligation
Convertible Capital Appreciation Bonds
Series 1995C (FGIC Insured)
05-01-20 6.15 3,470,000 3,529,753
Fontana Unified School District
Unlimited Tax General Obligation Bonds
Zero Coupon Series D (FGIC Insured)
05-01-22 6.28 2,000,000(g) 1,868,180
Foothill/Eastern Transportation Corridor Agency
Toll Road Senior Lien Revenue Bonds Series 1995A
01-01-34 6.00 1,775,000 1,900,368
Fresno Unified School District
Fresno County Refunding General Obligation
Bonds Series 1999C (MBIA Insured)
08-01-22 5.90 2,000,000 2,004,840
Garden Grove Agency Community Development
Tax Allocation Refunding Bonds
Garden Grove Community
10-01-23 5.88 3,000,000 2,791,440
Garden Grove Certificates of Participation
Bahia Village/Emerald Isle
(FSA Insured)
08-01-23 5.70 2,660,000 2,566,980
Hemet Redevelopment Agency Tax Allocation
Bonds Series 1999A (AMBAC Insured)
09-15-28 4.75 2,390,000 1,933,414
Huntington Beach Certificate of Participation Revenue Bonds
Civic Center Refinancing (AMBAC Insured)
08-01-16 5.50 1,715,000 1,664,116
Infrastructure & Economic Development Bank
Revenue Bonds American Center for Wine, Foods & Arts
(ACA Insured)
12-01-19 5.70 2,500,000 2,348,750
Inglewood Redevelopment Agency Revenue Bonds
Series 1998A (AMBAC Insured)
05-01-23 5.25 1,100,000 993,190
Intercommunity Hospital Finance Authority
Certificate of Participation (ACA Insured)
11-01-19 5.25 4,000,000 3,536,040
Irwindale Redevelopment Agency Sub Lien
Tax Allocation Bonds Series 1996
12-01-19 7.00 1,700,000 1,766,300
Janesville Union School District
Lassen County General Obligation Bonds
Series 1996
08-01-21 6.45 865,000(d) 850,702
La Mirada Redevelopment Agency Special Tax
Refunding Revenue Bonds Community Facilities
District 89-1 Series 1998
10-01-20 5.70 1,000,000 898,340
Lake Elsinore Public Finance Authority
Local Agency Revenue Bonds Series 1997F
09-01-20 7.10 3,000,000 3,033,780
Lake Elsinore Public Finance Authority
Tax Allocation Revenue Bonds Series 1999A
09-01-30 5.50 2,500,000 2,128,425
Lake Elsinore Redevelopment Agency
Community Facilities District 90
Tuscany Hills Public Improvements
Special Tax Parity Bonds Series 1999A
10-01-24 6.05 2,000,000 1,815,120
Lake Elsinore School Finance Authority
Revenue Bonds Series 1997
09-01-19 6.13 1,235,000 1,194,492
Las Virgenes Unified School District
Los Angeles County Capital Appreciation
General Obligation Bonds Zero Coupon Series 1997B
(FSA Insured)
11-01-21 5.67 1,800,000(e) 470,574
11-01-22 5.68 2,300,000(e) 564,213
11-01-23 5.68 2,945,000(e) 677,733
Los Angeles County Schools Regionalized
Business Services Pooled Financing Program
Certificate of Participation Series 1999A
(AMBAC Insured)
08-01-27 5.97 2,410,000 436,282
Los Angeles Department of Airports Revenue Bonds
Los Angeles International Airport Series 1995D
(FGIC Insured) A.M.T.
05-15-15 5.50 1,000,000 966,720
Los Angeles Department of Water & Power
Waterworks Refunding Revenue Bonds
Series 2 (Secondary FGIC Insured)
05-15-18 4.50 3,000,000 2,473,830
Los Angeles Multi-family Housing Revenue Bonds
Park Parthenia Series 1986A
(GNMA Insured) A.M.T.
01-20-22 7.40 1,000,000 1,017,340
LosAngeles Single Family Home Mortgage Revenue Bonds
Series 1991A (GNMA & FNMA
Insured) A.M.T.
06-01-25 6.88 745,000 759,095
Los Angeles State Harbor Revenue Bonds
Escrowed to Maturity
10-01-18 7.60 1,000,000 1,200,170
Los Angeles State Harbor Revenue Bonds
Series 1996B (MBIA Insured) A.M.T.
11-01-19 5.38 2,000,000 1,821,460
11-01-23 5.38 1,300,000 1,158,391
Los Angeles Wastewater System
Refunding Revenue Bonds Series D (FGIC Insured)
11-01-17 4.70 1,000,000 854,450
Los Angeles Water & Power
Electric Plant Revenue Bonds Series 1990
05-15-30 7.13 6,500,000 6,697,989
Millbrae Residential Facility Revenue Bonds
Magnolia of Millbrae Series 1997A A.M.T.
09-01-27 7.38 2,500,000 2,473,450
Modesto Irrigation District Finance Authority
Refunding Revenue Bonds Domestic Water
Series 1998D (AMBAC Insured)
09-01-22 4.75 2,000,000 1,659,900
Mount Diablo Hospital District Hospital
Pre-refunded Revenue Bonds
Series 1990A (AMBAC Insured)
12-01-17 7.00 3,000,000 3,140,220
North City West Community School Facility
Authority Special Tax Refunding Revenue Bonds
Series 1995B (CGIC Insured)
09-01-15 5.75 1,000,000 1,006,690
Northern California Transmission Agency
California-Oregon Transmission
Pre-refunded Revenue Bonds
Series 1990A (MBIA Insured)
05-01-24 7.00 2,000,000 2,049,780
Northern California Transmission Select Auction
Variable Rate Security & Residual Interest
Revenue Bonds Inverse Floater (MBIA Insured)
04-29-24 5.50 4,500,000(f) 4,191,840
Novato Community Facility District 1 Vintage Oaks
Public Improvement Special Tax Refunding Bonds
08-01-21 7.25 2,000,000 2,061,380
Orange County Special Tax Community Facilities Bonds
Aliso Veijo District 88-1 Series 1992A
08-15-18 7.35 3,000,000 3,265,560
Oxnard Certificates of Participation
Series 1999 (AMBAC Insured)
06-01-28 4.75 1,250,000 1,009,588
Pittsburg Infrastructure Finance Authority
Reassessment Revenue Improvement Bonds
Series 1998A
09-02-24 5.60 1,465,000 1,251,652
Pittsburg Redevelopment Agency Tax Allocation Bonds
Los Medanos Community Development Zero Coupon
(AMBAC Insured)
08-01-24 6.05 2,100,000(e) 459,249
Pleasanton Joint Powers Financing Authority Reassessment
Revenue Bonds Series 1993A
09-02-12 6.15 1,765,000 1,784,980
Port of Oakland Refunding Revenue Bonds
Series 1997G (MBIA Insured) A.M.T.
11-01-25 5.38 3,080,000 2,750,902
Poway Unified School District Special Tax
Refunding Bonds Community Facilities
District 1 (MBIA Insured)
10-01-23 4.75 2,500,000 2,063,000
Rancho Mirage Joint Powers Finance Authority
Certificate of Participation Eisenhower Memorial Hospital
03-01-22 7.00 4,250,000 4,546,310
Redding Redevelopment Agency Tax Allocation
Refunding Bonds Canby Hilltop Cypress
Series D (CGIC Insured)
09-01-23 5.00 4,700,000 4,056,523
Redwood City Elementary School District Capital
Appreciation General Obligation Bonds
San Mateo County Zero Coupon
Series 1997 (FGIC Insured)
08-01-20 5.65 5,475,000(e) 1,564,262
Richmond Elementary School District
Lassen County General Obligation Bonds
Series 1996
08-01-21 6.50 649,000 651,492
Richmond Joint Powers Financing Authority
Leases and Gas Tax Refunding Revenue Bonds
Series 1995A
05-15-13 5.25 2,000,000 1,905,640
Riverside County Certificates of Participation
(MBIA Insured)
12-01-21 5.00 1,530,000 1,332,951
Rural Home Mortgage Financing Authority
Single Family Mortgage Revenue Bonds
3rd Series 1997A (GNMA Insured) A.M.T.
09-01-29 7.00 1,425,000 1,527,657
Rural Home Mortgage Financing Authority
Single Family Mortgage Revenue Bonds
4th Series 1998B (FNMA/GNMA Insured) A.M.T.
12-01-29 5.75 1,455,000 1,452,978
Sacramento Cogeneration Authority
Pre-refunded Revenue Bonds
Procter & Gamble
07-01-10 6.38 500,000 546,395
Sacramento Cogeneration Authority
Unrefunded Revenue Bonds
Procter & Gamble
07-01-10 6.38 500,000 520,055
Sacramento County Certificates of Participation
Refunding Bonds Public Facilities (AMBAC Insured)
10-01-27 4.75 2,000,000 1,619,360
Sacramento Municipal Utility District Pre-refunded Bonds
Series Y (MBIA Insured)
09-01-19 6.75 3,400,000 3,593,970
Sacramento Power Authority Cogeneration
Revenue Bonds Campbell Soup Series 1995
07-01-22 6.00 1,000,000 936,840
San Diego Community Facilities District 1
Special Tax (MBIA Insured)
09-01-20 4.75 2,000,000 1,678,880
San Diego County Capital Asset Lease
Certificate of Participation
Series 1993 Inverse Floater (AMBAC Insured)
09-01-07 7.47 3,200,000(f) 3,444,000
San Diego County Water Authority
Revenue Bonds Certificates of Participation
Series 1998A (FGIC Insured)
05-01-24 4.50 2,500,000 1,964,225
San Francisco City & County Airport Commission
International Airport Revenue Bonds Issue 15B
2nd Series 1998 (MBIA Insured)
05-01-20 4.90 2,000,000 1,720,260
05-01-25 4.50 1,500,000 1,179,375
San Francisco City & County Airport Commission
International Airport Refunding Revenue Bonds Issue 20
2nd Series 1998
05-01-26 4.50 6,250,000 4,892,563
San Jose Redevelopment Agency Merged Area
Redevelopment Tax Allocation Bonds
Series 1993 (MBIA Insured)
08-01-24 4.75 3,055,000 2,509,591
San Jose Redevelopment Agency Merged Area
Redevelopment Tax Allocation Bonds
Series 1999 (AMBAC Insured)
08-01-23 4.75 3,000,000 2,477,370
San Jose Redevelopment Agency Merged Area
Tax Allocation Bonds Series 1993 Inverse Floater
(MBIA Insured)
08-01-14 7.41 3,000,000(f) 2,850,000
San Juan Unified School District
Unlimited Tax General Obligation Bonds
Zero Coupon Series 1999
08-01-21 5.68 820,000(e) 213,184
08-01-23 5.70 1,820,000(e) 415,743
08-01-24 5.78 1,810,000(e) 387,431
San Rafael Redevelopment Agency Tax Allocation
Capital Appreciation Bonds Zero Coupon
(AMBAC Insured)
12-01-18 5.58 1,440,000(e) 458,698
12-01-19 5.58 1,440,000(e) 428,458
12-01-20 5.60 1,440,000(e) 399,902
12-01-21 5.60 1,440,000(e) 374,544
San Ysidro School District General Obligation Bonds
San Diego County Series 1997 (AMBAC Insured)
08-01-21 6.13 1,000,000 1,023,250
Santa Clara County Mountain View
Los Altos Union High School District Unlimited Tax
General Obligation Bonds Series A
08-01-15 5.75 1,200,000 1,208,724
Santa Cruz Certificate of Participation
08-01-07 8.38 1,050,000 1,063,703
Santa Monica-Malibu Unified School District
Capital Appreciation General Obligation Bonds
Los Angeles County Zero Coupon Series 1999 (FGIC Insured)
08-01-22 5.38 7,300,000(e) 1,834,490
Santa Nella County Water District Improvement
Limited Obligation Refunding Improvement Bonds
Series 1998
09-02-28 6.25 2,450,000 2,224,282
Saratoga School District Capital Appreciation
Unlimited Tax General Obligation Bonds
Zero Coupon Series 1999B (MBIA Insured)
09-01-20 5.90 1,370,000(e) 386,326
Sierra Madre Finance Authority Water & Sewer
Refunding Revenue Bonds Series 1998A (MBIA Insured)
11-01-18 5.00 2,010,000 1,791,111
South Tahoe Joint Powers Financing Authority
Refunding Revenue Bonds Series 1995B
10-01-20 6.25 2,700,000 2,626,344
Southern California Home Financing Authority
Single Family Mortgage Revenue Bonds 1990B
(GNMA Insured) A.M.T.
03-01-24 7.75 335,000 343,841
Southern California Metropolitan Water District
Waterworks Revenue Bonds Series 1998A
07-01-22 4.75 3,750,000 3,102,900
Southern California Public Power Authority Transmission
Special Bonds
07-01-12 6.00 2,700,000 2,773,737
State Department Water Resource
Water Systems Revenue Bonds Center Valley
Series 1995O
12-01-18 4.75 2,000,000 1,705,300
State Department Water Resource
Water Systems Revenue Bonds Central Valley
Series L
12-01-23 5.50 3,000,000 2,799,840
State Department Water Resources
Water Systems Refunding Revenue Bonds
Central Valley Series 1997S
12-01-22 5.00 1,000,000 866,230
State Education Facility Authority
Revenue Bonds Pomona College
02-15-17 6.00 3,000,000 3,024,750
State Education Facility Authority
Revenue Bonds Series 1997B
04-01-21 6.30 1,000,000 996,860
State Public Works Board California Community
Colleges Lease Pre-refunded Revenue Bonds
Series 1994B
03-01-19 7.00 2,000,000 2,214,420
State Public Works Board Lease Revenue Bonds
Department of Correction Substance Abuse Treatment
Facility & State Prison at Corcoran Series 1996A
(AMBAC Insured)
01-01-21 5.25 1,870,000 1,701,719
State Public Works Board University of California Lease
Pre-refunded Revenue Bonds Series 1990A
09-01-15 7.00 2,250,000 2,339,258
State University Refunding Revenue Bonds
Series C (AMBAC Insured)
09-01-23 5.00 2,000,000 1,728,420
State Unlimited Tax General Obligation Bonds
12-01-28 4.75 1,000,000 803,820
State Unlimited Tax General Obligation Bonds
(Secondary FGIC Insured)
09-01-23 4.75 1,325,000 1,093,761
State Unlimited Tax General Obligation Refunding Bonds
02-01-21 5.00 3,000,000 2,614,470
Statewide Community Development Authority
Revenue Certificate of Participation
St. Joseph Health System Group
07-01-15 6.50 5,500,000 6,007,704
Stockton Single Family Mortgage Revenue Bonds
Series 1990A (GNMA Insured) A.M.T.
02-01-23 7.50 90,000 91,070
Upland Certificate of Participation Water System
Refunding Bonds (FGIC Insured)
08-01-16 6.60 1,000,000 1,045,940
Vallejo Certificates of Participation Touro University
06-01-29 7.38 2,000,000 1,975,440
West Sacramento Financing Authority
Special Tax Revenue Bonds Series 1999F
09-01-29 6.10 3,000,000 2,668,110
Total municipal bonds
(Cost: $233,966,885)
$233,537,200
Orange County Improvement District 88
Societe Generale V.R.
09-02-18 4.25 3,500,000 3,500,000
State Health Facilities St. Joseph Health Systems
V.R. Series 1991B
07-01-09 4.20 900,000 900,000
Total municipal notes
(Cost: $4,400,000) $4,400,000
Total investments in securities
(Cost: $238,366,885)(i) $237,937,200
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1999, the value of
securities subject to alternative minimum tax represented
6.67% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) Partially pledged as initial margin deposit on the following open interest
rate futures contracts (see Note 5 to the financial statements):
Type of security Notional Amount
Sales contracts
Municipal Bonds, March 2000 $3,000,000
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in market short-term rates. Interest rate
disclosed is the rate in effect on Dec. 31, 1999. Inverse floaters in the
aggregate represent 6.57% of the Fund's net assets as of Dec. 31, 1999.
(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) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies
to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 1999.
(i) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $238,367,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $8,788,000
Unrealized depreciation (9,218,000)
----------
Net unrealized depreciation $(430,000)
<PAGE>
<TABLE>
<CAPTION>
AXP Massachusetts Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (98.7%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
Bay Transportation Authority
General Transportation System
Refunding Bonds Series 1992B
<S> <C> <C> <C>
03-01-16 6.20% $1,500,000 $1,570,290
Bay Transportation Authority
Pre-refunded Revenue Bonds
Series 1992B (FSA Insured)
03-01-21 5.50 15,000 15,351
Bay Transportation Authority
Unrefunded Revenue Bonds
Series 1992B (FSA Insured)
03-01-21 5.50 485,000 448,998
Boston City Hospital Pre-refunded Revenue Bonds
Series A (FHA Insured)
02-15-21 7.63 1,000,000 1,037,900
Boston City Hospital Refunding Revenue Bonds
Series B (FHA Insured)
02-15-23 5.75 3,000,000 2,776,259
Boston General Obligation Bonds
Series 1991A (MBIA Insured)
07-01-11 6.75 500,000 525,495
Boston General Obligation Refunding Bonds
Series 1993A (AMBAC Insured)
02-01-09 5.65 1,500,000 1,531,680
Boston Industrial Development Financing Authority
Revenue Bonds Massachusetts College of Pharmacy
Series 1993A (Connie Lee Insured)
10-01-26 5.25 1,000,000 863,790
Boston Water & Sewer Commission
General Pre-refunded Revenue Bonds
Senior Series 1991A (FGIC Insured)
11-01-18 7.00 1,000,000(d) 1,061,690
Boston Water & Sewer Commission
General Revenue Bonds
Series 1998D (FGIC Insured)
11-01-22 4.75 1,000,000 815,660
Haverhill City Unlimited Tax General Obligation Bonds
Series 1997 (FGIC Insured)
06-15-17 5.00 250,000 223,173
Health & Educational Facilities Authority
Pre-refunded Bonds Northeastern University
Series E (MBIA Insured)
10-01-22 6.55 1,000,000 1,029,880
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds
Stonehill College Series 1990D (AMBAC Insured)
07-01-20 7.70 1,000,000 1,037,640
Health & Educational Facilities Authority
Pre-refunded Revenue Bonds
Wentworth Institute of Technology
Series A (AMBAC Insured)
04-01-10 7.40 750,000 770,985
Health & Educational Facilities Authority
Refunding Revenue Bonds
Beth Israel Hospital Series 1989E
07-01-09 7.00 300,000 304,449
07-01-14 7.00 250,000 252,058
Health & Educational Facilities Authority
Revenue Bonds Berkshire Health Systems
Series C
10-01-11 5.90 1,000,000 940,940
Health & Educational Facilities Authority
Revenue Bonds Brigham & Women's Hospital
Series 1991D
07-01-24 6.75 1,000,000 1,050,550
Health & Educational Facilities Authority
Revenue Bonds Cape Cod Health System
Series 1993A (Connie Lee Insured)
11-15-21 5.25 2,500,000 2,177,075
Health & Educational Facilities Authority
Revenue Bonds Charlton Memorial Hospital
Series 1991B
07-01-13 7.25 1,750,000 1,846,548
Health & Educational Facilities Authority
Revenue Bonds Holyoke Hospital
Series B
07-01-15 6.50 1,000,000 965,600
Health & Educational Facilities Authority
Revenue Bonds New England Deaconess Hospital
Series 1992D
04-01-12 6.63 1,000,000 1,059,450
Health & Educational Facilities Authority
Revenue Bonds Newton Wellesley Hospital
Series 1991D (MBIA Insured)
07-01-15 7.00 1,000,000 1,053,980
Health & Educational Facilities Authority
Revenue Bonds South Shore Hospital
Series 1992D (MBIA Insured)
07-01-22 6.50 1,000,000 1,019,470
Health & Educational Facilities Authority
Revenue Bonds Suffolk University
Series B (Connie Lee Insured)
07-01-22 6.35 2,495,000 2,509,122
Industrial Finance Agency Assumption College
Revenue Bonds Series 1996 (Connie Lee Insured)
07-01-26 6.00 1,000,000 975,410
Industrial Finance Agency Hampshire College
Revenue Bonds Series 1997
10-01-17 5.80 1,105,000 1,011,506
Industrial Finance Agency Pollution Control
Refunding Revenue Bonds Eastern Edison
Series 1993
08-01-08 5.88 2,000,000 1,937,100
Industrial Finance Agency Resource Recovery
Revenue Bonds SEMASS Series 1991A
07-01-15 9.00 1,500,000 1,604,850
Leominster General Obligation Bonds (MBIA Insured)
04-01-09 7.50 1,000,000 1,028,230
Mansfield General Obligation Bonds (AMBAC Insured)
11-15-11 6.70 1,000,000 1,058,570
Municipal Wholesale Electric Power
Supply System Pre-refunded Revenue Bonds
Series 1992B
07-01-17 6.75 1,395,000 1,488,605
Municipal Wholesale Electric Power
Supply System Refunding Revenue Bonds
Series 1994B (MBIA Insured)
07-01-11 4.75 1,750,000 1,611,155
Municipal Wholesale Electric Power
Supply System Revenue Bonds
Special Parts & Inflows (AMBAC Insured)
07-01-18 5.45 1,600,000 1,478,912
Nantucket General Obligation Bonds
12-01-11 6.80 1,000,000 1,059,530
North Andover General Obligation Bonds (MBIA Insured)
09-15-08 7.35 310,000 325,717
North Attleborough Unlimited General Obligation Bonds
Series 1997 (AMBAC Insured)
03-01-17 5.25 1,000,000 927,290
Port Authority Revenue Bonds
Series 1990A (FGIC Insured) A.M.T.
07-01-20 7.50 1,000,000 1,033,360
Southeastern University Building Refunding Revenue Bonds
Series A (AMBAC Insured)
05-01-16 5.75 1,250,000 1,238,150
Southern Berkshire Regional School District Unlimited Tax
General Obligation Pre-refunded Bonds (AMBAC Insured)
04-15-10 7.55 1,000,000 1,029,760
State Development Finance Agency
Private School Revenue Bonds
Series 1998
11-01-18 5.88 500,000 431,290
State Development Finance Agency
Revenue Bonds 1st Mortgage
Berkshire Retirement Community
Lennox Series 1999
07-01-29 5.63 1,500,000 1,228,170
State Development Finance Agency
Revenue Bonds Boston University
Series 1999P
05-15-29 6.00 1,500,000 1,445,805
State Development Finance Agency
Revenue Bonds Landmank School
Series 1999 (Asset Guaranty)
06-01-29 5.25 1,000,000 830,150
State Development Finance Agency
Revenue Bonds Massachusetts College of Pharmacy
Series 1999B
07-01-20 6.63 1,000,000(e) 981,340
State Development Finance Agency
Revenue Bonds Suffolk University
Series 1999
07-01-29 5.85 1,000,000 904,650
State Development Finance Agency
Revenue Bonds The May Institute Issue
Series 1999 (Asset Guaranty)
09-01-29 5.75 1,000,000 910,320
State Development Finance Authority
Revenue Bonds Boston Biomedical Research Institute
02-01-29 5.75 1,000,000 836,380
State Education Loan Authority
Educational Loan Revenue Bonds
Issue E Series B
(AMBAC Insured) A.M.T.
01-01-12 6.00 750,000 758,430
State General Obligation Consolidated Loan Bonds
Series 1991A (FGIC Insured)
06-01-11 6.00 1,095,000 1,117,699
State Health & Education Facilities Authority
College Revenue Bonds Brandeis University
Series 1998I (MBIA Insured)
10-01-28 4.75 2,000,000 1,592,680
State Health & Education Facilities Authority
Hospital Revenue Bonds Harvard Pilgrim Health
Series 1998A (FSA Insured)
07-01-22 4.75 1,000,000 797,600
State Health & Education Facilities Authority
Hospital Revenue Bonds Milford-Whitinsville
Regional Hospital Series 1998C
07-15-28 5.38 1,065,000 839,934
State Health & Education Facilities Authority
Pre-refunded Revenue Bonds Boston College
Series 1991J (FGIC Insured)
07-01-21 6.63 1,940,000 2,033,721
State Health & Education Facilities Authority
Pre-refunded Revenue Bonds Melrose-Wakefield
Hospital Series 1992B
07-01-16 6.38 1,000,000 1,057,130
State Health & Education Facilities Authority
Refunding Revenue Bonds Caritas Christi
Obligated Group Series 1999A
07-01-15 5.70 1,000,000 869,680
State Health & Education Facilities Authority
Revenue Bonds Boston College Series L
06-01-31 4.75 1,000,000 783,110
State Health & Education Facilities Authority
Revenue Bonds North Adams Regional Hospital
Series C
07-01-18 6.63 1,000,000 962,530
State Health & Education Facilities Authority
Revenue Bonds South Shore Hospital
Series 1999F
07-01-29 5.75 1,000,000 886,650
State Health & Education Facilities Authority
Revenue Bonds Southcoast Health System
Series 1998A (MBIA Insured)
07-01-27 4.75 1,000,000 777,980
State Health & Education Facilities Authority
Revenue Bonds Valley Regional Health System
Series 1994C (Connie Lee Insured)
07-01-18 5.75 1,000,000 961,500
State Health & Education Facilities Authority
Unrefunded Revenue Bonds Boston College
Series 1991J (FGIC Insured)
07-01-21 6.63 60,000 62,371
State Health & Educational Facilities Authority
Refunding Revenue Bonds Christopher House Series 1999A
01-01-29 6.88 1,000,000 923,760
State Health & Educational Facilities Authority
Revenue Bonds Learning Center for Deaf Children
Series 1999C
07-01-29 6.18 1,000,000 867,050
State Housing Authority Residential
Development Bonds Series 1992A (FNMA Insured)
11-15-11 6.88 1,000,000 1,053,410
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Marina Bay LLC
Series 1997 A.M.T.
12-01-27 7.50 1,000,000 1,005,450
State Industrial Finance Agency Assisted Living
Facility Revenue Bonds Newton Group Properties LLC
Series 1997 A.M.T.
09-01-27 8.00 1,160,000 1,210,100
State Industrial Finance Agency College Revenue
Bonds Tufts University Series 1998H (MBIA Insured)
02-15-28 4.75 1,000,000 798,000
State Industrial Finance Agency Miscellaneous
Revenue Bonds Cambridge Friends School
Series 1998
09-01-28 5.80 700,000 620,599
State Industrial Finance Agency School Bonds
St. John's High School of Worcester County
Series 1998
06-01-28 5.35 500,000 416,850
State Turnpike Authority Metro Highway System
Senior Lien Revenue Bonds Toll Road
Series 1997A (MBIA Insured)
01-01-37 5.00 2,000,000 1,641,040
State Water Resource Authority Revenue Bonds
Series 1992A (Secondary MBIA Insured)
07-15-22 5.50 1,100,000 1,122,649
Taunton General Obligation Refunding Notes
(FSA Insured)
05-01-19 4.75 1,000,000 826,100
University of Massachusetts Building Authority
Revenue Bonds Escrowed to Maturity
05-01-11 7.50 105,000 117,430
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1990A
04-01-14 7.63 500,000 514,265
Water Resource Authority General
Pre-refunded Revenue Bonds Series 1991A
12-01-19 6.50 1,000,000 1,054,650
Water Resource Authority General
Revenue Bonds Series B (MBIA Insured)
03-01-22 5.00 1,000,000 852,090
Total municipal bonds
(Cost: $79,888,234) $78,788,741
Total investments in securities
(Cost: $79,888,234)(f) $78,788,741
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1999, the value of
securities subject to alternative minimum tax represented
5.02% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B.-- Variable Rate Demand Bond
V.R.D.N.-- Variable Rate Demand Note
(d) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial
statements):
Type of security Notional Amount
Purchase contracts
Municipal Bonds, March 2000 $3,700,000
(e) At Dec. 31, 1999, the cost of securities purchased, including interest
purchased, on a when-issued basis was $992,651.
(f) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $79,888,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $2,345,000
Unrealized depreciation (3,444,000)
----------
Net unrealized depreciation $(1,099,000)
<PAGE>
<TABLE>
<CAPTION>
AXP Michigan Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (96.4%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
Allegan Hospital Finance Authority
Refunding Revenue Bonds Allegan General Hospital
<S> <C> <C> <C>
11-15-21 7.00% $1,000,000 $958,420
Auburn Hills Limited Tax General Obligation
Street Improvement Bonds
05-01-04 6.00 200,000(e) 203,092
Battle Creek Calhoun County Downtown
Development Authority Pre-refunded Bonds
Series 1994
05-01-22 7.65 1,250,000 1,401,325
Belding Area Schools Unlimited Tax General
Obligation Refunding Bonds Series 1998
(AMBAC Insured)
05-01-26 5.00 750,000 632,145
Buena Vista School District Saginaw County
School Building & Site Unlimited Tax
General Obligation Pre-refunded Bonds Series 1991
05-01-16 7.20 1,500,000 1,581,030
Central University Revenue Bonds
Series 1997 (FGIC Insured)
10-01-26 5.50 750,000 777,285
Central University Revenue Bonds
Series 1998 (FGIC Insured)
10-01-27 5.00 1,000,000 837,300
Chippewa County Hospital Financial Authority
Hospital Refunding Revenue Bonds
Chippewa County War Memorial Hospital
Series 1997B
11-01-14 5.63 500,000 440,700
Chippewa Valley School District Unlimited Tax
General Obligation Bonds (FGIC Insured)
05-01-21 5.00 1,000,000 863,220
Concord Academy Certificate of Participation Series 1998
10-01-19 7.00 1,000,000 906,140
Detroit Downtown Development Authority
Development Area Project 1 Junior Lien
Tax Increment Refunding Bonds Series 1996D
07-01-25 6.50 1,000,000 1,094,250
Detroit Sewer Disposal
Pre-refunded Revenue Bonds
(FGIC Insured)
07-01-23 5.70 1,600,000 1,656,416
Detroit Sewer Disposal
Unrefunded Revenue Bonds
(FGIC Insured)
07-01-23 5.70 400,000 378,728
Detroit Unlimited Tax General Obligation Bonds
Series 1995A
04-01-15 6.80 1,000,000(e) 1,095,450
Detroit Water Supply System Second Lien
Revenue Bonds Series 1995A (MBIA Insured)
07-01-25 5.50 1,500,000 1,368,120
East Lansing School District School Building & Site
Unlimited Tax General Obligation
Pre-refunded Bonds Series 1991
05-01-14 6.63 1,000,000 1,046,370
Eaton Rapids Public Schools
Unlimited Tax General Obligation Refunding Bonds
(MBIA Insured)
05-01-25 4.75 1,000,000 808,230
Edwardsburg Public Schools
Unlimited General Obligation Bonds
(FGIC Insured)
05-01-24 4.75 1,000,000 811,460
Farmington Hills Hospital Finance Authority
Revenue Bonds Botsford General Hospital
Series 1992A (MBIA Insured)
02-15-22 6.50 1,500,000 1,583,820
Ferris State University Board of Trustees
General Refunding Revenue Bonds
Series 1995 (MBIA Insured)
10-01-20 5.25 1,000,000 893,050
Forest Hills School District Unlimited Tax
General Obligation Pre-refunded Bonds
05-01-15 7.38 1,000,000 1,020,670
Fowlerville Community Schools
Unlimited Tax General Obligation Refunding Bonds
(FSA Insured)
05-01-26 4.75 2,810,000 2,259,521
Garden City Hospital Finance Authority
Hospital Revenue Bonds Series 1998
09-01-17 5.75 1,000,000 828,390
Genesee County General Obligation Bonds
Sewer Disposal System Series A (AMBAC Insured)
04-01-15 5.40 1,400,000 1,345,876
Gogebic County Hospital Finance Authority
Hospital Refunding Revenue Bonds
Grandview Health System Series 1999
10-01-16 5.88 1,000,000 861,670
Grand Ledge Public Schools Unlimited Tax General Obligation
Refunding Bonds Eaton, Clinton & Ionia Counties
Series 1995 (MBIA Insured)
05-01-24 5.38 2,000,000 1,807,840
Grand Rapids Community College Limited Tax
General Obligation Bonds Series 1996 (MBIA Insured)
05-01-19 5.38 1,000,000 927,880
Grand Rapids Sanitary Sewer System
Refunding Revenue Bonds
Series 1998A (FGIC Insured)
01-01-28 4.75 1,000,000 797,290
Grand Rapids Tax Increment Revenue Bonds
Series 1994 (MBIA Insured)
06-01-24 6.88 380,000 405,426
Inkster School District Unlimited Tax General
Obligation
Pre-refunded Bonds (AMBAC Insured)
05-01-18 7.00 450,000 461,016
Iosco County Water Supply System Limited Tax
General Obligation Bonds (AMBAC Insured)
05-01-08 5.50 175,000 178,700
05-01-09 5.50 200,000 204,162
05-01-10 5.50 200,000 204,116
Lake Orion School District General Obligation Bonds
(AMBAC Insured)
05-01-20 5.50 1,000,000 938,280
Lincoln Park School District Wayne County School Building
& Site Unlimited Tax General Obligation Bonds
(FGIC Insured)
05-01-26 5.90 1,000,000 1,058,420
Monroe County Pollution Control Revenue Bonds
Detroit Edison Fermi Plants Series
1990I (FGIC Insured) A.M.T.
09-01-20 7.65 1,000,000 1,038,300
Northville Public Schools Unlimited Tax
General Obligation Bonds Series 1991B
05-01-08 7.00 1,500,000 1,576,545
Ovid-Elsie School District Unlimited Tax
General Obligation Bonds (Secondary MBIA Insured)
05-01-21 5.60 1,000,000 1,043,500
Plymouth Educational Center Certificates of Participation
07-01-29 7.00 1,250,000 1,170,838
Redford General Obligation Bonds (MBIA Insured)
04-01-16 5.25 1,450,000 1,387,244
Richmond Limited Obligation Refunding Revenue Bonds
K mart Series A
01-01-07 6.63 530,000 529,120
Rockford Public Schools Kent County Unlimited Tax
General Obligation Pre-refunded Revenue Bonds
05-01-19 7.38 1,000,000 1,020,400
Romulus Township School District Unlimited Tax
General Obligation Refunding Bonds (FGIC Insured)
05-01-22 5.75 2,500,000 2,408,549
Schoolcraft Community School District
Kalamazoo County School Building
& Site Unlimited General Obligation Bonds
Series 1996 (FGIC Insured)
05-01-26 5.38 1,000,000 1,022,410
South Lake District Unlimited Tax General Obligation
Pre-refunded Bonds
05-01-10 6.80 355,000 370,854
South Redford School District Unlimited General Obligation
Bonds Series 1996 (FGIC Insured)
05-01-22 5.50 1,000,000 1,004,170
State Building Authority Refunding Revenue Bonds
Series 1991I
10-01-20 6.25 2,200,000 2,215,774
State Hospital Finance Authority
Hospital Pre-refunded Revenue Bonds
McLaren Obligated Group Series 1991A
09-15-21 7.50 1,750,000 1,866,043
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Detroit Medical Center Series 1988A
08-15-12 8.13 40,000 40,235
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Detroit Medical Center Series A
08-15-13 6.25 1,200,000 1,095,156
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Memorial Healthcare Center
Obligated Group Series 1999
11-15-21 5.88 1,000,000 883,000
State Hospital Finance Authority
Hospital Refunding Revenue Bonds
Sinai Hospital of Greater Detroit Series 1995
01-01-26 6.70 1,000,000 920,780
State Hospital Finance Authority
Pre-refunded Revenue Bonds
Henry Ford Hospital Series 1990A
07-01-10 7.00 1,000,000 1,034,160
State Hospital Finance Authority
Pre-refunded Revenue Bonds
Oakwood Hospital Group Series 1990A (FGIC Insured)
07-01-18 7.10 1,000,000 1,034,630
State Hospital Finance Authority
Refunding Revenue Bonds
Presbyterian Villages Obligated Group Series 1995
01-01-25 6.50 1,000,000 936,900
State Public Power Agency Belle River
Refunding Revenue Bonds Series A
01-01-18 5.25 1,000,000 911,970
State Hospital Finance Authority
Revenue Bonds Central Michigan Community Hospital
10-01-27 6.25 1,000,000 894,100
State Hospital Finance Authority
Revenue Bonds Presbyterian Villages of Michigan
Obligated Group Series 1997
01-01-25 6.38 700,000 647,143
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Detroit Edison
Series 1990BB (MBIA Insured)
07-15-08 7.00 1,000,000 1,127,890
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Detroit Edison
Series 1992BB (FGIC Insured)
02-15-16 6.50 1,500,000 1,562,445
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Ford Motor
Series 1991A
02-01-06 7.10 1,650,000(e) 1,826,451
State Strategic Fund Limited Tax Obligation Refunding
Revenue Bonds Oxford Institute
Escrowed to Maturity
08-15-05 7.88 135,000 144,698
State Strategic Fund Nursing Home
Revenue Bonds Holland Home Series 1998
11-15-28 5.75 1,000,000 786,650
State Trunk Line Bonds Series 1998A (MBIA Insured)
11-01-20 4.75 1,000,000 826,500
State Trunk Line Bonds Series A (FGIC Insured)
11-15-20 5.75 1,065,000 1,126,280
State University Revenue Bonds Series A
08-15-22 5.50 560,000 571,312
Strategic Fund Limited Obligation Refunding
Revenue Bonds Great Lakes Pulp & Fibre
Series 1994 A.M.T.
12-01-27 5.00 683,822 464,999
Summit Academy Certificates of Participation
Junior High School Facility Series 1999
09-01-29 7.00 695,000 627,453
Summit Academy Certificates of Participation
Series 1998
09-01-18 7.00 1,110,000 1,018,403
Troy City Downtown Development Authority
County of Oakland Development Bonds
Series 1995A (Asset Guaranty)
11-01-18 6.38 1,500,000 1,527,090
Van Buren Township Tax Increment Revenue Bonds
Series 1994
10-01-16 8.40 1,000,000 1,090,500
Wayne County Charter Airport
Revenue Bonds Detroit Metropolitan Airport
Series 1998B (MBIA Insured)
12-01-23 4.88 1,000,000 819,750
Wayne County Charter Airport
Revenue Bonds Detroit Metropolitan Airport
Series 1998A (MBIA Insured) A.M.T.
12-01-28 5.00 1,000,000 815,460
Wayne County Charter Airport
Revenue Bonds Detroit Metropolitan Airport
Series 1990A (AMBAC Insured) A.M.T.
12-01-20 7.00 1,080,000 1,120,630
Wayne State University Revenue Bonds
University Board of Governors (FGIC Insured)
11-15-29 5.13 1,000,000 852,250
Total municipal bonds
(Cost: $73,527,275) $73,996,390
1999 Municipal notes (0.4%)
Issuer(c,d) Effective Amount payable Value(a)
yield at maturity
Royal Oak (William Beaumont Hospital)
V.R. Series 1997L
01-01-27 4.80% $100,000 $100,000
University of Michigan Refunding Revenue Bonds
(University Hospital) V.R. Series 1998A
12-01-21 4.80 200,000 200,000
Total municipal notes
(Cost: $300,000) $300,000
Total investments in securities
(Cost: $73,827,275)(f) $74,296,390
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T -- Alternative Minimum Tax -- As of Dec.31,1999, the value of securities
subject to alternative minimum tax represented 4.48% of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N.-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B -- Variable Rate Demand Bond
V.R.D.N -- Variable Rate Demand Note
(d) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies to
reflect current market conditions; rate shown is the effective rate
on Dec. 31, 1999.
(e) Partially pledged as initial deposit on the following open interest rate
futures contracts
(see Note 5 to the financial statements):
Type of security Notional Amount
Purchase contracts
Municipal Bonds, March 2000 $4,000,000
(f) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $73,827,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $3,151,000
Unrealized depreciation (2,682,000)
----------
Net unrealized appreciation $469,000
<PAGE>
<TABLE>
<CAPTION>
AXP Minnesota Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (99.0%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
Albert Lea Independent School District 241
Unlimited Tax General Obligation Bonds
Series 1998 (MBIA Insured)
<S> <C> <C> <C>
02-01-16 4.80 2,555,000 2,245,666
Anoka County Housing & Redevelopment Authority
Revenue Bonds Epiphany Assisted Living LLC
12-01-29 7.40 3,560,000 3,443,481
Becker Pollution Control Revenue Bonds Northern
States Power Sherburne County Generating Station
Units 1 & 2 Series 1987A
12-01-05 7.25 2,000,000 2,003,920
Becker Solid Waste Disposal Facility Revenue Bonds
Liberty Paper Series 1994B A.M.T.
08-01-15 9.00 3,825,000 3,903,680
Bemidji Hospital Facilities 1st Mortgage Pre-refunded
Revenue Bonds North Country Health Services
Series 1991
09-01-21 7.00 1,755,000 1,851,894
Bemidji Independent School District 31
Unlimited General Obligation Bonds
(FSA Insured)
04-01-19 5.00 2,000,000 1,768,720
Bloomington Housing & Redevelopment Authority
Housing Revenue Bonds Senior Summerhouse
Bloomington
05-01-35 6.13 3,400,000 2,866,064
Brooklyn Center Tax Credit Investor Refunding
Revenue Bonds Four Courts Apartments
Series 1995B A.M.T.
06-01-09 7.58 2,450,000 2,431,944
Buffalo Independent School District 877 Unlimited
Tax General Obligation Refunding Bonds
(MBIA Insured)
02-01-18 4.80 1,710,000 1,450,798
Burnsville Multi-family Housing Refunding Revenue
Bonds Summit Park Apartments Series 1993
(FHA Insured)
07-01-33 6.00 4,000,000 3,876,680
Chaska Multi-family Housing Revenue Bonds West
Suburban Housing Partners A.M.T.
09-01-19 5.75 175,000 159,446
03-01-31 5.88 2,115,000 1,875,244
Columbia Heights Multi-family Housing Pre-refunded
Revenue Bonds Crestview Lutheran Home Royce
Place Series 1991 (FHA Insured)
06-01-32 7.75 2,695,000 2,885,051
Columbia Heights Multi-family Housing Revenue
Bonds Crestview Lutheran Home Royce Place
Series 1991
06-01-32 10.00 530,000 587,664
Duluth Economic Development Authority Health Care
Facilities Revenue Bonds BSM Properties
Series 1998A
12-01-28 5.88 500,000 410,540
Eden Prairie Housing Development Authority
Refunding Revenue Bonds Eden Commons
Series 1990 (FHA Insured)
03-01-25 8.25 5,995,000 6,016,522
Eden Prairie Multi-family Housing Refunding
Revenue Bonds Sterling Ponds Series 1999A A.M.T.
12-01-29 6.25 5,335,000 4,835,964
Eden Prairie Multi-family Housing Refunding
Revenue Bonds Sterling Ponds Series 1999B A.M.T.
12-01-29 6.25 745,000 675,313
Edina Multi-family Housing Revenue Bonds Walker
Assisted Living Series 1991
09-01-31 9.00 6,605,000 7,231,088
Faribault Rice & Goodhue Counties Independent
School District 656 General Obligation School
Building Bonds Series 1995 (FSA Insured)
06-01-15 5.75 6,900,000 7,149,435
Faribault Single Family Housing Mortgage Refunding
Revenue Bonds Series 1991A
12-01-11 7.50 795,000 815,376
Farmington Independent School District 192
Unlimited Tax General Obligation Capital
Appreciation School Building Bonds Zero Coupon
Series 1998B (FSA Insured)
02-01-15 5.30 2,070,000(e) 846,133
Fergus Falls Health Care Facilities Revenue Bonds
LRHC Long-term Care Facility Series 1995
12-01-25 6.50 1,500,000 1,460,535
Fridley Senior Housing Revenue Bonds
Banfill Crossing Homes Series 1999
09-01-34 6.75 3,090,000 2,876,172
Golden Valley Governmental Facilities
Local Government Information Systems Association
Revenue Bonds
12-01-17 6.10 1,125,000 1,045,159
Golden Valley Revenue Bonds Covenant Retirement
Communities Series 1999A
12-01-29 5.50 6,250,000 5,237,125
Harmony Multi-family Housing Refunding
Revenue Bonds Zedakah Foundation Series 1997A
09-01-20 5.95 1,240,000 1,185,961
Hastings Healthcare Tax-Exempt Nursing Home
Revenue Bonds Regina Medical Center
(ACA Insured)
09-15-28 5.30 4,100,000 3,414,029
Hennepin County Lease Revenue Certificates of
Participation Series 1991
05-15-17 6.80 7,250,000 7,542,755
Hopkins Pre-refunded Revenue Bonds Blake School
09-01-24 6.70 3,120,000 3,351,473
Hubbard County Solid Waste Disposal Revenue
Bonds Potlatch Series 1989 A.M.T.
08-01-13 7.38 5,610,000 5,728,034
International Falls Solid Waste Disposal Refunding
Revenue Bonds Boise Cascade A.M.T.
12-01-29 6.85 4,000,000 3,932,760
International Falls Solid Waste Disposal Revenue
Bonds Boise Cascade Series 1990 A.M.T.
01-01-15 7.75 4,000,000 4,071,760
Little Canada Multi-family Housing Revenue Bonds
Housing Alternatives Development Company
Series 1997A
12-01-27 6.25 4,900,000 4,541,614
Little Canada Multi-family Housing Revenue Bonds
Little Canada Series 1996 A.M.T.
02-01-27 7.00 3,790,000 3,693,734
Mahtomedi Multi-family Housing Revenue Bonds
Briarcliff A.M.T.
06-01-36 7.35 2,235,000 2,212,427
Maplewood Elder Care Facilities Revenue Bonds Care
Institute Series 1994
01-01-24 7.75 3,830,000 3,711,117
Maplewood Multi-family Housing Refunding Revenue
Bonds Carefree Cottages of Maplewood III
Series 1995 A.M.T.
11-01-32 7.20 2,895,000 2,775,871
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Group Health Plan Series 1992
12-01-13 6.75 10,500,000 10,521,314
Minneapolis & St. Paul Housing & Redevelopment
Authority Health Care System Revenue Bonds
Healthspan Series 1993A (AMBAC Insured)
11-15-18 4.75 13,500,000(f) 11,260,214
Minneapolis & St. Paul Metropolitan Airports Commission
Airport Revenue Bonds Series 1999B (FGIC Insured)
01-01-25 5.13 2,595,000 2,246,076
Minneapolis Community Development Agency
Limited Tax Supported Development General
Obligation Bonds Common Bond Fund Series 1997A
06-01-12 5.50 250,000 242,983
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 1st Series 1996
06-01-11 6.00 980,000 980,461
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 2nd Series 1998A
A.M.T.
06-01-16 5.20 290,000 254,617
06-01-19 5.25 500,000 441,120
Minneapolis Community Development Agency
Limited Tax Supported Development Revenue
Bonds Common Bond Fund 5th Series 1997
12-01-27 5.70 680,000 614,652
Minneapolis General Obligation Bonds Sports Arena
Series 1996
10-01-24 5.20 4,940,000 4,405,393
Minneapolis Nursing Home Revenue Bonds Walker
Cityview & Southview Series 1992
07-01-22 8.50 5,280,000 5,862,542
Minneapolis Parking Ramp
Unlimited General Obligation Bonds
12-01-26 4.75 2,660,000 2,169,948
Minneapolis Special School District 1 Certificates of
Participation Series 1997A (MBIA Insured)
02-01-17 5.38 2,400,000 2,282,736
Minneapolis Special School District 1 Certificates of
Participation Series 1998A (FGIC Insured)
02-01-19 4.75 2,000,000 1,664,300
Minnetonka Senior Housing Revenue Bonds
Westridge Senior Housing
09-01-17 6.75 650,000 610,454
09-01-27 7.00 500,000 477,085
Moorhead Economic Development Authority
Multi-family Housing Development Refunding
Revenue Bonds Eventide Senior Housing
Series 1999B
06-01-19 5.90 500,000 426,070
06-01-29 6.00 1,400,000 1,167,712
NewBrighton Tax Credit Investor Revenue Bonds
Polynesian Village Apartments Series 1995B A.M.T.
07-15-09 7.75 2,355,000 2,351,750
New Hope Housing & Healthcare Facilities Revenue
Bonds Minnesota Masonic Home North Ridge
Series 1999
03-01-19 5.90 2,000,000 1,705,940
03-01-29 5.88 7,000,000 5,736,990
North St. Paul & Maplewood Independent School
District 622 General Obligation Refunding Bonds
Series 1996A
02-01-25 5.13 6,310,000 5,504,087
Northern Minnesota Municipal Power Agency
Electric System Refunding Revenue Bonds
Series 1998B (AMBAC Insured)
01-01-20 4.75 4,500,000 3,726,450
Oakdale Multi-family Housing Refunding
Revenue Bonds Oakdale Village Apartments
Series 1998 A.M.T.
11-01-28 6.00 3,650,000 3,282,628
Olmsted County Health Care Facilities Refunding
Revenue Bonds Olmsted Medical Center
07-01-19 5.55 1,125,000 941,468
Park Rapids Independent School District 309
Unlimited Tax General Obligation Bonds
Series 1999 (MBIA Insured)
02-01-21 4.75 3,000,000 2,519,820
Plymouth Multi-family Housing Revenue Bonds
Harbor Lane Apartments Series 1993
(Asset Guaranty) A.M.T.
09-01-13 5.90 2,325,000 2,330,324
Richfield Independent School District 280 Unlimited
Tax General Obligation School Building Bonds
Series 1993C Inverse Floater (FGIC Insured)
02-01-10 5.88 3,300,000(g) 3,242,250
02-01-12 5.98 2,510,000(g) 2,400,188
Richfield Multi-family Housing Refunding Revenue
Bonds Village Shores Apartments Series 1996
08-01-31 7.63 2,970,000 2,900,502
Robbinsdale Multi-family Housing Revenue Bonds
Copperfield Hill Series 1996A
12-01-31 7.35 3,260,000 3,121,091
Rochester Health Care Facilities Revenue Bonds
Mayo Foundation Series 1992A
11-15-19 4.95 5,000,000 4,251,150
Rochester Multi-family Housing Development
Revenue Bonds Civic Square Series 1991
(FHA Insured) A.M.T.
07-15-31 7.45 4,305,000 4,439,574
Rochester Multi-family Housing Development
Revenue Bonds Wedum Shorewood Campus
06-01-36 6.60 5,000,000 4,567,100
Roseville Housing Facilities Nursing Home
Refunding Revenue Bonds College Properties
Series 1998
10-01-28 5.88 5,000,000 4,111,700
Sartell Health Care & Housing Facilities Revenue Bonds
The Foundation for Health Care Continuums
Series 1999A
09-01-29 6.63 3,000,000 2,730,090
Shoreview Senior Housing Revenue Bonds
Series 1996
02-01-26 7.25 3,200,000 3,056,000
Southeastern Minnesota Multi-county
Housing & Redevelopment Authority
Revenue Bonds Goodhue County Apartments
Series 1999B
01-01-31 5.75 2,415,000 2,250,466
Southeastern Minnesota Multi-county Housing &
Redevelopment Authority Winona County Unlimited
Tax General Obligation Bonds Series 1997
01-01-28 5.35 1,170,000 1,026,301
Southern Minnesota Municipal Power Agency
Power Supply System Revenue Bonds
Zero Coupon Series 1994A (MBIA Insured)
01-01-22 6.88 12,000,000(e) 3,092,040
01-01-24 6.08 5,150,000(e) 1,167,608
Southern Minnesota Municipal Power Agency
Revenue Bonds (Secondary MBIA Insured)
01-01-16 4.75 9,165,000 7,811,879
Southern Minnesota Municipal Power Agency
Unrefunded Balance Revenue Bonds Series 1992A
01-01-18 5.75 1,895,000 1,811,184
Southern Minnesota Municipal Power Agency Power
Supply System Pre-refunded Revenue Bonds
Series 1992A Escrowed to Maturity
(Secondary MBIA Insured)
01-01-18 5.75 1,970,000 1,963,814
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Bonds Zero Coupon
Series 1994A (MBIA Insured)
01-01-19 6.67 19,500,000(e) 6,123,585
Spring Park Health Care Facilities Revenue Bonds
Twin Birch Health Care Center Series 1991
08-01-11 8.25 1,780,000 1,906,807
St. Cloud Certificates of Participation
12-01-17 5.90 400,000 384,180
St. Cloud Hospital Facility Pre-refunded Revenue
Bonds St. Cloud Hospital Series 1990B
(AMBAC Insured)
07-01-20 7.00 5,000,000 5,270,650
St. Cloud Hospital Facility Refunding Revenue
Bonds Series 1993C (AMBAC Insured)
10-01-20 5.30 1,515,000 1,351,365
St. Louis Park Health Care Facilities
Revenue Bonds Healthsystem Minnesota
Obligated Group Series 1993
(AMBAC Insured)
07-01-23 5.20 5,000,000 4,333,500
St. Louis Park Health Care Facilities
Revenue Bonds Healthsystem Minnesota
Obligated Group Series 1993B Inverse Floater
(AMBAC Insured)
07-01-13 5.48 7,000,000(g) 6,133,750
St. Louis Park Multi-family Housing Refunding
Revenue Bonds Park Boulevard Towers
Series 1996A
04-01-31 7.00 3,940,000 3,865,928
St. Paul Housing & Redevelopment Authority Health
Care Facilities Revenue Bonds Lyngblomsten
Care Center Series 1993A
11-01-06 7.13 830,000 819,774
11-01-17 7.13 1,820,000 1,798,961
St. Paul Housing & Redevelopment Authority Health
Care Facilities Revenue Bonds Lyngblomsten
Multi-family Rental Housing Series 1993B
11-01-24 7.00 1,870,000 1,787,327
St. Paul Housing & Redevelopment Authority Health
Care Facilities Revenue Bonds Regions Hospital
Series 1998
05-15-28 5.30 4,125,000 3,244,106
St. Paul Housing & Redevelopment Authority Sales
Tax Revenue Bonds Civic Center
11-01-13 5.45 1,870,000 1,865,344
St. Paul Housing & Redevelopment Authority Sales
Tax Revenue Bonds Civic Center Escrowed
to Maturity (Secondary MBIA Insured)
11-01-23 5.55 7,500,000 7,156,500
St. Paul Housing & Redevelopment Authority Single
Family Housing Mortgage Refunding Revenue
Mortgage-backed Bonds Middle Income Phase II
(FNMA Insured)
03-01-28 6.80 3,345,000 3,462,510
St. Paul Independent School District 625 Certificates of
Participation Series 1999A
02-01-19 4.75 1,000,000 838,920
St. Paul Port Authority Revenue Bonds
Hotel Facilities Radisson Kellogg 2nd Series 1999
08-01-29 7.38 3,500,000 3,395,070
St. Paul Port Authority Unlimited Tax General
Obligation Bonds
03-01-24 5.13 4,770,000 4,159,583
State Agricultural & Economic Development Board
Health Care Facilities Refunding Revenue Bonds
Benedictine Health System-St. Mary's Health System
Duluth Clinic Obligated Group Series 1999A
(MBIA Insured)
02-15-23 5.00 4,795,000 4,077,141
State Agricultural & Economic Development Board
Health Care Facilities Refunding Revenue Bonds
Fairview Hospital & Healthcare Services
Series 1997A (MBIA Insured)
11-15-26 5.75 2,000,000 1,910,460
State Agricultural & Economic Development Board
Health Care Facilities Revenue Bonds
Benedictine Health Series 1999A
(MBIA Insured)
02-15-16 4.75 1,000,000 860,780
State General Obligation Various Purpose
Pre-refunded Bonds Series 1991
08-01-11 6.70 8,000,000 8,266,879
State Higher Education Facilities Authority
Augsburg College Mortgage Revenue Bonds
4th Series 1999Y
10-01-27 5.30 1,200,000 1,022,400
State Higher Education Facilities Authority
Augsburg College Mortgage Revenue Bonds
Series 4-F1
05-01-23 6.25 1,750,000 1,695,593
State Higher Education Facilities Authority
Gustavus Adolphus College Revenue Bonds
4th Series 1998X
10-01-24 4.80 2,340,000 1,897,646
State Higher Education Facilities Authority
Macalester College Revenue Bonds 4th Series 1997J
03-01-17 5.55 1,000,000 971,270
State Higher Education Facilities Authority
Northwestern College of Chiropractic Mortgage
Revenue Bonds 4th Series 1999Z
10-01-13 5.20 275,000 255,302
State Higher Education Facilities Authority
University of St. Thomas Revenue Bonds
4th Series 1997P
04-01-23 5.40 580,000 519,790
State Housing Finance Agency Single Family
Housing Mortgage Bonds Series 1991A
A.M.T.
07-01-22 7.45 1,195,000 1,223,572
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1992A
07-01-16 6.95 2,105,000(f) 2,176,696
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1994L
A.M.T.
07-01-20 6.70 800,000 812,200
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1996J
A.M.T.
07-01-21 5.60 465,000 426,438
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1997D
A.M.T.
07-01-19 5.85 2,465,000 2,365,463
State Housing Finance Agency Single Family
Housing Mortgage Revenue Bonds Series 1997E
A.M.T.
01-01-26 5.75 2,935,000 2,719,278
07-01-29 5.90 8,630,000 8,115,134
State Public Facilities Authority Drinking Water
Revenue Bonds Series 1999B
03-01-19 5.13 1,000,000 900,100
State Public Facilities Authority Water Pollution
Control Revenue Bonds Series 1998A
03-01-16 4.75 2,500,000 2,181,600
State University Board of Regents General Obligation
Bonds Inverse Floater Series 1993A
08-15-03 5.87 5,000,000(g) 5,050,000
State University Board of Regents General Obligation
Bonds Series 1996A
07-01-21 5.50 12,500,000 11,880,749
State University Board of Regents Refunding
Revenue Bonds Series 1986A Escrowed to Maturity
02-01-11 6.00 4,625,000 4,631,891
Vadnais Heights Multi-family Housing Refunding
Revenue Bonds Cottages of Vadnais Heights
Series 1995 A.M.T.
12-01-31 7.00 3,110,000 2,976,426
Vadnais Heights Multi-family Housing Tax Credit
Revenue Bonds Series 1997 A.M.T.
07-15-09 7.00 1,080,000 1,047,179
Washington County Housing & Redevelopment
Authority Refunding Revenue Bonds Woodbury
Multi-family Housing Series 1996
12-01-23 6.95 1,940,000 1,876,310
Western Minnesota Municipal Power Agency
Refunding Revenue Bonds Series 1987A
01-01-15 5.50 5,000,000 4,745,500
Western Minnesota Municipal Power Agency
Refunding Revenue Bonds Series 1987A
(Secondary MBIA Insured)
01-01-15 5.50 6,250,000 6,069,938
Western Minnesota Municipal Power Agency
Revenue Bonds Escrowed to Maturity
(AMBAC Insured)
01-01-16 6.75 5,935,000 6,156,910
Windom Independent School District 177
Unlimited Tax General Obligation Bonds
Series 1999
02-01-24 4.75 2,695,000 2,212,326
Woodbury Senior Housing Revenue Bonds
Summer House of Woodbury Series 1999
07-01-34 6.40 5,145,000 4,795,346
Total municipal bonds
(Cost: $403,718,446) $395,519,397
Total investments in securities
(Cost: $403,718,446)(h) $395,519,397
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1999, the value of
securities subject to alternative minimum tax represented 17.29% of
net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
(d) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies
to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 1999.
(e) For zero coupon bonds, the interest rate disclosed represents the annualized
effective yield on the date of acquisition.
(f) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional Amount
Purchase contracts
Municipal Bonds, March 2000 $6,600,000
(g) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a
multiple of, a decline (increase) in market short-term rates. Interest rate
disclosed is the rate in effect on Dec. 31, 1999. Inverse floaters in the
aggregate represent 4.21% of the Fund's net assets as of Dec. 31, 1999.
(h) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $403,718,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $9,515,000
Unrealized depreciation (17,714,000)
-----------
Net unrealized depreciation $(8,199,000)
<PAGE>
<TABLE>
<CAPTION>
AXP New York Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (97.6%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
Albany County Airport Authority Airport Revenue
Bonds Series 1997 (FSA Insured) A.M.T.
<S> <C> <C> <C>
12-15-19 5.50% $250,000(d) $231,728
Broome County Certificates of Participation
Public Safety Facilities Series 1994 (MBIA Insured)
04-01-22 5.25 2,650,000 2,368,597
Buffalo Municipal Water Finance Authority Water
System Revenue Bonds Series 1995 (FGIC Insured)
07-01-25 5.00 1,000,000 849,510
Buffalo Unlimited Tax General Obligation School
Bonds Series 1997B (AMBAC Insured)
02-01-16 5.38 500,000 471,460
Erie County Unlimited Tax General Obligation Bonds
Series 1995B (FGIC Insured)
06-15-25 5.50 700,000 644,350
Erie County Water Authority Water Works System
Revenue Bonds Series 1990A Escrowed to Maturity
(AMBAC Insured)
12-01-08 6.00 1,765,000 1,838,901
Fallsburg Sullivan Counties Unlimited Tax General
Obligation Pre-refunded Improvement Bonds
Series 1991 (AMBAC Insured)
04-01-11 7.05 325,000 341,643
04-01-12 7.05 325,000 341,643
04-01-13 7.05 325,000 341,643
04-01-14 7.05 325,000 341,643
Huntington Housing Authority Senior Housing
Facilities Revenue Bonds Gurwin Jewish Senior
Residences Series 1999A
05-01-39 6.00 1,750,000 1,478,155
Kenmore Housing Authority
Multi-family Housing Revenue Bonds
State University Buffalo Student Apartments
Series 1999A (Asset Guaranty)
08-01-24 5.50 1,000,000 893,730
Metropolitan Transportation Authority Commuter
Facilities Revenue Bonds Series 1997B
(AMBAC Insured)
07-01-24 5.13 1,000,000 867,720
Metropolitan Transportation Authority Commuter
Facilities Revenue Bonds Series 1998A
(MBIA Insured)
07-01-24 4.75 1,500,000 1,226,160
Metropolitan Transportation Authority Commuter
Facilities Service Contract Refunding Bonds
5th Series 1987
07-01-16 6.50 1,775,000 1,812,950
Metropolitan Transportation Authority
Dedicated Tax Revenue Bonds Series 1998A
(FGIC Insured)
04-01-28 4.75 1,000,000 804,330
Monroe County Airport Authority
Airport Refunding Revenue Bonds
Greater Rochester International Airport
(MBIA Insured)
01-01-16 5.88 1,500,000 1,517,880
Mount Vernon Industrial Development Agency Civic
Facilities Revenue Bonds Wartburg Senior Housing
Incorporated Meadowview
06-01-29 6.20 1,000,000 857,940
New York & New Jersey Port Authority Special
Obligation Revenue Bonds KIAC Partners
4th Series 1996 A.M.T.
10-01-19 6.75 1,500,000 1,518,045
New York City Industrial Development Agency
Civic Facilities Refunding Revenue & Improvement
Bonds Lighthouse International Series 1998
(MBIA Insured)
07-01-23 4.50 200,000 156,568
New York City Industrial Development Agency
Civic Facilities Revenue Bonds Riverdale Country
School Series 1997 (MBIA Insured)
06-01-17 5.25 1,000,000 916,560
New York City Industrial Development Agency
Civic Facilities Revenue Bonds Rockefeller
Foundation Series 1993
07-01-23 5.38 2,000,000 1,834,180
New York City Industrial Development Agency
Civic Facilities Revenue Bonds Touro College
Series 1999A
06-01-29 6.35 1,000,000 926,570
New York City Industrial Development Agency
Civic Facilities Revenue Bonds Trinity Episcopal
School Series 1997 (MBIA Insured)
06-15-27 5.25 1,000,000 873,030
New York City Industrial Development Agency
Civic Facilities Revenue Bonds YMCA Series 1997
08-01-16 5.80 1,000,000 954,280
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series 1994B Inverse Floater (MBIA Insured)
06-15-09 7.07 2,000,000(e) 1,952,500
New York City Municipal Water Finance Authority
Water & Sewer System Revenue Bonds
Series 1996B (MBIA Insured)
06-15-26 5.75 500,000 476,830
New York City Transitional Finance Authority
Future Secured Sales Tax Revenue Bonds Series 1998B
11-15-23 4.75 1,500,000 1,224,330
New York City Transitional Finance Authority
Future Secured Sales Tax Revenue Bonds Series 1999C
05-01-29 5.00 1,000,000 835,130
New York City Unlimited Tax General Obligation
Bonds Series 1996G
02-01-17 5.75 1,500,000 1,452,405
New York City Unlimited Tax General Obligation
Bonds Series 1996J
02-15-19 5.88 1,000,000 971,430
New York City Unlimited Tax General Obligation
Bonds Series 1999I (MBIA Insured)
04-15-29 5.00 1,000,000 834,050
New York City Unlimited Tax General Obligation
Pre-refunded Bonds Series 1994B-1
08-15-16 7.00 1,500,000 1,647,945
North Hempstead Unlimited Tax General Obligation
Various Purpose Bonds Series 1998A
(FGIC Insured)
01-15-23 4.75 1,000,000 822,330
Oneida County Industrial Development Agency Civic
Facilities Revenue Bonds Mohawk Valley
Handicapped Services (ACA Insured)
03-15-19 5.30 500,000 443,985
State Dormitory Authority College Revenue Bonds
Barnard College Series 1996 (AMBAC Insured)
07-01-16 5.25 1,140,000 1,060,246
State Dormitory Authority College Revenue Bonds
Consolidated City University System Series 1993A
07-01-13 5.75 3,000,000 3,008,400
State Dormitory Authority College Revenue Bonds
Cooper Union Series 1996 (AMBAC Insured)
07-01-20 5.38 860,000 789,489
State Dormitory Authority College Revenue Bonds
Culinary Institute of America Series 1997
(MBIA Insured)
07-01-17 5.00 500,000 442,815
State Dormitory Authority College Revenue Bonds
Long Island University Series 1999
(Asset Guaranty)
09-01-28 5.25 1,400,000 1,192,884
State Dormitory Authority College Revenue Bonds
St. Thomas Aquinas College Series 1998
(Asset Guaranty)
07-01-14 5.00 1,125,000 1,013,029
State Dormitory Authority Pre-refunded College
Revenue Bonds Consolidated City University
System 3rd General Resolution 2nd Series 1994
(MBIA Insured)
07-01-19 6.25 1,500,000 1,588,965
State Dormitory Authority Revenue Bonds
Pratt Institute Series 1999 (Asset Guaranty)
07-01-20 6.00 1,500,000 1,462,065
State Dormitory Authority Revenue Bonds
Frances Schervier Home Series 1997
(Asset Guaranty)
07-01-17 5.50 1,000,000 931,940
State Dormitory Authority Revenue Bonds
NYACK Hospital Series 1996
07-01-13 6.25 1,000,000 958,200
State Dormitory Authority Revenue Bonds
St. Francis Hospital Series 1999A
(MBIA Insured)
07-01-29 5.50 1,000,000 904,490
State Dormitory Authority State University Educational
Facilities Pre-refunded Revenue Bonds Series 1990A
05-15-12 7.70 1,750,000 1,807,908
State Dormitory Authority State University Educational
Facilities Refunding Revenue Bonds Series 1990B
05-15-11 7.50 1,900,000 2,160,547
State Dormitory Authority State University Educational
Facilities Refunding Revenue Bonds Series 1993A
(Secondary AMBAC Insured)
05-15-15 5.25 1,000,000 953,270
05-15-19 5.50 2,000,000 1,912,660
State Energy Research & Development Authority
Gas Facilities Revenue Bonds Brooklyn Union Gas
Series 1996 (MBIA Insured)
01-01-21 5.50 2,000,000 1,863,440
State Energy Research & Development Authority
Pollution Control Refunding Revenue Bonds
Rochester Gas & Electric Series 1992B
(MBIA Insured) A.M.T.
05-15-32 6.50 2,500,000 2,532,875
State Energy Research & Development Authority
Solid Waste Disposal Revenue Bonds New York
State Electric & Gas Company Series 1993A
(MBIA Insured) A.M.T.
12-01-28 5.70 3,000,000 2,777,340
State Environmental Facilities State Water Revolving
Fund Pollution Control Revenue Bonds Series 1990A
06-15-12 7.50 3,000,000 3,100,770
State Local Government Assistance Pre-refunded
Sales Tax Revenue Bonds Series 1991A
04-01-16 7.00 4,000,000 4,200,519
State Local Government Assistance Sales Tax
Refunding Revenue Bonds Series 1997B
(MBIA Insured)
04-01-20 4.88 1,000,000 846,220
State Local Government Assistance Sales Tax
Revenue Bonds Series 1992C
04-01-22 5.50 1,500,000 1,379,100
State Medical Care Facilities Finance Agency Mental
Health Services Refunding Revenue Bonds
Series 1993F (Secondary FSA Insured)
02-15-14 5.38 1,000,000 959,330
State Medical Care Facilities Finance Agency Mental
Health Services Revenue Bonds Series 1994A
(Secondary FSA Insured)
08-15-23 5.25 1,500,000 1,317,645
State Mortgage Agency Homeowner Mortgage
Refunding Revenue Bonds Series 1991TT
04-01-15 7.50 4,000,000 4,143,519
State Mortgage Agency Homeowner Mortgage
Revenue Bonds 27th Series 1992
04-01-15 6.90 3,000,000 3,165,360
State Thruway Authority Local Highway & Bridge
Service Contract Pre-refunded Revenue Bonds
Series 1991
01-01-11 6.00 2,500,000 2,545,350
State Urban Development Capital Correctional
Facilities Refunding Revenue Bonds Series 1994A
01-01-21 5.25 2,500,000 2,180,850
State Urban Development Capital Correctional
Facilities Revenue Bonds 5th Series 1995
(MBIA Insured)
01-01-25 5.50 750,000 689,063
State Urban Development Higher Education Applied
Technology Grants Revenue Bonds Series 1995
(MBIA Insured)
04-01-15 5.75 1,000,000 995,880
Suffolk County Industrial Development Agency
Continuing Care Retirement Revenue Bonds
Jeffersons Ferry 1st Series 1999A
11-01-28 7.25 1,500,000 1,462,665
Triborough Bridge & Tunnel Authority General
Purpose Pre-refunded Revenue Bonds Series 1990S
01-01-21 7.00 3,000,000 3,126,390
Triborough Bridge & Tunnel Authority Special
Obligation Refunding Revenue Bonds Series 1991B
(Secondary FGIC Insured)
01-01-15 6.88 2,000,000 2,081,200
Troy Municipal Assistance General Obligation
Revenue Bonds Series 1996A (MBIA Insured)
01-15-22 5.00 1,250,000 1,076,388
Ulster County Independent Development Agency Civic
Facilities Revenue Bonds Benedictine Hospital
Series 1999A
06-01-24 6.45 1,950,000 1,745,991
United Nations Development Senior Lien
Pre-refunded Revenue Bonds Series 1992A
07-01-26 6.00 4,500,000 4,763,294
Utica Industrial Development Agency Civic Facilities
Revenue Bonds Munson-Williams-Proctor
Series 1996A (MBIA Insured)
07-15-16 5.50 750,000 714,765
Total municipal bonds
(Cost: $102,249,643) $102,925,013
Municipal notes (0.8%)
Issuer(b,c,f) Effective Amount payable Value(a)
yield at maturity
Long Island Power Authority Electric Systems
Revenue Bonds V.R.
05-01-33 4.70% $700,000 $700,000
New York City V.R. Series 1994B2
08-15-11 4.75 100,000 100,000
Total municipal notes
(Cost: $800,000) $800,000
Total investments in securities
(Cost: $103,049,643)(g) $103,725,013
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1999, the value of
securities subject to alternative minimum tax represented 6.69% of
net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N .-- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
(d) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional Amount
Purchase contracts
Municipal Bonds, March 2000 $8,100,000
(e) Inverse floaters represent securities that pay interest at a rate that
increases (decreases) in the same magnitude as, or in a multiple of, a decline
(increase) in market short-term rates. Interest rate disclosed is the rate in
effect on Dec. 31, 1999. Inverse floaters in the aggregate represent 1.85% of
the Fund's net assets as of Dec. 31, 1999.
(f) The Fund is entitled to receive principal amount from issuer or corporate
guarantor, if indicated in parentheses, after a day or a week's notice. The
maturity date disclosed represents the final maturity. Interest rate varies
to reflect current market conditions; rate shown is the effective rate on
Dec. 31, 1999.
(g) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $103,050,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $3,908,000
Unrealized depreciation (3,233,000)
----------
Net unrealized appreciation $675,000
<PAGE>
<TABLE>
<CAPTION>
AXP Ohio Tax-Exempt Fund
Dec. 31, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Municipal bonds (99.0%)
Name of issuer and title of issue(b,c) Coupon Principal Value(a)
rate amount
Akron Bath Copley Joint Township Hospital District
Revenue Bonds Summa Hospital Series 1998A
<S> <C> <C> <C>
11-15-24 5.38% $1,500,000 $1,207,095
Barberton Limited Tax Various Purpose General
Obligation Bonds 1st Series 1989
12-01-09 7.35 700,000 715,596
Bellefontaine Hospital Facility Refunding Revenue
Bonds Mary Rutan Health Association of Logan
County Series 1993
12-01-13 6.00 1,000,000 920,240
Buckeye Valley Local School District School
Improvement Unlimited Tax General Obligation
Bonds Series 1995A (MBIA Insured)
12-01-20 5.25 1,000,000 907,930
Butler County Hospital Facility Improvement
Refunding Revenue Bonds Fort Hamilton-Hughes
Memorial Center Series 1991
01-01-10 7.50 1,750,000 1,811,128
Carroll Water & Sewer District
Unlimited Tax General Obligation Bonds
12-01-10 6.25 445,000 441,057
Carroll Water & Sewer District Unlimited Tax
General Obligation Bonds Water System
Improvement
12-01-10 6.25 955,000 956,356
Celina Local School District Unlimited General
Obligation Bonds Series 1996 (FGIC Insured)
12-01-20 5.25 1,000,000 911,240
Clermont County Hospital Facility Revenue Bonds
Mercy Health System Province of Cincinnati
Series 1989A (AMBAC Insured)
09-01-19 7.50 170,000 177,891
Cleveland Airport Systems Revenue Bonds
Series 1990A (MBIA Insured) A.M.T.
01-01-17 5.13 1,000,000 888,980
Cleveland Waterworks Improvement 1st Mortgage
Refunding Revenue Bonds Series F 1992B
(AMBAC Insured)
01-01-16 6.25 1,000,000 1,021,360
Columbus Tax Increment Finance Revenue Bonds
Easton Series 1999 (AMBAC Insured)
12-01-24 4.88 1,000,000 827,420
Coshocton County Solid Waste Disposal Refunding
Revenue Bonds Stone Container Series 1992
08-01-13 7.88 1,000,000 1,038,380
Cuyahoga County Health Care Facilities Refunding
Revenue Bonds Judson Retirement Community
Series A
11-15-18 7.25 1,000,000 982,760
Cuyahoga County Hospital Improvement Revenue
Bonds Mount Sinai Medical Center Series 1991
(AMBAC Insured)
11-15-21 6.63 600,000 633,426
Cuyahoga County Hospital Improvement Revenue
Bonds University Hospitals Health System
Series 1992 (AMBAC Insured)
01-15-11 6.50 500,000 527,060
01-15-19 5.40 1,000,000 926,860
Cuyahoga County Hospital Refunding Revenue
Bonds Cleveland Clinic Foundation Series 1992
11-15-11 5.50 1,500,000 1,505,610
Cuyahoga County Hospital Revenue Bonds Meridia
Health Series 1991
08-15-23 7.00 1,000,000 1,056,740
Cuyahoga County Limited Tax General
Obligation Bonds
05-15-13 5.60 500,000 507,970
Delaware County Sewer Improvement Limited Tax
General Obligation Bonds
12-01-15 5.25 1,000,000 937,360
Dover Limited Tax Improvement General Obligation
Bonds Municipal Sewer System
12-01-09 7.10 1,000,000 1,030,850
Erie County Hospital Improvement Refunding
Revenue Bonds Firelands Community Hospital
Series 1992
01-01-15 6.75 2,000,000(d) 2,037,740
Franklin County Convention Facilities Authority
Tax & Lease Revenue Anticipation Pre-refunded
Bonds (MBIA Insured)
12-01-19 7.00 1,500,000 1,568,715
Franklin County Health Care Facilities Refunding
Revenue Bonds Lutheran Senior City Incorporated
Series 1999
12-15-28 6.13 1,250,000 1,057,600
Franklin County Multi-family Housing Refunding
Revenue Bonds Jefferson Chase Apartments
Series 1998B A.M.T.
11-01-35 6.40 1,000,000 898,740
Franklin County Multi-family Housing Refunding
Revenue Bonds West Bay Apartments A.M.T.
12-01-25 6.38 1,000,000 929,020
Greater Cleveland Regional Transit Authority
General Obligation Bonds Series R
(FGIC Insured)
12-01-16 4.75 1,000,000 861,570
Hamilton County Sales Tax Revenue Bonds
Hamilton County Football Series 1998A
(MBIA Insured)
12-01-17 4.75 1,000,000 849,210
Hamilton County Sales Tax Revenue Bonds
Hamilton County Football Series 1998B
(MBIA Insured)
12-01-27 5.00 1,000,000 841,600
Hilliard County School District Unlimited Tax
General Obligation Bonds Series A (FGIC Insured)
12-01-20 5.00 1,000,000 876,280
Jackson County Hospital Facilities Revenue Bonds
Consolidated Health System Jackson Hospital
(Asset Guaranty)
10-01-20 6.13 1,000,000 976,380
Lakota Local School District Unlimited Tax
Improvement General Obligation Bonds
(AMBAC Insured)
12-01-14 6.25 2,000,000 2,140,301
Lorain County Hospital Facilities Refunding
Revenue Bonds EMH Regional Medical Center
Series 1995 (AMBAC Insured)
11-01-21 5.38 2,000,000 1,792,860
Lorain County Independent Living & Hospital
Facilities Refunding Revenue Bonds Elyria United
Methodist Series 1996C
06-01-22 6.88 1,000,000 982,550
Mahoning Valley Sanitary District Water
Refunding Revenue Bonds (FSA Insured)
11-15-18 5.75 1,300,000 1,273,532
Marion County Health Care Facilities Improvement
Refunding Revenue Bonds United Church Homes
Series 1993
11-15-10 6.38 945,000 912,284
Marysville Sewer System 1st Mortgage Revenue Bonds
Series 1988 (BIG Insured) A.M.T.
02-15-08 7.85 370,000 371,006
Marysville Water System Mortgage Revenue Bonds
Series 1991 (MBIA Insured)
12-01-21 7.05 1,000,000 1,055,420
Montgomery County Health Facilities Refunding
Revenue Bonds Friendship Village Dayton
Series 1990A
02-01-16 9.25 1,000,000 1,023,930
Montgomery County Hospital Facilities Refunding
Revenue Bonds Kettering Medical Center
04-01-22 6.75 1,000,000 947,130
Montgomery County Hospital Facility Refunding
Revenue & Improvement Bonds Ketter Medical
Center Series 1996 (MBIA Insured)
04-01-26 5.50 1,000,000 910,930
Montgomery County Water Revenue Bonds Greater
Moraine-Beavercreek District (FGIC Insured)
11-15-17 6.25 1,000,000 1,023,800
North Olmstead County General Obligation Bonds
(AMBAC Insured)
12-01-16 5.00 1,500,000 1,356,675
12-01-21 5.00 200,000 173,806
Oak Hills Local School District Unlimited Tax
General Obligation Bonds Series 1997
(MBIA Insured)
12-01-25 5.13 1,000,000 869,350
Orrville Electric System Refunding Revenue &
Improvement Mortgage Bonds Series 1997
(AMBAC Insured)
12-01-17 5.10 1,000,000 906,750
Pickerington Local School District Unlimited Tax
General Obligation Pre-refunded Bonds
(AMBAC Insured)
12-01-13 7.00 1,000,000 1,045,810
Rural Loraine County Water Authority Water
Resource Improvement Pre-refunded Revenue
Bonds Series 1991 (AMBAC Insured)
10-01-11 7.00 1,000,000 1,050,260
Stark County Health Care Facilities Refunding
Revenue Bonds Rose Lane (GNMA/FHA Insured)
07-20-33 5.45 215,000 188,903
State Air Quality Development Authority Refunding
Revenue Bonds JMG Funding Limited Partnership
(AMBAC Insured) A.M.T.
04-01-29 6.38 500,000 503,065
State Air Quality Development Authority Refunding
Revenue Bonds Series 1994 (AMBAC Insured)
A.M.T.
01-01-29 6.38 2,000,000 2,012,260
State Air Quality Development Authority Revenue
Bonds Columbus & Southern Series A
(FGIC Insured)
12-01-20 6.38 1,000,000 1,017,910
State Department of Administrative Services
Certificate of Participation Ohio Center Series 1998
(AMBAC Insured)
07-15-28 5.00 550,000 462,941
State Higher Educational Facility Commission Revenue Bonds
John Carroll University Project
04-01-20 5.85 1,000,000 962,060
State Housing Finance Agency Mortgage Revenue
Bonds Aristocrat South Board & Care Series 1991A
(FHA Insured) A.M.T.
08-01-31 7.30 1,500,000 1,533,120
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series 1990A
(GNMA Insured) A.M.T.
03-01-30 7.80 210,000 213,975
State Housing Finance Agency Single Family
Mortgage Revenue Bonds Series 1990C
(GNMA Insured) A.M.T.
09-01-21 7.85 420,000 432,566
State Municipal Electric Generation Agency
Revenue Bonds Joint Venture 5 (AMBAC Insured)
02-15-24 5.38 2,000,000 1,817,940
State Turnpike Commission Revenue Bonds Series 1998B
(FGIC Insured)
02-15-28 4.75 800,000 642,320
State Turnpike Commission Revenue Bonds Series A
02-15-24 5.75 1,000,000 1,053,070
State Turnpike Commission Revenue Bonds Series A
(MBIA Insured)
02-15-26 5.50 1,000,000 1,044,540
State Valley School District School Improvement
Unlimited Tax General Obligation Bonds Counties
of Adams & Highland Series 1995 (MBIA Insured)
12-01-21 5.25 2,000,000 1,800,340
State Water & Air Quality Development Authority
Pollution Control Refunding Revenue Bonds
Cleveland Electric Illuminating Series 1995
08-01-25 7.70 1,000,000 1,062,580
State Water & Air Quality Development Authority
Pollution Control Refunding Revenue Bonds
Toledo Edison Series 1994A A.M.T.
10-01-23 8.00 1,000,000 1,068,930
State Water & Air Quality Development Authority
Water Development Refunding Revenue Bonds
Pure Water (AMBAC Insured)
12-01-18 5.50 750,000 711,128
State Water & Air Quality Development Authority
Solid Waste Disposal Revenue Bonds Northstar
BHP Steel LLC-Cargill
Series 1995 A.M.T.
09-01-20 6.30 500,000(d) 495,050
University of Cincinnati Certificates of Participation
Student Recreation Center (MBIA Insured)
06-01-24 5.13 1,000,000 869,560
University of Toledo General Receipt
College Revenue Bonds Series 1998
(FGIC Insured)
06-01-20 4.75 1,000,000 833,310
University of Toledo General Receipt Pre-refunded
Bonds Series 1990 (MBIA Insured)
06-01-20 7.13 500,000 516,160
Warren County Various Purpose Limited Tax
General Obligation Bonds Series 1992
12-01-12 6.10 500,000 535,105
Total municipal bonds
(Cost: $68,528,797) $68,443,391
Total investments in securities
(Cost: $68,528,797)(e) $68,443,391
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements.
(b) The following abbreviations may be used in portfolio descriptions to
identify the insurer of the issue:
ACA -- ACA Financial Guaranty Corporation
AMBAC -- American Municipal Bond Association Corporation
BIG -- Bond Investors Guarantee
CGIC -- Capital Guaranty Insurance Company
FGIC -- Financial Guarantee Insurance Corporation
FHA -- Federal Housing Authority
FNMA -- Federal National Mortgage Association
FSA -- Financial Security Assurance
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance
(c) The following abbreviations may be used in the portfolio descriptions:
A.M.T. -- Alternative Minimum Tax -- As of Dec. 31, 1999, the value of
securities subject to alternative minimum tax represented 13.52%
of net assets.
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B -- Variable Rate Demand Bond
V.R.D.N -- Variable Rate Demand Note
(d) Partially pledged as initial deposit on the following open interest rate
futures contracts (see Note 5 to the financial statements):
Type of security Notional Amount
Purchase contracts
Municipal Bonds, March 2000 $4,000,000
(e) At Dec. 31, 1999, the cost of securities for federal income tax purposes was
approximately $68,529,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $1,864,000
Unrealized depreciation (1,950,000)
----------
Net unrealized depreciation $(86,000)
<PAGE>
American
Express
Funds
AXP State Tax-Exempt Funds
IDS Tower 10
Minneapolis, MN 55440-0010
TICKER SYMBOL
AXP California Tax-Exempt Fund Class A: ICALX Class B: N/A
AXP Massachusetts Tax-Exempt Fund Class A: IDMAX Class B: N/A
AXP Michigan Tax-Exempt Fund Class A: INMIX Class B: N/A
AXP Minnesota Tax-Exempt Fund Class A: IMNTX Class B: IDSMX
AXP New York Tax-Exempt Fund Class A: INYKX Class B: N/A
AXP Ohio Tax-Exempt Fund Class A: IOHIX Class B: N/A
PRSRT STD AUTO
U.S. POSTAGE
PAID
SPENCER, IA
PERMIT NO. 85
AMERICAN
EXPRESS
S-6329 N (2/00)
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.AXP State Tax-Exempt Funds IDS Tower 10 Minneapolis, MN
55440-0010
