AXP(SM) Global
Balanced
Fund
1999 SEMIANNUAL REPORT
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The goal of AXP Global Balanced Fund
is to provide a balance of growth of capital
and current income.
Distributed by American Express Financial Advisors Inc.
AMERICAN EXPRESS Financial Advisors
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An International Blend
AXP Global Balanced Fund offers a logical first step for investors who want to
have some exposure to foreign markets, but also want to avoid the greater
volatility of a portfolio consisting of only foreign stocks.
CONTENTS
From the Chairman 3
From the Portfolio Managers 3
Fund Facts 5
The 10 Largest Holdings 6
Financial Statements 7
Notes to Financial Statements 10
Investments in Securities 19
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(picture of) Arne H. Carlson
Arne H. Carlson
Chairman of the board
From the Chairman
It is an honor for me to join the American Express(R) Funds as chairman of the
board and chief executive officer for each of the funds. I have served for the
past eight years as governor of Minnesota and also for the past 20 years as a
constitutional officer responsible for the pension investments made on behalf of
government employees. My responsibility in the upcoming years is to serve your
interests.
By law, half the members of a mutual fund board must be independent of their
investment manager and distributor. I am one of those persons. I am not an
employee of American Express Financial Corporation (AEFC), nor do I own stock in
American Express Company. Both are fine companies, but the law clearly states
that to fully represent your interests I must be independent.
Having said that, I have a great deal of respect for the capabilities of AEFC
and for the services it provides to investors. Your financial advisor assists
you in financial planning, conducts regular investment reviews and responds to
your questions and needs. This is a very personal service that makes AEFC a
partner in your financial future. I know that AEFC has an investment focus on
the long-term performance of our economy and that it wants you to participate in
that growth. Consistent with that, our board is here to serve you and represent
your interests in a professional manner.
I also want to let you know that, on June 16, 1999, there will be a regular
meeting of shareholders. These meetings are held about every five years to elect
directors and consider other proposals. One proposal that is expected to be
approved is to change "IDS" to "AXP" in the Fund's name. We will discuss the
action taken on other proposals in future reports.
Arne H. Carlson
(picture of) Peter Lamaison
Peter Lamaison
Portfolio manager
(picture of) Michael Ng
Michael Ng
Portfolio manager
From the Portfolio Managers
AXP Global Balanced Fund enjoyed a substantial gain during the first half of the
fiscal year, as it took advantage of generally strong stock and bond markets in
the United States and Europe. For the six months -- November 1998 through April
1999 -- the Fund's Class A shares generated a total return of 12.94%.
Investment sentiment was beginning to improve when the period began last fall.
Inflation and interest rates were low in most major countries, while economic
growth was at least positive in Europe and downright robust in the U.S. This was
in sharp contrast to just a few months earlier, when a second bout of the
financial malady known as the "Asian flu" was confining stocks throughout the
world to a sick bed.
By November, though, spurred largely by interest-rate cuts in the U.S. and parts
of Europe, stocks and, to a lesser degree, bonds were off and running again. By
the end of the period, the Fund would record solid gains in five of the six
months -- the exception being February, when fear of higher inflation sent U.S.
interest rates higher and stocks and bonds lower.
THE U.S. LEADS THE WAY
To the Fund's benefit, we concentrated most (up to 50%) of the stock investments
in the U.S., whose market was among the strongest in the world over the six
months. The bulk of the rest of the stock holdings were in Europe, primarily the
United Kingdom, Germany and France. While those markets gained ground, the
returns were tempered by overall weakness in the region's new currency, the
euro. Among other major markets, Japan, where we maintained only a modest
exposure, provided mixed results in the face of a still-struggling economy.
Although a small area of investment for the Fund, holdings in the emerging
markets of South Korea, Mexico, Argentina, Hong Kong and Venezuela provided a
good boost to performance.
Over the period, the asset allocation ranged from roughly 65%-70% stocks,
30%-35% bonds and a negligible amount of cash reserves. On the bond side, we
split investments in the U.S. and Europe into essentially equal portions. The
U.S. bond market rallied strongly through December, then retreated during the
final few months of the period. In Europe, bond performance was more consistent,
though, as with stocks, returns were hampered by the euro's decline.
Looking ahead, given the remarkable ongoing strength of the U.S. economy and
still-low rate of inflation, one might expect continued gains for stocks and
bonds. However, the financial world looks far forward, and it could be that
investors will anticipate that the surging economy could drive inflation and,
thus, interest rates meaningfully higher. Should that happen, stocks and bonds
would likely suffer. Still, such concerns have proved to be temporary in recent
years, and we are keeping the portfolio fully invested, chiefly in the U.S. and
Europe, to take advantage of what, in our view, remains a positive long-term
investment environment.
Peter Lamaison
Michael Ng
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Fund Facts
Class A -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1999 $6.48
Oct. 31, 1998 $5.79
Increase $0.69
Distributions -- Nov. 1, 1998 - April 30, 1999
From income $0.02
From capital gains $0.02
Total distributions $0.04
Total return* 12.94%**
Class B -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1999 $6.46
Oct. 31, 1998 $5.77
Increase $0.69
Distributions -- Nov. 1, 1998 - April 30, 1999
From income $ --
From capital gains $0.02
Total distributions $0.02
Total return* 12.53%**
Class Y -- 6-month performance
(All figures per share)
Net asset value (NAV)
April 30, 1999 $6.49
Oct. 31, 1998 $5.79
Increase $0.70
Distributions -- Nov. 1, 1998 - April 30, 1999
From income $0.03
From capital gains $0.02
Total distributions $0.05
Total return* 13.02%**
* 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.
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The 10 Largest Holdings
Percent Value
(of net assets) (as of April 30, 1999)
U.S. Treasury (United States) 2.19% $3,164,682
7.50% 2016
General Electric (United Kingdom) 1.90 2,747,972
Fannie Mae (United States) 1.84 2,664,413
Citigroup (United States) 1.78 2,572,045
Electronic Data Systems (United States) 1.70 2,461,751
Total Petroleum Cl B (France) 1.66 2,405,270
SBC Communications (United States) 1.61 2,324,000
Banque Natl de Paris (France) 1.60 2,314,214
Nippon Telegraph & Telephone (Japan) 1.59 2,297,415
U.S. Treasury (United States) 1.58 2,284,045
7.88% 2021
Note: Certain foreign investment risks include changes in currency exchange
rates, adverse political or economic order, and lack of similar regulatory
requirements followed by U.S. companies.
For further detail about these holdings, please refer to the section entitled
"Investments in Securities."
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The 10 holdings listed here
make up 17.45% of net assets
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Financial Statements
Statement of assets and liabilities
AXP Global Balanced Fund
April 30, 1999 (Unaudited)
Assets
Investments in securities, at value (Note 1)
<S> <C>
(identified cost $131,223,634) $145,656,491
Cash in bank on demand deposit 1,215,190
Dividends and accrued interest receivable 1,113,525
Receivable for investment securities sold 2,072,034
Unrealized appreciation on foreign currency contracts
held, at value (Notes 1 and 5) 9,587
-----
Total assets $150,066,827
------------
Liabilities
Payable for investment securities purchased 5,596,910
Unrealized depreciation on foreign currency contracts
held, at value (Notes 1 and 5) 3,636
Accrued investment management services fee 3,135
Accrued distribution fee 1,199
Accrued service fee 694
Accrued transfer agency fee 633
Accrued administrative services fee 238
Other accrued expenses 117,470
-------
Total liabilities 5,723,915
---------
Net assets applicable to outstanding capital stock $144,342,912
============
Represented by
Capital stock-- $.01 par value (Note 1) $ 223,073
Additional paid-in capital 124,021,281
Undistributed net investment income 532,542
Accumulated net realized gain (loss) 5,146,764
Unrealized appreciation (depreciation) on investments and on translation
of assets and liabilities in foreign currencies 14,419,252
----------
Total -- representing net assets applicable to outstanding capital stock $144,342,912
============
Net assets applicable to outstanding shares: Class A $ 86,114,140
Class B $ 58,227,416
Class Y $ 1,356
Net asset value per share of outstanding capital stock: Class A shares 13,288,034 $ 6.48
Class B shares 9,019,078 $ 6.46
Class Y shares 209 $ 6.49
See accompanying notes to financial statements.
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Statement of operations
AXP Global Balanced Fund
Six months ended April 30, 1999 (Unaudited)
Investment income
Income:
<S> <C>
Dividends $ 340,947
Interest 1,422,918
Less foreign taxes withheld (35,026)
-------
Total income 1,728,839
---------
Expenses (Note 2):
Investment management services fee 503,535
Distribution fee-- Class B 193,754
Transfer agency fee 109,204
Incremental transfer agency fee
Class A 6,876
Class B 8,009
Service fee
Class A 66,145
Class B 45,122
Administrative services fees and expenses 38,452
Compensation of board members 5,138
Custodian fees 54,688
Postage 49,757
Registration fees 40,377
Reports to shareholders 21,615
Audit fees 8,000
Other 3,692
-----
Total expenses 1,154,364
Less expenses voluntarily reimbursed by AEFA (Note 2) (265)
----
1,154,099
Earnings credits on cash balances (Note 2) (9,977)
------
Total net expenses 1,144,122
---------
Investment income (loss)-- net 584,717
-------
Realized and unrealized gain (loss) -- net
Net realized gain (loss) on:
Security transactions (Note 3) 5,459,785
Foreign currency transactions (151,456)
--------
Net realized gain (loss) on investments 5,308,329
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 8,541,617
---------
Net gain (loss) on investments and foreign currencies 13,849,946
----------
Net increase (decrease) in net assets resulting from operations $14,434,663
===========
See accompanying notes to financial statements.
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Statements of changes in net assets
AXP Global Balanced Fund
April 30, 1999 Oct. 31, 1998
Six months ended Year ended
(Unaudited)
Operations and distributions
<S> <C> <C>
Investment income (loss)-- net $ 584,717 $ 1,257,087
Net realized gain (loss) on investments 5,308,329 299,267
Net change in unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in foreign currencies 8,541,617 4,486,751
--------- ---------
Net increase (decrease) in net assets resulting from operations 14,434,663 6,043,105
---------- ---------
Distributions to shareholders from:
Net investment income
Class A (264,628) (929,021)
Class B -- (390,897)
Class Y (5) (24)
Net realized gain
Class A (240,294) (81,058)
Class B (167,699) (51,691)
Class Y (4) (3)
-- --
Total distributions (672,630) (1,452,694)
-------- ----------
Capital share transactions (Note 4)
Proceeds from sales
Class A shares (Note 2) 24,308,927 37,246,605
Class B shares 13,293,306 26,572,664
Reinvestment of distributions at net asset value
Class A shares 475,236 955,528
Class B shares 165,954 435,464
Class Y shares 9 26
Payments for redemptions
Class A shares (10,345,880) (8,176,071)
Class B shares (Note 2) (4,760,663) (4,003,221)
---------- ----------
Increase (decrease) in net assets from capital share transactions 23,136,889 53,030,995
---------- ----------
Total increase (decrease) in net assets 36,898,922 57,621,406
Net assets at beginning of period 107,443,990 49,822,584
----------- ----------
Net assets at end of period $144,342,912 $107,443,990
============ ============
Undistributed net investment income $ 532,542 $ 212,458
------------ ------------
See accompanying notes to financial statements.
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Notes to Financial Statements
AXP Global Balanced Fund
(Unaudited as to April 30, 1999)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Fund is a series of AXP Global Series, Inc. and is registered under the
Investment Company Act of 1940 (as amended) as a diversified open-end management
investment company. The Fund invests primarily in equity and debt securities of
companies throughout the world. AXP Global Series, Inc. has 10 billion
authorized shares of capital stock that can be allocated among the separate
series as designated by the board.
The Fund offers Class A, Class B and Class Y shares.
o Class A shares are sold with a front-end sales charge.
o Class B shares may be subject to a contingent deferred sales charge and
automatically convert to Class A shares during the ninth calendar year of
ownership.
o Class Y shares have no sales charge and are offered only to qualifying
institutional investors.
All classes of shares have identical voting, dividend and liquidation rights.
The distribution fee, transfer agency fee and service 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 sales price. Debt securities are generally traded in
the over-the-counter market and are valued at a price that reflects fair value
as quoted by dealers in these securities or by an independent pricing service.
Securities for which market quotations are not readily available are valued at
fair value according to methods selected in good faith by the board. Short-term
securities maturing in more than 60 days from the valuation date are valued at
the market price or approximate market value based on current interest rates;
those maturing in 60 days or less are valued at amortized cost.
Option transactions
To produce incremental earnings, protect gains, and facilitate buying and
selling of securities for investments, the Fund may buy and write options traded
on any U.S. or foreign exchange or in the over-the-counter market where
completing the obligation depends upon the credit standing of the other party.
The Fund also may buy and sell put and call options and write covered call
options on portfolio securities as well as write cash-secured put options. The
risk in writing a call option is that the Fund gives up the opportunity for
profit if the market price of the security increases. The risk in writing a put
option is that the Fund may incur a loss if the market price of the security
decreases and the option is exercised. The risk in buying an option is that the
Fund pays a premium whether or not the option is exercised. The Fund also has
the additional risk of being unable to enter into a closing transaction if a
liquid secondary market does not exist.
Option contracts are valued daily at the closing prices on their primary
exchanges and unrealized appreciation or depreciation is recorded. The Fund will
realize a gain or loss when the option transaction expires or closes. When an
option is exercised, the proceeds on sales for a written call option, the
purchase cost for a written put option or the cost of a security for a purchased
put or call option is adjusted by the amount of premium received or paid.
Futures transactions
To gain exposure to or protect itself from market changes, the Fund may buy and
sell financial futures contracts traded on any U.S. or foreign exchange. The
Fund also may buy and write put and call options on these futures contracts.
Risks of entering into futures contracts and related options include the
possibility of an illiquid market and that a change in the value of the contract
or option may not correlate with changes in the value of the underlying
securities.
Upon entering into a futures contract, the Fund is required to deposit either
cash or securities in an amount (initial margin) equal to a certain percentage
of the contract value. Subsequent payments (variation margin) are made or
received by the Fund each day. The variation margin payments are equal to the
daily changes in the contract value and are recorded as unrealized gains and
losses. The Fund recognizes a realized gain or loss when the contract is closed
or expires.
Foreign currency translations and foreign currency contracts
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars at the closing rate of exchange. Foreign
currency amounts related to the purchase or sale of securities and income and
expenses are translated at the exchange rate on the transaction date. The effect
of changes in foreign exchange rates on realized and unrealized security gains
or losses is reflected as a component of such gains or losses. In the statement
of operations, net realized gains or losses from foreign currency transactions,
if any, may arise from sales of foreign currency, closed forward contracts,
exchange gains or losses realized between the trade date and settlement date on
securities transactions, and other translation gains or losses on dividends,
interest income and foreign withholding taxes.
The Fund may enter into forward foreign currency exchange contracts for
operational purposes and to protect against adverse exchange rate fluctuation.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund and the resulting unrealized appreciation and/or
depreciation are determined using foreign currency exchange rates from an
independent pricing service. The Fund is subject to the credit risk that the
other party will not complete its contract obligations.
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
fluctuations, and they may affect the Fund's net assets the same as owned
securities. The Fund designates cash or liquid high-grade short-term debt
securities at least equal to the amount of its commitment. As of April 30, 1999,
the Fund has outstanding when-issued or forward-commitments of $1,012,049.
Federal taxes
The Fund's policy is to comply with all sections of the Internal Revenue Code
that apply to regulated investment companies and to distribute all of its
taxable income to shareholders. No provision for income or excise taxes is thus
required.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of deferred losses on
certain futures contracts, the recognition of certain foreign currency gains
(losses) as ordinary income (loss) for tax purposes, and losses deferred due to
"wash sale" transactions. The character of distributions made during the year
from net investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Fund.
Dividends to shareholders
Dividends from net investment income, declared and paid each calendar quarter,
are reinvested in additional shares of the Fund at net asset value or payable in
cash. Capital gains, when available, are distributed along with the last income
dividend of the calendar year.
Other
Security transactions are accounted for on the date securities are purchased or
sold. Dividend income is recognized on the ex-dividend date or upon receipt of
ex-dividend notification in the case of certain foreign securities. For U.S.
dollar denominated bonds, interest income, including level-yield amortization of
premium and discount, is accrued daily. For foreign bonds the Fund amortizes
premium and original issue discount daily and market discount is recognized at
the time of sale.
As of April 30, 1999, AEFC owned 209 shares of Class Y.
2. EXPENSES AND SALES CHARGES
The 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 the Fund's
average daily net assets in reducing percentages from 0.79% to 0.67% annually.
Under an Administrative Services Agreement, the Fund pays AEFC a fee for
administration and accounting services at a percentage of the Fund's average
daily net assets in reducing percentages from 0.06% to 0.035% annually.
Additional administrative service expenses paid by the Fund are office expenses,
consultants' fees and compensation of officers and employees. Under this
agreement, the Fund also pays taxes, audit and certain legal fees, registration
fees for shares, compensation of board members, corporate filing fees and any
other expenses properly payable by the Fund and approved by the board.
Under a separate Transfer Agency Agreement, American Express Client Service
Corporation (AECSC) maintains shareholder accounts and records. The Fund pays
AECSC an annual fee per shareholder account for this service as follows:
o Class A $19
o Class B $20
o Class Y $17
Under terms of a prior agreement that ended Jan. 31, 1999, the Fund paid a
transfer agency fee at an annual rate per shareholder account of $15 for Class A
and $16 for Class B. Under terms of a prior agreement that ended March 31, 1999,
the Fund paid a transfer agency fee at an annual rate per shareholder account of
$15 for Class Y.
The Fund has agreements with American Express Financial Advisors Inc. for
distribution and shareholder services. Under a Plan and Agreement of
Distribution, the Fund pays a distribution fee at an annual rate of 0.75% of the
Fund's average daily net assets attributable to Class B shares for distribution
services.
Under a Shareholder Service Agreement, the Fund pays a fee for service provided
to shareholders by financial advisors and other servicing agents. The fee is
calculated at a rate of 0.175% of the Fund's average daily net assets
attributable to Class A and Class B shares and 0.10% of the Fund's average daily
net assets attributable to Class Y shares.
Sales charges received by American Express Financial Advisors Inc. for
distributing Fund shares were $271,844 for Class A and $22,730 for Class B for
the six months ended April 30, 1999. The Fund also pays custodian fees to
American Express Trust Company, an affiliate of AEFC.
AEFC has agreed to waive certain fees and reimburse expenses, with the exception
of 12b-1 fees, to the extent that total expenses for Class A shares exceed 1.50%
for a minimum period ending Oct. 31, 1999. Any waiver or reimbursement applies
to each class on a pro rata basis.
During the six months ended April 30, 1999, the Fund's custodian and transfer
agency fees were reduced by $9,977 as a result of earnings credits from
overnight cash balances.
3. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities (other than short-term
obligations) aggregated $60,852,251 and $46,780,773, respectively, for the six
months ended April 30, 1999. Realized gains and losses are determined on an
identified cost basis.
4. CAPITAL SHARE TRANSACTIONS
Transactions in shares of capital stock for the periods indicated are as
follows:
Six months ended April 30, 1999
Class A Class B Class Y
Sold 3,883,585 2,134,702 --
Issued for reinvested distributions 76,189 26,920 1
Redeemed (1,638,790) (759,251) --
---------- -------- ----
Net increase (decrease) 2,320,984 1,402,371 1
Year ended Oct. 31, 1998
Class A Class B Class Y
Sold 6,478,414 4,626,191 --
Issued for reinvested distributions 168,495 77,135 5
Redeemed (1,426,496) (700,458) --
---------- -------- ----
Net increase (decrease) 5,220,413 4,002,868 5
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5. FOREIGN CURRENCY CONTRACTS
As of April 30, 1999, the Fund has foreign currency exchange contracts that
obligate it to deliver currencies at specified future dates. The unrealized
appreciation and/or depreciation on these contracts is included in the
accompanying financial statements. See "Summary of significant accounting
policies." The terms of the open contracts are as follows:
Exchange date Currency to Currency to Unrealized Unrealized
be delivered be received appreciation depreciation
<S> <C> <C> <C> <C>
May 3, 1999 106,239 161,017 $ 314 $ --
U.S. Dollar Australian Dollar
May 3, 1999 1,223,342 1,155,513 -- 2,427
U.S. Dollar European Monetary Unit
May 3, 1999 828,042 881,078 6,169 --
European Monetary Unit U.S. Dollar
May 4, 1999 317,226 512,769 2,415 --
British Pound U.S. Dollar
May 4, 1999 72,022 108,960 82 --
U.S. Dollar Australian Dollar
May 6, 1999 180,384 21,455,289 -- 684
U.S. Dollar Japanese Yen
May 7, 1999 245,928 29,299,847 -- 525
U.S. Dollar Japanese Yen
May 28, 1999 68,194 72,661 607 --
European Monetary Unit U.S. Dollar
Total $9,587 $3,636
6. BANK BORROWINGS
The Fund has a revolving credit agreement with U.S. Bank, N.A., whereby the Fund
is permitted to have bank borrowings for temporary or emergency purposes to fund
shareholder redemptions. The Fund must have asset coverage for borrowings not to
exceed the aggregate of 333% of advances equal to or less than five business
days plus 367% of advances over five business days. The agreement, which enables
the Fund to participate with other American Express funds, permits borrowings up
to $200 million, collectively. Interest is charged to each Fund based on its
borrowings at a rate equal to the Federal Funds Rate plus 0.30% or the
Eurodollar Rate (Reserve Adjusted) plus 0.20%. Borrowings are payable up to 90
days after such loan is executed. The Fund also pays a commitment fee equal to
its pro rata share of the amount of the credit facility at a rate of 0.05% per
annum. The Fund had no borrowings outstanding during the six months ended April
30, 1999.
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7. FINANCIAL HIGHLIGHTS
The table below shows certain important financial information for evaluating the
Fund's results.
Fiscal period ended Oct. 31,
Per share income and capital changesa
Class A Class B Class Y
1999c 1998 1997b 1999c 1998 1997b 1999c 1998 1997b
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $5.79 $5.33 $5.00 $5.77 $5.31 $5.00 $5.79 $5.33 $5.00
Income from investment operations:
Net investment income (loss) .04 .10 .09 -- .06 .06 .05 .12 .10
Net gains (losses)
(both realized and unrealized) .69 .48 .31 .71 .48 .30 .70 .47 .31
Total from investment operations .73 .58 .40 .71 .54 .36 .75 .59 .41
Less distributions:
Dividends from net investment income (.02) (.11) (.07) -- (.07) (.05) (.03) (.12) (.08)
Distributions from realized gains (.02) (.01) -- (.02) (.01) -- (.02) (.01) --
Total distributions (.04) (.12) (.07) (.02) (.08) (.05) (.05) (.13) (.08)
Net asset value, end of period $6.48 $5.79 $5.33 $6.46 $5.77 $5.31 $6.49 $5.79 $5.33
Ratios/supplemental data
Net assets, end of period (in millions) $86 $63 $31 $58 $44 $19 $-- $-- $--
Ratio of expenses to
average daily net assetsd 1.50%e 1.49%f 1.45%e,f 2.26%e 2.25%f 2.22%e,f 1.24%e 1.42%f 1.30%e,f
Ratio of net investment income
(loss) to average daily net assets 1.23%e 1.86% 2.18%e .46%e 1.10% 1.41%e 1.41%e 2.02% 2.46%e
Portfolio turnover rate
(excluding short-term securities) 38% 74% 44% 38% 74% 44% 38% 74% 44%
Total returng 12.94% 11.01% 8.10% 12.53% 10.18% 7.31% 13.02% 11.17% 8.24%
a For a share outstanding throughout the period. Rounded to the nearest cent.
b Inception date. Period from Nov. 13, 1996 to Oct. 31, 1997.
c Six months ended April 30, 1999 (Unaudited).
d Expense ratio is based on total expenses of the Fund before reduction of
earnings credits on cash balances.
e Adjusted to an annual basis.
f AEFC reimbursed the Fund for certain expenses. Had AEFC not done so, the
annualratios of expenses would have been 1.53% and 2.29% for Class A, 2.29%
and 2.96% for Class B, and 1.46% and 2.14% for Class Y, for the periods
ended 1998 and 1997, respectively.
g Total return does not reflect payment of a sales charge.
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<CAPTION>
Investments in Securities
AXP Global Balanced Fund
April 30, 1999 (Unaudited)
(Percentages represent value of investments compared to net assets)
Common stocks (67.8%)
Issuer Shares Value(a)
Australia (1.2%)
Airlines (0.2%)
<S> <C> <C>
Qantas Airways 91,000 $249,913
Banks and savings & loans (0.2%)
Commonwealth Bank of Australia 18,000 327,744
Media (0.1%)
Publishing & Broadcasting 29,000 194,921
Metals (0.4%)
Broken Hill Proprietary 21,000 237,411
WMC ADR 49,000 211,739
Total 449,150
Utilities -- telephone (0.3%)
AAPT 96,000(b) 343,046
Telstra 18,798 102,004
Total 445,050
Chile (--%)
Utilities -- telephone
Compania de Telecomunicaciones de Chile ADR 127 3,358
France (8.8%)
Banks and savings & loans (1.6%)
Banque Natl de Paris 27,919 2,314,214
Building materials & construction (0.8%)
Lafarge 12,528 1,217,812
Electronics (0.7%)
SGS-Thomson Microelectronics 10,299 1,072,958
Energy (3.1%)
Elf Aquitaine 13,181 2,047,276
Total Petroleum Cl B 17,565 2,405,270
Total 4,452,546
Food (0.5%)
Sodexho Alliance 4,838(b) 793,867
Household products (1.1%)
Rhone-Poulenc Cl A 33,258 1,581,318
Industrial equipment & services (0.9%)
Castorama Dubois 5,350 1,280,361
Utilities -- electric (0.1%)
Suez Lyonnaise des Eaux 804 136,771
Germany (3.1%)
Automotive & related (1.4%)
Volkswagen 29,089 2,062,349
Chemicals (0.6%)
Henkel KGaA 11,203 886,598
Industrial equipment & services (1.1%)
Mannesmann 11,540 1,519,269
Hong Kong (0.4%)
Banks and savings & loans
Hang Seng Bank 45,000 532,674
Italy (3.1%)
Banks and savings & loans (2.9%)
Banca Nazionale del Lavoro 287,115 979,866
Instituto Bancario San Paolo di Torino 126,504 1,898,028
Unicredito Italiano 251,331 1,274,675
Total 4,152,569
Utilities -- telephone (0.2%)
Telecom Italia 25,400 270,256
Japan (5.8%)
Automotive & related (1.3%)
Denso 42,000 853,049
Toyota Motor 35,000 993,759
Total 1,846,808
Banks and savings & loans (0.3%)
Sumitomo Chemical 93,000 415,171
Computers & office equipment (0.5%)
Fujitsu 42,000 719,376
Electronics (0.6%)
Matsushita Communication Industrial 12,000 861,343
Multi-industry conglomerates (0.3%)
Marubeni 215,000 497,016
Retail (0.5%)
Marui ADR 44,000 730,048
Utilities -- telephone (2.3%)
Nippon Telegraph & Telephone 2,110 2,297,415
NTT Mobile Communication Network 170 996,692
Total 3,294,107
Mexico (0.8%)
Banks and savings & loans (0.1%)
Grupo Financiero Banamex Accival 47,170(b) 120,222
Beverages & tobacco (0.4%)
Fomento Economico Mexicano ADR 14,300 520,163
Media (0.3%)
Grupo Televisa 10,300(b) 422,300
Netherlands (2.2%)
Industrial equipment & services (1.4%)
Philips Electronics 25,022 2,154,717
Utilities -- telephone (0.8%)
Equant 12,387 1,124,268
New Zealand (0.2%)
Utilities -- telephone
Telecom Corp of New Zealand 59,000 307,325
Singapore (0.9%)
Banks and savings & loans
Oversea-Chinese Banking 138,000 1,293,515
Spain (1.2%)
Utilities -- telephone
Telefonica de Espana 36,415 1,706,414
Sweden (0.9%)
Communications equipment & services
Ericsson (LM) Cl B 51,305 1,346,772
Switzerland (1.3%)
Banks and savings & loans
UBS 5,739 1,948,995
United Kingdom (6.8%)
Banks and savings & loans (0.1%)
Standard Chartered 33,133 598,074
Multi-industry conglomerates (2.9%)
General Electric 260,380 2,747,972
Williams 195,621 1,333,607
Total 4,081,579
Retail (0.7%)
Great Universal Stores 85,188 971,007
Transportation (0.3%)
Stagecoach Holdings 119,204 413,280
Utilities -- telephone (2.8%)
Cable & Wireless Communications 110,796 1,264,670
Orange 71,593 970,959
Vodafone 99,677 1,824,905
Total 4,060,534
United States (31.3%)
Banks and savings & loans (1.3%)
Bank of America 26,866 1,929,315
Chemicals (2.8%)
Du Pont (EI) de Nemours 30,800 2,175,249
Monsanto 40,470 1,831,268
Total 4,006,517
Computers & office equipment (6.6%)
America Online 10,300 1,470,325
Cisco Systems 14,517(b) 1,655,845
Electronic Data Systems 45,800 2,461,751
Hewlett-Packard 21,710 1,712,376
Intl Business Machines 10,450 2,186,009
Total 9,486,306
Electronics (1.4%)
Intel 32,240 1,972,685
Energy (1.1%)
Texaco 26,000 1,631,500
Financial services (3.6%)
Citigroup 34,180 2,572,045
Fannie Mae 37,560 2,664,413
Total 5,236,458
Health care (2.5%)
Boston Scientific 48,400(b) 2,060,025
Pfizer 13,540 1,557,946
Total 3,617,971
Household products (0.8%)
Colgate-Palmolive 10,680 1,094,033
Insurance (1.5%)
American Intl Group 18,010 2,115,049
Metals (0.4%)
Pasminco 133,300 149,083
Multi-industry conglomerates (1.1%)
General Electric 15,640 1,650,020
Retail (3.9%)
Rite Aid 63,940 1,490,601
Safeway 16,250(b) 876,484
Wal-Mart Stores 33,800 1,554,800
Walgreen 63,460 1,705,488
Total 5,627,373
Utilities -- telephone (4.3%)
AT&T 32,250 $1,628,625
MCI WorldCom 27,700(b) 2,276,594
SBC Communications 41,500 2,324,000
Total 6,229,219
Total common stocks
(Cost: $83,259,806) $98,122,261
Other (--%)
Issuer Shares Value(a)
United States
Telefonica
Rights 36,415 $33,859
Total other
(Cost: $--) $33,859
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bonds (28.4%)
Issuer Coupon Principal Value(a)
rate amount
Australia (0.3%)
New South Wales Treasury
(Australian Dollar)
<S> <C> <C> <C>
03-01-08 8.00% 600,000(d) $458,249
Canada (0.4%)
Govt of Canada
(Canadian Dollar)
06-01-09 5.50 640,000 450,108
Rogers Communication
(Canadian Dollar) Sr Nts
07-15-07 6.37 300,000 214,109
Total 664,217
China (0.1%)
Greater Beijing
(U.S. Dollar) Sr Nts
06-15-07 9.50 300,000 159,000
Denmark (0.8%)
Govt of Denmark
(Danish Krone)
05-15-03 8.00 600,000 99,659
11-10-24 7.00 6,300,000 1,110,602
Total 1,210,261
Germany (2.7%)
Federal Republic of Germany
(European Monetary Unit)
06-20-16 6.00 434,598 544,166
07-04-27 6.50 1,515,809 1,988,615
Treuhandanstalt
(European Monetary Unit)
01-29-03 7.13 1,022,584 1,233,098
Total 3,765,879
Greece (0.4%)
Hellenic Republic
(Greek Drachma)
03-21-00 9.80 160,000,000 521,920
Hong Kong (0.4%)
Guangdong Enterprises
(U.S. Dollar) Sr Nts
05-22-07 8.88 200,000(d) 65,000
Hutchison Whampoa Finance
(U.S. Dollar) Company Guaranty
08-01-27 7.50 525,000(d) 472,606
Total 537,606
Indonesia (--%)
Tjiwi Kimia Finance Mauritius
(U.S. Dollar) Company Guaranty
08-01-04 10.00 100,000 66,000
Italy (0.7%)
Govt of Italy
(European Monetary Unit)
01-01-04 8.50 800,000 1,025,942
Japan (0.2%)
Sony
(U.S. Dollar)
03-04-03 6.13 250,000 251,709
Mexico (0.4%)
Banco Nacional de Comercio Exterior
(U.S. Dollar)
02-02-04 7.25 500,000 459,687
Bancomext Trust
(U.S. Dollar)
05-30-06 11.25 150,000(d) 160,500
United Mexican States
(British Pound) Medium-term Nts Series E
05-30-02 14.48 125,000 199,908
Total 820,095
Norway (2.5%)
Govt of Norway
(Norwegian Krone)
05-31-01 7.00 14,960,000 1,998,567
11-30-04 5.75 7,200,000 971,568
05-15-09 5.50 4,715,000 640,636
Total 3,610,771
Panama (0.2%)
Banco General
(U.S. Dollar)
08-01-02 7.70 250,000(d) 231,323
Peru (0.2%)
Southern Peru Copper
(U.S. Dollar)
05-30-07 7.90 250,000 225,698
Philippines (0.1%)
Philippine Long Distance Telephone
(U.S. Dollar) Medium-term Nts Series E
03-06-17 8.35 150,000(d) 129,007
South Korea (0.3%)
Hyundai Semiconductor
(U.S. Dollar) Sr Nts
05-15-07 8.63 200,000(d) 169,256
Korea Electric Power
(U.S. Dollar)
07-01-02 8.00 200,000 203,572
Total 372,828
Spain (0.9%)
Govt of Spain
(European Monetary Unit)
04-30-06 8.80 322,744 445,538
01-31-29 6.00 690,863 838,544
Total 1,284,082
Sweden (0.4%)
Govt of Sweden
(Swedish Krona)
02-09-05 6.00 1,300,000 172,699
08-15-07 8.00 1,600,000 241,894
Paulson Enterprenad
(Swedish Krona)
12-15-00 6.14 1,000,000 119,057
Total 533,650
United Kingdom (3.4%)
United Kingdom Treasury
(British Pound)
03-03-00 9.00 250,000 415,037
07-14-00 13.00 250,000 439,049
11-06-01 7.00 500,000 840,679
06-07-02 7.00 75,000 127,650
06-10-03 8.00 865,000 1,547,138
04-18-05 9.50 340,000 677,338
12-07-05 8.50 425,000 824,728
Total 4,871,619
United States (13.7%)
California Infrastructure-
Pacific Gas & Electric
(U.S. Dollar)
06-25-03 6.16 400,000 403,836
Citicorp
(Deutsche Mark)
09-19-09 3.47 1,000,000 591,637
DTE Burns Harbor LLC
(U.S. Dollar) Sr Nts
01-30-03 6.57 180,240(d) 175,373
Federal Natl Mtge Assn
(U.S. Dollar)
02-15-08 5.75 900,000 893,795
03-01-10 6.50 1,000,000(f) 1,009,063
07-01-13 6.00 744,294 738,481
03-01-27 7.50 170,792 175,632
Ford Motor Credit
(U.S. Dollar)
09-10-02 6.55 400,000 407,632
GTE North
(U.S. Dollar) Series F
02-15-10 6.38 250,000 251,421
Morgan (JP)
(U.S. Dollar) Sr Sub Medium-term Nts Series A
02-15-12 4.00 100,000(e) 89,706
Phillips Petroleum
(U.S. Dollar)
03-15-28 7.13 200,000 191,849
TU Electric Capital
(U.S. Dollar) Company Guaranty
01-30-37 8.18 100,000 104,144
U.S. Treasury
(U.S. Dollar)
11-30-99 5.63 800,000 803,994
05-15-00 6.38 500,000 507,280
11-15-00 5.75 1,500,000 1,515,272
11-30-00 4.63 1,500,000 1,490,395
02-28-01 5.63 2,000,000 2,018,520
02-28-03 5.50 650,000 655,514
02-15-05 7.50 650,000 719,035
10-15-06 6.50 465,000 495,433
11-15-16 7.50 2,700,000 3,164,682
02-15-21 7.88 1,850,000 2,284,045
02-15-29 5.25 600,000 563,016
TIPS
01-15-07 3.38 200,000(c) 200,348
USX
(U.S. Dollar)
03-01-08 6.85 200,000 199,451
Zurich Capital
(U.S. Dollar) Company Guaranty
06-01-37 8.38 125,000(d) 132,441
Total 19,781,995
Venezuela (0.4%)
PDVSA Finance
(U.S. Dollar)
02-15-10 9.75 500,000(d) 498,215
Total bonds
(Cost: $41,483,383) $41,020,066
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Short-term securities (4.5%)
Issuer Annualized Amount Value(a)
yield on date payable at
of purchase maturity
U.S. government agencies (3.5%)
Federal Home Loan Bank Disc Nt
<S> <C> <C> <C>
05-21-99 4.77% $600,000 $598,420
Federal Home Loan Mtge Corp Disc Nts
05-20-99 4.75 2,400,000 2,394,016
06-04-99 4.71 500,000 497,785
06-04-99 4.78 400,000 398,207
06-21-99 4.72 600,000 595,873
06-22-99 4.72 500,000 496,613
Total 4,980,914
Commercial paper (1.0%)
Merrill Lynch
05-04-99 4.87 1,500,000 1,499,391
Total short-term securities
(Cost: $6,480,445) $6,480,305
Total investments in securities
(Cost: $131,223,634)(g) $145,656,491
See accompanying notes to investments in securities.
</TABLE>
<PAGE>
Notes to investments in securities
(a) Securities are valued by procedures described in Note 1 to the financial
statements. Foreign security values are stated in U.S. dollars. For debt
securities, principal amounts are denominated in the currency indicated.
(b) Non-income producing.
(c) U.S. Treasury inflation-protection securities (TIPS) are securities in which
the principal amount is adjusted for inflation and the semiannual interest
payments equal a fixed percentage of the inflation-adjusted principal amount.
(d) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security has
been determined to be liquid under guidelines established by the board.
(e) Interest rate varies either based on a predetermined schedule or to reflect
current market conditions; rate shown is the effective rate on April 30, 1999.
(f) At April 30, 1999, the cost of securities purchased, including interest
purchased, on a when-issued basis was $1,012,049.
(g) At April 30, 1999, the cost of securities for federal income tax purposes
was approximately $131,206,000 and the approximate aggregate gross unrealized
appreciation and depreciation based on that cost was:
Unrealized appreciation $16,655,000
Unrealized depreciation (2,205,000)
----------
Net unrealized appreciation $14,450,000
<PAGE>
Quick telephone reference
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Sales and exchanges, dividend payments or reinvestments and automatic payment
arrangements: 800-437-3133
AMERICAN EXPRESS CLIENT SERVICE CORPORATION
Fund performance, fund prices, account values, recent account transactions and
account inquiries: 800-862-7919
TTY SERVICE
For the hearing impaired: 800-846-4852
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AMERICAN EXPRESS Financial Advisors
<PAGE>
